- Tags : Negotiation Strategy
By: ProcurementIQ Analyst, Jonathan Bryan
Strategic Questions for Choosing the Right Supplier
The heating, ventilation and air-conditioning (HVAC) construction and maintenance market has been flourishing in the past three years. Increased adoption and use of central air systems have pushed market revenue up 4.3% to $91.7 billion in 2017. HVAC systems are used throughout all industries to provide comfortable working and living conditions for occupants. Furthermore, many companies have been upgrading their AC systems to be more energy efficient, thereby spurring demand for these services.
Suppliers in this market often provide a range of services under the HVAC umbrella, such as system, filter and boiler inspection; preventive and emergency maintenance; and water treatment services. While in-house maintenance services can cover some aspects of HVAC maintenance, the importance and complexity of these systems often pressure buyers into seeking third-party service providers with strong credentials and experience. Such suppliers often reduce further expenses through preventive maintenance and greater technical experience.
The number of service providers for HVAC construction and maintenance typically correlates with trends in a region’s construction market. Most vendors have fewer than 20 employees and focus on small construction projects or building AC maintenance. Additionally, startup costs and barriers to entry are low in this market, which allows it to expand and contract alongside the overall construction market. ProcurementIQ estimates that there are more than 108,000 service providers operating in the HVAC construction and maintenance market in 2017. While market competition varies by region, it is generally high due to the breadth of available suppliers. Given the size of the market, buyers can often have difficulties choosing a vendor.
To assist in the selection process, ProcurementIQ has identified several key questions procurement professionals should ask when selecting an HVAC construction and maintenance service provider: