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Western HVAC Performance Alliance CQM ASHRAE/ACCA/ANSI Standard 180 User Guide CUSTOMER COMMUNICATIONS Working Group “Standard 180 Performance Objectives to Value Propositions Interview Process” Work Product

A WHPA Work Product as of November 15, 2017 Prepared by:

WHPA CQM Standard 180 User Guide Customer Communications Working Group

Working Group Chair, Janet L. Peterson, XCSpec, Inc.

WHPA Work Product Summary

Work Product Summary-CQM STD 180 UG CC WG Performance Objectives to Value Propositions Interview Process to EC

DATE: November 7, 2017 INITIATING BODY: Commercial Quality Maintenance Standard 180 User Guide Customer Communications Working Group WORK PRODUCT NAME: Standard 180 Performance Objectives to Value Propositions Interview Process

TYPE OF ACTION REQUESTED: ☒ VOTE ☐ GUIDANCE ☐OTHER: Click here to enter text.

APPROVAL HISTORY WORKING GROUP: Commercial Quality Maintenance Standard 180 User Guide Customer Communications Working Group

☐ BY CONSENSUS ☒ BY VOTE TALLY: An email vote was conducted from October 26 to 30. Of 7 voting members, 4 voted AYE, 1 voted NAY, 1 Abstained, 1 no response. AYE votes: Aire Rite AC & Refrigeration; AMS; Western Allied Corp.; XCSpec. NAY vote: ASHRAE; Abstained: Tre’ Laine Associates; no response: Charles Segerstrom EE Consulting. DATE: October 30, 2017

COMMITTEE: Commercial Quality Maintenance Committee

☐ BY CONSENSUS ☒ BY VOTE TALLY: An email vote was conducted from October 30-31, 2017. Of 14 voting members, 12 voted AYE, 1 abstained, 1 no response. AYE votes: ACCA; ASHRAE; Aire Rite AC & Refrigeration; AMS; CLEAResult; Honeywell E&ES; Honeywell Smart Energy; PG&E; SCE; SDG&E; Western Allied Corp.; XCSpec. NAY votes – 0. Abstained – Tre’ Laine Associates. DATE: October 31, 2017

WORK PRODUCT OBJECTIVES: Revise and expand on the 2016 CQM Committee work product. The 2017 report refined the grouped interview questions and provided examples of questions for key topics. It provided greater guidance on how to conduct the initial responsible party/service provider discussions and a structured approach for a first face-to-face meeting. It also expanded on the need for practical metrics to be established for all critical performance objectives/goals in order to establish status and recognize progress/success. The overall intention of this program management and evaluation process



was to enable comparison between enhanced program costs/investment and the multiple benefits delivered – the “value proposition,” evidence for continuation of more comprehensive maintenance. BACKGROUND: The 2016 work product developed an initial interview process between the building responsible party (owner, facility/property manager, contract professional) and service provider intended to raise key maintenance related issues to identify performance objectives (goals) for a Standard 180 based maintenance program. This initial effort was intended to be incorporated into a Standard 180 User Guide. That overall effort was being led by the larger CQM Standard 180 User Guide (Technical) Working Group.

CA ENERGY EFFICIENCY PLAN STRATEGIC GOAL ALIGNMENT:

☐ GOAL 1 ☒ GOAL 2 ☐ GOAL 3 ☐ GOAL 4 CEESP HVAC GOAL STRATEGIES: Quality HVAC installation and maintenance becomes the norm. The marketplace understands and values the performance benefits of quality installation and maintenance. BENEFITS: 1. Spotlights benefits of Standard 180 based maintenance. The building responsible party is often unaware of the benefits which a Standard 180 based approach to HVAC maintenance could provide. Those might include: lower HVAC related utility costs; reduced service/repair costs; increased space occupant comfort; reduced space disruption; greatly extended HVAC equipment life which would reduce the need for significant capital expenditures. To develop a satisfactory maintenance program (inventory plus maintenance plan), both the owner/responsible party and a prospective service provider need to explore what the program will cover as well as establishing goals and means to track and measure progress against those goals to implement a successful program. 2. Service provider accountability. Establishing goals and an evaluation process means the program and service provider can be held accountable for progress and results. An interview process, often multiple discussions, was needed to highlight key topics and issues which should be addressed. This interview process is intended to discover the most critical needs which the owner might or might not have previously considered. Identifying those goals, establishing metrics to measure status, progress, success and means of reporting, was a critical initial step in determining the value which such an approach to maintenance could deliver. 3. Pathway to market transformation. Without such a process, building responsible parties most often revert back to or simply continue their simplistic approach of getting bids against a poorly defined list of maintenance tasks and selecting a service provider based on the lowest bid price.

OUTSTANDING ISSUES / DEBATES / MINORITY VIEWS: This work product was the result of a smaller working group’s efforts to focus on the “front end” of a process to develop a maintenance program with goals/ performance objectives and help building facilitators move beyond the common industry practice of getting bids to address a list of ill-defined maintenance tasks. This work product was developed to help provide expanded guidance and specific suggestions on how to hold meaningful and productive discussions. ISSUES: there was one NAY vote at the working group level. This party was concerned



about some of the wording in the first three pages which provided background information. Suggested edits were provided after the voting had already begun so they were unable to be discussed adequately by the WG. This party’s NAY vote was converted to an AYE vote at the full committee level once they were assured that those suggested edits would be further considered by the User Guide Working Group in future revisions of the user guide content.

POTENTIAL AUDIENCE: Building responsible parties (owner/facility or property managers/contract professionals); commercial contractors and their sales and service staff; utility program designers, developers, implementers and evaluators.

