Commercial Maintenance Contracts: What You Should Know

The Three most important words you will ever use Maintenance, Preventative, Proactive. They are only as good as the Company Backing It Up!

Owners of chain stores, offices or other multi-facilities are always on the lookout to save a buck - and who can blame them? Cost of maintaining several buildings full of workers or customers can be high, and it's smart to be frugal whenever possible.

However, when it comes to your HVAC system, there's no such thing as a cut rate. Those who contract out HVAC maintenance and service to the lowest bidder often end up paying thousands of dollars more than they should.

Why?

Because there is a direct correlation between the amount of maintenance given to each piece of HVAC equipment and its service life. Cut back on maintenance to save a few bucks annually and expect some emergency purchase of a new compressor or chiller earlier than necessary.

As you know, these vital pieces of equipment aren't cheap. A compressor can cost from $1,500 for a small unit up to $50,000. A chiller is even more expensive - as much as $200,000. And it's not a purchase you can put off until cash flow improves. Let your air conditioner fail in August or your heat in January and see how your tenants and customers react.

If you have constant HVAC problems, your tenants will start looking elsewhere. How does that cut-rate maintenance contract sound now?  The American Society of Heating, Refrigeration and Air Conditioning Engineers, standards on how long equipment should last.

These figures are vital when deciding which service contract to accept. If you approve a service agreement that undercuts what's recommended, you're only increasing your operating costs in the long run. Lower prices mean the service provider will be shaving hours off maintenance. This is the trap many multifacilities owners fall into. They don't spend enough time qualifying these contracts based on real-world numbers. They see the lowest price and take it, not realizing they probably will end up paying much higher costs down the road.

For example, a retail facility puts it HVAC maintenance contract out to bid and accepted the lowest bidder, saving about $1,000 a year - or so the company thought. In the first year of the contract, it had to replace one compressor and two motors that burned up because the belts weren't properly maintained. It has also had water leaks from the condensing coil icing, which ruined a section of ceiling. The total cost was $3,000, which was much more than what they had expected to spend. This is too typical of a scenario, wasting money that could be better spent elsewhere.

To find out which HVAC contractor is best for your facilities, don't go strictly by price. Ask them how many hours they'll be spending on your equipment and how that compares to industry estimates. Ask them about the lifetime of each piece of equipment and what kind of planned replacement process they recommend.

You should be looking at an overall asset management plan, not a fix-it guy who will only respond to emergencies. You want a partner - someone who can recommend long-term strategies and solutions.

HVAC is such a huge cost, building owners should invest a small amount of time in asking the right questions of the service providers. A good HVAC contractor will welcome these questions and be eager to help you craft a strategy that will maximize the life of your equipment and maintain the comfort level inside the building for the lowest overall possible cost.