Project Accountability Curbs Operator Abuse

Sept. 28, 2010

Carelessness in the field results in the type of repair that frustrates equipment managers as they strive to reduce the costs associated with neglect and abuse. Maryland-based Facchina Construction Co. tackled it three years ago, and equipment manager Chris Sullivan says incidents of neglect and abuse have dropped.

"Project managers and operators are taking better care of equipment," Sullivan says. "They report damage immediately, and equipment is in better condition."

1 Split equipment operations

Facchina has a separate division that owns the equipment and rents it at an hourly rate to its projects. These costs are built into the project at estimate.

Previously, damage caused by accident, neglect or abuse was charged directly to the piece of equipment and, consequently, to the division. But, the cost to repair damage to equipment rented from a rental house was charged directly to the jobsite, a system that inspired the division to move accountability for its owned equipment to the jobsite.

"We started doing what the outside [rental houses] were doing," Sullivan says. "We started treating the equipment division as an outside rental company."

2 Set up reports, accounting

Facchina created a separate job code for billing purposes, a code termed ANA for accident, neglect and abuse. Jobsite damage is cost-coded to this new account. With every incident, a summary report shows mechanic's time and parts expense. ANA now appears on project cost reports, sent to project managers monthly.

"If they have a large amount of damage, they know they have to get on their operators," Sullivan says. "They take it a lot more seriously now that they're paying for it."

Project estimators will now have more accurate numbers to use in building their bids. "Estimators have always included an amount for accidents in their bids," Sullivan says, "but the ANA system allows us to capture the cost in that job rather than absorbing it in the equipment department."

3 Make note of damages

Project managers report damage to the equipment division, at which point head mechanic Gary Gilliland visits the site. He determines whether the damage is accidental or abusive and completes a report. Other damage is recorded by the field-and-lube serviceman, who visits the majority of equipment on a daily basis, Sullivan says.

4 Allow for adjudication

Of course, project managers have and will take issue with some determinations, so Facchina management will step in to make the judgment calls, Sullivan says. "We haven't had many instances of conflict," he says. "More often than not, it's pretty clear that it's wear and tear or it's abuse."

Initial debates result in a compromise or with Sullivan standing his ground. But if the project team can't work it out with the equipment team, Facchina vice president David Anderson, who oversees both operations, meets with Sullivan, Gilliland, and the project manager.

"Sometimes it's hard, given that the damage is discovered days [after it occurred]," Sullivan says.

5 Train operators

Of course, the new accountability had to be transmitted from the equipment management team to the project teams. Facchina accomplished this through its project managers.

"The project superintendent and manager hold safety meetings every week," Sullivan says. "They [now] stress equipment safety and maintenance. They are responsible for the operators and for getting them to take care of the equipment."

The equipment division supplies an inspection book for each type of equipment. Operators inspect the machine and fill out the book every day. Project managers receive a copy of the completed checklist or check the book for compliance.

6 Monitor savings

Facchina has been building a historical database of ANA costs for three years. Eventually, enough data will be collected to give the company the ability to accurately predict ANA costs in its estimates. The data will also enable Sullivan to better manage equipment costs.

Actual savings since implementation haven't been determined. "Our ANA system is in the third year and is still in the developmental phase," he says, so accurate numbers on the saving in repair costs are not available. That, coupled with a growth in revenue over the three-year period the ANA system has operated, has made it difficult for Sullivan to ascertain if the number of incidents has declined.

"But it is safe to say that the number of incidents in proportion to the volume of work that we are performing has decreased."

Although he cannot put an exact number on the savings yet, "it is not hard to see the change in attitude that the [jobsite personnel] have toward the equipment now that they are held financially responsible," he says. "As we expand and develop our ANA system, we will have records to show the percent of equipment costs on a job that are ANA costs.

"With enough historical data, we will be able to compare job and manager performances."

Chris Sullivan
Chris Sullivan
Head mechanic Gary Gilliland
Head mechanic Gary Gilliland (right) inspects damaged equipment on site to determine if the machine has be
Chris Sullivan
Head mechanic Gary Gilliland (right) inspects damaged equipment on site to determine if the machine has been abused. Equipment manager Chris Sullivan (left) says incidents have dropped.
Mechanic Robert Gutridge works on the hydraulics of a John Deere 710 dozer in the shop because of ANA damage. Project managers receive reports listing labor and parts costs.

Headquarters: LaPlata, Md.

Specialties: Highway/heavy

Equipment Value: $25 million

Fleet Makeup: 283 units, including 200 pieces of heavy equipment and trailers, and 83 trucks and other mobile pieces

Support Staff: 4 mechanics and 2 fuel truck drivers

Facilities: 1 shop, 1 field service truck

Market Range: D.C., Va. and Md.

How ANA Is Reported

When damage occurs to a piece of equipment, an abuse, neglect, accident account-notification form details the damage and the estimated cost. Here's what's recorded:

  • Equipment number
  • Project number
  • Event description; for example, one machine backed into another
  • Parts and outsourced labor, including invoice numbers and amounts
  • Internal labor, including rates and amounts
  • Equipment used in the repair; for example, mechanics truck, including rate and amount
  • Operator name
  • Superintendent and manager names
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