Future of HVAC and industry supply issues.

[bnold]

Back in 1995 the Carrier rep made several visits during construction as did other manufacturers... my current thinking is this is not as common post pandemic?

Nope, pretty much same, reps will come out as often as I ask. They know the recourse if they don’t.

 

[milkman636]

The hospital added 5 million in hard money back in 1994 for the renovation build out.

There was also an option to purchase and being privy to conversations it came down to maximizing the short term cash flow.

Remember each member of the board gathering and being asked if he or she planned to be practicing medicine 30 years in the future and if so should the option to purchase be exercised.

The CPA presented detailed graphs showing dollars in physician partner pockets well ahead of the purchasing curve.

To the very last one none the original partners remain today with all but one retired or passed away...

On the seniority list I am number 2 with a receptionist hired straight out of high school being number 1.

Having institutional knowledge has often proved very valuable...

That’s an all too common problem, people making decisions knowing that they will not have to deal with the consequences of those decisions.

It’s kinda sounds like whoever let the originals make the decision 30 years ago has set the hospital up for a financial crossroads today. Finding new real estate can’t be cheap right now, and renovating new space to fit the purpose will be even less cheap. Buying the existing place will be like paying for it again for another 30 years, plus all the capital expenditures for repairs that are due.

If I’m reading this situation right, the unit replacement budget and your possible retirement date may ultimately be determined by the hospital’s decision to stay at that location or not. In the mean time your going to get the leaky coil replaced and try to pull together some replacement cost to help guide the decision.

I’ve had good luck previously contacting manufacturers reps directly, the York, Trane and Carrier guys that sell to contractors. They know who moves their products and can connect you with some of the better priced installers, and they have the ability to work on equipment pricing for the project as a whole. One of them will probably be hungrier and easier to work with than the others.

That quote for a coil replacement seems high enough to explore the possibility of replacing a single unit right now too. Definitely sounds like more shopping is in order.

 

[Sigarms]

Back in 1995 the Carrier rep made several visits during construction as did other manufacturers... my current thinking is this is not as common post pandemic?

As others have noted, It's as common now as it was back in 1995.

HVAC is a compeitive market, and although equipment is important, what's more important IMO is service.

 

[bnold]

As others have noted, It's as common now as it was back in 1995.

HVAC is a compeitive market, and although equipment is important, what's more important IMO is service.

Completely agree.

 

[Sigarms]

Completely agree.

Thank you.

I don't care what your buying. If a friend asks me about pricing he got in the HVAC field, I tell him I like tell anyone else, get at least 3 quotes and compare price, knowledge and service.

I'm looking at spending some major bucks for my back deck, I went out and got 5 quotes because I have no clue about the market pricing for a new deck.

That said, if you only shop for the lowest bid, you dang well make certain you're comparing apples to apples, because if I'm offering a both a product and service for install, I don't want to be the lowest price.

No different than HVAC. Anyone can beat another price by 20-50% easily in the HVAC field, the key question is what are you getting for your money? There are a LOT of variables when it comes to pricing that a lot of guys either leave out what they are going to have to do either by mistake, or worse, they intentially do a half arse job which is why they are so cheap to begin with.

Residential new construction (new apartments inparticular) is pretty funny. Generally the lowest price gets it (because they beat someone out by 100k on a 200 system install), but the guys installing it don't have to service it. Go figure.

The only reason I'm stating this is because I have no doubt that if the OP does his shopping and compare apples to apples with the service vs the service he recieves, I don't think anyone is bending over anyone on price. A business relationship is a 2 way street.

Now, if you're HVAC company was bought out by a investement company and they keep the same business name and make it appear that no changes have ever happened to the company, you will get bent over LOL

 

[milkman636]

A service oriented company is going to be at a pricing disadvantage on a job like this. Install focused companies have more manpower to throw at a job to get it done quicker, and they typically get better costs on the units and big ticket items like the crane.

This is not a knock on service companies, just an acknowledgment that if these mostly are single zone rooftops, and Carrier has a direct replacement that keeps the curb and duct connections the same, an experienced install contractor could turn these over in a weekend with minimal disruption to the buildings use.

