OEM Elevator Service Contract or Independent Elevator Company in Las Vegas? What Building Owners Are Really Paying For!
Written by Eng. Houssam Zammam, QEI Elevator Inspector and Elevator Portfolio Manager,
AR Elevator USA
When a new elevator is installed in a Las Vegas building, maintenance is almost always offered by the manufacturer. The first agreement is signed, a few years pass, and then a renewal letter is received with a number that makes a fair question be asked by the owner. What exactly is being paid for, and can this be done in a better way?
It is an issue which warrants serious attention. One of the biggest recurring expenses that a business establishment incurs is in elevator maintenance. The uptime, the repair costs, the inspections, and the daily lives of everyone who uses your cars as tenants, guests, and patients are all determined by the contract that lies underneath. It does not matter if the property being run is one located close to the Strip, one in Summerlin, one in Henderson, one in North Las Vegas, or one in Paradise, the same question will come up sooner or later.
The real differences between an OEM service contract and an independent elevator company in the Las Vegas Valley are explained in this guide, along with where each one makes sense and what should be asked before anything is signed.
The Short Answer
An OEM is the original equipment manufacturer, the company that built your elevator. Otis, Schindler, KONE and TK Elevator are the names most owners know. An independent elevator company is a contractor by whom equipment from many different manufacturers is maintained, repaired, and modernized, usually with a local team and local management.
Both can do great work, and have to follow the same licensing requirements for Nevada. But the distinctions lie in five areas. Contract format, turnaround time, parts and repair costs, adaptability, and last but certainly not least – your building’s level of service.
Elevator Maintenance Contract: What It Really Covers
Monthly prices are compared first by most owners. Only part of the story is told by the monthly price. Contract names are changed from one company to the next, so the scope should be read instead of the title. In general, elevator maintenance agreements fall into three levels.
1. Basic or examination contracts. The firm comes regularly to inspect, clean, lubricate, and maintain the machinery. The repair works and spare parts are charged separately.
2. Mid level contracts. Routine visits plus coverage for selected components, usually with a long list of exclusions.
3. Full maintenance contracts. Routine visits plus most repairs and parts, again with exclusions. These cost more each month, but they make budgeting far more predictable.
Two items surprise owners more than anything else. The first is the exclusions list. The second is the callback terms. A cheap-looking contract can suddenly turn into an expensive one if any critical item is missing and each call after business hours comes at a premium rate.
References to hoist cables, controllers, drive mechanisms, door operators, hydraulic cylinders and jacks, underground plumbing, interior cabin decorations, vandalism, and “obsolete” items require scrutiny. These are the items most often carved out of a full maintenance agreement, and they are also the most expensive things to replace.
Before comparing OEM and independent service proposals, building owners can review what an elevator maintenance contract should include to better understand service coverage, exclusions, callback terms, and repair responsibilities.
Does Your Contract Include the Annual Inspection, Category 5 Load Test and Fire Recall Testing?
This is where many Las Vegas owners get caught off guard. The three biggest compliance events of the year can still be left outside the monthly price, even when a maintenance contract is made to look complete. Before comparing any two proposals, be sure to know the details about how each proposal handles the following items.
The Annual Inspection and Category 1 Test
In Nevada, passenger and freight elevators are inspected every year by a state inspector or a special inspector, and the operating permit runs for no more than one year. During that visit, your elevator mechanic performs the annual Category 1 test, a no load checks of the safety devices and operating systems, while the inspector witnesses it.
There are usually three separate costs involved. The first is the mechanic’s time to prepare the equipment, run the Category 1 test and stay with the inspector. The second is the special inspector’s fee, since Nevada rules refer to the special inspector as the one retained by the building owner. The third is any deficiency the inspector writes up. Some contracts include the mechanic’s time, some bill it hourly, and deficiency repairs are often billed separately unless they fall under covered parts. Ask each bidder to state in writing which of these three costs are inside the monthly price. At AR Elevator USA, the annual Category 1 test is included in every maintenance contract.
The Category 5 Full Load Test
The five-year test is the Category 5 test, and it is the most demanding test that will be faced by your elevator. On a traction elevator, the car is loaded with certified test weights equal to its rated capacity, and it is proven by the mechanic that the governor, car safeties, buffers, and brake will stop and hold a fully loaded car. A Category 5 test is required for hydraulic elevators when they are equipped with items such as safeties, a governor, a plunger gripper, oil buffers or an overspeed valve. Category 5 tests are specifically required by Nevada rules to be witnessed by a special inspector or the state.
