Most people are unaware of the complexities of the systems that provide “comfort” in a building environment. When you arrive on a hot summer day, the interior space is cooler and less humid, providing a comfortable experience. Likewise on a cold winter day you rush into the building from the biting cold winds, where some magical invisible equipment is keeping the previously cooled summer environment now warm and toasty. Without a second thought, you proceed on your mission in a much more comfortable environment.
However, behind the scenes is a very complicated system of sensors, controls and highly technical mechanical equipment working hard to provide that seasonal comfort. This equipment is far more complex and costly than a standard residential type furnace and air conditioner installation. While new systems become more and more efficient, the latest U.S. Department of Energy report assigns 41% of a building’s energy use to heating, ventilation and cooling!
Further, just like any other piece of mechanical equipment, it is slowly wearing out as it runs every day, 365 days a year. While buildings last decades, average replacement age of this equipment (commonly referred to as HVAC) is 12.1 years. R.S. Means (which is the standard “manual” for estimating building costs) pegs the cost of HVAC equipment at $400,000 for a typical 50,000 square foot facility! So in that facility you are effectively using up over $33,000 worth of equipment, or 1/12th the cost of replacement for that equipment. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) identified 8 specific areas of Owning and Operating Costs tied to indoor comfort. This includes the above equipment capital and energy costs, as well as repairs, maintenance, labor and lost productivity. Obviously this emphasizes a real need to pay attention to this equipment!
Once the equipment is installed, it needs regular care and maintenance just like a car, production machinery or any other asset that wears out. Mechanical contractors, like many other building trades, have been hit hard by the recession and some have moved towards offering maintenance services to stay afloat. Unfortunately maintaining a highly technical piece of HVAC equipment is far different than installing a factory fresh system running at peak efficiency! There are several levels of quality services operating today, and few standards exist to help a facility manager or owner select a firm qualified to maintain their HVAC equipment. There is much more involved than changing filters, drive belts and lubrication. Improperly maintained equipment wears out faster, uses more energy and breaks down more often, costing more for replacement parts and loss of productivity.
At a recent talk at a national meeting of the Mechanical Contractors Association of America, the speaker stated that, “Every dollar in a maintenance contract should yield $3 in repairs, except for full maintenance contracts, which should have fewer repairs if the contractor is doing his job.” The typical business model of most mechanical contractors fits this model by design. They make money when something breaks and they are called to repair or replace the item! The incentive is not to spend the necessary time to adequately maintain the equipment, as specified by the manufacturer.
A much better business model is one designed to provide incentive for the contractor to avoid breakdowns and replacement or repair costs. If the contractor assumes liability for all repair or replacement costs, he makes money by maintaining the equipment properly; this not only extends the useful life of the equipment, but also reduces energy usage and downtime. In addition to the benefit of saving money, it is also good for the environment. As a reminder – saving money goes right to the bottom line, meaning profit!
So how can a building owner or facility manager select the right provider of maintenance services? According to an article in Contracting Business, Earl King discussed how different methods of pricing can indicate the quality of a contractor’s service. Since all contractors within a region have to pay their service techs about the same, parts and materials, trucks, gasoline, etc., cost about the same, variations in pricing are simply a time calculation. If one company is priced disproportionately lower than another company, less time must be being spent on the equipment.
Studies have shown that in the overall life of the equipment, full maintenance saves money versus the typical repair or replace when it fails type maintenance contract. A contract where the company assumes full responsibility for the equipment will naturally cost more than a contract where the maintenance company is “off the hook”, and is able to bill for additional services when a breakdown occurs. The true measure is a comparison of the 8 areas identified by ASHRAE between the two models.
Ask your contractor how long have they been in business, how long have they been performing maintenance contracts, what is their customer satisfaction rate, have they received any recognition from a related national organization and will they assume responsibility for all repairs and replacements of equipment? That will help you separate the companies that know maintenance from those who use it as a filler between construction jobs.
