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Rental As A Federal Acquisition Alternative

Rental As A Federal Acquisition Alternative. Dana Fairley Business Development Specialist, GSA John McClelland Vice President, Government Affairs American Rental Association (ARA). Today's Goals. Inform Customers about Schedule 51 V, Offerings

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Rental As A Federal Acquisition Alternative

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  1. Rental As A Federal Acquisition Alternative Dana Fairley Business Development Specialist, GSA John McClelland Vice President, Government Affairs American Rental Association (ARA)

  2. Today's Goals • Inform Customers about Schedule 51 V, Offerings • Explain the Partnership between General services Administration (GSA) and The American Rental Association (ARA) • Introduce ARA • Explain the Benefits of Rental • Illustrate Rental Offerings under the GSA Schedule 51V

  3. The GSA Center for Facilities Maintenance and Hardware (CFMH)is one of seven GSA Acquisition Centers. The “Centers” award and administer the Multiple Award Schedules Program.

  4. The Center for Facilities Maintenance and Hardware Manages Two Schedules: • Schedule 03FAC Facilities Maintenance and Management • Services such as: • Complete Facilities Maintenance • HVAC • Plumbing • Electrical • Energy Solutions • Elevator Inspection and Preventative Maintenance

  5. The Center for Facilities Maintenance and Hardware Manages Two Schedules: • Schedule 51 V Hardware SuperStore • Products typically found in a Hardware Store, such as: • Tools and Tool Kits • Lawn and Garden Equipment • Woodworking and Metalworking Equipment and Machinery • Coatings, Adhesives and Sealants • Rental and Leasing of products

  6. GSA’s Partnership with American Rental Association (ARA) • Established in the Fall 2008 to increase awareness of rental as a viable acquisition alternative • ARA, CFMH and Rental Schedule Holders • MarkeTips Promotion, Slip Sheet Development, Conferences, Newsletter, EXPO Class, etc.

  7. About ARA • Membership trade association founded in 1955 • Source for research, information, government affairs, business development tools, education and training, insurance and marketplace opportunities • Construction/industrial, general tool and event equipment rental

  8. ARA’s Role in the Industry • Promote the success of our members and advance the growth of the equipment rental industry • Information source and resource • Advocate for industry growth and success • Industry image • Resources contributing to business success • Buyer-seller connection

  9. ARA Membership • General Member: • A business engaged in renting tangible personal property to the general public (“Rental Business”) • Associate Member: • A business engaged in furnishing or providing equipment, merchandise or services related to the Rental Business, but not otherwise qualified to be a General Member

  10. Market Segments Defined • Construction/Industrial Equipment: Almost exclusively rented by construction companies or contractors • Earthmoving equipment • Access equipment • Pumps & generators

  11. Market Segments Defined • Construction/Industrial Equipment: Industrial equipment comprises a broad range of equipment used in the production or movement of other goods • manufacturing machinery • transportation equipment • medical equipment

  12. Top Construction Rental Equipment • Skid-steers • Mini-excavators • Excavators – full size • Telehandlers • Aerial work platforms • Backhoes • Forklifts • Mini/midi wheel loaders • Compressors – trailer mounted • Attachments According to the 2008 ARA/IHS Global Insight survey

  13. Market Segments Defined • General Tool Equipment: Equipment usually rented by professional contractor and do-it-yourself (DIY) homeowners for light construction, including building renovations, additions, concrete work and landscaping. • small hand-held tools • yard-care equipment • jackhammers • pressure washers • small skid steers

  14. Top General Tool RentalEquipment • Jackhammers • Concrete-cutting saws • Walk-behind trenchers • Yard-care equipment • Pressure washers • Compactors • Scaffolding • Manlifts • Pumps • Floor- and carpet-care equipment According to the 2008 ARA/IHS Global Insight survey

  15. Market Segments Defined • Event Equipment : • Items rented to homeowners, consumers and corporations for celebrations, promotions, recreational and special events. • Items in this segment could also be rented by groups like FEMA, Red Cross and other emergency assistance organizations • Tents • Tables and chairs • Linens and tableware

  16. Equipment Rental Industry Size • The 2008 United States equipment rental revenue was estimated to be $35.3 billion • Construction/Industrial equipment = $24.5 billion • General tool equipment = $8.4 billion • Party and event equipment = $2.4 billion

  17. 2008 United States Economic Impact of the Rental Industry • Employment: 613,348 • Industry output (Million US$): $96,847 • Value Added (Million US$): $52,119 • Labor income: $30,266 million • Indirect business taxes: $4,831 million • Business income: $17,021 million

