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Heating Ventilation Air Condition Refrigeration (HVACR)

Over the next 12 months the average company will overpay on HVACR spend by 60%.
Will your organization be one of them?

A White Paper
The Air Company of Georgia
License# CN210920


Fueled by excessive costs associated with a fragmented service market, companies HVACR spend has been growing over the past years. Companies are searching for a way to ensure proper capital budgeting for future needs but often overlook HVACR spend.

The painful truth is that over the next 12 months the average company will overpay on HVACR spend by 60%

Simply put, pricing and services offered are the wild west, providers are notoriously inconsistent in terms of pricing and terms of service, they view their clients as transactions and not as relationships.

Many maintenance departments are well intended but have little to no leverage when it comes to certain key issues.

The Air Company was founded on the premise of providing exceptional service at below market rates. We fight everyday on behalf of our clients to ensure appropriate pricing for labor and materials while providing exceptional mechanical know how at a substantial cost savings.

The Air Company and Client Use Only Third Party Distribution Prohibited

Over the next 12 months the average company will overpay on HVACR spend by 60%. Will your organization be one of them?

  • Most organizations operate at 40% efficiency on HVACR repair and purchases
  • 80% of organizations do not lever PM (Preventative Maintenance) relationships for replacement products
  • 70% of equipment failures are self induced by non-complete preventative maintenance
  • 12% of repairs should be covered under warranty but are completely ignored by vendors
  • Only 15% of facilities bundle HVACR repairs contributing to a net overspend of 60%
  • The average overspend on new unit purchases is 40%
  • Organizations do not have access to 'trade' labor and product pricing

Lift the veil on your HVACR Spend ​

  • Get the best deal on every HVACR interaction
    • Bundled savings for all HVACR preventative plans could top at 20%
    • Consolidating purchases can result in substantial net savings
    • Insist on compression pricing for 'swap' products
    • All new purchases should come with a PM for new items
    • Existing PM's should be adjusted to reflect new purchases or warranty items
  • If you can track it you can manage it
  • Organizations typically have little idea on what they are spending in totality HVAC spend for PM and new purchases Refrigeration spend for PM and new equipment Filtration and mechanical part spend Planned project component spend Rental spend Emergency Action Spend


Best practice in the industry is to utilize leverage pricing for the whole relationship. The number 1 spend typically for organizations is new or replacement equipment and 80% of organizations do not lever the existing PM relationship and insist on compression pricing.

If an organization does not have a PM in-force with a company and are seeking replacement, they tend to "shop" quotes. Most HVAC companies have fixed pricing for that call. No leverage is given because of the transactional nature of the call. 


The Air Company and Client Use Only Third Party Distribution Prohibited

Case study - Total Relationship Service and Pricing

An existing client has approx. 55k sq ft conditioned space with 6 separate buildings. They currently have 3 dining outlets with 22 HVAC and 32 refrigeration units. Their best guess total HVACR PM and replacement spend 2018 was $32k. They performed most of their PMs and used 3 different vendors for replacement and repairs. We helped consolidate spend on purchases, swaps, and back stopped their PMs.

First year savings 12k with projected savings going forward of 21%.

Case study - HVAC replacement

A client who handled their own PM plan needed 2 replacement swaps during the year. The department received three different bids each time and went with 3 different vendors for the swaps. Many HVAC companies do not offer best price because they know they are getting shopped. We reviewed best practice bidding history and encouraged transparency. We estimated that the client over-paid by 40% based on equipment purchased. We set up guidelines with transparency to offer a lower mark up than what was received.

Projected client savings of 17%. We assisted in providing national and local margin data

Case study - Refrigeration

A client had a walk in cooler malfunction, a stand alone company was called. They were charged a trip charge and work started after 4pm, so they were charged over- time. The repair took 3 hours. We looked at part cost and labor pricing and the client was charged $855. The client had no pricing leverage. With an associated PM and pricing leverage our data shows that the appropriate cost should have been $625.00.

Projected client savings of 12%. We assisted the client in obtaining an appropriate PM contract, and discounted future refrigeration repairs.

The Air Company and Client Use Only Third Party Distribution Prohibited

Case study - Filters

Many organizations prefer to buy their own filters and mechanical parts thinking they are getting a good deal. Most organizations go to a "filter warehouse" and buy 1 year supply of filters. A client purchased $1,400 of filters and $450 of mechanical parts. We did an analysis and discovered they saved a little better than retail. We assigned a PM lite contract and now assist in their purchases. Many supply houses have over 5 pricing tiers.

Projected savings to client is 45% in the next two years. We use our national buying database to ensure appropriate compression pricing.

Case study - Bundle and Save

In 2018 a facility incurred the following expenses:

  • $12,500 HVAC Replacement - done by stand alone company
  • $7, 200 Refrigeration Repair - done by stand alone company
  • $9,500 PM HVAC maintenance - done by stand alone company
  • $2,100 Filters and Mechanical Parts purchased by organization
  • $32,000 Total Spend

The company has no leverage because they were using different vendors. ​

Projected savings of 50% due to the centralization of repairs and purchases. Total savings of $16,00.00 for 2019

The Air Company and Client Use Only Third Party Distribution Prohibited

How The AIR Company of Georgia Can Help

Individual Repair Orders for HVACR

Individual Orders for upgrades and swap outs

Turn key and a la carte Preventative Maintenance Programs

We offer bulk compression pricing for expected swap outs

Consulting Services Contracts

Product Selection - Almost all manufactures offer different lines of equipment. Navigating the top rated ones can offer real value, knowing who makes what can be a real advantage.

Most facilities have very talented maintenance departments. We don't look to replace them, we take a consultative approach, we give them the tools to save you money. You value your employees - so do we. We want them to be successful.

We consistently share best practices when it comes to ASHRAE standards, often saving our clients time and money. We can help elevate your staff's HVAC and facility game.

Resources:

  • Notations and Resources
  • The cost and savings are based on client data 2017-2020.
  • US Bureau of Labor Occupational Outlook Handbook Data
  • US GSA Commercial HVAC Study
  • ASHRAE General and Specific Standards
  • National Institute of Energy Buying Database
  • US Department of Energy Building Technologies Program Management
  • This Report is Property of The Air Company
  • No information can be shared with any third party Duplication and Forwarding is expressly prohibited