Author: Brett Knox
June 05, 2024 - 6 MIN. READ
HVAC contractor supplies are critical to successful and timely project completion. Projects have set timelines for all tasks and are highly dependent on timely delivery, correct specifications, and required quality levels for supplies (both parts and equipment).
Late delivery can wreak havoc on your schedule. Low-quality or incorrect specifications can negatively impact HVAC system performance. Overpriced supplies cut into your margins. All of these cost you time, money, and business.
Supply chains have largely recovered from the unpredictability of the last several years, but not completely. Some long lead items persist, and prices are edging up. You need to be on top of the market to stay competitive.
This article will address those concerns and provide actionable tips for effectively procuring HVAC contractors supply.
1. Define Project Requirements
The first step to a successful project is to plan and get clear on the required supplies for each job. Begin by determining the type of project you have. Is it a boiler installation or a rooftop unit? Not only are the equipment and materials different but it may require the use of electrical or plumbing subcontractors.
Do a pricing take-off from plans. Using estimating software to generate a parts list saves time and ensures accuracy. Be sure to accurately reflect existing conditions, and make sure to include the entire scope of work.
Compliance with local building codes and state and local regulatory requirements is critical. Violations can be costly and embarrassing.
2. Research Reputable HVAC Contractor Suppliers
As an HVAC contractor, you depend on your suppliers to deliver on time and as ordered. Late deliveries or deliveries of the wrong stock, will delay project completion, upset your customers, and affect your reputation. Picking reputable and reliable suppliers is paramount.
Reliability comes first. Then you can negotiate pricing. Ideally, your suppliers should be close to you geographically to save on delivery time and transportation costs.
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3. Evaluate Product Quality
Do not assume the quality of an HVAC contractor supplier's product. Be sure to provide your required technical or performance specifications, and ensure the supplier confirms the specifications.
Standards and Certification
Two major HVAC standards authorities are the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) and the American Society of Heating, Ventilation and Air Conditioning Engineers (ASHRAE). When specifying parts and supplies, ensure compliance with relevant AHRI or ASHRAE and local, state, and federal regulations as they may apply. This may help give you recourse if the supplies are non-compliant, but you still must be duly diligent.
Ensure you are familiar with required Seasonal Energy Efficiency Ratio ratings and standards like Energy Star efficiency ratings for appliances. Finally, be familiar with federal, state, and utility incentives for electrification projects.
4. Consider Cost and Budgeting
Your pricing take-off will generate a budget that includes labor hours and supplies. These are direct costs.
You must then add your overhead allocation (for example, office space costs, technology, and insurance). This requires in-depth knowledge of these costs, so spend the time or hire an accountant to help you. And be sure to keep your overhead costs down for tighter bids.
The last factor is your desired profit margin. Consider this carefully, research the market, and talk to trusted friends in the business. In the end, consider adding a contingency allowance.
Align your Procurement Process
Make sure your process for procurement is aligned with your business strategy. Think through price vs. quality of supplies. Do not be tempted to buy lower quality than required to shave the bid. Poor performance and failures will be expensive long-term and harm your reputation. You may pay more for the right quality, but in the long run, it will pay off. Keep that balance in mind.
For complex purchases that require both goods and services, use a Request for Proposal document. For simpler buys, use a Request for Quotation or Bid Request. Send them to your qualified HVAC contractors suppliers and compare responses side by side. Select finalists subject to the final contract, then negotiate for the best terms you can.
Seek out long-term, positive relationships. Establish trust with open conversation and straight dealing. Trade higher volume or longer term for better pricing or non-price value adds like free warehousing and transportation.
Product warranties are also important. Research the typical warranty period for parts and require it. The longer, the better, since you can look to the warranty to pay for replacement rather than paying out of pocket.
Suppliers have more market knowledge than you do. They know about supply news before it becomes public, so it pays to have a good, open relationship with them.
Consider an electronic procurement system. Your chosen system should save you time, money, and resources, as well as provide solid procurement data.
5. Ensure Timely Delivery and Logistics
We've already mentioned that on-time delivery of HVAC contractor supply is crucial. Accept nothing less. Work closely with the supplier from the beginning so that they know deadlines as well as you do.
Work out delivery schedules down to date and time with your suppliers. Confirm carrier details on exceptionally critical items—know who is carrying it, when, and from where. Make sure the supplier has contact numbers for the driver.
Communicate frequently on delivery status and ensure that the supplier will quickly notify you of delays or problems.
For critical-lead-time items, work with the supplier on backup plans. Consider carrying a contingency supply. One example is to pre-order and carry a stock of known critical parts in your warehouse.