The vehicle will remain out of operation for much of the workday during a Category 5 test. A complete crew is usually necessary, and test weights must be brought to the building and loaded into the car. Sometimes adjustments or replacement parts must be done if the device fails its first attempt. This test is treated as extra work billed separately under some contracts, while it is included in a full maintenance agreement under others. Each bidder should be asked whether the Category 5 test is included, whether test weights and their delivery are included, and how a failed device would be billed. If your next Category 5 is due during the contract term, which proposal is truly the better deal can be changed by that answer alone?
For a detailed explanation of testing procedures, equipment requirements, inspection documentation, and scheduling, building owners can review our guide to Category 5 elevator testing in Las Vegas.
Fire Recall Testing and What It Should Cost
Firefighters’ emergency operation, often called fire recall or fire service, is what sends your elevators to the designated landing during a fire alarm and lets firefighters take control of the car. There are two different tests, and owners often confuse them.
The first is the routine key switch test. ASME A17.1 calls for elevators with firefighters’ emergency operation to be checked monthly by authorized personnel, using the Phase I recall key switch and at least a one floor run on Phase II, with a written record kept. A good maintenance contract should include this check during regular visits and log it in your maintenance records.
The second is the fire alarm initiated recall test. Here the smoke detectors, heat detectors and other devices that trigger recall are activated, and the team confirms the elevator responds correctly, including the alternate landing and the flashing firefighter hat where they apply. In Nevada, the Report of Fire Service Testing is signed by both the fire alarm contractor and the elevator mechanic, and the completed report should be ready for the elevator inspector. Because it involves two trades working together, this test is often priced outside a basic maintenance agreement.
Rates for fire recall testing vary with the number of elevators, the number of floors and initiating devices, the type of building and whether the work happens during business hours or overnight. The rates for the work are usually quoted by elevator firms in one of two ways: flat rate per elevator or hourly charge for the mechanic’s time. Write to all of the bidders for their rate in writing, whether it is a rate per elevator or a rate per visit, the overtime rate charged should the test be required outside office hours, and who schedules the fire alarm contractor. The fire alarm contractor usually bills separately, so make sure you are comparing the full cost of a completed, signed report and not just half of it.
At AR Elevator USA, we keep it simple. The annual Category 1 test is included in every maintenance contract we write. The Category 5 load test and fire recall testing are quoted upon request, based on your equipment and your building, so you get a clear written price for each one before any work is scheduled.
What You Pay For With an OEM Contract
A manufacturer brings genuine strengths. The equipment was designed and built by it, so the product is known inside and out by it. Engineering support is provided behind its field technicians, and proprietary parts can often be supplied directly from its own supply chain. For a brand new elevator still under warranty, or for a system with unusual proprietary controls, it can be considered a strong choice.
What is included in the price should also be understood by owners. The cost of having regional offices, salespeople, and corporate infrastructure is borne by a huge national or international corporation, and that cost is somewhere factored into the contract. The cost of renewing, repairing, and upgrading is often priced well above the local branch level, making it difficult for your contacts to negotiate the price down. Many OEM agreements are run for several years and are automatically renewed unless written notice is given within a narrow window.
An OEM contract is not necessarily made into a bad deal by any of this. It simply means that the price should be tested against other bids.
What You Pay For With an Independent Elevator Company
Service, responsiveness, and flexibility are used by an independent contractor to compete. Because the company is smaller and the decision makers are usually located nearby, a direct line to the people doing the work and faster answers on repairs are often provided to owners. Room is also given to owners to shape a contract around the building rather than having the building forced into a standard template.
Many brands are also serviced by independents. Everything can often be placed under a single provider by a property with mixed equipment, for example, one manufacturer in the main tower and another in the parking garage. Scheduling, records, inspections, and billing are all kept in one place.
Wide variations in size and capability are seen among independent companies. Some are outstanding. Some are stretched thin. As the owner, your job is to verify the company rather than assume anything about it.
What Stays the Same in Nevada No Matter Who You Hire
Nevada sets the same baseline for every provider. According to NRS 455C, any person involved in constructing, installing, altering, or repairing an elevator is supposed to be a certified elevator mechanic; the task is undertaken by a licensed elevator contractor. Apprentices and helpers can be used in assisting but are supposed to be supervised by a certified mechanic.
Periodic tests have to be conducted by an elevator mechanic who is certified and has to be attended by an inspector or a special inspector and the contractor has to issue prior written notification before the testing commences. Passenger and freight elevators are tested once every year, while an elevator permit lasts for only one year. Those requirements are identical whether your maintenance provider is a global manufacturer or a Las Vegas company.
