What are construction equipment rental rates?
An equipment rental rate is the price per hour, day, week, or month charged for a piece of construction equipment, whether rented from a vendor or charged to the job from the contractor's own fleet. Longer terms usually cost less per day, while fuel, delivery, and damage waiver are often extra. Operator labor is usually priced separately as labor.
Every machine on a job has a rate. If it came from a rental house, the construction equipment rental rate is on the rental contract. If the contractor owns it, the rate is an internal number meant to recover ownership costs (purchase price, financing, depreciation, insurance, storage) and operating costs (fuel, maintenance, wear parts) through the construction projects that use it. Both kinds of rates end up in estimates, job costing, and change order pricing.
Rental house versus owned fleet pricing
| Rental from a vendor | Owned equipment charged to the job | |
|---|---|---|
| Who sets it | The rental company | The contractor, often from its own cost records or a published schedule |
| Typical units | Day, week, four-week month; weekly and monthly usually cheaper per day | Hour or day, sometimes split into standby and operating |
| What is included | Machine only; fuel, delivery, damage waiver, and environmental fees often extra | Whatever the contractor's rate buildup covers |
| Operator | Usually not included | Usually separate labor cost |
Rental terms matter as much as the rate. Daily, weekly, and monthly rates are separate prices. A machine rented by the week and kept a day longer often bills at the daily rate for the extra day. Pickup is not the same as off-rent; the clock usually stops when you call it off, not when the truck shows up.
Construction equipment on change orders and government work
Owners push back hardest on equipment rates in change orders, so many construction contracts specify how equipment rates are set: a percentage of a published rental guide, actual invoices, or the owner's own schedule. On federal cost-based pricing, FAR 31.105(d)(2) says actual cost data from the contractor's records is used when ownership and operating costs can be determined. Predetermined schedules, such as the Army Corps of Engineers Construction Equipment Ownership and Operating Expense Schedule, may be used when actual data cannot be. The same section says reasonable costs of renting construction equipment are allowable, but major repair and overhaul costs for rented equipment are not.
A worked example on a construction project
Say an earthwork sub prices a change order for 3 extra days of excavation on a $1.1 million site project. The excavator is owned, and the sub's internal rate is $95 an hour for operating time. A rented compactor costs $310 a day plus a $150 delivery charge each way (made-up figures for illustration). The change order shows 24 excavator hours at $95, 3 days of compactor rental at $310, two delivery charges, operator labor at the burdened rate, and markup per the contract. The owner's rep can check every number against a time card or an invoice.
Questions to ask before you sign for a machine
- What is the term? Daily, weekly, and four-week month prices differ, and a machine kept past the term often bills at the daily rate for the extra days.
- What is included in the quote? Ask whether fuel, delivery and pickup, damage waiver, and environmental fees are in the price or added on the invoice.
- When does billing stop? Get a call-off number. The clock usually stops when you call the machine off rent, not when the truck picks it up.
- Is an operator included? Usually not. Price the operator as labor at the burdened rate.
- How will the project be charged? Check whether the contract uses actual invoices, a percentage of a published rental guide, or the owner's schedule, so change orders match it.
- Would owning cost less on this project? On long projects, compare the total rental bill with an internal rate for an owned machine.
Common mistakes
- Charging owned equipment at retail rental rates when the contract calls for cost.
- Not tracking idle and standby time, then fighting over it later.
- Leaving rentals on rent after the work is done. Call them off and record the call-off number.
- Forgetting fuel, delivery, and damage waiver when comparing rental quotes.
Related terms
See equipment cost, burden rate, and direct costs. For the buy-or-rent call, read when to buy vs rent construction equipment and how to manage equipment rental costs.
Frequently asked questions
How are construction equipment rental rates usually quoted?
By the day, week, and month, with longer terms costing less per day. Some equipment is also rented by the hour. Fuel, delivery, and damage waiver are often extra.
What rate should I use for my own equipment?
A rate that recovers ownership and operating costs from your own records. On cost-based federal pricing, FAR 31.105(d)(2) prefers actual cost data and allows predetermined schedules only when actual data cannot be determined.
Can I charge standby time?
Only if the contract allows it. Many contracts and published schedules pay standby at a reduced rate, so read the change order and equipment pricing clauses.
Is operator labor part of the equipment rate?
Usually not. Operator wages and burden are priced as labor. Some rental companies offer operated rentals at a combined rate.
