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Dave Hoeing

St. Louis area native Dave Hoeing has decades of experience to look back on when he talks about cost estimating and submitting bids for commercial HVAC projects. As a young man he earned his degree in Computer Aided Drafting (CAD) and soon after graduation went on to land his first job in the HVAC trade. His familiarity with the design side of the industry led him to estimating insulation jobs, and eventually much bigger jobs doing estimates for major commercial HVAC projects.

Hoeing didn’t sugar coat anything when talking to us about how contracts, estimating, and bidding work in the HVAC industry. He held back just enough not to incriminate anyone and gave us an honest and gritty look at how contract bidding works in the real world.

  • How did you get into HVAC and what kind of background do you come from?

    I’m from St. Louis, been here all my life. Lived in Tulsa for six months but moved back.

    The way I got into HVAC was through my technical school ITT. I graduated in 1992 with an associate’s degree in Computer Aided Drafting and that was how I started by HVAC career, in that field using autoCAD.

    Eventually through the years as I moved on it kinda morphed or mutated into an estimator position because most of the drafting positions really dried up as engineers and project managers started doing those tasks on their own, as opposed to actually hiring a draftsperson.

  • What is a typical day like as an HVAC estimator?

    A typical day starts with checking your emails and the fax machine for contacts to see if there’s anything new to bid. If there is you would respond with a yes or no answer. Then your day would continue with ongoing bids that you have from the day before.

    If there’s a new bid you would download drawings and specs and start doing a takeoff on the drawing using a scale master wheel or a digitizer or any other computer interface means to analyze the project.

    Basically for HVAC estimating you just count up all the duct work, pipe fittings, equipment, labor, crane use – all those factors that are involved in completely installing the HVAC system so you don’t miss anything in your bid because everything is attached to dollars.

    To make a good estimate we would look at other bids we’ve done for other projects and we would incorporate those into ours; bids for equipment, suppliers, rooftop units, VAV boxes, pumps, air inline units, exhaust fans, supply grills – things like that. We would get numbers from those previous bids and add them to our bid. We’d also get an insulator price, a balancer price, and a controls price. So for an actual HVAC bid you’re looking at four or five or six other prices to put into your bid as well.

    Everything would come together on a single Excel spreadsheet where we would apply our profit and overhead at the end. Also tax if you have it, permits if needed – usually always – and we’d come to a final number. Normally we’d discuss it with a team and see if we all agree on that number, and make sure it sounds good for that project.

    Once we agreed we’d send it to the general contractors.

  • Presumably every HVAC estimator would go through that same process. Why do bids have such a wide range of variation?

    Well, there’s a myriad of answers for that. One is that you could have an estimator who doesn’t find or understand everything on the drawings.

    Another reason would be political reasons. Somebody knows something that the other guy doesn’t – some valuable information. Sometimes general contractors have favorite HVAC contractors that they always do business with and they give you what they call the “last look.” Sometimes they’ll even share the other bidders’ numbers with you and you’ll take a look at those and evaluate if you could do the job for that low of a number.

    Sometimes you’d have to walk away if it was impossible to do what they’re asking.

  • Can you explain what you mean about the politics in HVAC bidding?

    Definitely be weary, or at least cognizant, of the politics that go on. There’s a lot of behind-the-scenes conversations that take place that probably shouldn’t ethically. There’s a lot of bid rigging out there that I’ve seen; witnessed myself.

    You have the union involved, more so with the insulation side, but it can have some influence. Like I said, you may be friends with a certain general contractor that you’re real tight with and they prefer to use you as their mechanical guy. They put the bids out for bid but it’s just a going-through-the-motions type thing sometimes.

  • Can you give some examples of this and go into detail?

    Without incriminating anyone, I can tell you that my upper management would say things like, “We’ve got this job no matter what. They’re just going to send this out for a public bid and it doesn’t really matter what those numbers are. We’re going to get the job. Just do your regular bid and send it over.”

    Another example of bid rigging is actual calls from contractors who would literally tell you the other guy’s numbers. You’re not supposed to do that but it does happen.

  • You said it's unethical for a private business to pre-select the bidder they want. Why is that if it's a private company? Can't they choose whoever they want?

    Some bids are private bids and they do have that choice to choose whoever they want. Other bids, like schools or even some healthcare facilities, are public knowledge and they have to put it out for bid. In knowing who they’re going to use they put it out for bid anyway because they have to.

    In a private bid situation they might even do that just to make themselves look good. A just-to-keep-them-honest type of thing.

  • They don't want to be seen as playing favorites? What's the advantage in that?