COMMITTEE: WHPA Executive Committee

☐ BY CONSENSUS ☒ BY VOTE DATE: November 15, 2017 MOTION: At the November 15, 2017, Executive Committee Meeting, the Commercial Quality Maintenance Committee “Standard 180 Performance Objectives to Value Propositions Interview Process” Work Product Summary and Work Product were presented by Committee Chair Jan Peterson (XCSpec). Scott Higa (SCE) made the motion and Don Tanaka (UA) seconded the motion to adopt this Work Product. VOTE TALLY: There were 10 out of 13 voting members represented. 9 Aye votes were cast by HARDI, IHACI, JCEEP-by-proxy, NCI, PG&E, SCE, SDG&E, SoCalGas, and UA. There were no Nay votes. CEC abstained. FURTHER ACTIONS REQUIRED: If approved, the CQM Committee requested that this work product be provided directly to the WHPA representatives for ACCA, ASHRAE, SCE, PG&E, SDG&E, and SMUD in addition to being posted to the WHPA website list of work products. NEXT STEPS: None

WHPA CQM STD 180 UG CC WG Performance Objectives to Value Propositions Interview Process Work Product

Apprvd by EC-CQM STD180 UGCCWG Performance Objectives to Value Propositions Interview Process Work Product page 1 of 16

ASHRAE/ACCA/ANSI STANDARD 180 BACKGROUND This WHPA Commercial Quality Maintenance (CQM) Committee Work Product is intended to provide guidance and suggestions to those parties responsible for overseeing commercial building HVAC system maintenance as well as for those who perform and deliver those maintenance, repair, and equipment replacement services. It is hoped that these suggestions might also be helpful to utility staff responsible for designing and implementing commercial maintenance programs based on this standard. The Commercial Quality Maintenance Committee and its Working Groups have been evaluating this Standard since 2009 to gain a better understanding and offer suggested revisions and an interpretation of how the standard might be implementation (operationalized). Most earlier Working Group efforts dealt primarily with technical aspects of the Standard such as developing a new Section 5 Economizer Maintenance Task Table and suggesting revisions to Section 5 Rooftop Unit Table 5-22. The original Standard used general statements to simply “name” each task which this Committee believed needed far greater clarification if that Standard was to be implemented consistently. The Working Group thought that the “what” in the current Standard needed a “how to” explanation to avoid confusion by implementers and to allow evaluation for compliance with requirements of the Standard. In 2008, Standard 180 was the first ASHRAE/ACCA/ANSI American National Standard focused on HVAC commercial maintenance practices. Most standards focused on new buildings and new equipment and/or their system installation. Standard 180 was also established and intended to be a minimum Standard, though it went well beyond common practice in this industry. The Standard was never intended to limit an owner, responsible party, or their service providers to these minimum practices. Users were encouraged to read and study the Standard’s FORWARD to understand that much more than the “minimum” could be elected and justified. Owners were encouraged to consider additional energy conservation measures as well as technology improvements and upgrades to increase system efficiency, to extend system life, and to optimize system performance. WORK PRODUCT BACKGROUND Many users of Standard 180 have believed that the equipment maintenance task tables found in Section 5 were the core of this Standard and simply skipped past the FORWARD and Sections 1 through 4. Often their reason for this was that an owner or property manager needed to produce a scope of work for securing maintenance agreement bids. A common industry practice was to secure multiple bids for a fixed list of tasks for a fixed price and select from one of the least expensive ones. Their assumption was that all work would be performed equally well. This Committee’s members do not believe this is a sound assumption. Many commercial buildings simply have a “scheduled filter replacement,” a very minimal inspection, or a “run to failure/breakdown” program thinking that these are the least expensive approaches because of their lower “up front” cost. What this approach doesn’t consider with only looking at the artificially low visible contract is that this approach only defers maintenance expenses, at best. At its worst, such an approach contributes to causing preventable repairs, avoidable equipment failure, and premature major capital expenditures. Committee members agree that a better approach would be to implement a sufficiently comprehensive maintenance program intended not only to keep “visible” contract costs in line but also to avoid most or all “invisible” costs like excessive energy consumption, occupant discomfort and complaints, expensive repairs, and even more expensive premature equipment failure and replacement. According to the Standard, it is the owner/responsible party and NOT the service provider or in-house maintenance staff who was “responsible” for what kind of maintenance program would be implemented. Some property managers/owners/managers are very capable at this with an adequate understanding of HVAC systems



and what it takes to protect their operation and assets. For many owners and managers, this was not their area of expertise, interest, or primary responsibility. In those circumstances, they would need to depend on the knowledge of a senior maintenance staffer or contracted service provider to work through this process of developing an adequate HVAC system maintenance program. The sections of Standard 180 prior to the maintenance task tables in Section 5, and especially Section 4 Implementation, state the requirements of the Standard and the “what” in general terms. How to get at the “how” of things—create concrete program performance objective goal statements—was not spelled out in detail or with examples. This Committee concluded that the first practical step in developing that maintenance program would require a structured dialogue and a series of discussions or interviews to gather important background information, to clarify the owner/facility manager/responsible party’s goals, and to explore potential goals they hadn’t considered. PURPOSE OF THIS WORK PRODUCT NOTE: Most of this portion of the User Guide was developed from the perspective where an owner or facility manager is the “responsible party” and where maintenance services needed to be contracted. This is a direct result of the expertise and experience of the current Committee and Working Group members. A parallel effort is intended for future work which would provide more detailed suggestions where facility managers had their own in-house staff to implement most maintenance and repairs. The goal of this Work Product is to provide a framework for that critical owner/responsible party and a service provider dialogue to educate as well as to identify and state:

• Key topics and issues which need to be discussed to develop a lean but comprehensive maintenance program.

