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The proliferation of installation and commissioning faults in Australia’s refrigeration and air conditioning industry has been attributed to the “least cost” approach to procurement.

Seeking out the cheapest option is the standard approach to procurement across the Australian RAC market and throughout the construction industry.

A federal government report released last month entitled Leaks, Maintenance & Emissions found the construction and RAC industries are highly competitive, with tender processes designed to rate different procurement options or different providers largely based on cost, with the least cost solution most often selected.

“In many projects this reflects the split incentives that exist between the developer/designer, who looks to achieve lowest capital costs, and the owner/operator who would benefit from a lowest life-cycle cost approach, even at the expense of a higher initial capital cost,” the report said.

“As less expensive equipment and lower quality systems tend to be lower performing and require more maintenance it also suggests that least cost purchasing can drive excessive energy consumption in RAC systems.”

At the same time least cost building construction practices do not build to best practice or good quality standards but to meet minimum compliance. Least cost can refer to both equipment and practitioners (designers and contractors) and both can have an influence on system quality.

The quality and integration of different building elements generally suffers, resulting in low quality buildings with poor sealing and low thermal performance.

The report found that systems procured on a least cost basis can employ low quality minimum performance equipment, poor workmanship and quality assurance, poor system monitoring and control, and lack of system documentation and operator training and understanding.

These tendencies in the Australian market can be compounded by an absence of an integrated approach to commissioning.

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