Getting a Good Contract for an HVAC Installation Job
Last updated in November 2016
Once you’ve decided on the new heating or cooling system you want to buy, collect bids from high-quality contractors. Each contractor’s proposal should include several elements, all of them important in your choice on the best outfit for your job.
Getting a Good Price
Based on what you learn from discussions with several companies, tell each company exactly what you want them to do. Then ask them to revise their proposals to respond to your exact specifications with quotes for fixed-price contracts.
Getting competitive bids on installation or replacement jobs is a very easy way to save money. For large installation jobs, with large price variations between bids, it’s common to save more than $1,500 by getting several bids.
Even for smaller installation jobs, company-to-company price differences are large. The table below shows the difference between the highest and the lowest price quotes for four jobs we shopped. On three of the four jobs, the highest price was more than double the lowest price.
Our Undercover Shoppers Were Quoted
Big Price Differences by Companies*
|Description of job||Low price||Average price||High price|
|Replace the blower motor and capacitor for a Trane XR90 single-stage gas furnace||$308||$581||$1,046|
|Replace the ignitor for a Carrier Weathermaker 8000 gas furnace||$144||$236||$399|
|Supply and install a Honeywell VisionPRO TH8110R1008/U programmable thermostat||$195||$389||$900|
|Supply and install an Aprilaire #600M Whole-House Humidifier||$450||$621||$810|
|*Job descriptions are summaries; for each job, companies were given additional detailed specifications and instructions.|
Our surveys of consumers indicate that even for jobs that cost more than $2,000, more than 40 percent of consumers get no competitive bids, and only about 25 percent get at least three bids. For $1,000 to $2,000 jobs, nearly 60 percent get no competitive bids. These consumers are passing up some easy money. (Remember that money saved is better than money earned because you don’t pay taxes on the money you avoid spending.)
The price comparison scores on our Ratings Tables will help you select companies likely to make reasonable bids. But these scores are at best only a starting point. Many companies that charge relatively high prices for one job may come in relatively low on others.
Getting a Good Contract
In addition to the price, and a description of equipment to be installed and work to be done, each contractor’s proposal should include other elements, all of them important in your choice on the best outfit for your job.
Ask the contractor if it will give you a performance guarantee. For a complete heating and cooling system, the contract might say: “When the outside temperature is 85°F and six persons are inside, the inside temperature can be maintained at 78°F or cooler; when the outside temperature is 40°F, the inside temperature can be maintained at 75°F or higher.”
Also request a guarantee covering the uniformity of temperature. On a hot day, you don’t want to lower the temperature of some rooms to 65°F to get other rooms down to 78°F. If you are having ductwork installed, companies should be willing to guarantee that “all rooms on the same floor can be maintained within a range of 5°F.” It’s more difficult to make promises on floor-to-floor temperature variation, unless you’re installing a separate system for each floor.
The installer’s warranty should provide you with free repairs in the event of any defects in equipment or workmanship, or any failure to meet performance specifications. One year is standard; you can try to negotiate for more than one year, but it won’t be easy because contractors will insist that most installation defects show up in the course of one full heating or cooling season.
Make sure you get a contract that requires no payments until the work is complete. By withholding all payment until the end, you will be able to prod the contractor to make things right if you are not satisfied. It’s also a sign that the company is not living from hand to mouth—it is at least financially secure enough to buy equipment and make payroll without needing its customers’ payments.
If possible, make all payments by credit card. If you are dissatisfied with the work or the equipment, you can dispute the charge with your credit card issuer or the company.
Ask every company you are considering for a certificate of insurance indicating that it carries workers’ compensation coverage for workers injured while on your property (otherwise you could be liable). Also, get evidence of liability insurance, so you’ll know the company can make good if, for instance, it drops an air-conditioning unit through your ceiling.
Additional Work Specifications
Go over the details of exactly what work is to be done—we have seen excellent contracts running eight pages or longer. Make sure each company’s proposal (and the contract you finally sign) is explicit about these responsibilities:
- Providing needed electrical supply and hooking up your system to your existing electrical panel;
- Providing drainage for condensate;
- Providing equipment support (a base for an outside condensing unit, for example);
- Securing all required permits;
- Enclosing ductwork, finishing, and painting;
- Patching holes;
- Removing trash and old equipment.
Get It in Writing!
Once you have settled on all the terms of an installation job, have them written up in a firm fixed-price contract. Our consumer surveys found that for jobs that cost over $2,000 more than 10 percent of customers fail to get such contracts, and for $1,000 to $2,000 jobs more than 30 percent fail to document the deal. That is playing with fire.