Do you know what kind of commissioning you are getting? (Part 2 - fee differences)

December 13, 2018

This post is a follow-up to an earlier post here on process vs. technical commissioning and will make much more sense if you have read part 1.

 

Here I am going to take you through a hypothetical project to give you an idea of the differences in services you will see between a technical commissioning approach and a process commissioning approach. This will also give you an idea of why firms offering these two different types of commissioning will give you significantly different bids on a project.

What you will see is that even though technical commissioning is a costlier service, the amount of money saved by not paying Contractors more AND having a more thorough commissioning service more than pays for itself by the time the building is accepted by the Owner.

 

Let’s look at process vs. technical commissioning using a hypothetical project:

 

We’ll say that this project is the new construction of a 50,000 sq.ft. high school. Building spaces will consist of a gymnasium, cafeteria, auditorium, administration, classrooms, and shop spaces. Project delivery method shouldn’t matter too much for the purposes of this scenario, but let’s assume that this will be delivered with a design-bid-build model and the construction team will utilize a single-prime contract structure (if it was a multiple-prime contract structure then things get really messy!).

 

Systems commissioned would consist of:

 

HVAC:

  • Variable-volume air handling units

  • VAV boxes w/ hot water reheat coils

  • Finned tube radiation along the perimeter

  • Unit heaters and cabinet unit heaters

  • Natural gas boilers with a primary/secondary heating piping system with redundant pumps

  • Air-cooled chiller with redundant chilled water pumps

  • Roof-mounted exhaust fans

  • Natural gas kitchen and shop make-up air units

  • Data room air conditioning units

  • Building Automation System (BAS) for systems

 

Domestic Plumbing:

  • Electric domestic water heaters with recirculation pumps

 

Electrical:

  • Zone level dual technology occupancy sensors which are tied into the classroom VAV boxes as well as lighting

  • Daylight harvesting sensors in common lobby areas

  • Emergency diesel generator and associated ATS switches

 

Let’s give this project the following commissioning scope (this is a mid-range scope as far as commissioning goes):

  • Commissioning plan

  • Document review (2 document reviews)

  • Shop drawing review of commissioned equipment

  • Prefunctional checklists

  • TAB verification of outside air quantities to AHU’s

  • Functional performance testing

  • 10-month warranty review

  • Final commissioning report

 

Alright, we have a clear picture in our minds of what the project is, and the scope of commissioning expected. Now let’s look at the project through the lens of a process commissioning approach vs. technical commissioning approach.

 

Design Phase:

 

There is essentially no difference in the services offered by the two types of commissioning in this phase of a project. The main difference you might see is whether the commissioning firm does a ‘sampling based’ review or a ‘full review’ of the plans and specs. The advantage that the technical approach has is that having done all the plan review in this phase, it is those same individuals ON-SITE doing testing and verification in the construction and acceptance phases of the project. This results in more issues being resolved sooner rather than later (or not at all!) because someone less familiar with the entire scope of the project is performing testing.

 

Any commissioning service will do the following in the design phase:

  • Commissioning Authority (CxA) develops the design phase commissioning plan.

  • CxA performs a design phase kick-off meeting to describe roles and responsibilities.

  • CxA performs 2 reviews of the contract documents, typically at the 50% and 99% CD phase.

  • CxA  develops the commissioning specifications and related sections for other divisions (i.e., div. 21, 22, 23, 25, & 26).

 

Construction Phase:

 

Here is where you will start to see stark differences between the two approaches to commissioning: those performing process commissioning will be on-site significantly less and rely more on the Contractors to check their own work; those performing technical commissioning will be on-site to do in-person verification. The advantage of the technical approach is the in-person verification of equipment. In addition, since the commissioning team (as opposed to the Contractors) are checking multiple systems they are deliberately on the look-out for issues than arise when systems interact with each other (for example, the mechanical and electrical systems). It is often the case that each system is performing as intended from the point of view of that system alone, but when it is their interaction that creates a problem, it is not clear which Contractor is responsible to correct it – if that problem is noticed at all without a technical Commissioning Agent on site!

 

Both types of commissioning service provider do the following:

  • Leads the construction phase kick-off meeting to discuss roles and responsibilities. 

  • Reviews the equipment submittals of the commissioned equipment and systems alongside the A/E.

 

But from here on out the process approach and technical approach look very, very different. In short, the process approach produces paperwork for Contractors to fill out that is then spot-checked by the commissioning firm; in contrast, the technical approach involves Commissioning Agents being on-site to verify items themselves rather than relying on reports from the installing Contractors.

