FieldLedger
Calculator

Equipment Cost Allocation Calculator

Compute hourly ownership rate, operating rate, and total recovery rate for federal construction equipment under the USACE EP 1110-1-8 schedule. FAR 31.205-11 (depreciation) and FAR 31.205-52 (cost of money) feed the underlying allowability.

Inputs

Result

Depreciation per year
$16,875.00
(Acquisition - salvage) / economic life. Straight-line.
Depreciation per hour
$14.06
Annual depreciation divided by annual operating hours.
COFCC per hour (simplified)
$2.75
4% of average book value, annualized to operating hours. Approximation of EP 1110-1-8 Appendix B capital recovery.
Ownership rate per hour
$16.81
Depreciation + COFCC + taxes/insurance.
Operating rate per hour
$12.85
Fuel/lube + repairs/maintenance + tire wear.
Total recovery rate per hour
$29.66
Ownership + operating. The hourly rate to charge cost-reimbursable construction work.

Educational tool. The COFCC figure here is a 4% approximation. Actual EP 1110-1-8 Appendix B uses a Treasury cost-of-money rate updated semiannually under FAR 31.205-52 and CAS 414. For audit-grade rates use the current EP 1110-1-8 schedule and the published Treasury rate, not this simplification.

What this calculator computes

U.S. Army Corps of Engineers EP 1110-1-8, "Construction Equipment Ownership and Operating Expense Schedule," is the authoritative reference for hourly equipment rates on federal cost-reimbursable construction work. It standardizes how depreciation, cost of facilities capital, taxes and insurance, fuel and lube, repairs and maintenance, and tire wear roll into a defensible hourly recovery rate by equipment class.

The total recovery rate splits cleanly into two components. Ownership cost is what the contractor incurs to own the equipment whether it is running or not: depreciation, capital recovery (COFCC), property taxes, and insurance. Operating cost is what the equipment incurs only when it is running: fuel and lube, repairs and maintenance, tire wear, and ground-engaging components for some classes. Federal rates charge ownership for all hours the equipment is on the job and operating only for hours actually operated.

Depreciation in EP 1110-1-8 is straight-line on (acquisition cost minus salvage value) over the economic life specified in the schedule for the equipment class. The hourly rate divides annual depreciation by annual operating hours. FAR 31.205-11 governs the underlying allowability and accepts straight-line as the default; other methods are allowable if disclosed under CAS 409 and consistently applied.

Cost of Facilities Capital Cost of Money (COFCC) recovers the contractor capital tied up in the equipment. The mechanism is at FAR 31.205-52 and CAS 414. EP 1110-1-8 Appendix B computes COFCC by applying the current Treasury cost-of-money rate (updated semiannually by Treasury under Public Law 92-41) to the average book value of the equipment over the recovery period. This calculator approximates the rate at 4% for sizing; live audit-grade work uses the current Treasury rate.

Operating rates in EP 1110-1-8 are tabulated by equipment class and operating condition (light, average, severe). The contractor selects the row that matches actual operating conditions and uses those values directly. The calculator above accepts the operating rates as user inputs, since they are class-specific and not derivable from acquisition data.

EP 1110-1-8 produces materially different rates from commercial sources. The AED Green Book and the Equipment Watch Blue Book derive rates from rental market data and are oriented toward commercial bidding. EP 1110-1-8 derives rates from contractor-incurred ownership and operating costs and is oriented toward federal cost reimbursement. Mixing methodologies on the same submission is an audit flag.

Compliance methods

The mechanical sequence the contractor runs to produce an EP 1110-1-8 rate:

  1. 1. Identify the equipment class

    EP 1110-1-8 indexes equipment by class (excavators, dozers, graders, cranes, pumps, generators). Match the actual unit against the schedule by capacity and configuration. Misclassification is the most common contractor error.

  2. 2. Pull schedule values

    The schedule gives economic life in years, expected annual operating hours, and operating cost components by equipment class. Use these unless contractor-specific data is materially different and supportable on audit.

  3. 3. Compute ownership rate

    Depreciation per hour plus COFCC per hour plus taxes and insurance per hour. COFCC uses the current Treasury rate from EP 1110-1-8 Appendix B. Charge ownership on standby hours, not just operating hours.

  4. 4. Compute operating rate and total

    Fuel and lube plus repairs and maintenance plus tire wear gives the operating rate. Add to ownership for total recovery rate. Apply only to hours the equipment was actually operated, not standby.

Frequently asked

What is USACE EP 1110-1-8?
EP 1110-1-8 is the U.S. Army Corps of Engineers "Construction Equipment Ownership and Operating Expense Schedule." It provides standardized hourly ownership and operating costs for construction equipment used on Corps cost-reimbursable contracts. The schedule covers depreciation, cost of facilities capital, taxes and insurance, fuel and lube, repairs and maintenance, and tire wear by equipment class.
When is EP 1110-1-8 required?
On cost-reimbursable USACE construction contracts the EP 1110-1-8 schedule is the controlling reference for equipment rates. On other federal construction work, the contracting officer may incorporate it by reference, or the contractor may propose a different schedule (Blue Book / Green Book / actual cost) subject to negotiation. EP 1110-1-8 carries the strongest precedent for federal work.
How does this differ from commercial equipment-rate methods?
Commercial sources like the AED Green Book or the Blue Book derive rates from rental market data and are oriented toward commercial bidding. EP 1110-1-8 derives rates from contractor-incurred ownership and operating costs and is oriented toward cost reimbursement. The schedules can produce materially different hourly rates for the same equipment.
What is COFCC?
Cost of Facilities Capital Cost of Money (COFCC) is the contractor capital tied up in the equipment, treated as a cost under FAR 31.205-52 and CAS 414. EP 1110-1-8 Appendix B computes COFCC using the average book value of the equipment and the current Treasury cost-of-money rate updated semiannually. This calculator approximates COFCC at 4% of average book value; for audit-grade rates use the current Treasury rate.
How does FAR 31.205-11 govern equipment depreciation?
FAR 31.205-11 makes depreciation an allowable cost when computed in accordance with GAAP and the contractor consistently applied policies. Useful lives must be reasonable. The straight-line method approximation in this calculator is the method most commonly accepted for EP 1110-1-8 ownership rate development; declining-balance and other accelerated methods are allowable if disclosed and consistently applied.

Related