Your GC didn't have a stack of 2x4s to mark up and sell you, although they are essential to your project. He did however have large equipment that he's made years of payments on which are essential to your project. What, he's supposed to eat the wear and tear on his equipment because he's a nice guy? No, he took the risk of making the payments on this equipment and maintaining it so he could make money.

Now I’m curious…so if he excavated the dirt and carried it away in his dump truck, would he be able to sell that dirt?

Despite what people here are going to tell you, we can't know without actually reading the contract. Your best bet is to engage an attorney with experience in construction contracts to review and discuss the contract with you.

@Joseph Corlett, LLC said, "He did however have large equipment that he's made years of payments on which are essential to your project." - That is a great example of a capitalized expenditure... a.k.a. overhead. Since the contract has an overhead amount it would cover any and all equipment which has a productive life of more than one job.

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It sounds like you have a cost plus contract rather than a time and materials contract. In a cost plus contract the contractor must either have a separate line item in the bid for labor and items he will provide for a charge or those items are included as part of the "plus." which would be the overhead and profit.

Where are you located as different states have different statutory requirements for construction contracts?

Thank you all for the helpful information and advice, really appreciated!

@bry911 we are in central Oregon.

Agree that you need to read the contract carefully, perhaps with an attorney to understand it, but the underlying truth is that, one way or another, you need to pay the costs that the contractor incurs. Trucks and forklifts aren't free, and you shouldn't expect to get their use for free. The contract determines whether the route you pay by is overhead, a direct charge, an increased profit line, or whatever. If it's any comfort, the bottom line cost to you should remain about the same whichever line the charges appear on. .

Those a big big discounts from what the open market rental of equipment would be. Talk to any heavy equipment rental places if you think this is an issue. Even with his % on top, you are still getting a big bargain. Dump truck rentals start at 1K a day and go up. Or $1500-5K a week. You'd be looking at 15K a week for all of that equipment rental, if the GC didn't own it. Plus the labor for the operator, which is more than the equipment.

@User said, Those a big big discounts from what the open market rental of equipment would be. Talk to any heavy equipment rental places if you think this is an issue. Even with his % on top, you are still getting a big bargain. Dump truck rentals start at 1K a day and go up. Or $1500-5K a week.

In Portland Oregon, the weekly price for a skid steer is $1,000... which breaks out to $25 per hour (based on a 40 hour week), monthly goes down to $16 per hour. A 5 cubic yard dump truck is $1,295 per week. Why do people insist on outlandish posts on things that are easily verifiable? Those are not "big big discounts," in fact, they are slight premiums.

And this perfectly illustrates why these items need to be attached to the contract. In a time and materials contract the owner purchases the materials (and yes in a time and materials contract equipment rental would be a material) and so they get approval. If you are going to charge for use of your own equipment, that amount needs to be disclosed. The exact same things goes for a cost plus contract.

A heavy equipment rental place is literally next door to our office. Those are their rates. I didn't price a skid steer with them. Just specifically a dump truck, and asked a quick off the cuff estimate for all of that equipment. If the OP wants to do a check as to what all of that would cost, that's fine. It is still a large savings over 3rd party rentals, which do not include operators.

I thought the OP’s concern was about how & when charges are disclosed and whether they think they are agreeing to one set of costs and then more are added ( for the basic work, and not the same as cost overruns.)

@User said, A heavy equipment rental place is literally next door to our office. Those are their rates. I didn't price a skid steer with them. Just specifically a dump truck, and asked a quick off the cuff estimate for all of that equipment. If the OP wants to do a check as to what all of that would cost, that's fine. It is still a large savings over 3rd party rentals, which do not include operators.

What kind of new math is this? How is it a large savings over 3rd party rentals if it is more money? I literally checked United Rentals in Portland Oregon...

You can check the other equipment and none of it approaches anything that would make it cheaper. In a time and materials contract the cost of the operator would be billed separately and not included in the equipment premium.

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This is exactly why these things needs to be spelled out in the contract before being billed. Because the OP can now reasonably go back and say that they are not going to pay the contractor $60 per hour because the avoidable rate is $25 per hour.

The entire purpose of a time and materials contract is that the owner purchases the materials and those materials are installed by the contractor. The contractor is allowed to charge a markup on materials and may purchase materials for the convenience of owners but they are not allowed to fabricate rates for tools that they provide. This is what the hourly rate is for. This is not to say that a contractor shouldn't charge a premium for using their heavy equipment, it is to say that a rate schedule for that equipment needs to be made available prior to its use.