14th September 2016
Save cost – and make money – through innovative M&E procurement processes
More public sector organisations are starting to look at smarter, hassle-free and more innovative procurement processes – particularly when it comes to heating systems – not only in a bid to reduce build costs but as a way to generate revenue.
The traditional approach to procuring mechanical services is to get contractors into design, value engineer and build it. Then you might get someone else in to operate the system and then, employ a customer services team to manage customer service and billing. This disjointed and inefficient approach often creates problems- designers over-design, builders look for savings post design and there is a lack of coordinated commissioning. This leaves you with ineffective systems, endless snags and contractors shrugging shoulders and looking elsewhere in an endless blame game.
With this in mind, think: how many heating systems run at a peak of 30% of their designed capacity? How many buildings have oversized pipes and excessive heat loss? How many system complaints are being received, which are a nightmare to sort out?
Too many to count.
So what does the clever person do? They link the operator into the design, ideally the build and certainly the commissioning. This is increasingly happening in the US. Better yet, they also get the operator to provide customer service and billing – taking on the risk of collected revenue as the system design and operability. If this is all done – or at least enforced – by one party, the subsequent issues which seem to plague developers are significantly reduced.
Better still, when the design is honed to ensure both efficient design and operation: plant and pipes are sized properly and unnecessary valves are removed, typically saving around 20% of build cost.
When the system is designed properly it is then easy to input long-term heat agreements and sell the right to provide heat to the building(s). This concession agreement can work across all sectors from residential, commercial or industrial sites. So, it turns out, the provision of M&E services is more interesting – and more important – than just a tick-box saying that it is done. It is an area in which extreme cost savings can be found and one where external money can be brought in to defray the cost of the installation.
By linking all of these steps together, not only can you ensure significant cost savings to your organisation, you can be sure that the endless shrug and “not my problems” are a thing of the past.
By Toby Heysham, Managing Director, Pinnacle Power