We'd Like a Seat at the Table

Sept. 1, 2003
by Mark Watson Sheet metal HVAC contractors play a pivotal role in the construction process directing numerous instrumental parts during a symphony performance.

by Mark Watson

Sheet metal HVAC contractors play a pivotal role in the construction process — directing numerous instrumental parts during a symphony performance. However, since sheet metal HVAC firms don’t always precisely fit the definition of “mechanical” contractor, they sometimes fall into the category of “sub” and traditionally are denied a seat at the table when a project is in the planning stages.

Ironically, during the construction process, it’s often the sheet metal HVAC contractor’s CAD program and CAD drawings that lead and orchestrate the project — directing the timing and placement of ductwork, air handling equipment, plumbing, electrical, drywall, etc.

Fortunately, things are changing. Today, many sheet metal contractors who perform Design/Build work have the opportunity to sit at the table with the owner and/or general contractor (GC). Several years ago, SMACNA (Sheet Metal and Air Conditioning Contractors’ National Association) members reported they were hired by a general contractor 48% of the time, by the building owner 36%, by the mechanical contractor 31%, and by the construction manager 23% (the numbers don’t total 100% because the surveys allowed contractors to answer multiple questions).

It makes good business sense for the owner or GC to bring the sheet metal HVAC contractor into play when the project is in its infancy. Consider that approximately 65% of the mechanical work is done by the sheet metal contractor on most large projects. By contracting directly with us, there’s no other contractor mark-up, thus the savings can be significant.

When dealing directly with the sheet metal HVAC contractor, the building owner has tighter control over the project because that contractor is in charge of the scheduling and pricing for 65% of the mechanical work slated for installation.

At the early stages of the design process, budget issues are typically a major concern, and the sheet metal contractor’s expertise and ability to value engineer are critical in making all the proposed components fit in the building and the budget. Day-to-day dealings with the owner are opportunities for sheet metal contractors to show their professional skills, creating more opportunities to be successful.

As a subcontractor, we sometimes find ourselves dealing with mechanical contractors who don’t have the HVAC expertise that our company has developed in its 50-plus years in business. We become frustrated with poor coordination of the work, slow processing of submittal data, and change orders that don’t get paid.

In addition, when you’re a lower tier sub, there are continually issues with prompt payment. With a struggling economy, we watch our cash flow and accounts receivables daily. Typically, we find that our older receivables belong to the mechanical contractor, and that there is a tendency for some to use subcontractors as their bank. A subcontractor has to be aggressive in demanding to be paid in a timely manner or else his firm will become another method of “creative” financing.

We’re Not Alone

Sheet metal contractors aren’t alone in their desire to elevate the importance of the HVAC portion of the construction project. When the Construction Specifications Institute was rewriting the MasterFormat draft two in October 2002, new plumbing (Division 34) and HVAC (Division 35) provisions were created. This forward-looking approach recognized that owners consider HVAC systems to be one of, if not the most important components of the building.

Unfortunately, politics prevailed and now draft four is back to the same old way of doing business, ignoring that the contracting world has changed. Whether one recognizes it or not, owners and their engineers and architects will demand an approach that recognizes the inherent value of the HVAC system. Draft two of the MasterFormat was a fleeting moment of short-lived success.

Bidding direct to the owner and general contractor is nothing new for sheet metal HVAC contractors. In fact, this method of doing business has been preferred for many years and tends to pick up momentum when the economy is sluggish.

In a perfect world, the sheet metal HVAC contractor would be invited to sit at the table and help write a beautiful construction symphony. That would be music to my ears.

Mark Watson is president of Climate Engineers, Inc., Cedar Rapids, IA. His company is a $17 million full-service HVAC and sheet metal business with facilities in Cedar Rapids, IA, and Rock Island, IL. His staff is comprised of 130 engineers, project managers, CAD designers, and sheet metal professionals from Sheet Metal Workers Local 263 and Local 91. Watson is the incoming president of SMACNA. He can be reached at [email protected] or by phone at 319/364-1569.