HVAC: System Redesign Options
Everything you need to know about your hvac Redesign
(And if you still have questions, we’d love to dive into the details with you.)
So you’ve decided to replace your HVAC...
Here at the Community Purchasing Alliance, we’re committed to taking the guesswork out of your biggest contract decisions. In our piece on aging HVAC systems, we asked the question: “to repair or replace?” and offered some industry standards that can help you make the best choice for your organization. For the second installment in our HVAC series, we’re diving into the wild world of system design.
If you followed our guide to determine whether you need to repair or replace your HVAC system and it turns out that you not only need new equipment, but a complete system overhaul, there are two ways to implement your project: Design Build and Plan & Spec. The main distinctions between the two are the ways that pricing and budget are determined and the number of vendors you would need to manage.
The Short Version
In the Design Build method, a single firm is responsible for the design, procurement, and construction of a new system and you will have a single point of contact for the entire project. That contractor will quote a total price for the entire project and is responsible for remaining within that budget, agreeing to cover the cost of any overages. Under Plan & Spec, you would hire an independent engineering firm to design your new system and then a separate HVAC contractor to install the system. You’d manage project budgets with each firm, usually billed on an hourly basis or within a defined scope of work, and with any additional work billed to you as a change order.
The Long Version
Anyone who’s ever negotiated a contract knows that knowledge is spending power. Here’s a little more detail on each type of approach to help determine what might be the right fit for your organization:
Design Build involves a single point of contact between the building owner and the contractor. Under this approach, the HVAC contractor either has in-house engineering and design capabilities or subcontracts with a design firm. They are also responsible for equipment selection, procurement, and installation and hiring and coordination of any subcontractors needed for demolition, asbestos abatement, ductwork, plumbing, etc. The Design Build contractor has ultimate responsibility for budget, schedule, management of other contractors, and the overall outcome of the project.
Plan & Spec is the more traditional approach and requires the owner to coordinate with multiple entities: an engineering firm, an installation contractor, and sometimes a third party Owner’s Agent or Project Manager who represents your interests and oversees the project. With the Plan & Spec approach, the building owner assumes any risks of the project, primarily cost increases and design flaws. There are 4 main phases to Plan & Spec projects:
Bidding and selection of an engineering firm.
Develop a scope of work and compile information about your building
Invite at least 2-3 engineering companies to bid on your project
Tip: Ask for referrals from trusted colleagues who have done similar projects
Design Phase.
The engineer works closely with the owner to identify the needs of the project
The engineer develops a narrative scope of work and schematic design drawings that become a “biddable” set of plans which include equipment type and size, heating/cooling requirements, and any ductwork and ventilation locations
Bidding and selection of an installation company.
Using the plans developed by the engineer, solicit bids from 2-3 HVAC companies Tip: Make sure that the companies bid on the full scope of work and that you make a fair “apples-to-apples” comparison
Some engineers will include a bid review in their scope of work and will seek out any clarification or additional information needed from the HVAC bidders
Construction Phase.
Coordinate delivery of equipment (Tip: Are there any road closures, tree trimming, or other accommodations that need to be made?)
Set a schedule in place to ensure that work is completed during times that do not interfere with building activity.
Monitor the ongoing installation for safety and workmanship
There are advantages and risks to each approach and we’ve laid out some of the key considerations for each here:
Project Budget:
With Design Build, there is more budget certainty since the work must be completed within the originally agreed upon budget. A potential liability with this method is that a contractor may choose more affordable yet less reliable equipment to keep costs down or may inflate the price of a project to account for the possibility of changes in plan and may result in a more expensive project overall.
With Plan & Spec, there is more transparency in pricing since all phases require detailed Scopes of Work and the possibility of lower overall project costs as a result of competitive bidding. The main risk is the possibility for lack of communication and coordination between engineer and contractor which invites change orders and increased cost for the owner.
Project Duration:
Since Plan & Spec requires multiple phases of vendor selection, plan design, and bidding, it is a lengthier process than Design Build, which streamlines these phases under the supervision of a single contractor. This may be a critical consideration if a new system needs to be in place before the next heating or cooling season.
Project Quality:
With Design Build, a benefit is that the design is informed by the contractor who will actually be installing the new system resulting in more efficiently laid out equipment and thus a more efficient system which is more affordable to operate. However, the contractor may select the lowest-cost (and under-qualified) subcontractors or less than ideal equipment to keep costs down.
Plan & Spec is more suited to a collaborative approach between owner and engineer and can result in a project that is more tailored to your needs. It ensures that new systems are designed by a firm with capacity and technical expertise and allows for a simpler bid process. The potential downfall of this approach is that the design may not always take into account practical considerations of implementation that an installation contractor is best suited to inform.
Stay tuned for our next look at HVAC: Owner’s Agents and Financing Options
There’s a lot to consider here and we’re always happy to talk you through the complexity of these projects. Let us know if you have an HVAC project causing you headache and heartache and we’ll guide you through the best ways to get a new system in place that best suits your needs and budget.
Does all of this sound a little overwhelming? …
CPA can help you at every step of the way. We take the knowledge we’ve gained from years of experience with our member organizations and make complex building management straightforward. We can even help you manage the entire project using our 4-step vendor selection and project implementation process:
Screen and pre-qualify vendors using our network of organizations to check references, get reviews, and identify high-performing contractors to invite to bid on your project.
Issue a Request for Proposals (RFP) on your behalf with 3-4 recommended vendors. We use a detailed Scope of Work to use for bidding process to ensure we can make apples-to-apples comparisons of the proposals.
Deliver an RFP results report with vendor recommendations based on price, experience, reference checks, and worker equity practices.
Provide Owner’s Rep/Project Management services to help ensure your project goes smoothly. We coordinate pre-construction meetings and conference calls, take detailed notes, facilitate project schedule creation, and communicate regularly with all parties.