A facilities manager at a hospital said, “Some building owners would rather replace equipment a couple years too early than a week too late.” Those are some wise words, from our perspective. If you’ve ever been in charge of a building whose HVAC system has failed and occupants are roasting in the summer or freezing in the winter, you know the wisdom of this statement.
As long as everything is running smoothly, it’s difficult to justify a capital expenditure on a piece of commercial equipment. But what happens when, as the building ages, equipment begins to fail in spite of diligent preventive maintenance? How do you know if you should replace your equipment instead of servicing it?
- Consider the age of the equipment. Sometimes, if something in a system fails, it can be due to a faulty piece of equipment. More often than not, it’s due to improper installation. If you have a piece of equipment that is less than five years old, you should first check how the equipment is installed. If you find that everything is as it should be, do some equipment testing to see if it’s functioning properly. If the equipment is older, mechanical parts wear out after years of use. Repair costs will likely escalate; it’s important to consider if multiple repairs and all the costs incurred with those repairs is fiscally logical. You may find that replacement costs, while initially larger, are lower long-term than the cost of multiple repairs.
- How many times have you repaired the equipment? Be sure to log equipment repairs along with the costs of parts, labor and, perhaps less easily ascertained, the cost of down time for the facility. If you’ve had to make costly repairs on a piece of equipment more than twice, it may be time to consider a replacement.
- Consider new technologies available. You may be repairing a piece of equipment fairly regularly but you have a maintenance staff and the costs of parts are minimal. You know that recouping the first costs of a replacement will take some time so you’re willing to continue to repair aging equipment. However, there may be hidden cost benefits to replacement that you aren’t considering. Technology is improving by leaps and bounds in today’s world. Replacing an old piece of equipment may reduce your energy costs exponentially due to new efficiency standards.
It’s never an easy decision to pull the plug on large HVAC and plumbing system components. Fortunately, there are experts who can assist you with making the call. Your local manufacturer’s rep may have a field services department that can give you a breakdown on repair costs (including parts and labor) versus the cost of replacing the entire unit.