• What the owner/responsible party really wanted to accomplish and how they would know when or if those goals were accomplished.

• Key program performance objectives (outcomes) or goals and “translate” or link each to a benefit.

• Cumulative benefits which could clearly far outweigh the higher “up front” or first costs of a more comprehensive maintenance program.

That collection of goals and benefits would constitute the “value proposition” for undertaking a Standard 180-based approach to maintenance. That framework for a customer “interview process” was intended to provide the “front end” of a larger process that would include:

1) Formulating a solid maintenance program, 2) Details on how to implement the program, 3) Examples for reporting and evaluating status and progress toward goals, and 4) A full-circle approach for refining the program on a continuous improvement basis.

This Work Product is intended to be merged with efforts of the CQM Standard 180 User Guide Technical Working Group in the future to develop a Standard 180 User Guide to address that entire process. High Level Overview of the Process to Scope a Maintenance Agreement The objective of this entire process should be to build a cooperative relationship between the owner/property manager and the service provider. Both parties need to develop trust and openness from the initial interview through signing of the agreement to accomplish this objective.

Step 1: Preparing for and setting up initial meeting.

Step 2: First structured meeting identifying key program goals and reach agreement on a plan to move forward.



Step 3: Survey of HVAC system equipment in parallel with gathering important facility information.

Step 4: Confirming the survey information and units/equipment to be maintained.

Step 5: Establishing maintenance program goals, metrics and agreement on how evaluate program implementation and to measure program success.

Step 6: Consider recommendations beyond Standard 180 minimum requirements.

Step 7: Provide quote that meets agreed upon goals/objectives, scope of maintenance tasks/activities, and reporting. Map Goals to Metrics.

Step 8: Closing – signing the maintenance agreement.

Step 9: On-going operational reviews with the customer. The above outlines a sequence of steps. Many of these steps would require several discussions/meetings depending on circumstances for that specific building and number of sites being considered for inclusion under the maintenance agreement. The dialogue which Standard 180 encouraged could be initiated by either party, the building owner/responsible party, a prospective service provider, or the in-house maintenance staff. Of most importance would be that all crucial topics got discussed and that information necessary to making sound decisions was gathered, reviewed, and analyzed together so that all parties reached a common understanding and agreement on how to proceed. Each of these steps will be discussed in further detail. STEP 1: PREPARING FOR THE FIRST MEETING The interview objectives are broken out into four groups of related questions. Groups 2, 3, and 4 are developed in more detail later in this Work Product in the form of “flow charts.” The groups of questions are intended to:

1) Assess the customer’s view and commitment to developing an adequate maintenance program, 2) Determine customer’s operational priorities, 3) Scope the customer’s financial budget/limitations, responsibilities, decision-making process, and

commitment, and 4) Discuss how to apply metrics that allow the customer to “measure” maintenance quality success.

The goal of this first meeting, or a couple of initial meetings, is to reach agreement on an action plan. That plan should identify a prioritized set of goals, develop a maintenance plan detailed enough for implementation, work within a defined budget or the group of budgets related to the HVAC system, and clearly state how status and progress would be reported and how success would be measured. Committee members also thought that this process, in many cases, would need to include educating the owner/responsible party about relevant and critical HVAC system information and methods of tracking status and reporting. This would help the owner/responsible party more thoroughly understand the value which could be delivered by achieving program goals. The collaborative program development process would help translate performance objectives/goals into “value propositions,” the reasons why adopting this approach to maintenance was more than worth the higher up-front and visible (contract) maintenance cost. ACTIONS TO TAKE PRIOR TO FIRST STRUCTURED MEETING This information could be requested by the prospective service provider, in no specific order, prior to any face-to-face meeting. The owner’s willingness to seek out and provide useful information will be a measure of their commitment to getting the greatest value for their total maintenance and HVAC-spend and not in just obtaining the lowest contract bid price. It would also give the service provider a better idea of how that organization made maintenance, service/repair, and capital expenditure decisions and who had responsibilities for each part



of the total budget. In addition, it would help inform the service provider with some insight into whether the owner was aware of all the elements which contribute to their total maintenance-related spend.

• Who are you talking with? Owner, property/facility management, maintenance supervisor?

• What was the primary building use? Restaurant, office, retail, auditorium, classroom, storage, meeting rooms, etc.

• Was the space owner-occupied or tenant-leased?

• Who is responsible for HVAC maintenance and service? For equipment replacement?

• How are maintenance utilities paid? Triple Net? Single zoned HVAC?

• Knowledge of their business—if possible talk the customer’s language.

• Approximate building age?

• Square footage of the occupied space or building?

• Most recent HVAC system major renovation – implied code level as well as age of equipment.

• Number of rooftop units – did the owner have an up-to-date inventory of all major HVAC equipment? How many, what size, general efficiency/EER level? Mostly single zone constant volume or some number of multizone, variable volume units? Could use Google map for a rooftop survey count of packaged equipment.

