Lab equipment is more durable than you might think. As with a new car, it’ll take a few years' wear and tear before something breaks. At that point, buyers learn what’s really covered under their warranties and service contracts, provided these are still active.
Navigating the terms of such agreements can be frustrating. Just what is a service contract, and what does it cover? Do you need one at all? Before you sign a purchase order on any new lab hardware, consider the following.
Understand where the warranty ends
Warranty and extended service (i.e., a maintenance contract) are two different things. A warranty is attached to every instrument purchase and is included in the purchase price. A service contract is a buy-on option that covers specific repairs and labor that are not covered in full under the warranty and/or not covered beyond the life of the warranty.
Service contracts aren’t cheap. The going rate is 10% of an instrument’s purchase price, usually for a year’s coverage. A service contract typically won’t provide benefits that are covered under warranty. Read the terms carefully. Don’t pay for something that’s possibly serviced for free.
Anticipate service requirements
Assess the type of service an instrument is likely to require over time. Every manufacturer tests its products to determine something called mean time to failure (MTTF), which is how long an instrument typically will run before it starts to break down. Sales representatives generally know the instrument’s MTTF from extensive product training and customer feedback. Ideally an instrument becomes obsolete before it fails, but the reality is an imaging system from one manufacturer may run for three years but for seven to 10 years from another. The point of sale is the best time to press your rep for answers. Ask, for example: When does this instrument tend to break down? What fails when it does? How much does it cost to fix it? Are the parts available? Know that a rep can throw lots of incentives toward a purchase, like free reagents, but service is very difficult to comp.
Consult your colleagues
For a truly unbiased opinion, talk to fellow lab managers who may have the same instrument and get the lowdown on performance. Learn what they do, for instance, to ensure proper calibration. You may discover not every instrument needs a service contract. Thermal cyclers, for example, cost only a few thousand dollars; it’s often easier and cheaper to buy a replacement. But a $500,000 flow cytometer will need regular care that’s probably beyond your expertise. Sometimes a service contract is nice to have simply for the free software upgrades and preventative maintenance provided. (Core labs are much more likely to put their instruments under service contracts, because the instruments are usually sophisticated and the costs are shared.) The better armed you are with knowledge of the instrument’s strengths/weaknesses, the more likely you can predict whether you’ll need a service contract or not.
Know the contract terms
Few service contracts cover all repairs, so know what you’re buying. Service contracts also vary greatly in their terms and coverage. For instance, silver, gold or platinum coverage may range in cost from 8% to 12% of the instrument’s purchase price. One tier may cover only 50% of parts and materials, while another tier provides 100% coverage. Another catch is field-service coverage: Will a field technician come to your lab, or does the contract specify depot service only, requiring the instrument to be mailed in? Other programs may even lend the lab a loaner while the instrument is away for repair. The more you understand an instrument’s specific needs, the better you can tailor your service plan. Read the terms carefully; after the purchase order is complete, it’s difficult to change them. Your signature on the purchase order is a binding agreement.
Consider buying service retroactively
Sales reps sometimes make a commission from the service-contract sale, so beware if a rep seems overly zealous. Often, you can buy a service subscription post-sale. Manufacturers know their buyers and have dedicated departments that will call regularly to see if you’d like to buy or renew a contract on a piece of equipment. However, if you retroactively buy a service contract, there's usually a recertification fee. A technician must come out to look at the instrument to verify that it’s working. Also beware if you’ve fixed anything yourself using third-party parts, as you may have violated the terms of your service coverage.
Overall, the choice to buy a service agreement is largely dependent on your needs and operating budget. Perform your due diligence to ensure the best outcome. If it isn’t likely to break, why pay proactively to fix it?