 

Here is a more detailed outline of how these approaches look in the construction phase:

 

Process Approach:

  • CxA updates the commissioning plan for the construction phase. I have seen project specifications where it asks that the Contractors develop the commissioning plan, but for this scenario, we will keep it with the CxA.

  • CxA develops the prefunctional check sheets and functional test sheets once shop drawings are approved.

  • CxA submits a copy of the functional performance test sheets to the A/E and Contractor(s) for review and comment.

  • CxA gives the prefunctional check sheets to the installing Contractors from the various divisions.

  • Contractors execute prefunctional check sheets. Each division Contractor will need to fill out their portion of the prefunctional check sheet for every piece of commissioned equipment. While filling out their portion, they are NOT looking at other trade sections.

  • Contractors turn completed check sheets over to the CxA for a sampling review. I have seen project specifications that indicate that the CxA will spot check anywhere from 1-100% of Contractor completed check sheets.

  • Contractors submit deficiencies to the CxA for inclusion onto the master issues log.

  • CxA reviews select completed check sheets. This usually happens towards the end of the construction phase when prefunctional check sheets are turned in.

 

Technical Approach:

  • CxA updates the commissioning plan for the construction phase.

  • CxA develops the prefunctional check sheets and functional test sheets once shop drawings are approved.

  • CxA submits a copy of the functional performance test sheets to the A/E and Contractor(s) for review and comment.

  • CxA executes prefunctional check sheets. Since the CxA is performing this work, they can be more pro-active in getting to the job site and working behind Contractors as they are installing the equipment. The CxA is also looking at all trade work and looking for issues arising from interactions between equipment and systems.

  • CxA alerts and discusses any deficiencies with the Contractors.

  • CxA adds and tracks deficiencies onto the master issues log.

 

You may notice the technical approach looks a bit simpler, and that is because it is: there is less involvement by the Contractors in completing commissioning paperwork. This leaves them free to focus on installing equipment. The CxA completes the prefunctional checks.

 

 

Acceptance Phase:

 

In this final phase you will also see significant differences between the process commissioning approach and the technical commissioning approach. The major difference between the two approaches during this phase of construction is who exactly is doing the testing and their familiarity with all building systems. Those commissioning firms employing the process approach will typically only have 1 agent on-site; this agent directs testing by Contractors (literally looking over the Contractors’ shoulders while they perform each test). This has the major disadvantage of requiring ALL Contractors to be on-site at the time of testing – often a logistical nightmare.

In addition, because the CxA was on-site significantly less during the construction phase they are less familiar with the building systems and possible issues.

 

By contrast, the technical commissioning team will consist of 2 technicians performing each test: these are the same technicians who have been on-site throughout the construction process and know the building systems well. The technical commissioning team will call Contractors back to the site only if it is necessary.

 

In this hypothetical scenario both types of commissioning will:

  • Complete the TAB verification along with the TAB Contractor.

  • CxA meets the Owner and Facility Staff to discuss building operation, any outstanding items, answer questions, etc. during the 10-month period of the warranty.

  • CxA compiles and turns over the final commissioning report once all commissioning scope items are completed.

Here is a more detailed outline of how these approaches look in the construction phase:

 

Process Approach:

 

Contractors (Mechanical, Electrical, Controls, and possibly others) perform functional performance testing at the direction of the CxA. The CxA observes and documents the testing process and results. Testing can either happen where all parties are present during the entire functional testing process, or testing is scheduled for individual parts for each Contractor. Either way, there are inefficiencies.

 

Technical Approach:

  • CxA conducts functional performance testing. This SHOULD be performed with a minimum of 2 commissioning technicians, one person at the BAS workstation and the other at the end device being tested. You NEED to have a person at the front end computer AND one at the end device you are testing! This is something that doesn't happen on a process approach.

  • CxA alerts and discusses any deficiencies with the Contractors.

  • CxA adds and tracks deficiencies onto the master issues log.

 

Cost Differences

 

Now that we have an idea of the various roles and responsibilities let’s take a look at associated costs with these types of commissioning approaches. As you can see from the process approach, there is more involvement by the various Contractors during the prefunctional and functional testing phases of the project. This time is above and beyond the time the Contractors spend on installing the equipment and performing their checks. In the technical approach you will have noticed that the CxA team spends more time on-site, often with a team of 2 technicians.

 

For the sake of simplicity, we will say the CxA and all Contractors in this scenario bill out at $100/hr.