• How were the units controlled? Individual thermostats or some form of networked automation system? Understand the Customer’s Building Type/Market Segment Understanding the different types of commercial/industrial/institutional buildings (market segments) and facility manager orientations/perspectives will help implementers of the Standard select portions of the User Guide most relevant to their circumstances. In the following interview examples, we will reference the market set following the designations identified below. Key Variables 1. Building type/market segments: There are many other ways to “segment” building types. The following

were four very common types selected by the previous CQM User Guide Working Group in their 2016 work product: a. Owner occupied/smaller businesses with limited locations b. Owner occupied/larger businesses and facilities often with several locations c. National accounts, multi-location chains (retail, restaurants etc.) d. MUSH (municipals, universities, schools, hospital/health facilities—mostly public and/or non-profit

organizations)

2. Client/customer perspective on maintenance and level of HVAC expertise: a. Reluctant/skeptical/minimal maintenance and primarily price driven b. Open to explore maintenance program goals/metrics/tracking c. Motivated to establish better, more comprehensive program d. Sophisticated (currently using or interested in preventive/predictive maintenance, expanding building

automation to address HVAC system maintenance/performance, program goals/metrics based management, looking for tracking and advanced technologies and program refinement/improvement)

3. Budgets/financial responsibilities and planning for: a. Maintenance contracts and agreements b. Major repairs/service c. Capital expenditures (HVAC equipment replacement/installations)



Understand the Customer’s Commitment, their “Collaboration” Factor, and Expertise The facility manager/owner’s willingness to seek out and provide useful information during the goal development process is one measure of their willingness to collaborate and take responsibility for developing meaningful goals. The following matrix was developed to combine levels of responsible party “commitment” and expertise with a selection of four common building market segments/types. Understanding the customer’s financial responsibilities, limits of authority, and budgets for HVAC system maintenance, repairs, and replacement will aid in exploring potential program goals, scoping the number of surveys required, and how many “decision-makers” must be involved within that organization. Also, this will provide a stronger idea of “who” must be included for significant decisions and program/contract approval. In the following responsible party/market segment matrix, you will need to determine the range of authority and responsibility for budgets for all important decision-makers in that organization.

• Top Organizational Asset Manager(s): Owner, CFO, CEO, or institutional equivalent. They will perform a cost/benefit analysis on the program/contract and provide final approval

• Facility manager, facility maintenance supervisor if in-house staff

• Energy/utility cost manager

• Capital replacement management

• Supply manager/contracts/bid procurement Proposed Agenda Topics for First Structured Meeting Understanding the market segment and building user profile will aid (get some info from User Guide document already prepared). Reference Chapter XX in this User Guide for further clarification as to use of market segment data.

• Your company’s capability.

• Solicit customer and try to understand their position and attitude towards maintenance – cooperative or minimalist?

• Briefly outline benefits of a collaborative relationship to quality maintenance.

• Solicit customer and try to understand their pain points.

• Try to understand who is financially responsible for the maintenance and capital equipment budgets. Assess if you are targeting the right individual.

• Does the customer have a means or a method that they currently assess maintenance effectiveness? Any Metrics?

• Site some metrics that may be used.

What the Service Provider Should Bring to the First Structured Meeting

• Agenda – Prepare your agenda for the meeting ahead of time. Have copies ready. Anticipate a 45-minute to 1-hour initial meeting, maximum.

• Collateral information on your company’s capabilities to present.

• Case studies matched to this customer’s type of building and use. Case studies which clearly illustrate comprehensive maintenance benefits and collectively illustrate a value proposition to adopt this approach to maintenance.

• Information regarding any relevant utility maintenance-related programs or HVAC system/component rebates that might be available for this customer.



STEP 2: FIRST STRUCTURED MEETING The goal of this meeting is to establish agreement on a “go forward” plan and to schedule a second meeting or a sequence of meetings. Proposed Topics for the First Structured Meeting

• Agenda – Introduce your prepared agenda.

• Review your company’s capability – be ready to leave company collateral.

• Solicit customer and try to understand their position and attitude towards maintenance – cooperative or minimalist?

• LISTEN and ASK QUESTIONS

• Briefly outline benefits of a collaborative relationship to quality maintenance.

• LISTEN and ASK QUESTIONS

• Solicit customer and try to understand their pain points.

• LISTEN AND ASK QUESTIONS

• Site some specific examples/case studies that align with this customer’s objectives and market segment.


• Try to understand who is financially responsible for the maintenance, repair, capital equipment, and utility/energy budgets. Assess if you are including all the right individuals. Determine whether other decision-makers need to be involved to address those additional HVAC related financial issues.


• Does the customer have a means or a method that they currently use to assess maintenance effectiveness? Any metrics?


• Site some metrics that may be used.


• Formulate a plan of action required to get to a signed agreement. During this meeting, address questions from all three groups illustrated in the three flow charts which follow. They are grouped here by topic area only for the reader’s convenience. Questions are grouped to show those related to a similar topic/issue. But, in an interview, it would be important to work through these questions in an order that suited the client’s preference. It was not intended for the service provider to go through these interview questions in a strict, rigid manner taking each group of questions in turn. Each client discussion would be unique. Both parties share a responsibility to cover all critical topics before ending. Proposed Discussion Topics that can be Used to Determine Customers Collaboration Factor During the first meeting, it is important to assess the customer’s level of interest and willingness to collaborate in exploring a better approach to delivering maintenance. Take time to present the following points that outline the advantages of collaboration and assess their responses to this discussion. Through collaboration between the service organization and customer, we can:

1) Find solutions for their outstanding HVACR related issues and problems. This is addressed in more in first of three flow charts below that addresses the customer’s pain points.

2) As a service organization with established competency in HVACR, you can evaluate their current system/equipment as well as their operations and management approach. A highly competent contractor is well positioned to help analyze operations and utility bills and make recommendations which could result in significant energy and asset savings as well as improve occupant comfort levels. Local professional service organizations are also in the best position to be aware of utility programs that may lower their customer’s overall HVACR related costs.



