Chapter #2 – HVAC Quotations (MEP Estimating Spreadsheet)
Receiving, reviewing and posting vendor and subcontractor quotes to your estimating spreadsheet is time consuming for larger projects. Reviewing then as soon as you receive them will help reduce the stress on bid day of having to request changes from your vendors for any errors on their quotes.
Its unfortunate but you’ll most likely receive some of the quotations on bid day which can be a hectic day if the project is large or complicated.
Request that vendors provide you with pricing at least one or two days before the bid day, to allow you to review and comment on their quote. Remember that it’s very important you spend time reading the vendors and subcontractors quotes for possible errors and exclusions. Also, review the quote to ensure the proper quantities and compliance with the specifications.
If you know that you will have to analyze vendors that package several equipment items together, you can use the “Equipment Pricing Analysis” form below the first page of the equipment sheets on your estimating spreadsheet under the equipment tab.
HVAC Equipment Pricing Analysis
It’s unfortunate but some vendors will refuse to break up a bid package. The equipment vendor maybe representing more than one HVAC manufacture. The vendor then decides that they will package all the various manufactures HVAC equipment that they represent into one large bid, and refuse to give you breakout prices for each category of equipment.
The packaged bid might include the Cooling Towers, Pumps, Chillers and VFD’s. The analysis is based on all the vendors bidding on approved equal equipment.
For example let’s say that below are the six bids that you received, each bidding on a different lot of equipment.
You will need some way to compare the six bids to see what is the most competitive combination of prices. It’s easiest to do that using a simple Spreadsheet or chart. This comparison chart is located in the MEP Academy Spreadsheet.
Using the vendor quotes from above, you can put them into the chart below in order to compare them.
Looking at the below comparison chart, how would you know that the packaged bid from Vendor #1 (red circle #2) which includes all the listed equipment, is the best price compared to everything else you have received? Looking at the scope of work for each vendor won’t easily reveal the most competitive combination of prices without some way of comparing them.
Fill in the separate pieces of equipment that are being packaged under the column heading ‘Item Description” shown at the (red circle #1 above). Put the vendors bid price for their lot of equipment under one of the Vendor columns for Vendor #2 through Vendor #6.
Under each vendor type the letters “Included” in the space next to the equipment that is included in their bid package price, or list the separate price for each item that the vendor has broken out, such as vendor #2 has bid $115,000 for the cooling towers and $140,000 for the chillers, but has no bid for the pumps and VFD’s which is shown highlighted in yellow.
After you record the prices of all the vendors, you will be able to see the gaps (yellow highlighted boxes) in their pricing for the equipment that they’re not bidding.
The gaps need to be filled in using another vendor’s price for only the items that are missing. This allows for a comparison between two or more vendors that are packaging their quote, but for which the various packaged prices are not completely the same in scope of equipment.
The example above shows vendor #1 submitting a bid of $345,000 for the Cooling towers, Pumps, Chillers and VFD’s. This is the packaged bid that we need to determine whether it’s a good or bad price.
The best way to analyze the quotes is to plug values from other vendors or use deductive reasoning based on historical data. The latter method involves substituting what you believe a piece of equipment is worth based on what you have paid for similar equipment in the past, and then either adding or deducting that from a packaged price to find the relative value of the remaining equipment.
After analysis between vendor #1 & #4 above, it is clear that vendor #4 is low bidder based on using vendor #3 to complete the total price. At this point you would include the price of Vendor #4 for the Chiller and Pumps and Vendor #3 for the Cooling Tower and VFD’s, as this combination is lower than the packaged bid of $345,000 form vendor #1.
If you just used the packaged bid of $345,000, than you would have been 13% higher than the combination price available with vendor #3 & 4.
Quotations by Telephone
If taking a quote by phone make sure that the vendor follows up with a written quotation. When taking a quote over the phone you need to ensure that they have seen all the drawings, specifications and any addendums.
You will need make sure that they have the correct quantities and confirm what they are excluding. It is in your best interest not to take phone quotes without having a written quotation, especially on expensive or complicated systems.
Per Plans and Specifications
Is the vendor bidding according to the plans and specifications? Often vendors will bid on items that they have not been approved for. Such as, if the specifications call for a certain make and model number for a piece of equipment, and the specifications clarify that no other equipment will be accepted, or that only those listed as approved equal will be considered.
Taxes
Make sure that the quotation doesn’t include taxes if you will be using a spreadsheet that adds taxes to your equipment.
Shipped Broken Down
If you notice that the equipment comes broken down in multiple pieces for shipping or for getting it into the existing openings, then make sure you have the additional labor covered for this.
Addendums
Does the vendor acknowledge any addendums? Were there any addendums issued on this project after the vendor received the original set of plans? Did you notify the vendors and subcontractors of any addendums that were issued?
When you receive an addendum it is important that you notify all your vendors and subcontractors so that they have the latest information, as it’s possible that the addendum will impact their pricing.
Faxes
The use of the FAX machine is diminishing as email as replaced much of their usage. But if your still using a FAX machine, be sure to check it for any quotation that may have been sent using this method. It’s always a good idea to get in early on bid day and check the fax for those quotes that arrived overnight.
Understanding the MEP Estimating Spreadsheet (Free Course)
- Chapter #1 – HVAC Equipment
- Chapter #2 – HVAC Quotations
- Chapter #3 – Subcontractors
- Chapter #4 – Sheet Metal Material and Labor Summary
- Chapter #5 – Labor Rates
- Chapter #6 – Rentals
- Chapter #7 – General Conditions
- Chapter #8 – Finalizing the Estimating Spreadsheet
Get a copy of the MEP Academy Spreadsheet here >>> MEP Academy Spreadsheet
