Evaluating HVAC Options

Jan. 28, 2003
Is It Time to Consider Outsourcing Your HVAC Functions?
Companies are constantly searching for new ways to improve bottom-line results, and many have turned to outsourcing as a means of focusing their resources on core competencies that directly add value to their customers, while letting experts manage non-core business functions. The list of functions that are regularly outsourced includes information technology, telecommunications, payroll, janitorial, and security services.HVAC systems offer another powerful opportunity for outsourcing. Installing, upgrading, operating, and maintaining an HVAC system represents a significant cost. By shifting these responsibilities to an HVAC solution provider, facilities managers are in a position to redirect available capital to primary business functions that increase shareholder value.Every situation is unique, so outsourced HVAC solutions must be customized to meet the specific requirements of the facilities manager. Each solution begins with an assessment of the owner’s business needs for HVAC, combined with a review of the HVAC system itself, be it existing or planned.A recommendation follows the assessment, offering the owner an overview of the tailored solution developed during the discovery phase. If the system is existing, the solution may include a partial or total retrofit to improve efficiency and reduce costs. In the case of new construction, the HVAC solution provider would design a new system, select and procure equipment, and manage the construction.In every HVAC-outsourcing agreement, the solution provider will own, maintain, and operate the plant for a period of time as defined by the contract, assuming all costs of maintenance and management. While energy costs normally remain the responsibility of the facility owner, the solution provider guarantees the efficiency of the supply side of the system. This allows the owner complete flexibility in its operational profile while reaping all the benefits of the new efficiencies.As the solution provider assumes responsibility for the HVAC system, the facilities manager realizes a number of advantages. Most notable among them is the transfer of all risks and capital costs associated with the system to the provider. And as that transfer takes place, the owner may enjoy an infusion of capital from the sale of existing HVAC assets to the provider.Facilities managers can upgrade their system without the capital investment otherwise required. Reliability is assured as the solution provider establishes and maintains full-time remote monitoring and diagnostics of the system to guarantee equipment uptime and service levels.At the same time, facilities managers can rely on the expertise of the solution provider to improve efficiencies and reduce energy costs as part of the outsourcing agreement. Fixed monthly expenses relating to ownership, maintenance, and repair become a reality, helping owners meet their financial goals.Finally, a number of end-of-term options make it possible to renew the contract or buy back the system, depending on the owner’s preference when the agreement expires.HVAC outsourcing offers advantages worthy of investigation as companies look to improve their bottom line. The practice relieves facilities managers of the complexity, distraction, downtime, and headaches of running their own HVAC system. Freed of these facilities-related challenges, owners are better able to direct financial and staff resources to revenue-producing actions that will help them achieve their financial goals and improve their economic position.Robert Russell is vice president of Global Marketing, Engineered Systems Group, York, PA-based York International Corp. (www.york.com).

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