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To: Jack Zahran who wrote (12013)	2/27/1998 11:57:00 PM
From: Richard S. Schoenstadt	Read Replies (2) \| Respond to of 31646

"DR. J, their rate for Y2K work is $160/hr and it will probably go up as the demand increases. Management has stated that they are getting that price. Dead issue. " Dead issue? Perhaps then you can explain this from fma's notes of the SHM. (Post number somewhere around 9948) " Hurd. Fallon or Kelso noted the database now holds 10,000 items and continues to grow. When an item is found suspicious or non-compliant, it takes 2 1/2 hours per item to fix it. Accessing the data base costs $5000.00. The typical plant might have 100 items at $200.00 an item (or more) to fix." 200/2.5=$80 an hour. It looks to me like not all year 2k work will be billed at $160 an hour. Also it seems to me if the company was getting $160 an hour for all year 2k work they should have made more money in the second qtr than they did. They had the same number of people working in service work. But supposedly a higher number of these in year 2k work. Therefore they should have generated greater revenues then in the previous qtr. But they didn't if I understood the company's explanation correctly. Remember revenues were down from the 1st qtr to 2nd qtr. As I understood it the company said this was due to lower material sales. Ok. But service revenues should have been higher, due to year 2k rates being higher, and they don't appear to have been. If we have any mathematicians here they ought to be able to estimate what service revenues should have been if you assume 1.7 million in year 2k revenues at billing rates of $160 vs. standard rates of say a $100. RS