Determine Customer’s HVAC System Issues and Priorities The first questions determine customer’s objectives and priorities. Coupling this with the information retrieved earlier, this should scope the operational situation with the customer.

Suggested Questions Related to HVAC System and Facility Issues, Priorities, and Goals ➢ Has there been any record of building occupant complaints or issues in their spaces? ➢ How do you control temperature in all the individual spaces? Individual thermostats or is equipment

operated on some form of building automation and control? ➢ What goals were established for your current maintenance program? ➢ What would you say have been your top four or five priorities?

o Satisfied occupants? Comfort? o Quick contractor response? o Lower contract costs? o Fewer unexpected repairs, lower service costs? o HVAC system reliability? o Lower energy costs? o Lower overall HVAC-related operating costs? o HVAC equipment longevity? o HVAC system improvements and upgrades? o Establishing or extending system monitoring to catch issues early to avoid failures?

➢ How do you evaluate how well the current program is doing? ➢ On average, how many unexpected, unscheduled service calls and repairs have you experienced each year? ➢ When you need emergency service, what’s been your response time experience from your current provider? ➢ How reliable would you say your HVAC system has been? What would you say has been your average

uptime?



➢ Are there any specific parts of the building for which HVAC operation is extremely critical? o Data centers? o Clinical or medical rooms or suites? o Assembly? o Clean rooms? o R&D or testing?

➢ How critical is it for your HVAC system and individual units to be running? Does downtime put you in any sort of jeopardy?

➢ What’s been your HVAC related energy spend? ➢ Does someone track total energy bills, consumption, and demand charges? Do you have a breakout for

what portion of that total spend is HVAC system related? Determine Customer’s HVAC Program Performance Goals and Evaluation Metrics The final set of questions determines the customer’s metrics for measuring maintenance program goals and service success. Ultimately, after there is a clear understanding of maintenance agreement goals and objectives, the metrics are applied to measure the success of achieving these goals. The following table is for reference of the types of metrics that can be proposed and can help determine the sophistication of the customers and their systems. Coupling this with the information retrieved earlier, this should help define how to establish metrics for a maintenance program relationship and capture the data needed to determine the applicable evaluation metrics – whether return on their investment (ROI), uptime or improved occupant comfort – for customer to evaluate results vs. expectations. Evaluation and reporting keeps the service provider in touch with his client and encourages both parties to attempt continuous improvement for their maintenance program.



Specific Maintenance Program Goals and Examples of Resultant Evaluation Metrics ➢ Goal – reduce energy costs and use. Metric: track and evaluate total and HVAC-only related energy use and

costs. Do you have a record of your utility spend per month for the last two to three years? If not, could that information be collected? Could someone break out those records by energy consumption not just monthly cost? Establishing a baseline for energy use would allow monthly comparison to a multi-year rolling average going forward. That’s one way to track and evaluate your overall energy use trend. In many buildings, HVAC system electrical use is somewhere between 25% and 40% of total electricity used. It’s a rough way to see whether we can spot some impact from more comprehensive maintenance.

➢ Goal – reduce energy costs and use. Metric: detailed monitoring of all HVAC related equipment. Have you considered setting up a low-cost electrical use monitoring system for all the HVAC related equipment? That way, we could zero in on the actual HVAC related energy use and see what impact might result from our more comprehensive maintenance approach. And, we’d have some detailed information for each unit and those being repaired to see what changes over time.

➢ Goal – reduce HVAC system repair costs. Metric: track and evaluate the number and costs for unscheduled service and repairs. Do you have records for past unscheduled service calls and HVAC related repairs? With that past information, we could compare past frequency and costs for service/repair to what happens going forward. The number and costs for unscheduled work should go down. We could establish a target for that reduction as a goal and then track how we’re doing now and against your past track record.

➢ Goal – reduce energy costs and use. Metric: compare energy and/or HVAC related operating costs to similar facilities nation-wide. Do you know your maintenance cost per square foot of building space? Have you ever used the ENERGY STAR Portfolio Manager tool? If so, we could establish how well you have compared in the past and track any changes going forward after implementing more comprehensive maintenance. We can benchmark your facility or portfolio of buildings against similar one nation-wide. See (https://www.energystar.gov/buildings/facility-owners-and-managers/existing-buildings/use-portfolio-manager)

➢ Goal – reduce HVAC related capital expenditures. Metric: track and evaluate capital replacement expenses against past average annual expenses. Have you tracked the number of failed units which required replacement over the last three to five years? If you can help provide that information, we could compare past to future results in units as well as total replacement costs. Often, because those replacement costs are managed outside of the maintenance budget, organizations aren’t aware of how costly premature and avoidable equipment failures are to the overall costs for HVAC operations.

Understand the Financial Landscape Determine Budget or Financial Costs and Degree of Commitment: The second set of questions are designed to help determine the customer’s span of financial authority, financial objectives, priorities, budgets, and to identify all the decision-makers who should be involved in the development of the maintenance program. Key to success at this step is to make sure that you understand and that you are communicating with the financial decision maker who may have different objectives than the parties managing the contract bid process and those responsible for managing contracted services and facility management. Before starting this set of questions, make certain that you are talking to the right person initially and to all of the responsible parties for these maintenance related costs.

https://www.energystar.gov/buildings/facility-owners-and-managers/existing-buildings/use-portfolio-manager

https://www.energystar.gov/buildings/facility-owners-and-managers/existing-buildings/use-portfolio-manager



Suggested Questions Related to Budget and HVAC System Related Costs ➢ How are HVAC system related costs managed in your organization?

o For maintenance expenses or maintenance contracts? o Service calls and repairs? o HVAC equipment replacement? o Energy/utility bills?

