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MEMO <br />DATE: January 4, 2001 <br />TO: DMG Coal and Minerals Staff Cost Estimators <br />FROM: Tom Gillis <br />RE: Notice of cost increases in updated CIRCE5 estimating software <br />I have just completed updating the hourly equipment costs in the CIRCES sofware. Due to significant <br />increases in interest rates and fuel prices over the last yeaz, plus a substantial increase in equipment <br />operator labor rates over the last 5 years (rates not updated since 1995), the total hourly cost of owning and <br />operating construction equipment has increased by approximately 13.8%. The actual percent increase <br />varies depending on the type and size of equipment used. <br />As a result of higher hourly equipment costs, the total direct cost of completing any equipment-based <br />reclamation tasks will have a corresponding increase in cost. <br />Example: Cat D8N Dozer 1999 costs 2000 costs % increase <br />Ownership $/hr $41.10 $44.00 7.1 <br />Operating $/hr $55.64 $64.40 15.7 <br />Operator $!hr $23.12 $27.99 21.1 <br />Total $/hr $119.86 $136.39 13.8 <br />Due to such a significant increase, Bruce Humphries has requested that all specialists include a cover letter <br />with any bond calculations we send out, explaining the reasons for the increase. <br />ltdg <br />cost2000.doc <br />