When selecting a electronic system provider use the following questions as a guide to help calculate the true cost of the system.
- What is the initial cost of the installation?
- What is the warranty provided by the equipment manufacturer(s)?
- What is the warranty provided by the installation company?
- Are there any recurring fees required by the manufacturer or installation company? Example - subscriptions for software updates, programming, etc.
- What are the installation company’s charges for any government required services? Example - state mandated inspections of fire alarm systems.
- What are the estimated replacement costs for the primary components of the system? Primary components would be control panels, sensors, horns, etc. Try to get product pricing guaranteed for at least two years.
- What are the installation company’s standard service rates? Is there a minimum time or trip charge? Is there a recurring fee required to receive service? Example - some companies require you to subscribe to their software update program prior to providing repair or upgrade services.
Let’s look at an example for a fire alarm installation.
|Category||Company A||Company X|
|Manufacturer Warranty||3-5 years, depending on component||1 year|
|Installer Warranty||Conditional Lifetime||1 year|
|Arbitrary Recurring Fees||none||$5,000.00|
|Replacement Costs||$4,000.00 for main panel, $80.00 per smoke detector, $60.00 per horn/strobe||$8,000.00 for main panel, $110.00 per smoke detector, $75.00 per horn/strobe|
|Service Rates||$85.00 per hour, two-hour minimum||$125.00 per hour, three-hour minimum|
So looking at proposals from these two companies, Company X’s price appears lower - until you consider the cost of ownership. In the first year, Company X adds $9,000.00 to the initial cost - narrowing the gap from $15,000.00 to $6,000.00 - and that’s in just the first year!
In year two - again there is a $9,000.00 charge from Company X - while only a $2,000.00 charge from Company A. The initial cost of installation may be higher with Company A - but that investment is recovered within two years.
If you hadn’t figured it out by now - that’s a typical comparison of AMFES with our competition (you get to guess who’s Company X).