# Salvage value of decommisioned condensing units?



## Electric_Light (Nov 25, 2007)

Suppose I write ITB for replacement of A/C units, but not explicitly state the ownership of the decommissioned units, so that it is not implied that they belong to the contractor. 

After the bid is awarded, contractor will be asked to leave the existing units on premise. Would it bring a reasonable ROI by putting them on metal scrap or used equipment market myself? 

I figured that if thieves are ripping apart A/C systems in use for scrap copper, decommissioned units ought to be worth something and it seems silly to just let the contractors haul it away. If they're to be sold to scrapper, do they need to have the refrigerant recovered?


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## beenthere (Mar 5, 2009)

Yep, need to be recovered. or some won't take them. others may charge you more to recover then the scrap value.

Some contractors include the value of the scrap as part of their profit.

Better put it in the contract. or they may take them anyway, as implied ownership.


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## Sar-Con (Jun 23, 2010)

The best option is to have the contractors include the disposal/salvage in their contract. These guys know where to dispose of it, and how to handle any freon/other gases/etc. If it was left to you, you'd have to spend a few hours to source the best salvage guy, then haul it away, etc. Waste of your time. In a competitive market like this the contractor will know best and it will reflect in your prices. 

The second option, if these units are very large, or if there is a lot of units to be disposed, you may want to send out a second RFP out to just the salvage guys.


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## Electric_Light (Nov 25, 2007)

beenthere said:


> Yep, need to be recovered. or some won't take them. others may charge you more to recover then the scrap value.
> *
> Some contractors include the value of the scrap as part of their profit.*
> 
> Better put it in the contract. or* they may take them anyway,* as implied ownership.


Exactly, but they assume they get to keep it. This is why maybe its best to wait until binding bid is submitted, then instruct old units are not to leave premises. If I leave out the destiny of existing units out of ITB and they do not stipulate specifics in the bid submission that old units are to be surrendered as a part of payment, they're not entitled to it... or am I wrong? Anyone know how UCC handles situations like this? 

So, I think it is legit to accept the bid, then say instruct dismantled units are to remain on premises. I suppose I could include something clever like "recover refrigerant from existing units for use in other equipment owned by the owner" but leave out where about the old units go. I've seen old commercial units for sale, so it might even make sense to locate buyers before work begins and list as FOB origin @ owner's lot.


I mean,there's ought to be a way to get the same amount of pie for the least net cost without leaving the air conditioned office...

Edit: mods feel free to delete it.. I posted this in business section, where I should have posted in first place... thanks


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## beenthere (Mar 5, 2009)

Your wrong.

Thats where implied ownership comes in. If you omit that you want them in the contract. Then standard practice makes the units the property of the HVAC sub contractor.

Its pretty much industry practice. Some contractors will let the unit with you.

If you try slight of words in the contract. You'll end up getting lots and lots of job extra charges. That add up to alot more then what the old units are worth as scrap, or resell.

If i bid a job that someone tried to pull that, when i was including the salvage of the old condensers.

I could find a thousand bucks of job extras. Without looking. Not including the 750 dollar recovery deposit you would own me.


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## Electric_Light (Nov 25, 2007)

beenthere said:


> Your wrong.
> 
> Thats where implied ownership comes in. If you omit that you want them in the contract. Then standard practice makes the units the property of the HVAC sub contractor.


How is that spelled out in UCC? I can't find where it spells out trash is owner's, treasure is contractors'. If I solicit bids for lighting retrofit and not say anything about removed materials, can I expect the scrap ballasts and mercury containing lamps to become the property of retrofit company therefore the disposal is included in bid? If I explicitly state scrap is to not leave the premises, it might actually affect the bid price unfavorably. 



> Its pretty much industry practice. Some contractors will let the unit with you.
> 
> If you try slight of words in the contract. You'll end up getting lots and lots of job extra charges. That add up to alot more then what the old units are worth as scrap, or resell.
> 
> ...


Since ITB would include disconnecting of old unit for split system recovery is a part of required process. If they're self-contained units, then I'd probably want to hold off pulling charge until I've sold what I can to a used equipment broker. As for what's going to scrap, I can simply create another ITB for recovery and award it to someone else.


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## beenthere (Mar 5, 2009)

Don't have to recover split systems for removal. if they are still working, they can pumped down to themselves. If they aren't still working. The valves can be shut off, and only the line set and coil recovered. Still leaving the majority in the condenser.

Are you going to buy your own recovery tanks?

You need to specify, that ALL trash, used equipment, and material, will be placed in owner(you) provided dumpster(how ever, law in most states anything in a dumpster, is free to anyone that takes it out. So then you would need a special scrape material and equipment dumpster.

You MUST spell out if the equipment is to remain your property. 

Other wise. Expect lots of AIAs for lots of job extras.

EG: If I recover several systems. And then you inform me that you are keeping them. And also want the refrigerant. You better have your own cylinder right there at that time. Or I'll back charge you for storage, for every day that you don't have one. And either way. I'll charge you extra, for pumping it from my cylinder into Your cylinder. Which better have a current DOT cert.

And after that. If you expected the job to flow smoothly. You would be in for a surprise.


