Selection of Construction Equipment

One of the problems encountered by a contractor as he plans to construct a project is the selection of the most suitable equipment to be used. For a beginner contractor, he cannot spend all the money for equipment in a particular investment. A contractor can never afford to own all types and sizes of equipment. A contractor does not have to pay for the construction equipment but it must pay for itself by earning for the contractor more money than it costs.

Factors Affecting the Selection of Construction Equipment

1. Standard type of Equipment. There is no such definition of standard type of equipment. An equipment maybe standard to one contractor but may not be to another. It depends on the operations of a contractor/company.

2. Special Equipment. One definition of special equipment is one that is manufactured for use on a single project or a special type of operation

3. Replacement of Parts. One factor in the Selection of branded equipment is the availability of replacement parts. When buying equipment, spare parts must be readily available or could be easily purchased. A truck with a broken axle is useless until the axle is replaced. A contractor should know where to obtain spare parts for his equipment, if not, then it may be wise to purchase or rent another equipment.

4. Cost of Owning and operating construction equipment. There is no exact method of determining the probable cost of owning equipment. Carefully kept records should give information as a guide as to the type of equipment you need to purchase. The number and the kind of projects a contractor is involved in should indicate what kind of equipment he has to purchase.

5. Economic life of construction equipment. The owner of the construction equipment should be interested in obtaining the lowest possible cost per unit of production. In order to accomplish this objective, he must follow an informed program of equipment replacement. How many years will he use his equipment?? Do his maintenance costs warrant the operation of the equipment or is there a need to dispose the equipment and buy another on?? The owner must consider all the costs related to the ownership and operation of the equipment. The costs to be considered are: depreciation and replacement, investment, maintenance and repairs, downtime, obsolescence. An analysis of the effect which hours of usage will have on each of these costs will establish the time at which a machine should be replaced.

6. Sources of Construction Equipment. Contractors are frequently concerned about whether to purchase or lease construction equipment. Under certain conditions, it is financially advantageous to purchase whereas under the conditions it is more economical and satisfactory to rent it.

       Three Methods by which a contractor may secure the use of equipment

        1. Purchase
        2. Rent (Lease agreement)
        3. Rent to own

A. Advantages of owning equipment 

1. it is more economical if the equipment is used sufficiently.
2. It is ready available or immediately at the disposal of the owner.
3. It is better maintained and better in mechanical condition.

B. Disadvantages of owning equipment

1. It is more expensive than renting.
2. Substantial investment is required.
3. The ownership may influence the contractor to continuously use the equipment in lieu of more modern equipment.
4. The ownership may influence to do the kind of work using his equipment but that which may require different equipment.
5. The ownership may influence the contractor to use equipment beyond its economical life.

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