What hour rate means?

[rogerius]

I'll appreciate if somebody can explain to me what hour rate means when you hire a contractor.
We are looking for a contractor to do the grading around the house and two of the guys which came to take a look offer to do the job based on the hour rate of equipment. I asked him to detail and they said that they will bring the machines and 2 operators on site and will charge the time for each machine for duration of work. I ask him what equipment? He said: excavator, douser, truck and a steer. My question was, why you charge the hour rate for 4 machines when you got just 2 operators? They said that is the standard in industry to pay the time for equipment which is on site. Is this true or BS?
I don't have any experience with this so I appreciate any suggestion.
THX.

 

[oosik]

Something does not sound correct here. I would ask this company to give you a bid on the entire project and go from there. Get at least three bids from different companies. If they do not want to provide a bid - skip this company. You could very easily be getting into an open ended deal - not good.

Then if they have six machines & one operator or six operators and one machine. You could care less. You have a signed contract and that is that.

 

[Ford850]

Could mean he's charging the total hours used, for each machine (from hour meters).

 

[EddieWalker]

In my experience it's the hours operating the equipment regardless of how many pieces of equipment that you have there. Two operators count as two hours for every hour they are working.

But as a contractor, there are a variety of meanings to just about everything, and that confusion is where most problems come from. Assume nothing and do not commit to anything until you are 100% sure that you understand the contractors words and meanings. They speak their own language and in my experience, clients speak a different language based on their experience and it can be very confusing to figure out if they are talking about the same thing that I'm talking about. Often I will apologize to them while discussing their project because I just don't understand what it is that they are saying!!!!

 

[EddieWalker]

Something else that I just thought of. While talking to the contractor, make sure that you have a notepad with you and make sure that he sees you writing down what you agree to. You can ask him to put everything in writing, but a lot of them will never get back to you. If they see you writing down what you agree to, that will make everything a lot more clear when it comes down to what he is expected to do and what he is expected to charge you.

 

[TractorGuy]

I talked to one guy that would quote by the job or by the hour. He said his hour rate would be on top of a delivery fee of $350 of each piece of equipment he brought to my site. So if he brought an excavator and a dozier I would pay $700 PLUS how ever many hours he put on the equipment. I think his rate was $100 per hour working time.

Same guy offered to dig the stumps and burn my 5 acres for ten grand. In hindsight I wish I would told him to have at it. I shied away because he said I would need a larger tractor than the JD855 I had at the time to clean up after him.

I got a second quote to have it cleaned up and finish graded that was $4500 per acre. Even that doesn't sound too bad now.

I ended up buying a New Holland 575E backhoe to tackle the task myself. 3 years later I have a couple acres to go. Hopefully I can get my money back out of the backhoe when I'm done although the wife has said we should just keep it. That was before I upsized my tractor and added a loader so I think I can get by fine with that after the digging is done.

 

[Carl_NH]

As Eddie said - 2 operators for an hour = 2 hours billed no matter the machines they are operating. Unless this is a small project like a day or two and they need to load and deliver 4 pieces of equipment that takes time and I have seen some contractor's charge a "setup or delivery fee" but that is not the norm.

If its a multi day project like a week or two, you only want to pay for seat time or labor time when they are on the job doing work. As others have said, get an estimate and a description of what they are going to do - to do X work like 100 yards of dirt/topsoil, grading/raking seeding or whatever you need to have done, and do not sign or agree to an open ended contract.

 

[3Ts]

It sounds like time off the machine's hour meter. WARNING - this means that if they have the machines at the job site and just let all 6 sit and idle all day, you'll be paying for 6 hours of machine time for each hour they idle. I have heard that this is not unusual in contracts where the job has to be done as quickly as possible. First thing the company does is bring out all the equipment they think they'll need and start them up. They may use them or they may not, but the machine hours get billed.

 

[rogerius]

It sounds like time off the machine's hour meter. WARNING - this means that if they have the machines at the job site and just let all 6 sit and idle all day, you'll be paying for 6 hours of machine time for each hour they idle. I have heard that this is not unusual in contracts where the job has to be done as quickly as possible. First thing the company does is bring out all the equipment they think they'll need and start them up. They may use them or they may not, but the machine hours get billed.

Exactly what my neighbour told me last night. He had one of the contractors built his septic last year and did the deal based on hour rate. He said the excavator was running 2 days continuously and at 180CAD/hour, he gave him a nice bill for a basic septic system.
Still looking around but I can see that here is a jungle in term of quoting a job. All start the discussion by asking you where are you from and what are you doing for leaving and I have a fell that they prepare the quote based on that. Looks like there is a price for locals and a price for "city people". Others start the quote with "What is your budged?" which drives me nuts.