 

Process Approach Fees

 

Let’s say that the CxA charges a fee of $40,000 (400 labor hours) for this project to deliver a process approach. This includes all of the deliverables, time to create the prefunctional check sheets, time for random sampling (let’s assume 25% sampling for this post), time for the creation of functional sheets, and time for observing and directing functional performance testing, etc.

 

Each Contractor will also need to include time in their bids for filling out prefunctional check sheets and include time, material, tools, etc. for performing functional testing at the direction of the CxA. The division 21, 22, 23, 25, and 26 Contractors in this example all need to include this time in their bids. Unless this has been clearly spelled out in the relevant specification sections how much time to include or the Contractors have enough experience in commissioning to know, they will be taking a guess on how much time to allot. The Contractors will either a.) over-estimate the time it takes, or more likely, b.) underestimate the time it takes. If they under-estimate, then you end up fighting with Contractors to get them to fully perform their commissioning tasks, or they will seek a change order for the additional time. From discussions that I have had with Contractors and research online so far, I have seen numbers range anywhere from being 10%-25% of what the CxA’s fee is. Taking our CxA’s fee of $40,000, this could range anywhere from $4,000-$10,000 (40-100 labor hours)…for each Sub-Contractor! This does not include additional costs of required testing equipment that the Contractors may need to provide. So if we stick to the lower end of this estimate and say that each Sub-Contractor comes in at 10% of what the CxA’s fee is, then by the time you add division 21, 22, 23, 25 and 26, that’s $20,000 total for the Contractors involvement. Add the $40,000 from the CxA, and we have a grand total of $60,000 to commission this building.

 

Technical Approach Fees

 

Utilizing a technical approach, we can expect that the CxA’s fees will be higher than a process approach provider because obviously, they are putting more time into this project. Using this project example as outlined above, the CxA should easily be able to come in within the same $60,000 (600 labor-hours) total commissioning fee for commissioning the project. This fee would cover all of the CxA’s time for creating documentation, executing prefunctional checks, performing functional performance testing utilizing 2 staff members, some follow-up verifications, and compiling the final report. With this approach, project Contractors do not need to include time in their bids to perform commissioning tasks. They only need to address deficiency items which did not meet the design intent.

 

I have had Contractors argue that even utilizing a technical approach that they still have added time in the project and should be compensated. I do not agree with this statement because the CxA can only test to and enforce what is in the original design documents. Any deficiency items identified by the CxA during the commissioning process are items that did NOT meet the design intent/bid documents. This is no different than if the Architect/Engineer or Owner walks through the site and notices that something was not installed or working per the contract documents. It is the Contractors responsibility to adhere to the contract documents. The CxA is merely an Owners representative, ensuring that the project is built and operating to meet the original design intent to meet the Owner’s needs.

 

Conclusion

 

From an Owner’s point of view when comparing fees from different commissioning providers, we can see how they might think: “I’ll go with Commissioning Firm A because their fee is $20,000 less than Commissioning Firm B”. Why would they spend the additional money to go with the higher priced technical commissioning firm. Well, reading through this post, and especially when taking into account the emergent behavior from our last blog post, you can begin to see why you should pay more attention to the commissioning delivery method rather than solely make your decision based on fee. You should keep in mind the indirect additional costs to the project in the form of additional Contractor fees and additional complexity in scheduling when your CxA utilizes a process approach.

 

Here is a summary from our 50,000 sq.ft. hypothetical example:

 

 

Clearly there is no real advantage to the lower process approach fee. And for several reasons, you are more likely to either spend more overall with the process approach and/or have a less functional and less-efficient building. Because technical commissioning firms are so much more involved in every phase of the project they will be able to deliver a better functioning building to the Owner at hand-over. Please ask your prospective commissioning provider many questions and read their proposal carefully so you know exactly what kind of service you are getting! Commissioning firms vary drastically in the services they provide, and we find that many people are un-aware of these differences. That is why we are taking the time to highlight the differences here.

 

Do you have a story or experience with the two commissioning processes? If so share your story with us via the ‘contact’ page here.

 

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Sources:

  1. https://www.contractingbusiness.com/archive/commissioning-contractors-perspective-providing-value-owner

  2. http://labs21.lbl.gov/DPM/Assets/PECI%20newconst%20commissioning%20costs.pdf

  3. https://www.wbdg.org/files/pdfs/establishing-commissioning-fees-wilkinson.pdf

  4. Direct conversations with Contractors

     

     

     

     

     

     

     

     

     

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