➢ Are maintenance related costs budgeted separately or are several of them handled together under one or only a couple of budgets? How are those budgets arrived at? o Previous billing costs? o A sort of multi-year rolling average? o What someone designated as a target amount?

➢ Who is responsible for each of those budgets?

➢ How are budget-to-actual expenses reviewed and evaluated?

➢ Do you have a plan established for an orderly replacement of less efficient HVAC equipment before failure? Are you trying to standardize equipment at a higher efficiency/EER level to lower energy costs? How much of your current rooftop unit inventory are you intending to changeout and upgrade? How many replacement units per year does your current capital replacement budget allow?

➢ How long have you operated under the current maintenance agreement? Annual or multi-year type?

➢ How much of the total HVAC related spend does the maintenance agreement account for?

➢ What % of the total HVAC related spend goes towards the annual maintenance agreement cost?

➢ How do you approach replacement of HVAC equipment? Do you get a quote from your service provider or do you put that work out for bid separately? Who manages that process?



STEP 3: CREATING AN ACTION PLAN ASHRAE/ACCA/ANSI Standard 180 provides tables in Section 5 which list and describe recommended HVAC equipment/system maintenance tasks. However, Section 4 provides a structure for developing a maintenance program which depends a great deal on collaboration and trust between client and service provider. This standard describes what ASHRAE (American Society of Heating, Refrigeration and Air Conditioning Engineers) and ACCA (Air Conditioning Contractors of America) consider to be a minimum set of requirements for a maintenance program to achieve a reasonable level of occupant comfort, energy efficiency, and indoor air quality. It was never intended to limit how comprehensive or advanced a maintenance program might become. Ultimately, it is the owner or party responsible who is “responsible” for whatever maintenance program is implemented, not the contractor/service provider. The contractor/service provider’s role is to:

• Help an owner/responsible party explore their current approach and issues,

• Identify ways it could be improved,

• Establish a maintenance agreement/program to reach the owner’s goals,

• Implement that program and report on implementation, progress toward those goals, and

• Suggest program revisions and improvements Refer to Chapters 3 and 4 of this User Guide for guidance and further details on how one might develop and implement a maintenance program. Responsible Party/Owner and Service Provider Simulated Narratives The following narrative was written to describe how initial customer/client and contractor/service provider maintenance program discussions might proceed. There are many situations that could alter just how this discussion would take place depending on:

• The market segment/building type and whether single or multiple locations are involved,

• The approach to maintenance this organization has previously followed,

• The client’s individual perspective and range/level of responsibilities,

• How maintenance related budgets are managed, as well as

• How familiar the clients are with HVAC systems, operations, and advanced technologies which might be beneficial.

To simplify example narratives, each situation/narrative will focus on four Key Variables: (1) Building type/market segment; (2) Client orientation and HVAC related expertise; (3) Building issues and current maintenance objectives; and (4) Budget/financial responsibilities. There are many ways that buildings can be characterized. This and future examples will deal with one of four common types or segments. Key Variables 1. Building type/market segment (there are others, but we’ll address these four large segments for starters)

a. Owner occupied/smaller businesses with limited locations, b. Owner occupied/larger businesses and facilities c. National accounts, d. MUSH (municipals, universities, schools, hospital/health facilities – mostly public and/or non-profit

organizations) 2. Client/customer perspective on maintenance and level of HVAC expertise.

a. Reluctant/skeptical/minimal maintenance and primarily price driven b. Open to explore maintenance program goals/metrics/tracking c. Motivated to establish better, more comprehensive program



d. Sophisticated—currently using or interested in preventive/predictive maintenance, expanding building automation to address HVAC system maintenance/performance, program goals/metrics based management, looking for tracking and advanced technologies and program refinement/improvement

3. Budgets/financial responsibilities and planning for a. Maintenance contracts and agreements b. Major repairs/service c. Capital expenditures (HVAC equipment replacement/installations)

Think of this as an exercise starting with where a specific client would place themselves. Why were they willing to meet? What is their main responsibility and limits of responsibility? How motivated are they to consider a more comprehensive approach to HVAC system maintenance? Is their organization positioned and motivated to implement such an approach? Each narrative is intended to simulate how initial discussions might proceed with a very capable contractor/service provider. The narratives/discussions will go back and forth between major topics but are all intended to cover all the key questions a client/customer should consider to address their current major concerns/problems as well as topics/issues they might not yet be considering. Responsible Party/Owner – Market Segment Matrix On the following grid/table, where would a responsible party (client/facility manager) place themselves and their organization? What orientation or perspective do they currently have towards HVAC maintenance?