There is one more point many owners miss. Under NAC 455C.504, the maintenance control program and all maintenance records for each piece of equipment are the property of the owner of the elevator, not the contractor. The owner is responsible for keeping them at the building or at a central location, making them available to inspectors on request, and retaining maintenance records for at least five years. Records can be kept electronically, as long as they are complete, current and immediately available.
In practical terms, if providers are ever changed, the program and records are retained with your building. Any company being considered should be asked exactly how and where that documentation is kept and how quickly a full copy can be provided.
To keep inspection dates, periodic testing requirements, and permit renewals on track regardless of which contractor you hire, building owners can consult our Nevada elevator compliance calendar.
Why Las Vegas Buildings Are a Special Case
Elevators are operated in Southern Nevada in circumstances not seen anywhere else in most of America. The machine room and hoistway temperatures are raised due to the hot summer climate, causing problems for the controllers, drives, and hydraulic oil. Fine desert dust works its way into door tracks, door operators and hall fixtures. Hotels, casinos, resorts and convention properties are operated around the clock, so a stuck car at midnight on a holiday weekend is still treated as a guest complaint and may result in an entrapment call. Long outages cannot be afforded at all by medical offices, surgery centers and senior living communities in Henderson, Spring Valley and Enterprise.
More importance is given to response time and local presence than to the logo on the contract. You should be asked where the technicians assigned to your building actually live and work and how many certified Nevada mechanics are employed by the company in Clark County. You should be told how quickly a callback is answered at 2 a.m. on a Saturday in July.
Questions to Ask Every Bidder
Whether your current provider is retained or other providers are considered, the same questions should be put to everyone, and the answers should be requested in writing.
1. Are you a licensed elevator contractor in Nevada, and do all mechanics working on my equipment have certifications?
2. What exactly do you cover under my policy and what don’t you cover, and can I have the list of all exclusions?
3. How do you handle callbacks, and how much do you charge for nights, weekends, and holidays?
4. What is your normal response time to LV area jobs and who answers after hours?
5. How soon can I have my maintenance control program and maintenance history?
6. How would you go about pricing repair and parts not covered under the contract?
7. What is the contract duration? Will it auto-renew or how will I have to give notice to cancel it?
8. Can you service all makes of equipment that I have on my property even if some are proprietary controllers?
9. Who schedules periodic tests and annual inspections, and who coordinates with my special inspector?
10. Is the annual inspection and Category 1 test included, and what about the Category 5 full load test and test weights?
11. What is your price for conducting fire recall tests, and is that per elevator or per visit? Do you coordinate the work with the fire alarm company?
12. May I talk to three owners/managers in Southern Nevada who are your current clients?
Red Flags in an Elevator Agreement
1. Renewal by default with limited cancellation time period.
2. Ambiguities with regard to covered and non-covered services.
3. Long terms with steep annual price increases built in.
4. No clear commitment on callback response.
5. Hesitation or delay when you ask for your records or maintenance control program.
6. A proposal that cannot be compared item by item with the others.
Comparing Elevator Maintenance Estimates Equally
A low monthly figure is not necessarily an indication of an elevator being cheaper. For equal comparison of offers, align them along the following criteria.
1. Monthly rate and annual increase in price.
2. Scope of covered repairs and parts.
3. Callback and overtime policies.
4. Response time commitments.
5. Contract length and exit terms.
6. Whether the annual inspection, Category 1 test and Category 5 full load test are included.
7. The rate for fire recalls testing and who coordinates the fire alarm contractor.
8. Support for deficiency corrections after inspection.
9. References from similar properties in the Las Vegas Valley.
What you expect to spend in a normal year, including repairs outside the contract, should be added up. Then, a bad year, one with a failed controller or a major hydraulic repair, should be pictured. The right contract is the one that still makes sense in both years.
When an OEM Contract May Be the Right Call
1. Your elevator is fairly new and covered under the warranty period of the OEM, which demands servicing to be carried out only by the OEM.
2. Your building has more than eight elevators made by the same manufacturer, making the OEM more interested in providing prompt servicing.
3. You have properties in several states and you prefer having one national service agreement for your needs.
When an Independent Elevator Company May Be the Better Fit
1. More personal interaction and faster decision-making are desired by you.
2. Multiple elevators made by different manufacturers are owned by you, and consolidation is desired.
3. You want a contract written around your building, with plain terms and fewer surprises.
4. Your renewal price has jumped, and you want to see what the Las Vegas market really looks like.
5. Local response time matters more to you than a national brand name.
6. An independent elevator company is considered the best choice for routine service and fast response times when fewer than 8–10 units are owned on your property.
