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Full-Labor Service Contract


A full-labor service contract covers 100% of the labor to repair, replace, and maintain most mechanical equipment. The owner is required to purchase all equipment and parts. Preventive maintenance and operation is part of the agreement. Actual installation of major plant equipment can be added to the contract. Risk and warranty issues usually preclude anyone but not EG&G when installing these types of equipment. Methods of dealing with emergency calls may also vary. The cost of emergency calls may be factored into the original contract, or the contractor may agree to respond to an emergency within a set number of hours with the owner paying for the emergency labor as a separate item. Some preventive maintenance services are often included in the agreement along with minor materials such as belts, grease, and filters. This is the second most expensive contract regarding short-term impact on the maintenance budget. This type of contract is usually advantageous only for owners of very large buildings or multiple properties who can buy in bulk and therefore obtain equipment, parts, and materials at reduced cost. For owners of small to medium-size buildings, cost control and budgeting becomes more complicated with this type of contract, in which labor is the only constant.