Dana Fairley Business Development Specialist U.S. General Services Administration

1. Rental as a Federal Acquisition Alternative: How Rental of Equipment is Cost Effective, Sustainable and Other Benefits Dana Fairley Business Development Specialist U.S. General Services Administration Alysia RyanDirector, State Government Affairs American Rental Association May 2012

2. Value to the Customer • Owning equipment requires significant capital to cover costs of the equipment and maintenance, but renting keeps the burden of buying, maintaining and selling the equipment with the rental business not the government agency • Rental companies make significant annual investments in the newest, most advanced equipment. By renting, agencies have access to equipment which helps them meet government sustainability and carbon emission goals.

3. Rental through the GSA Schedule 51V • Schedule 51V, Hardware SuperStore • Special Item Number (SIN) 515 002 • Includes rental of all commercial products, equipment and machinery covered under the Schedule 51V such as: tools; tool kits; hardware store products; paint and coating applicators and accessories; appliances; lawn and garden equipment and machinery; and woodworking/ metalworking and industrial equipment and machinery

4. Industry Partners with Schedule 51V • The following Industry Partners have a contract under Schedule 51V, SIN 515 002, Rental • Construction Machine Services, LLC • Frank’s Supply Company, Inc. • H&E Equipment Services, Inc. • Hertz Equipment Rental Corp. • JCB Construction Inc. • MJL Enterprises, LLC

5. Industry Partners with Schedule 51V (cont.) • The following Industry Partners have a contract under Schedule 51V, SIN 515 002, Rental • NEFF Rental, Inc. • RSC Equipment Rental, Inc. • Sunbelt Rentals, Inc. • TOPP Construction Services, Inc. • Triple C Hardware & Lumber, Inc. • United Rentals, Inc.

6. Rental Sales Growth • FY08 $3.2 Million • FY09 $8 Million • FY10 $13.8 Million

7. GSA’s Partnership with ARA • Established in the Fall 2008 to increase awareness of equipment rental as a viable acquisition alternative • ARA, FMHAC, and 51V Rental Industry Partners • Quarterly Meeting • Slip Sheets • MarkeTips Promotion • Unified Message

8. About ARA • International 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

9. ARA’s Role in the Industry (cont.) • Core Purpose: Promote the success of our members and advance the growth of the equipment rental industry • Goals: • Information source and resource • Advocate for industry growth and success

10. ARA’s Role in the Industry • Customer recognition of rental for needs • Resources contributing to business success • Buyer-seller connection

11. 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

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

13. Market Segments Defined (cont.) • 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

14. 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

15. 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

16. Top General Tool Rental Equipment • Jackhammers • Concrete-cutting saws • Walk-behind trenchers • Yard-care equipment • Pressure washers • Compactors • Scaffolding • Man-lifts • Pumps • Floor- and carpet-care equipment

17. 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

18. Equipment Rental Industry Size • The 2010 United States equipment rental revenue was estimated to be $26.9 billion • Construction/Industrial equipment = $17.6 billion • General tool equipment = $7 billion • Party and event equipment = $2.3 billion

19. 2010 United States Economic Impact of the Rental Industry • Employment: 314,984 • Industry output (Million US$): $56,931 • Value Added (Million US$): $29,324 • Labor income: $17,474 million • Indirect business taxes: $2,933million • Business income: $8,917 million

20. 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

21. Benefits of Renting versus Lease/Purchase • Transfer burden & costs of ownership • Ownership requires a capital investment to cover the direct costs of equipment • Renting Keeps the burden of buying, maintaining, and selling the equipment on the rental business. Not on the customer

22. 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.

23. Benefits of Renting versus Lease/Purchase • Flexibility & Availability of Equipment • Renting allows the agency 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.

24. Benefits of Renting versus Lease/Purchase • New Equipment • Rental companies make significant annual investments in the newest, most advanced equipment on the market

25. 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 • Ex: 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.

26. Evaluating the Rent vs. Buy/Lease Decision • 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. 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

31. 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