Elevator Maintenance Contracts

By Michael Morgenstern President/Owner National Elevator Consulting

There is a growing interest among building owners and operators for pooled, tailored, long-term maintenance/service contracts. The primary benefits include customization to suit specific requirements, more influence to ensure better service, and lower pricing. An agreement that is written exclusively for the building owners/operators ensures that specific requirements are addressed for specific types of buildings included under the contract. When negotiating elevator contracts the expertise, knowledge, and influence of using experts is essential.

It is important to point out that standard contracts proposed by elevator contractors are not written in the best interests of the building owner/opera- tor, but that of the elevator contractor. An experienced elevator consultant will draft a customized tender specification, deliver a comprehensive, cost-effective package, and circumvent unreasonable clauses often included in standard contracts provided directly by elevator companies.

Longer-term comprehensive maintenance service contracts assure quality service at a lower overall cost.

Pricing is largely linked to labour rate changes and the cost of materials. Although a fixed-price contract is preferred by most building owners and operators, it is not the most cost-effective approach in the long term. The consultant’s role is vital in drafting a tailored comprehensive specification at a reasonable cost. Often consultants can negotiate volume pricing by including additional buildings within a tender package, and savings are realized for all building owners.

Performing preventative maintenance to maximize the life of the elevator is in the best interests of both the elevator contractor and the customer.

Building owners typically long-term capital upgrade budgets and replacing elevators prematurely due to inadequate servicing disrupts financial forecasts. Additionally, breakdowns caused by inadequate maintenance service often result in service disruptions to building residents and staff, inconvenience to all elevator users, and lower customer satisfaction.

Planned maintenance service has many benefits, including the reduction of repair costs, extended life of equipment, lower risk of breakdowns, and increased efficiency with less unplanned downtime.

In Ontario, it is the owner’s responsibility to ensure the mandated level of maintenance service is provided in compliance with the ASME A17.12019/CSA B44-19 Safety Code for Elevators and Escalators. However, this is only a minimum requirement.

The consultant will address in a maintenance service tender specification many other requirements and special conditions, including the service level and frequency required, as the number of preventative maintenance visits per year is not specified in many standard contracts.

When negotiating contracts, there are many key elements owners should be looking for with the help of a consultant.

The auto-renewal clause in many service contracts is only advantageous for the elevator company to secure an additional contract term, without the owner having the option to obtain competitive pricing. To ensure that the preventive maintenance coverage continues when both parties do not realize the term has expired, the contract should be written to go on for shorter terms (month-tomonth) which allows for the building owner’s options to remain open.

What services are included and at what cost? What is covered? Excluded? The range of services and coverage is vast, and the fine print is important. What are the terms of the agreement? Con- tractors vary in expertise and efficiency. Working with a consultant to award a contract is in the best interest of the building owner and operator. Consultants can bridge the needs of the customer with the credentials of the contractor, to find a well-balanced match.

Cost, ability to deliver, and timeline are not the only considerations. A company’s strength, size, location, skill level, performance, customer service, and experience, are also considered by consultants to create a customized relationship and contract. A comprehensive and tailored contract will set both the customer and the contractor up for a successful long-term relationship. u