    Exactly. The advantage comes from this: if you see that ABC company is always using XYZ insulation, you’re just wasting your time sending them a bid. You kind of read the writing on the wall after you bid specific contractors for a while. You bid them and you bid them and you bid them. And they always go with someone else.

  • You mean they want to keep other subcontractors involved so the competition stays on their toes?

    That’s exactly right. And they’ll even throw you a bone every now and then to keep you interested. But for all you know they’re taking your number that might be low all the time and calling up their buddy and saying, “XYZ Insulation is at this number.” I’ve had those types of calls all the time.

  • And when the general contractor does that to you, how do you know if they're telling the truth? That sounds like politics.

    Right. It’s a shame. It’s kind of a game you have to play. It’s kind of dirty and dishonest, but it does exist.

  • Have you ever seen a situation where the owner of a government-funded project has their contractor picked out before the bidding process starts?

    Those situation are high-profile and in the spotlight. They can’t do that. The risk of getting caught doing that is much greater that the risk for those as you go down the line: a general contractor, subcontractor, a subcontractor of a subcontractor, and so on.

    I’ve even seen it where you might be going after a job you really want and the general contractor calls you up and says, “We’ve got this other number that’s really low. We can’t go with you this time, we’ll make it up to you the next time.” Meaning they’ll allow you to see numbers, or tell you numbers, or say that you’re the only bidder, or allow you pad it a little for yourself the next time. There’s not a lot of that, but it does happen.

  • If you had to guess, what percentage of contracts would you say were favored or awarded on a friend basis?

    If I had to guess I’d say at least 50 percent. I don’t have any hard data to support that, it’s just kind of a guess. It’s always about the low number. It would be a true statement to say it’s definitely a lot more than most people would think.

  • Is it all about money?

    Pretty much. Everything is usually driven by the lowest number. Who can do it for the cheapest price. What was that line in Armageddon? “This giant nuclear weapon built by the lowest bidder.”

  • What advice would give for someone going in to the field of HVAC estimating and bidding?

    The bidding documents that you’re going to look at for almost every single job are terrible. There’s rare exceptions. You’re going to see incomplete drawings and it’s just because of the times we’re in. It’s get it done as fast as you can and it doesn’t matter if it’s right. It seems that way, but that’s just me.

    Other contractors have concurred that when the drawings are poor – there’s incorrect information, missing information, or conflicting information – that it can be a problem. If they show 12-inch piping going up to the floor above, and the next drawing shows two-inch, well, something doesn’t seem right there.

    Or you’ll look from drawing to drawing, and a giant chilled water line doesn’t show up and you’re like, “where does this go?” You have to be very cautious and weary of drawings. I take every single bid and ask myself, “Okay, what’s going to be wrong with this one?” Because it seems to happen every time.

    When you look at specifications, deciphering what they’re saying is an art in and of itself. Sometimes they’ll talk in circles or specify material that doesn’t exist anymore. Then you’ll have to A) talk to your supplier and qualify your bid using something comparable, or B) call the engineer, get his voicemail, leave a message, not get a call back… the idea is call the engineer, tell him that a product doesn’t exist, and ask him what can be used instead.

    Often times owners of insulation companies and mechanical contractors will take a guess – a swag. They’ll take a guess at what material makes most sense, and oftentimes what is the cheapest. They’ll bid it with a certain type of material and then use a cheaper material. Sometimes they’ll get caught and sometimes they won’t.

    I never got into that myself since I was never in a position to own a company, so I left those decision to others.

  • Why do HVAC schematic drawings have so many mistakes?

    I think the reason there are so many mistakes on these drawings and specifications is because – this is just an opinion – people just don’t care. They want to get the job done and get something to the next guy down and get paid. Everybody suffers because you spend more time than you would have if it had been done right.

    Some are just honest mistakes. If you have a 14-inch pipe and you go to the next floor and you show four-inch pipe then someone could have mistyped a “1.” You know, those things happen.

    But there’s a lot of instant gratification in this business to where all the players want everything done immediately and want to get paid. On the specifications side, they’ll often times use a common specification so they don’t have to edit it a lot. That makes sense in one way and not another. It makes sense in that there’s a lot of repeat items.

    If Washington University builds a building and they’re going to use 30-ton units or one-inch fiberglass they’re always going to use that same type of material on their buildings.

    For copying and pasting in a bad way, an example is when an engineer wants to use a more costly material because it’s better, and the specs designer glosses over it or misses it; they copy and paste it just to get it sent out.

    Then you bid the job and people call you back and ask, “why are you bidding this job with such-and-such material when we always use this other type of material?” And you answer, “well, that’s what’s in the spec.”

    The safest way to go about it is to bid what’s in the spec. Then you won’t get yourself in trouble.