Commercial Service Contracts

What You Should Know

commercial_service_contractsWhile many large facilities maintain an in-house staff of mechanics and technicians to keep their buildings running, HVAC technology has advanced to a point where outside expertise often supplements or replaces such employees. HVAC contractors may provide a higher level of service than found in-house, but managing them can be a challenge in itself.

A comprehensive HVAC service contract is one of the best ways to meet that challenge.

Such agreements contain, or reference, a clear set of task specifications, a detailed equipment list and essential contractor qualifications. Doing so avoids conflicts while securing a desired level of service. Depending on a facilitys size, complexity and need for reliability, a variety of other important provisions might well be worth including in a contract.

Basic Provisions

Regardless of the type of service being rendered, a service contract should address the usual contract issues, including length, responsibilities, wage rates, dispute resolution, force major and other items. A simple one- or two-page document from a contractor is rarely sufficient to cover all the bases. Even a long and detailed contract may not, however, lead to the level and type of service desired unless it clearly states what work is to be done, on what schedule, and how is it to be performed, tracked and verified.

At the very least, a scope of work must cover preventive maintenance, repairs and replacements, finding and correcting operating problems, and reporting on such work. Some scope-of-work provisions also include guidance on engineering and upgrades to improve energy efficiency. To ensure those efforts are done to the satisfaction of the facility, specifications detailing items such as preferred products and methods, service hours, contractor professional qualifications and exclusions are often referenced in an addendum.

Among the specific items needed in a scope of work are:

  • Identities, by a unique number, of all pieces of equipment to be serviced along with the location of the equipment, referenced by unchanging room numbers or other means.
  • Task descriptions for each generic type of service, such as seasonal chiller servicing.
  • Procedures on how to log, track and file work orders and materials used in them.
  • Methods to pursue and track changes to equipment and programming.
  • Details on how often reports must be provided.
  • Descriptions of any training, drawings or other non-routine activities desired by the owner.

Getting detailed Information

Task descriptions detail the steps involved in each type of routine service. When big-ticket items like chillers are involved, such descriptions may be broken down into subtasks, such as seasonal startup and shutdown, inspections and efficiency verification.

Although a good HVAC contractor can help facility executives assemble a scope of work, it may be advisable to use the services of an independent engineer to avoid any potential conflicts of interest.

A facility executive needs to be sure that the personnel and equipment provided by a contractor will meet expectations and standards. To that end, the following details should be spelled out in the contract or an addendum:

  • Warranties on labor and materials should be summarized with regard to length and coverage.
  • Brands and model numbers of routine replacement parts, such as air filters, should be identified so that the facility may approve of them and, if it changes contractors, be able to maintain service continuity during such a transition.
  • A copy of all relevant contractor licenses, certifications including factory-training certificates for major equipment permits, insurance and other documents should be provided. If those materials were detailed in the contractors proposal, that document should be appended to and referenced in the contract. Likewise, if the equipment list was part of the proposal, it too should be referenced in the contract.
  • The type and quality of measuring and repair instrumentation duct thermometers, power analyzers and other equipment to be used during repairs or troubleshooting should be listed. The contract should also indicate which personnel are trained to use them.

If services include cooling-tower and duct maintenance, be sure the contractor has procedures in place to detect and remedy health-related situations such as mold and the bacterium that causes Legionnaires disease. If the contractor subcontracts mold detection and remediation, be sure the subcontractor has qualifications in the area.

Contractor employees who are not U.S. citizens should also be identified and listed. Copies of green cards or equivalent work permits should be kept on file.

Sharing Responsibilities

To help the contractor and avoid possible confusion, any shared activities should also be addressed. Doing so may take little more than exchanging information and providing access, but consider doing the following before the contractor initiates work:

  • Affirming that the contractor inspected the equipment and premises and accepted responsibility for them in “as is” condition or has indicated changes needed before service may commence.
  • Setting base comfort conditions, such as seasonal temperatures and humidity.
  • Providing secure storage for contractor equipment, especially when of a hazardous nature.
  • Defining and logging passwords to be used for contractor personnel when altering building management system programming.
  • Listing and describing any responsibilities shared between the contractor and the organizations facility staff.
  • Furnishing access to buildings during off-hours and supplying security credentials to minimize service delays.

Other steps that might be necessary, depending on the scope of the contract, include specifying energy prices to be used when analyzing energy cost-cutting measures and agreeing on the frequency, method and types of chemicals to be used in water treatment procedures.

In addition, equipment installed by the contractor should be accompanied by electronic and paper files of its maintenance manuals for the facility executive to keep. Protect your business with a heating and cooling service contract. Fixed fuel prices, routine maintenance check ups, emergency service and more 855-767-5255

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