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  1. #1
    Join Date
    Jun 2007
    Location
    Maine
    Posts
    12

    Default Oil Boiler Bids: Why the Difference Between These Two?

    Background: We have a 3100 sqft old house that has had insulation retrofitted, as well as all new double-pane efficient windows and doors. Most of the house is heated with big old cast-iron hot water radiators, but there is a three-room zone (den, laundry room and attached bathroom) heated with baseboard. We generally keep the heat in that three-room zone several degrees lower than in the rest of the house. We did our own whole-house heat loss and came out at 108K, estimating high on items that we weren't sure about. (In other words, our true number should not be higher and is probably lower.) One of the bidders calculated our heat load from radiators, baseboard, etc. at 112K.

    We have been getting bids to replace our ancient oil boiler. We have five bids and we are satisfied with that number. After doing a lot of research and getting a recommendation from an independent HVAC consultant, we've decided to go with Energy Kinetics' System 2000. I know there have been some knocks against this system, but we have researched those criticisms and we're comfortable with our choice.

    We have two bids on the System 2000, but they are quite different. I would like to describe the two bids, talk about the bidders, and see if anybody has any ideas why there is such a significant bid price differential. For reasons I'll explain below, we have a strong preference for the higher bidder, but we want to understand and feel comfortable with why the bids are different before we pay more.

    BIDDER #1 (Let's call him Chet)

    Bid price is $9,850, for:

    EK-1 with its 40-gal storage tank. Burner is Beckett model AFG
    Replace current zone system with System 2000 zone manager
    Honeywell AQ2000 outdoor reset
    Two new room thermostats
    In addition to mfg warranties, a 12-month parts/labor warranty

    No down payment required

    BIDDER #2 (Let's call him Ray)

    Bid price is $7,900 for EK-1 (burner make not specified)

    In addition to mfg warranties, a 12-month parts/labor warranty if we buy our oil from Ray's company.

    33% down payment required.

    Ray's bid doesn't mention the storage tank, but the company has told us on the phone that it's included. It definitely doesn't include the outdoor reset or the new room thermostats. We think it includes the zone manager, but we need to confirm that.

    COMPARING CHET AND RAY

    Chet has had his own heating contractor business for many years and is well known and respected. He has excellent reports on Angie's list. Other contractors in the area we've talked to speak very highly of him. The guy who is lining our chimney (who was recommended to us by just about everybody and who is great) said he gets plenty of referrals from both of them and of course he wouldn't say anything bad, but it was clear he was a big fan of Chet's.

    We really liked Chet when he came to the house. He was friendly, checked everything out carefully and then sat down and talked with us for nearly an hour, answering all of our questions in a way that was easy for us to understand.

    Chet is a System 2000 Premium Dealer, which means he has had all their training, has installed at least 20 System 2000s per year and has 24-hour service. Chet told us that he has been recommending the System 2000 since 2006 and he was prompted to study the System 2000 by its energy cost savings, which is critically important here in Maine.

    Ray is about 60 and had his own heating contractor business for many years, but he now works for an oil/propane/kerosene supply and heating equipment company. He is a very quiet guy; not unfriendly by any means, but a little shy. He seemed to check everything out fairly carefully. He was here about half an hour. Ray told us he's been installing and servicing the System 2000 for about 15 years. He was not identified to us as a Premium Dealer by Energy Kinetics. He has no reports on Angie's List.

    COMPARING THE BIDS

    Obviously, one explanation for the bid differential is that Chet's includes the outdoor reset and Ray's doesn't. We have decided we do want the outdoor reset, though we understand that it likely will not save us as much with the System 2000 as with a different boiler system. We assume that Ray would add outdoor reset to his bid if we asked. We know that Chet will take the outdoor reset out of his bid if we want.

    We assume that the two new room thermostats we're getting from Chet but not Ray should cause a minimal difference in their bids. I don't know if the installer warranty being conditioned, in Ray's case, with us buying oil from his company has any effect on the bid price. I do know we are not planning to buy oil from his company.

    We are meeting with Ray on Monday to talk about his bid and maybe all will be explained then. We did talk to Chet yesterday about the discrepancy and he said he was surprised how low Ray's bid was. He didn't have a bad word to say about Ray. He said it's possible that Ray is not using the primary/secondary piping system he plans to put in that he thinks is a good idea for our setup. I think he may be correct there, since Ray's bid just says: "connect new boiler to supply and return piping." Of course we will ask about that. Bottom line with Chet is that he is standing by his bid, which I respect.

    MAKING THE FINAL DECISION

    We really feel most comfortable with Chet as a person and a professional. He's enthusiastic and we like the fact that he has a longstanding independent heating business, so that we know his recommendations are based on his own choices, not dictated to him by his employer.

    I don't have a strong positive feeling about Ray's bid, though he seemed to be an honest, experienced and competent person. I feel like there must be something missing there. On an apparent apples-to-apples comparison with the bids we received for three-pass cast-iron boilers (all with Reillo burners), his was the lowest. Our other bids were for (1) Buderus G115/34 with a Weil-McLain **** Plus 40 indirect h/w, (2) Buderus G215/3 with a SuperStor SSU45 h/w and (3) Pensotti DK2-5 with Amtrol CH31-2 h/w. If you delete the outdoor reset from those other bids, they're $300+ more than Ray's bid. One of the Buderus bidders said he could also quote us a System 2000 but when he heard Ray's quote he expressed surprise, said he couldn't come close to it and decided not to include a System 2000 bid. I know somebody's bid has to be the lowest, but everybody seems to assume that the System 2000 will generally be a little more expensive than the kinds of three-pass cast-iron boiler systems we're looking at.

    After we meet with Ray, I hope we have an understanding of what underlies the spread between his bid and Chet's. If not, we may call the district sales manager for System 2000 to see if he can give us any helpful information.

    ULTIMATE QUESTION

    Sorry for such a long-winded post, but I wanted to try to put in every potentially relevant thing I could think of.

    Does anybody have any comments that can help us figure out what accounts for the difference in Chet's and Ray's bid prices? Any comments on outdoor reset when coupled with the System 2000? How about primary/secondary piping systems in our setup?

    Thanks in advance for any insights you may be able to offer.

  2. #2
    Join Date
    Jun 2007
    Location
    Fayette County, Ohio
    Posts
    6,047

    Default Re: Oil Boiler Bids: Why the Difference Between These Two?

    One of the big differences that I see is the 2 additional thermostats, which suggests additional zone control.
    Jack
    Be sure you live your life, because you are a long time dead.-Scottish Proverb

  3. #3
    Join Date
    Jun 2007
    Location
    Maine
    Posts
    12

    Default Re: Oil Boiler Bids: Why the Difference Between These Two?

    JLM, thanks for your reply. I don't think Chet is looking at additional zone control. We never discussed additional zones. One of the new thermostats is definitely because he's replacing the old-style mercury-switch thermostat with a digital thermometer for Zone 1 (the main zone). I think the other one is for Zone 2, although that zone already has a digital thermostat.

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