Switching Elevator Companies without Risking Your Permit
A maintenance provider is changed more routinely than many owners expect, but a plan is deserved.
1. Term, renewal date, and notice provisions need to be kept in mind after reading the existing agreement. If there is any doubt about any matter, it may be reviewed by an attorney.
2. Obtain a copy of your maintenance control program and your maintenance records, which belong to you.
3. Seek out two to three proposals in writing using the same scope in order to make comparisons.
4. The expiration date of your operating permits, as well as your inspection and testing dates, should be reviewed.
5. A walk-through should be conducted with the new vendor before the changeover date, with existing conditions and any deficiencies being documented.
6. Responsibilities regarding coordination with your special inspector for the next inspection cycle should be clarified.
With the right approach, the entire process should go smoothly. Neither your residents nor your guests should realize there is a change other than your elevators continue to operate.
FAQ
Can I switch from an OEM contract to an independent elevator company in Las Vegas?
In most instances, yes, but only if the terms of your current contract are adhered to. The duration of the contract, its expiration date, and the necessary notification period needs to be verified and the contract evaluated by a lawyer prior to giving the notice.
Are independent elevator companies cheaper than OEMs?
Not always. Pricing is determined by the equipment, the scope, and the company. The only reliable way to know is for written proposals with the same scope to be compared side by side.
Can an independent company service my brand of elevator?
There are many firms that service traction, hydraulic, and machine room-less elevators from various companies. The potential firms must be questioned about their experience on servicing your elevator and controller as well as management of proprietary diagnostic systems.
Who owns my elevator maintenance records in Nevada?
The owner does. According to NAC 455C.504, the maintenance control program and all maintenance records belong to the elevator owner, and the maintenance records shall be kept for at least five years.
Would switching to another elevator company have any effect on my permit?
No, provided that your permit and inspection schedules are met regularly. Your conversion should be done in accordance with your inspection schedule.
Does an elevator maintenance contract include the annual inspection in Las Vegas?
Sometimes, but rarely all of it. A contract may cover the mechanic’s time for the Category 1 test and inspection, while the special inspector’s fee and deficiency repairs are billed separately. Ask each bidder to spell this out in writing. Every AR Elevator USA maintenance contract includes the annual Category 1 test.
Is the Category 5 load test included in a maintenance contract?
It depends on the contract. Some agreements bill the five year Category 5 full load test as extra work, including the test weights and crew time. Others, often full maintenance agreements, include it. If your next Category 5 is due during the contract term, get the price before you sign. At AR Elevator USA, the Category 5 load test is quoted upon request with a clear written price.
How much does a fire recall test cost in Las Vegas?
The cost depends on how many elevators, floors, and initiating devices there are, as well as whether the testing is performed during office hours or at night. Most companies will charge either a flat fee per elevator or hourly, and a separate invoice comes from the fire alarm company. Ask for a written price that covers a completed, signed Report of Fire Service Testing. At AR Elevator USA, fire recall testing is quoted upon request, based on the number of elevators and devices in your building.
What licenses should an elevator company have in Nevada?
The corporation should have a license as an elevator contractor, and your equipment should be maintained by individuals who are licensed elevator mechanics in NRS 455C and NAC Chapter 455C. Ask for proof of both before you sign.
Get a Second Opinion on Your Elevator Contract
If a renewal just landed on your desk, or you simply want to know whether your current agreement is fair, AR Elevator USA can review it with you. We will look at what is covered, what is excluded, how callbacks are billed, whether your annual inspection, Category 5 load test and fire recall testing are included, and how the price compares with what similar buildings across Las Vegas, Henderson and North Las Vegas typically pay. If you move your maintenance to AR Elevator USA, the annual Category 1 test is included in your contract, and we will quote your Category 5 load test and fire recall testing upon request. There is no pressure to switch. Some owners stay where they are and negotiate better terms. Others decide to make a change. Either way, exactly what is being paid for will be known to you.
All elevator types and manufacturers throughout Southern Nevada are maintained, repaired, inspected, and modernized by AR Elevator USA. Call our Las Vegas team or visit arelevatorusa.com to schedule your contract review.
Contact AR Elevator USA
AR Elevator USA
4345 Corporate Center Drive, 203 Suites, North Las Vegas, NV 89030
☎ 702-463-6430 / 702-810-2757
✉ info@arelevatorusa.com