By Rodney Garrett

There are two main two issues confronting the contractor when purchasing new construction equipment: One is evaluating different makes for selecting the most productive and reliable piece; the other is the price tag attached to the machine. Not always, but often the "better" equipment comes with a higher price tag, and that necessitates the contractor to establish if the higher cost can be offset by gaining higher productivity with the equipment.

Amortizing or making rental payments on equipment is a certainty whether that equipment is operated or not. Contractor Dan Turkowski of Irwin, PA, says buying higher-priced equipment can be a good choice if indeed the machine’s performance brings in additional revenue by increased production. He says, however, that additional revenue from the greater productivity must not only meet the higher purchase price but must exceed it for increased profits.

Purchasing Principles

Turkowski is vice president of HET Corporation. In charge of equipment acquisition, he follows certain principles when purchasing. One principle is to assess any added values that come along with a given brand and model of equipment. These added values are those that go beyond productivity and dependability of the machine. Turkowski says added values include the fast service offered after the sale of the equipment and the just-in-time parts deliveries. Of course, the purchase price is important, but he says the purchase price should not be confused with the equipment’s cost of ownership. Cost of ownership includes the machine’s operating costs, finance costs, maintenance costs, and depreciation. High maintenance costs can take the gloss off of a low-priced machine.

HET owns or leases Caterpillar and Kobelco equipment. Included in the fleet are two Cat D30 articulated trucks, a Cat 815F soil compactor, three Kobelco excavators, a Cat excavator, two Cat 426 rubber-tire excavators, and four new Cat model 627F and 621E scrapers. As for bulldozers, there are two Cat D8 and two Cat D4 units. Besides these major pieces of equipment in the fleet, there are scores of smaller-size equipment. Recently the contractor decided on a brand change for buying a new bulldozer that will be discussed later.

HET maintains all of its equipment in-house. When the equipment has high operation hours on it, it is either traded or rebuilt. All rebuilds are carried out by the local equipment dealer.

HET is a full-service site-excavating contractor, including constructing private roadways, reprofiling on landscaping projects, sloping at project sites, and trenching and backfilling. It also does grading, foundation excavation, and cut-and-cover excavation for installing underground utilities and paves roads and parking areas.

New Size Dozer Is the Perfect Fit

Periodically HET acquires more work than can be carried out with the company’s equipment fleet. Equipment is then rented. Turkowski carefully selects the rental equipment by evaluating its performance and reliability.

Recently he decided on renting a newly introduced model New Holland DC180 bulldozer. He decided on this bulldozer because its design and some features were unique enough to compare its performance against other make dozers. He says this dozer’s performance has been so good that he had it moved from project to project as each was completed. To date it has been used on five major projects.

The size of the bulldozer falls somewhere between the D4 and D8 Caterpillar dozers in the fleet. The DC180 weighs 45,690 lb. (operating weight with an 11-ft., 1-in. straight blade), and the net flywheel power is 180 hp. Both Turkowski and the production supervisor, Dan Lentz, say the performance of the DC180 is somewhere between that of a D6 and D7, but closer to a D7.

"It has exceptional pushing power for blading the earth. Actually we have used it for pushing our Cat self-propelled scrapers for a week’s worth of production when we needed an extra push bulldozer," relates Lentz. Usually he rents a Komatsu 155AX or a Cat D8 dozer for pushing the scrapers. Despite its smaller size, the DC180 performed well in pushing the scrapers, according to Lentz. The working conditions were to push and fill each scraper by making one 100- to 120-ft.-long pass. The ground conditions were predominately clay mixed with shale in some areas. Surprisingly the DC180 was able to push and fill the scrapers in just 10 seconds more than required using a D8.

Lentz is quick to point out that he does not liken the DC180 production capacity to the bigger dozers used for pushing scrapers. To illustrate, he says, the scraper production in rocky or hard ground would increase substantially by using the bigger dozers. While the DC180 can be used as a temporary push dozer, it is too light for day-in, day-out pushing.

Where this dozer shines, according to Lentz, is in profiling complex slopes. The reason is that this dozer was designed with a low center of gravity that enables it to be operated safely with good stability while traversing very challenging slopes.

HET gets many projects that involve slope work. Lentz says their smaller bulldozers could be used for this slope work, but productivity would suffer. Larger bulldozers also could be used, but transporting them from project to project is time-consuming and very expensive. This midsize dozer can be transported over public roads without dismantling the tracks (a 10-hour job for the bigger dozers, according to Lentz), the blade, or the ROPS. The ROPS on the bigger bulldozers sits very high and occasionally must be removed when transporting the dozers through the many low-head-clearance tunnels found in and around the Pittsburgh area.

Turkowski anticipates buying a New Holland DC180 bulldozer this year. He projects a 15% increase in business for 2001 and does not want to rent the present DC180 for the long term. Usually equipment is not rented longer than four months, as it is considered not to be cost-effective. Cost of equipment ownership is simply less than long-term renting, he points out.

Why buy the New Holland over other good brands? The main reason is that all five of the company’s operators who have used it say it is a very good slope machine. For this kind of work it is proving to be very productive, and there is an extra margin of safety because of its very low center of gravity.

Turkowski says the jury is still out on how dependable it is. While there has been no downtime experienced in the 700 machine-hours it was operated, he says that is not sufficient machine time to establish its long-range dependability. Still, he feels it is worth buying the machine because it is priced very competitively and the local dealer, Highway Equipment, is very dependable for service and parts availability. Highway Equipment and the contractor have a long business relationship because the contractor’s Kobelco excavators and other brand equipment were sold and now serviced by the dealer.

Turkowski sees loyalty to equipment dealers as important and therefore buys most of the equipment from either Beckwith Machinery Company (a Caterpillar dealer) or Highway Equipment. Both dealers have earned his company’s loyalty through their good service, he says. Buying new equipment from one or the other of these dealers is predicated primarily on the particular machine’s performance capabilities and its purchase price, all other things being equal. For that reason he will continue to buy certain model Caterpillar and Kobelco equipment. If the New Holland bulldozer proves to be reliable, this brand will be added to the list.

As Turkowski points out, he is not in the excavation business to spend money on equipment but to make money by excavating, and purchasing the best performing machine that is dependable and competitively priced is a step in the right direction for increased profitability.

Author Rodney Garrett of Bernville, PA, specializes in construction subjects.