Construction Law/Standing Time

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Question
Hello John
What would be a excitable formula to calculate standing time rates could I use a percentage of my normal rate.

Answer
Dear Gordon,

Thank you for this question.

I presume that you are talking about standing time for construction plant and equipment.

Unfortunately there is no universally accepted formula. In many contracts in the past I have seen a facility whereby the Contractor includes his rates that shows adjustments for working and no-working periods by percentage, as you have suggested. Where that is not the case I suggest that you look at each item of plant/equipment and consider where the differences lie between working/standing and then work up a cost from first principles.

For example, with a 360 degree excavator when it is working it is consuming fuel and oil and those costs can be calculated. A machine that is working also requires more regular maintenance. When it is working the capital depreciation is higher; a machine with greater working hours on the clock is worth less than one with low usage and again an assessment can be made. However, when the machine is stood it is still costing the owner through, for example, depreciation and the need for maintenance.

If you were to look at some of the websites for major equipment you will find that they publish maintenance schedules and rule/oil cons,ables figures which you can use in your calculation.


I hope that this assists you.

Kind regards,
John Dowse

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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