Rabbits' feet and lucky pennies took commercial HVAC contractors only so far through the first days of the current economic downturn, some two years ago. Once the wishing and hoping had ended, it was the proven measures that took the best companies through to survival in the present day: customer contacts, new technology, more attentive service, referrals, and overall leaner practices.

The contractors interviewed for the 2011 Contracting Business.com Design/Build Contractor Survey (click here for CB.com Top 50 for 2011)are primed for a business resurgence. New installations have dropped off for most, but service activity has been steady. They say the ultimate remedy will be more shovels breaking ground, and looser purse strings from banks and customers.

Charles Richter, executive vice president, ACCO Engineered Systems, Glendale, CA, has seen many business cycles come and go during his 43 years in the HVAC industry. He says this present downturn is notable for its duration, and for a lack of help from usually eager bankers.

"We've tracked it over time, and we typically see a downturn in the construction market every eight to 10 years. But this one has been longer and more brutal," Richter explains. "The length of the downturn, to a great degree, is being caused by the lack of financing that's available to the private sector marketplace."

What does a mechanical HVAC superpower such as ACCO —with stated 2010 revenue of $470 million — do in times like these, to stave off the, "bigger they are, the harder they fall" syndrome? Richter says a hefty project backlog helps to halt a decline, as long as those projects last.

"As you consume your backlog, you have to find replacement projects. In the early stages of the recession, our burn rate was greater than our replenishment rate. In the last few months we've seen the replenishment rate start to exceed our burn rate. There are definitely some positive signs."

Those positive signs include an upswing in ACCO's activity in the health care, government, and education markets.

BIM & LEED Gain Ground
Building information modeling (BIM)—the computer aided design process that provides 3D computer graphic representations showing the integration of all aspects of a project, continues to gain in popularity. Today, 28% of contractors we surveyed have replaced their usual project planning methods with BIM’s richly-detailed CAD drawings (http://bit.ly/BIM_Revolution).

"Our BIM growth has been due to increased specification requirements for projects, an expansion of our piping and plumbing prefabrication, and the use of automated survey instruments for the layout of hangers and inserts,” says Guy Gast, president of the Iowa division of Waldinger Corp., Des Moines, IA. He adds that Waldinger, with a solid $150 million in revenue, has always been a leader in CAD/CAM, and BIM applications play to the firm’s strengths.

Joe Cvetas, chief business development officer, Southland Industries, Long Beach, CA — the 2001 ContractingBusiness.com Commercial HVAC Contractor of the Year— says Southland first used BIM more than two decades ago, to improve its fabrication and installation capability. As the program has been improved, Southland has expanded its use of it.

"Southland uses BIM to streamline the engineering, construction, and maintenance process, and provide accurate, valuable, and usable content to owners for operating, maintaining, and renovating the facility," Cvetas says.

Dennis Muravez, retrofit/service manager, for McClelland Air, Chico CA, says McClelland is the only company north of Sacramento with in-house BIM capabilities, which harmonize with McClelland’s commitment to be ready for anything.

"We try to meet our customers' needs, now and in the future. The trends are LEED® (Leadership in Energy and Environmental Design — http://bit.ly/LEED_Movement) and BIM, and we're getting started in that direction," says Muravez, a 25-year employee with supervisory responsibilities over 14 technicians. "We're seeing customers who are trying to be more environmentally-friendly and energy-efficient."

'Green' Counselor Selling
Our survey found that commercial HVAC contractors' pursuit of the United States Green Building Council's (USGBC's) LEED certification and/or "greener" HVAC delivery methods, continues at a steady pace; 71% say they're getting greener. However, as with all new methods and ideas, there's a right way and a wrong way to proceed. Regarding green mechanical improvements, Jeff Scherr, president, and Tony Scherr, vice president, Comfort Heating & Air Conditioning, Billings, MT, follow a well-defined plan of action and customer counseling.

"We offer green products, such as high efficiency heating and cooling equipment, ECM motors, digital thermostats, and more," Jeff Scherr says. "We also tout how maintenance plans are essentially green, as they will ensure that the equipment being serviced will run at designed efficiency; for example, how plugged coils will increase cooling costs. We also discuss proper equipment settings. All of this is green, and customers appreciate it," Scherr says, and adds that he views greener building comfort as the prize at the end of a sometimes complicated maze, that customers need help navigating through.