  18. Why would GSA customers want to rent equipment? • Transfer burden and costs of ownership • Provides the right equipment for the right job • Advice and assistance from professional staff • Flexibility and availability of equipment • Professional grade, heavy-duty equipment • Environmentally friendly and recently manufactured

  19. Benefits of Renting versus Lease/Purchase • Transfer burden & costs of ownership Ownership requires a capital investment to cover the direct costs of equipment . . . BUT Renting keeps the burden of buying, maintaining, and Selling the equipment on the rental business, not on the customer

  20. Benefits of Renting versus Lease/Purchase Transfer burden & costs of ownership • Renting offers the widest variety of equipment for added job versatility without the added hassles associated with ownership, including the costs of: • Warranties • Insurance • Regular maintenance and repairs • Storage • Transportation

  21. Benefits of Renting versus Lease/Purchase Assistance from Experienced & Professional Staff • Renting not only helps reduce costs, it also provides access to expert knowledge and training. It allows customers to take advantage of staff professionals who will: - Assess and secure the right equipment for the job - Offer a wide variety of specialized and modern equipment … Some rental businesses offer specialized equipment applications, such as scaffolding services, aerial specialists, pump & power, and more.

  22. Benefits of Renting versus Lease/Purchase Flexibility & Availability of Equipment • Renting allows the customer to take on a wide variety of jobs and projects that may require equipment that they don’t have the capital to purchase Seasonal and large jobs require specialized equipment that can be obtained by renting. Renting allows for equipment to be available when and where needed.

  23. Benefits of Renting versus Lease/Purchase New Equipment • Rental companies make significant annual investments in the newest, most advanced equipment on the market: Franks Supply Company, Inc. Hertz Equipment Rental, Inc. Neff Rental, Inc. RSC Equipment Rental, Inc. Sunbelt Rentals, Inc. United Rentals, Inc.

  24. Benefits of Renting versus Lease/Purchase • Environmentally Friendly – “Clean & Green” Because rental equipment is newer, renting instead of buying insures that customers have access to the most fuel-efficient and emission controlled equipment on the market All rental stores in California with certain types of equipment are required to be in compliance with CARB regulations • These regulations can be implemented in other parts of the U.S.

  25. Evaluating the Rent vs. Buy/Lease Decision

  26. Fleet Management Metrics • Time Utilization: the percentage of time a piece of equipment is rented or at a job site. • Dollar Utilization: the cost of a piece of equipment new divided by the revenue generated by that piece of equipment. • Average Fleet Age: the age in months of a piece of equipment.

  27. Rental Fleet Averages • The average construction rental fleet has a time utilization of 55-65 percent. • The average dollar utilization of a rental fleet is about $0.45. • The average age of a construction rental fleet is just under 35 months.

  28. Factors to Evaluate • Estimate the time utilization of the equipment you want to acquire. • Determine the rental rate (day, week, month) of the equipment based on how it is used. • Determine the total cost of acquiring the equipment through a purchase or lease.

  29. Decision Rules • If the annual cost of rental charges divided by acquisition cost is less than $0.45, consider renting. • If your estimated time utilization is less than 55 percent, consider renting • If your jobs are varied and require special equipment, consider renting. • If your fleet’s diesel emissions are controlled by regulation, consider renting.

  30. Renting Equipment Through GSA • Schedule 51V Suppliers currently include: • Frank’s Supply Company, Inc. • Hertz Equipment Rental Corp. • Neff Rental, Inc. • RSC Equipment Rental, Inc. • Sunbelt Rentals, Inc. • United Rentals, Inc. • Contact your GSA contracting officer about modifying your contract to include rental today!

  31. Summary of Rental • Equipment rental is largely diversified • Rental businesses are located everywhere you need to do work and provide equipment for every type of job • Renting offers the newest equipment at the best possible price • It is an environmentally sound choice • Rental professionals offer expert advice and maintain the equipment

  32. Rental under the GSA Schedule • Rental is a Viable Acquisition Alternative • Rental Often Makes Good Economic Sense • Schedule 51V Provides Excellent Selection of Rental Companies • Schedule 51V Rental Companies have a Vast Array of Products to Fulfill Your Acquisition Requirements • For Additional Information on Rental, Please Visit ‘http://www.gsaelibrary.gsa.gov/’ and Search Schedule 51V

  33. Thank You! Dana Fairley Business Development Specialist, GSA (816)823-4258 Dana.Fairley@gsa.gov www.gsa.gov And John McClelland Vice President, Government Affairs American Rental Association (202) 289-4460 john.mcclelland@ararental.org www.ararental.org

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