Responsible Party – Key Decision Maker (s) Market Segment – Facility Type

A B C D

Facility In-House Staff Maintenance

Contracted Maintenance

Owner Occupied Small

Small

Owner Occupied Large

National Account, Multi-Location Chain

MUSH (municipals, universities, schools, hospitals, public facilities)

1. No maintenance plan or master task list, staff responds to complaints, breakdowns, supervisor might have little HVAC expertise and/or inadequate budgets for operations and/or capital expenditures/replacement

Skeptical, “run to failure” or minimal maintenance approach, low HVAC expertise, lowest bid/contract price approach, maintenance contract not linked to capital expenditure budget or eqpt. longevity

2. Open to developing maintenance program goals & metrics, interested in HVAC system operation, status reporting, improvement

Open to developing maintenance program goals & metrics, interested in HVAC system operation, status reporting, improvement

X



Responsible Party – Key Decision Maker (s) Market Segment – Facility Type

3. Motivated, interested to developing a more comprehensive maintenance program, continuous improvement, interested in advanced technologies

Motivated, interested to developing a more comprehensive maintenance program, continuous improvement, interested in advanced technologies

4. Sophisticated facility management – monitoring, building automation/control, – seeks advanced technologies for preventive/predictive maintenance

Sophisticated facility management – monitoring, building automation/control, – seeks advanced technologies for preventive/predictive maintenance

Maintenance Program Initial Discussion – Example Narrative Background – In this scenario, the client previously used little structure for obtaining maintenance services other than obtaining multiple bids. No program goals or evaluation methods were previously developed. The “owner” usually just compared company lists of maintenance tasks. This “owner” was solely responsible for all budgets and decisions related to HVAC including energy use and costs.

• HVAC System Maintenance Services Contracted to Owner/Responsible Party

• Client/Customer Approach – Open Maintenance Orientation

• Market Segment/Building Type – Owner Occupied/Large – Multi-Location Retail Hardware Stores This is an example of how initial meeting discussions might proceed between a client and a new possible service provider. SP = Service Provider/Contractor C = Client/Customer SP: First of all, thank you for making time to meet. You said on our first phone conversation that you used to just get three or four contractor bids, compare the list of proposed maintenance tasks and bid prices. I understand that you haven’t been completely pleased with the results of that approach and are interested in taking a look at more than just bids. When I meet with new clients, we usually walk through some basic questions to get a few more details about what you’ve done in the past, how that’s worked for you, and what you’d like to get from your maintenance program. Was there anything more that you wanted to cover today?

C: That sounds like a good way to start. I’ve only got about an hour for today, but I did want to ask you to take a look at my current contract to get your opinion, if there’s time.

SP: I’d be happy to critique your current contract. But, t might make more sense for me to take a copy with me today and take a few minutes to examine it before I try to just give you some feedback, if that’s okay.

C: That would be great. We’ll put that on the agenda for our next meeting.



SP: Was that going to be for this location or are you looking for this maintenance agreement to cover other locations?

C: We’ve got eight other hardware stores around the city. I want the agreement to cover all nine locations.

SP: Are you the primary decision-maker or are other staff involved with things like approving major repairs and replacing HVAC equipment and the energy bills?

C: I’m the owner and have final say over any facility related contracts, but we have a store manager in each location. They let me know about any issues in their store. I hear about any breakdowns pretty quickly, especially when there’s no cooling on hot days. But, I still make the decisions about whether to approve repairs and whatnot.

SP: With that in mind, I’d like to propose that we meet today to get an overview of what you have been doing, how that’s been working for you, and what you had in mind for maintenance going forward. You can also get a better idea about our firm, how we normally approach maintenance, and about our other client’s facilities. If we can get that far, I’d like us to also decide whether it makes sense to meet again and what we want to cover at our next meeting. How does that sound?

C: Good. With only an hour, why don’t you fill me in a bit on your company, Sundowner AC, wasn’t it?

SP: Yup, Sundowner AC, Heating and Refrigeration. Well, this is a family owned firm, like yours, and has been in business for over 50 years. A second generation of the family is managing so there’s been a lot of stability and continuity for our staff. I’ve been with the firm for over fourteen years. I’ve liked the firm because it really looks for ways to help their clients keep their systems running really well and protect their systems to avoid large replacement costs. That usually saves on HVAC related energy costs too. We’ve specialized in some newer technologies that even help current systems improve their performance and lower operating costs. We try to assess what needs attention to stretch client maintenance budgets and put those savings where they would do the most good. Do you have any specific questions before we continue?

C: Yes, how much work do you do in this area? What sort of response time could we expect if we do have a breakdown or emergency and how does that work?

SP: We’ve got over a dozen other clients within five miles of your location, so we’ve got trucks in the immediate area all the time. We’ve got a “hot line” 24/7, 365 days a year to respond. Our more comprehensive maintenance plan customers can count on a response within two hours during normal business hours weekdays and within four hours the rest of the day/night and on weekends. We’d respond to minimal maintenance program customers next, as a lower priority. Does that answer your question?

C: Yes, it does. So, you sound like most of your customers have pretty comprehensive maintenance programs?

SP: That’s the case. If a customer only wants an inspection or two a year and some filter changes and thinks that’s it, we usually pass on bidding their facilities. We’ve found that neglected equipment always ends up being emergency calls at just the wrong time and we sometimes get blamed for the breakdown and any delay in responding. Everyone gets mad. In the long run, we’ve felt that working with clients who want to protect their assets and avoid breakdowns works best for both parties.

C: That sounds good. With the last couple of contractors, I’ve not been very satisfied with some unexpected and expensive emergency service and wanted to see if we could reduce those breakdowns by doing a better job up front.



SP: With that in mind, how would you describe your current maintenance approach? What would you like your contractor to do for you? Here’s a range of maintenance approaches that are pretty common. Where would you put your company right now?

1 2 3 4 5 6 7 8

C: Well, I’d put us somewhere between the third and fourth spot. We’ve contracted for two seasonal changeover inspections and services per year. We have one of the staff replace rooftop unit filters monthly and get them bulk from our contractor. I’m looking to consider alternatives since we’ve not been entirely satisfied with what’s gone on with this approach. We’ve had a couple of unexpected RTU failures and had to scramble to get emergency service and resources for major repairs on one and to replace another entire unit because they said it was beyond repair. I’ve looked pretty closely at those contract prices up front. They always seem pretty reasonable and our current contractor hasn’t suggested doing any more comprehensive maintenance. I’m not even sure what more could or should be done to avoid those failures. These guys have seemed competent. Even though I’m used to spending a lot less than some full-service programs I’ve heard of, I’m not sure our approach really costs less in the long run.

