How and Why to Write Testing Proposals

Dec. 1, 2006
Most of us can whip out an equipment replacement proposal in minutes. The scope of work is often identical from one change out to another. Most of us have a few boiler plate proposals filed away in our computers so we can edit the date, name, and address and hit the print button.

Most of us can whip out an equipment replacement proposal in minutes. The scope of work is often identical from one change out to another. Most of us have a few boiler plate proposals filed away in our computers so we can edit the date, name, and address and hit the print button.

But how often does changing the equipment really solve the comfort and efficiency problems our customers are complaining about? If you’re still just a “box changer,” you’re probably convinced your company is doing a great job by swapping equipment. I challenge you to call the last dozen proposals you lost. Typically you’ll learn on several of these jobs you were defeated by contractors who charged 50% more than you and still got the job. You lost because some of your competitors offered to renovate the duct system in addition to changing the equipment.

Meet a dangerous new foe. Armed with an air balancing hood and a Magnehelic gauge, he slips ahead of you by offering diagnostic testing on a routine sales call. His testing expanded the job to include duct renovation, additional accessories, air balancing, and documented proof that his system operates up to 50% more efficient than yours. He can do all this and be offering the exact same equipment as you are.

HVAC diagnostic testing has become a powerful differentiator that separates the old from the new players in our industry. It has formed a new product you’re your competitors don’t understand, but consumers love. The new product is a system that actually works.

They outsell you because they prove to your customers that your equipment won’t do what you tell them it will. They do this by testing the performance of the system before they offer the solution. Their solution is almost never simply changing the box. The devastating result is your proposal is rendered inadequate and is dismissed.

Scary, isn’t it? Even scarier is that many of them have become so proficient at testing a system that on many jobs they do the testing at no cost to their customers. They have learned that testing often increases their closing rates from the industry average of 30% to 70% or better.

But some jobs, including most referrals, present the opportunity to be paid for the testing. Can you imagine being paid $295.00 for a sales opportunity? Now that’s a major shift in our industry.

HVAC system performance testing proposals are a different animal than equipment change out proposals. When a customer contracts with your company for diagnostic testing, the proposal must be clear and concise with a well-defined scope of work aimed at delivering solutions. The hope of an all inclusive solution is why consumers want and pay for diagnostic testing.

Standard Content
All proposals must contain some standard content to qualify as a proposal and make a binding agreement. These includes names, addresses, and phone numbers of both parties, as well as the address where the testing will be performed. A price and payment terms must be included and the company, and the customer, should both sign the proposal.

Define the Scope of Work
Remember, what your selling is information that will lead to an all inclusive solution to their comfort and efficiency issues. The main ingredients to your proposal must define the scope of the testing and the fact that the report will include written recommendations. A good proposal will include a sample of a completed report.

Occasionally we hear of a customer who assumed the diagnostic proposal included the repairs to the system as well as the testing and reporting. The proposal should clearly state that only testing and reporting are included in the cost and that repairs and duct renovations will be additional and will be addressed under a separate proposal, once the testing reveals what repairs are needed to the system.

If the building contains multiple systems, be sure to clearly identify the systems that will be and may not be included.

Identify Tests and Reports
Mention each type of testing that will be included and describe the tests briefly. Group the tests by air diagnostics, carbon monoxide testing, or combustion diagnostics. Include whether or not there will be any system adjusting performed during the testing. About 1-in-10 systems are in good enough condition that simple adjusting can improve performance significantly.

You may also attach a copy of some of the test procedures that you will be using. State that the reports will be written and include the fact that you will review the findings and recommendations with your customers when you are completed with the testing.

Include a Cost Estimated for Recommendations
One additional service that should be offered is to include a cost estimate of the repairs that may be required to correct the system defects that are discovered. This helps the customer know that you are able and qualified to complete the work. Some contractors claim that as high as nine out of 10 diagnostics reports turn into a repair job when the final report is presented in this manner.

To further clarify the scope of work, you may want to cover items that are excluded from the proposal. These may include testing that you may or may not choose to perform such as: hydronic balancing, mold testing, pollution source identification, or building envelope testing.

Pricing and Payment Terms
The price should be specified clearly in the proposal. Prices may be presented using options for different types of testing and reporting that may suit the project. Options are usually appreciated in a proposal. Options should be easy to select in a proposal and include a space to initial, in order to accept or decline each option.

Payment terms for testing and reporting normally specify that the cost to be paid in full when the final report is presented to the customer. Clearly state payment terms in a proposal and discuss it before the proposal is signed, and your customer will normally have a check ready. A down payment of 30% will normally cover the direct costs of the testing.

Stay Legal
In some states, down payments for contracting work is illegal. Other states require a right to rescind clause for in home sales wherein an accepted proposal can be withdrawn by a homeowner within three days.

Other governing authorities require certain licenses be held before a tech can open a blower compartment. Check with your legal council for local proposal and work restrictions to be sure you are operating within the legal requirements imposed in your area.

The scope of work provided in the final report does not need to be overly detailed. You should define the necessary work so it can be understood by the building owner, but not so detailed as to hand off a work order to a competitor.

Most contractors report that if the consumer decides to have the recommendations completed, more than 90% of the time they are the ones that get the contract. The confidence your customers gain in you by seeing the testing, and reading your reports, nearly always assures that you will be the one doing the work.

Many contractors offer to apply all, or part, of the testing fees to the cost of the system repairs and renovations as an additional incentive to get the work, if needed. I like to keep this one in my pocket until I have to use it as a final negotiating point.

The bottom line with charging for diagnostic testing is that you’ll never know until you ask. So, write and present a testing proposal next time the opportunity arises.

Rob “Doc” Falke serves the industry as president of National Comfort Institute ,a training company specializing in measuring, rating, improving, and verifying HVAC system performance. If you're an HVAC contractor or technician and would like a free sample of an HVAC Diagnostic Testing Proposal, contact Doc at [email protected] or call him at 800/633-7058. Go to NCI’s website at for free information, technical articles, and downloads.

About the Author

Rob 'Doc' Falke | President

Rob “Doc” Falke serves the industry as president of National Comfort Institute an HVAC-based training company and membership organization. If you're an HVAC contractor or technician  interested in a building pressure measurement procedure, contact Doc at [email protected]  or call him at 800-633-7058. Go to NCI’s website at for free information, articles and downloads.