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Blue Book

The use of Blue Book rates and other similar manuals to compute the extended operating costs of contractor-owned equipment has been approved by a wide array of courts and boards. See Southland Enterprises. Inc. v. U.S., 24 C1. Ct. 596 (1991) (approving use of modified Blue Book rates to calculate an extended equipment cost claim where downward modifications were based on expert testimony); Western Alaska Contractors, J.V., ASBCA No. 46033, 95-1 BCA '27,392 (1994) ("the Blue Book is an accepted method of estimating costs of equipment and provides for adjustment when equipment is used on a federally funded project"); Jack L. Olsen, Inc., AGBCA No. 87-345-1, 93-2 BCA 525,767 (1993) (Blue Book ownership rates provide a reasonable proxy for detailed actual costs); Layne-Minnesota, Inc. v. Singer Co., 574 F.2d 429 (8th Cir. 1978) (approving equipment cost claim based on AGC equipment rates where actual costs cannot be obtained from the contractors records).

The reason that courts have accepted Blue Book and other rates for calculating equipment costs is that it is often impractical for contractors to maintain records of actual operating costs for each piece of equipment. Accordingly, it is not unusual for contractors to use Blue Book rates to compute extended equipment costs. However, federal agencies may not accept Blue Book rates if another equipment guide is listed in the specification as applying to the contract, or if the agency believes that the Blue Book rates are unreasonably high.