If you want to GC a job. Better be straight up with the subs. Or you'll be wondering if you should have bought yourself a jar of Vaseline.


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## thom (Nov 3, 2006)

Electric_Light said:


> Exactly, but they assume they get to keep it. This is why maybe its best to wait until binding bid is submitted, then instruct old units are not to leave premises.


So, you want to be an underhanded conniving assh0le, manipulating the bidders into thinking the salvage is theirs then taking it away in order to cheat them into a few more bucks in your pocket? 

Maybe the world will get lucky and you'll be run over by the salvage truck.


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## beenthere (Mar 5, 2009)

thom said:


> So, you want to be an underhanded conniving assh0le, manipulating the bidders into thinking the salvage is theirs then taking it away in order to cheat them into a few more bucks in your pocket?
> 
> Maybe the world will get lucky and you'll be run over by the salvage truck.


Wait till he wants a sub to release their lien.


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## flashheatingand (May 3, 2008)

I read this post in the business section as well. If this were a residential retro job, the h/o has dibbs on the equipment. We shouldn't assume that the gear is ours. I ask, and more times than not, they let us take it. If this is a big commercial job in which several units are involved, it still is between the hvac guys and the owner. 

The way I sees it, the property owner gets dibbs, then the sub. The G.C. is at the bottom of the feed chain in this scenario.


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## CCCo. (Jul 19, 2009)

What was the question again? 

I forget. :sleep1:


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## MAULEMALL (May 16, 2010)

CCCo. said:


> What was the question again?
> 
> I forget. :sleep1:


 *Salvage value of decommisioned condensing units?*



*I took a couple units off of some comercial property and got $.09 a pound for the compressors... the rest goes into piles,, Copper , Al , Steel*


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## siggy (Aug 26, 2010)

To not let a contractor know the complete scope of work to be performed, even if this work includes "implied work," such as taking away your thash when finished is a very poor business practice. I thought this was a site for proffessional contractors not proffessional theives. I hope that your HVAC contractor comes to you at the end of a job and says "Oh, you wanted the system to actually heat and cool. Well thats gonna cost you extra!"


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## beenthere (Mar 5, 2009)

> i hope that your hvac contractor comes to you at the end of a job and says "oh, you wanted the system to actually heat and cool. Well thats gonna cost you extra!"


rofl


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## flashheatingand (May 3, 2008)

I dunno guys, the op does sound underhanded and that isn't right. But, the question at hand in this issue is, who has dibbs on the equipment. We first ask the client if they want the equipment. It's not ours until they say so.


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## MechAcc (Feb 27, 2005)

*Yes the refrigerant would have to be recovered if it is a split system with dead compressor or if the unit is to be cut apart for scrapping.
Be upfront with the contractors during the bid process that the old equipment is to be left on premises. 

*


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## flashheatingand (May 3, 2008)

Why does the guy "have" to be up-front. Let us just say that he heard that the equipment is worth $30.00, while the work was being performed, doesn't he have the right-away to property. Until they say they don't want the piece, it's theirs.

Hey, I want the scrap, it's easy money. Don't get me wrong. But, it's our responsibility to ask before taking it away. 

Here is another scenario: You find a pretty good saw-zall or a nice torch in the crawl space. Is it implied that the tool belongs to the worker? Or do you ask first?


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## beenthere (Mar 5, 2009)

flashheatingand said:


> I dunno guys, the op does sound underhanded and that isn't right. But, the question at hand in this issue is, who has dibbs on the equipment. We first ask the client if they want the equipment. It's not ours until they say so.


From the OP's statements. I don't think this is a little residential job he is talking about.

In commercial. Everything is to be spelled out in the contract.

In no mention of the equipment is given. The HVAC contractor gets it.

if an owner wants to retain ownership of the refrigerant. Then that must be speced in the contract. And weather he is providing his own DOT approved recovery cylinders, or buying them from you must also be speced in the contract.

If its not mentioned, the the refrigerant belongs to the HVAC contractor.

If not mentioned and then the GC, or building/space owner wants the equipment or refrigerant. Then it becomes a change order, and is charged separately for, and at a higher price.

If a contract lists that all Subs are responsible for their own trash removal. And the old equipment is not listed as belonging to the GC/building/space owner. It is the property of the HVAC sub by the contracts trash paragraph.

On a large commercial job. The scrape value of the old units, can be thousands of dollars. And that is where some of the job profit is figured on some bids. Most of the time, the HVAC sub will ask who has owner ship, before bidding. But not always. So it ends up being a job killer, if the GC tries to claim ownership.


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## beenthere (Mar 5, 2009)

flashheatingand said:


> Here is another scenario: You find a pretty good saw-zall or a nice torch in the crawl space. Is it implied that the tool belongs to the worker? Or do you ask first?


A tool is not a scrape item. So its personal property of someone. Not part of the job demo work.


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## beenthere (Mar 5, 2009)

PS: Currently, #1 copper scrape is 2.80 a pound here. So we're not talking just 30 bucks for a little residential coil. On a commercial job that has several coils. Could be several hundred bucks, to a couple thousand depending on job size.

Heck, even steel is bringing 7 bucks on the hundred.


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