 

[Sigarms]

A service oriented company is going to be at a pricing disadvantage on a job like this. Install focused companies have more manpower to throw at a job to get it done quicker, and they typically get better costs on the units and big ticket items like the crane.

This is not a knock on service companies, just an acknowledgment that if these mostly are single zone rooftops, and Carrier has a direct replacement that keeps the curb and duct connections the same, an experienced install contractor could turn these over in a weekend with minimal disruption to the buildings use.

Service department will always run a higher operation cost vs installation for any HVAC company. That said, if you're running a service department correctly, it should also bring you in more revenue.

I honestly don't know of any HVAC company that I can think of who doesn't run a installation department that doesn't bring in more revenue than service work. Generally, the "service only" companies you'll find are smaller guys who work out of their home who don't have a state license (don't get me on that LOL) and they're happy with 3 service calls a day.

I think the term you're looking for instead of "service orinted company" and "installed focused HVAC company" is "residential new construction HVAC company" and a "commercial HVAC company". Then you have your "AOR" HVAC companies that do add on replacement, which is more like what people are used to when companies come to your home to offer a quote for both service and install/replacement work.

When it the last time you called a HVAC company to come out to look at your HVAC system, and you realize that its finally time to replace it, and the and service company who came to charge you a diagnostic service fee tells you "sorry, we don't do installs"?

Also remember this, if you have good help and your paying your employees what they're worth, the more man power you have, the higher the labor costs you have running your company.

I did forget one variable when it comes to pricing to tract homes and commercial businesses, and that's "national accounts". Large tract home builders and large business franchises located all over the US do negotiate special pricing on product from the manufacturer. That said, again it's a level playing field as the contractors who bid this work have access to that pricing. Prime example, Clayton homes who builds modular homes uses Carrier with the FED electric furnace, private lable outdoor unit (standard model number however) along with coil. Or you can take fast food restaurants along with large box stores you find in every state.

 

[ultrarunner]

My one and only Heat Pump I paid a local family owned HVAC contractor to install at the Olympia rent house not working.

It was 14k and as I’m 800 miles away it was all done with a couple of emails and of course permit and completion pictures with warranty and then full payment sent.

Tenant said it’s in the high 90’s and A/C not working… no problem as I emailed HVAC company owner to put me on schedule.

Hearing nothing I turn it over to my property manager and tenant and manager get night before confirmation of 9 am service call.

At 9:30 tenant text says $200 payment required for diagnostic fee at time of tech arrival.

I call contractor and said here is my credit card and tenant waiting… contractor says they do not accept credit card over the phone and then I learned ownership recently changed hands so I’m stuck…

Property manager says they are not set up for payment at time of service and no one available to go to property and meet tech…

Tomorrow another company is scheduled to go out…

I’ve done several installs with the HVAC company and referred many…

The name is the same but service is the pits… I still have some remaining warranty on unit but with the difficulty in just getting someone out I’m not holding my breath…

 

[Sigarms]

The name is the same but service is the pits… I still have some remaining warranty on unit but with the difficulty in just getting someone out I’m not holding my breath…

It doesn’t do you any good, but out of curiosity was the company bought out by a local company or a National company run by an investment company?

The northern western states (particularly Washington) were notorious for higher costs in HVAC, but $200 for a diagnostic fee is way out there IMO.

There are also professional consultant groups in business to convince contractors to raise thier pricing (in some cases rightfully so) and a big group is located in Seattle.

 

[ultrarunner]

It doesn’t do you any good, but out of curiosity was the company bought out by a local company or a National company run by an investment company?

The northern western states (particularly Washington) were notorious for higher costs in HVAC, but $200 for a diagnostic fee is way out there IMO.

There are also professional consultant groups in business to convince contractors to raise thier pricing (in some cases rightfully so) and a big group is located in Seattle.

Have not been able to learn more… I left 2 voice mails and 1 email through the Contact Us portal after this happened.

A/C is a growth industry in Western WA with even military saying A/C will now be included in construction projects.

Hope the natives are treating you right in Northern California… seeing vastness of a dry summer must standout?