SP: I’ve understood that many firms believe that the lowest contract cost equates to the lowest overall total cost. I don’t agree with that conclusion. Spending to do less up front seems less expensive on the surface. But we’ve found that many system issues can be caught before they fail to avoid a lot of really expensive repairs and replacement costs. In many cases, we can even improve the operating performance of systems so you spend less on energy. If lowering total HVAC operational costs is a goal for your program, getting the lowest maintenance bid will definitely not help accomplish that goal. Let me ask a couple of related questions. How long does your organization plan to manage and operate this building? That’s a big and important variable to consider.

C: We’re planning to manage this property for at least the next 5 to 10 years. We’re looking to expand the business if the existing locations can remain profitable, so keeping annual costs low and avoiding equipment replacement are both important. We’ve got enough units on each roof to keep the open spaces comfortable.

SP: So far, it sounds like you’d like to reduce or eliminate those expensive and unexpected emergency repairs and total unit replacements, if possible. To be honest, better maintenance will not guarantee elimination of unit failures, but we should be able to reduce them. That will allow you to have us assess current system performance and unit operation. We’ll be able to set up a plan for future replacement of low efficiency units or those that are likely to fail soon.

C: I’d really like to be looking at plans for future replacement with newer units rather than having to deal with a really expensive emergency failure and replacement. Those surprises throw our monthly cashflow budgets for a loop.

SP: So far, we’ve established a couple of key goals. Keeping the stores comfortable, increasing system uptime and reliability, reducing unexpected failures, and maybe saving on repair and energy costs. Do those sound like the priorities?

C: Those are the big ones. And, I think you’ve stated them in the right order. Reduce system costs, first. Reduce energy costs, second.

SP: Now, I’d like to dig a little deeper into how you approach the finances for maintenance and repairs. You said that you handle all those costs, right?

C: Right. I’m the one who must approve any facility expenses over a few hundred dollars, which the store managers take care of.

No inspections, service after breakdowns, run to fail

Minimal maintenance, filter

inspection

Periodic inspection incl. filter

replacement

Periodic inspection, seasonal start-up

inspections

preventive maintenance,

comprehensive periodic inspection

Unit evaluation based maintenance

Predictive maintenance

Unit monitored evaluation, some bldg. automation



SP: Do you have separate budgets established for contracts, extra repairs/service, energy, and for equipment replacement?

C: No, I’ve currently just charged all of those against one large “operating expense” budget. I don’t break out the heating and cooling system from electrical service/energy costs or roofing repairs or all the rest.

SP: So to be clear, all of those “operating expenses” are just charged against an operating budget, not a specific budget, right? Have you totaled up the additional HVAC repair and replacement costs each year to add to the contract and get an overall total HVAC systems cost?

C: No, I’ve just charged it all to “operating expenses.” I’ve never added up all the additional HVAC related expenses. It’s just seemed like it came to a lot more than that contract bid amount.

SP: We’ve not got a lot of time left in your hour today, so I’d like to suggest a couple of items be added to the agenda for our next meeting.

• First, I’d like to suggest I have one of our techs survey your system at one of the nine stores, maybe this one. He won’t be evaluating or measuring its current performance now but just listing what you have on the rooftop. He’ll look for signs of excessive wear or neglected maintenance since you’ve only authorized seasonal inspections and service.

• Next, I’d like to ask you to take that list and help us understand the approximate age of the equipment, how long you’ve had each unit running, or how recently it was replaced.

• Then I’d like you to list out all of the HVAC expenses you’ve had during the last two or three years. That way you and I will both get a better idea of what you’ve actually been spending on the equipment, including any unit replacement costs (unit and installation/startup included). We can use that information to compare your building costs to like buildings across the country—costs per square foot.

• Finally, I’d like you to have someone collect your electrical utility bills for the last two to three years to get some idea about what you’ve been spending. HVAC typically uses somewhere in the 25% to 40% range of that total for retail stores. We’ll try to pick some reasonable % to track.

There are two important reasons I’m asking you to get all of this information. You’re showing me that you are serious about establishing a better program. It’s worth our time to conduct that initial system survey. With that energy use and maintenance cost information, we’ll be able to establish a baseline which will help us to zero in on goals and figuring out some way to evaluate progress. Are you willing to tackle gathering that info?

C: It’ll take some time to dig all of that up. But, yes, I’m willing. It will take a couple of weeks. Will building meter billing be enough detail?

SP: No, I’d like you to collect both of the energy costs—the level of electrical consumption and demand charges in both the kWh and kW from those bills. Your utility might even have collected some of that information in tables they use to produce graphs online for your account. We’ll need the actual use, not just costs, because rates might have changed when maybe use hasn’t. We don’t want to blame the wrong item for any increases.

Great. All we have to do now is get a date set for my guys to access your roof for the survey and schedule a date for our next meeting. In the meantime, I’ll evaluate your current contract against what we normally propose and take a look at the equipment survey results. You’ll dig into past maintenance and system costs over and above contract costs and collect several years of energy data. Sounds like a good plan.

Western HVAC Performance Alliance CQM … Product/Performance... · Guide CUSTOMER COMMUNICATIONS...

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