Allocation of Elevator Contract Costs : LUSENET : Elevator Problem Discussion : One Thread

It seems there are MANY knowledgable people on this board re: elevators and I am hoping that one (or more) of you can help me.

The situation is that I am in a building where I think I am being overcharged for elevator maintenance. There are 9 total elevators with approximate specs as follows:

(1) Kone-Miprom 1 Hydraulic-5 openings (1) Kone-Miprom 1 Hydraulic-3 openings front & rear (1) Kone-Miprom 1 Hydraluic-3 openings (2) Kone-Miprom 21/Megatech Traction--8 floors--8 openings each (2) Kone-Miprom 21/Megatech Traction--15 floors--8 openings each (1) Kone-Miprom 21/Megatech Traction--33 floors--18 openings (1) Kone-Miprom 21/Megatech Traction--33 floors--33 openings

We are responsible for the last 2 (33 floor) elevators, the company responsible for the other 7 elevators negotiated the contract and had the maint company include a cost breakdown by elevator, which I think may have been specified by the other owner, not based on actual maint costs. Please comment if you could on this breakdown of costs.

First 3 elevators (hydraulics) $150/month for all 3 combined Next 2 elevators (8 floors) $300/month for both Next 2 elevators (15 floors) $300/month for both Next 2 elevators (33 floors) $400/month for both

We are responsible for the the 18 opening 33 floor elevator completely and 18 of the openings on the other 33 floor elevator. How would you go about properly allocating this cost? Are there professionals that could help us determine if we are being charged fairly?

I know this is a long question, but I know this group has a great deal of combined knowledge, and am hoping someone could give me a rough idea of where we are at, or at least steer me in the right direction

Thank-you in advance

-- BRS (, March 04, 2005


Overcharged? Those prices better be per elevator or you're getting the deal of a lifetime if it's full maintenance. Even at per elevator for full maintenance that's some great deals. At least for the LA area. Prices do reflect where you are because of union agreements. You're elevators are located where?

-- joe (, March 04, 2005.

I am in Michigan, and glad to know my costs are less than in LA :-), the total contract for all 9 elevators is $3,450 per month. My main concern is if the costs are allocated by elevator correctly. Should a 33 floor traction with 18 openings be eight times the cost of a 5 opening hydraulic for example?

Thank-you BRS

-- BRS (, March 04, 2005.

Yes they are correct. You can not compare hydraulic to traction. they are totally different and the tractions are much more expensive.

-- joe (, March 04, 2005.

OVERCHARGED! Those are incredibly low prices even for an O/G with no callbacks and overtime! $150 for 3 combined Lets see, a mechanic makes between $30-40/hr plus his benefits etc his costs are about $60-80 to the company. At $80/hr and he spends 1 hr on each car it's total cost to the company for just his labour is $240 to do one maintenance on 3 units. If he booked 1/2 per car (which means he isn't doing sweet dick all for mtce) it's still a cost of $120 to the company and your elevators will FALL APART! For an O/G contract you should be paying $150 /month /unit!

-- Brian (, March 04, 2005.

Just to give you an idea of how fair those prices are, i thought i might comment on the monthly contract price of the building i work in. It contains 5 2-3 stop hydros, 4 13stop battery cars, 6 15 stop, 15 story cars, 6 15 stop, 29 story cars, and 6 14stop 41 story cars, a couple of 35 stop freights and a 3 stop basement traction car. THere are a total of 31 hydro and traction cars. We are losing money charging $27k a month for service. The company we took the contract over from was getting $40k a month for just the 20 tower cars, and the other service company was getting close to the same for the remaining cars, a combined $80k a month for 31 elevators.

$50 a month for a hydro is about 1/3 of what it should cost. $300 a month for a traction car is a very CHEAP price. Sounds like you are getting a fine deal. The question really is, what level of service are you getting at that price, and is the company charging you for every repair they can? THat is how our company makes up its losses, billable repairs.

-- Jim B (, March 05, 2005.


Did you guys plan to take it below cost, or did you goof?

Thanks Dan

-- Dan (, March 05, 2005.

Sounds to me that 2 salesmen are in the unemployment line, along with a sales manager...

Company's today can't pay their men for what your contract was sold at, and make money...

Payback has to be NO SERVICE...

-- Will (, March 05, 2005.

Dan, I am not sure why they took the contract at the price they did. Honestly, it was the first true High Rise contract that our company had. What made it all worse was that when the 5 year contract came due, and the job went out to bid due to frustrations with the office (i.e. lack of call backs, billing problems, etc.) we ended up reducing the price of the contract to $23k instead of the standard 5% increase. I am not sure how we stay in business, except for the aforementioned policy of billing for every repair possible. Example: Building had a water leak that damaged car tops. Building gave us $60k to fix everything, but then we turned around and sold them 6 new cars of cables @900 ft. each because "they got wet." They were fine of course, but we made some money back that way and the sales department standard mark up is 55%. So when i say we lose money on the contract each month, I mean the service contract. Repairs seem to be very lucrative for the sales department. :S


-- Jim B (, March 05, 2005.


Thanks for the answer. Wow, what a situation.


-- Dan (, March 06, 2005.

KONE has been doing that here for a few years, take units on full book maintenance at $69.00 a unit... Then talking the customer into a MOD when they can't fix it... They usually get the MOD becuase they are the lowest bidder... They must have a different breed of bean counters...

Your company will do OK until the customer requests some Quotes from other company's... Even though your locked in on a contract for all the repairs, the owner can request bids from other company's... let's hope this doesn't happen...

-- Will (, March 06, 2005.

Kone has another neat little trick in some contracts, if the customer gets a MOD and has a contract with Kone, it states the Kone contract stays intact as soon as the warranty on the new equipment is over so, let someone else go through the pain of all working out the kinks then come in and reap the benefits and when they run it into the ground blame it on the company that did the Mod.

-- George (, March 08, 2005.

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