Top Considerations in Evaluating HVAC Contractor Estimates – Part I
Posted by CLS Admin on June 02, 2015
You probably know the drill by now. As the cooling season heats up, contractor estimates come across your desk seemingly every day. In each case, you want to make sure that you’re getting the right service at the right price – especially with dozens or even hundreds of locations under your management.
What to do? Do you have a system in place to evaluate the many HVAC contractor estimates that
you or your team receives for this work? Do you know the right questions to ask? Do you know what’s customary for certain services and parts, and what is considered excessive? Do you have sufficient insight to help you make smart decisions about the contractor, his capabilities, his processes, and his accountability?
In this post, we’ll consider some key questions that can help you evaluate the estimates you’ll invariably receive. It’s by no means an exhaustive list; but it should give you a sense of some of the baseline issues that are important to consider when evaluating a contractor’s estimate.
Question: How do you as the provider determine the amount of time quoted for labor and materials?
Answer: Whenever possible, get more than one estimate from competing providers for a specific repair or replacement, and make sure that the estimates you receive allow you to make apples-to-apples comparisons. When this isn’t possible, do some up-front research – on the Internet or through discussions with colleagues and industry insiders – to determine what is customary and fair for the scope of work (including parts and labor), both in your specific market, and nationwide.
The Internet is a wonderful resource; you can find out a lot about a given HVAC product by doing a simple search on the manufacturer and model number of a given product. Look at several sources, and use the information to make informed decisions. Keep in mind, however, that cheaper isn’t always better – nor does it guarantee that a lower-cost part is the specific part you really need. On top of that, a provider will usually provide a warranty (often one year) for the part they’re specifying, so there’s value in that provider’s quote over and above the base cost of a part you may find online.
At the end of the day, do some research and get educated, but weigh the information you get against the reputation and track record of the provider. Ultimately, you’ll need to trust the professionals you’ve hired to do the work.
Question: When it comes to cost markups, what is customary, and what is excessive?
Answer: Unfortunately, determining reasonable cost markups is more art than science. Contractors markup both product and labor costs – they have to in order to make a profit. If the part costs $1,000, a contractor may mark up that cost by 15 to 20%. If it costs $6, he or she may mark it up more.
The numbers by themselves do have meaning, and again, you should do as much investigative work as time permits to understand what seems reasonable. But when you hire a contractor, you’re paying for more than just parts and labor. Like we said earlier, you’re getting the benefit of that contractor’s experience, their knowledge, and their ability to diagnose problems and implement solutions to mitigate damage and prevent bigger problems down the road. That’s a qualitative consideration, but it’s a very important one.
Bottom line: Hire someone with a track record that you can trust. More often than not, they’ll provide the right service at a competitive overall cost – and potentially save you headaches down the road.
Question: What do HVAC part and system warranties generally cover, and for how long?
Answer: Manufacturer and technician warranties vary, but generally speaking, most HVAC-related warranties cover one year for workmanship/labor, and three years on parts, excluding the compressor and heat exchanger. For these, compressors usually carry a five to 10-year warranty, while heat exchangers usually carry a 10 to 20-year warranty. Most manufacturers also offer extended warranties.
When you receive two or more estimates, you should certainly evaluate material and labor costs. But we recommend evaluating warranties as well. If one manufacturer offers an extra year or two on the parts, all other things being equal, you may want to go with that provider.
We hope that you found these questions helpful as you look for the right HVAC contractor to service your business. Check back soon for part two of this series.