American
Made

Equipment Rental Policy

Purpose

This policy establishes guidelines for renting equipment when company-owned equipment is out of service. The goal is to minimize downtime, maintain job schedules, and ensure cost-effective decisions while keeping the team productive.

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When to Rent vs. Wait for Repairs

Estimated Downtime Impact on Jobs Decision
Less than 3 days Minor delays, rescheduling possible Wait for repairs
3-7 days Some job delays, lost revenue risk Rent if necessary for key jobs
More than 7 days Major impact, crew unable to work Rent immediately

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Decision-Making Factors

When a piece of equipment breaks down, the following factors determine whether to rent or wait for repairs:

  1. Repair Timeline – If repairs take longer than 3-7 days, renting should be considered.
  2. Job Impact – If job delays cause revenue loss or contract breaches, renting is prioritized.
  3. Crew Productivity – If employees remain idle for multiple days, renting is often more cost-effective than paying wages for no work.
  4. Rental Cost vs. Idle Costs – Renting is justified if the cost of lost productivity exceeds the rental expense.

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Example Cost Comparison

  • Scenario: A bucket truck breaks down with an estimated repair time of 2 weeks.
  • Idle Salary Cost: Crew salaries continue at $3,000 per week.
  • Rental Cost: A replacement bucket truck costs $500 per day ($3,500 per week).
    📌 Decision: Renting prevents lost revenue and ensures crew members are working, making it the better option despite the rental cost.

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Rental Authorization Process

  1. Report Equipment Breakdown – Crew must notify the office immediately when equipment fails.
  2. Determine Repair Timeline – The office contacts the mechanic for an estimated repair time.
  3. Evaluate Rental Need – Based on downtime, job impact, and cost analysis, the office decides whether to rent.
  4. Rental Approval – Rentals over $1,000 require owner approval before booking.
  5. Rental Agreement & Scheduling – The office handles rental booking and ensures it is available when needed.
  6. Return Equipment Promptly – As soon as the company-owned equipment is repaired, the rental is returned.

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Additional Notes

  • Emergency Work Priority: For storm response and insurance jobs, rental decisions should be made immediately if critical equipment is down AND SHOULD BE RENTED.
  • Alternative Job Assignments: If equipment downtime is brief, crews may be reassigned to different tasks to remain productive without renting.
  • Budget Considerations: If renting a piece of equipment will significantly cut into job profits, alternative solutions should be explored.
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