How to Bid on HVAC Contracts
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In the construction industry, the majority of contracts are awarded through a process known as bidding. During this process, contractors submit pricing that includes all materials, labor, and profit, and the lowest bidder will usually be awarded the contract. One of the largest components of a typical construction project is the mechanical portion, which consists of heating, ventilation, and air conditioning (HVAC) work, along with plumbing. Successful HVAC bidding requires a higher level of experience and technical knowledge than that required for other trades. With a bit of experience in the mechanical industry, however, it is possible to bid on HVAC contracts accurately.
Find jobs to bid on. Visit local general contractors and inquire about bidding opportunities. Some may require you to pre-qualify to bid with them, and may ask for company information, financial statements, and employee resumes. Others may accept bids without restriction. You can also find thousands of federal projects at the Federal Business Opportunities website, and state projects from across the U.S. can be found at the National Association of State Purchasing Offices (NASPO) website.
Review the entire set of project drawings. Often, the architectural drawings can give you the most information about the intended use of the space. Look to see how this building fits in with others nearby, as this could affect the HVAC bid.
Use the HVAC drawings and specs to determine material quantities. Start with major equipment, such as air handling units, fans, VAV boxes, and condensers. Calculate the total linear footage of each type of duct work and piping that is required. Count the total number of grilles, diffusers, louvers and other materials that will be needed. Send these quantities to your various material suppliers and request pricing. For smaller jobs, and most residential work, you can obtain fairly accurate pricing using the RS Means book. This resource is widely used in the construction industry, and contains unit prices for materials by region. This book can often be found in the research section of most libraries.
Determine labor costs. Calculate how many feet of material can be installed each hour, and multiply this by the hourly wage of your employees. Check to see if there are any project-specific items that can impact productivity or wages, such as night work, wage scale, or overtime. Also check to see if the project is located within an occupied building, as this can often dramatically decrease productivity.
Include the cost of the permit. Generally, HVAC contractors are expected to pull their own permits. Depending on the size of the job and the state you live in, the cost of an HVAC permit can run into the thousands. Refer to the Resources section of this article for a list of state and county permit agencies. Your local agency can provide HVAC permit pricing, which is usually calculated by square footage.
Calculate other costs. This may include your estimating and project management costs, work vehicles, tools, or miscellaneous expenses. Don't forget to include the costs of lifts or cranes, as these items are often needed to install rooftop units and other equipment. Once you've included all your costs, add a small percentage to account for job profits. Depending on the size of the job, this could range from a few percent up to a full 100 percent markup.
Check the project scope and bidding requirements to ensure you have bid the job as specified. Look carefully into whether the contractor will accept HVAC bids, or whether it expects an entire mechanical bid, which would also include plumbing. Because mechanical systems are so interdependent, the entire mechanical package is often awarded as one contract. If this is the case, you can partner with local plumbing firms to submit a complete bid.
Emily Beach works in the commercial construction industry in Maryland. She received her LEED accreditation from the U.S. Green Building Council in 2008 and is in the process of working towards an Architectural Hardware Consultant certification from the Door and Hardware Institute. She received a bachelor's degree in economics and management from Goucher College in Towson, Maryland.
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