(b) Direct labor man-hours. The determination of the direct labor man-hours to be applied will be based on
working hour requirements for maintenance tasks listed in applicable equipment publications; commercial flat rate
manuals, when appropriate; similar work performed previously; or individual experience. The direct labor man-hours will
be periodically reviewed and updated, if necessary.
(c) Civilian labor rates. The cost of civilian labor will be based on a labor rate for the work center which will
perform the work. Procedures described in AR 37-110 will be used to convert working years to average productive
working hours when civilian labor pay scales are stated in terms of annual salaries. Labor rates, whether determined
from annual salaries or hourly wage rates, will be computed (to include provisions for the cost of annual, sick, and other
leave, and government contributed fringe benefits) in accordance with AR 37-110.
(d) Military labor rates. Labor rates used for military personnel will be the average military wage rate for the
work center performing the work, based on standard rates published in AR 37-108.
(e) Labor rates including indirect expenses. Major Army commanders and heads of agencies may establish
and use standard hourly rates for direct labor (including indirect or overhead) so long as such rates are consistent with
AR 37-55 and AR 37-110. When such standard rates are established, separate rates will be established for each
category of supportable items or weapons systems (e.g., aircraft, automotive equipment, combat vehicles, construction
equipment, electronics and communications equipment, missile systems, ships, munitions armament, weapons
armament, rail equipment, general equipment, and commodity groups of equipment); depot maintenance and
direct/general support maintenance; and each major geographical area where wage levels vary significantly.
(f) Depot maintenance labor rate. When considered necessary for determining the proper depot maintenance
labor rate, assistance may be requested as authorized by AR 700-4.
(2) Materials. The cost to repair will include all materials directly applied to, and identifiable with, the particular
equipment undergoing repair.
(a) Consumable items received from the supply system may be costed as billed by the supply agency. If no
billing is available, consumable will be costed at the standard inventory prices as published in appropriate supply
manuals. Items procured from local sources will be priced at the latest invoice cost. Cost of items fabricated will be
based on actual cost for like items, where possible. When actual cost is not available, engineering estimates, including
indirect expenses, will be used.
(b) Replacement components and assemblies used in the repair process will be costed at the standard
inventory price. Credit will be taken for the return of the repairable component in an amount equal to the current
standard inventory price, less the estimated cost to repair component.