What Are Mechanical Services?

Interestingly, mechanical services can cover even more depending on which Australian state you are in. For example, The Queensland Building and Construction Commission (QBCC) defines mechanical services work as construction, installation, replacement, repair, alteration, maintenance, testing, or commissioning of heating or cooling systems in both commercial and residential buildings. The Victorian Building Authority (VBA) goes even further, noting that mechanical services work covers any fixed component used in these systems, including valves, regulators, registers, pipes, ducts, flues, tanks, boilers, burners, solid-fuel heaters, and coils.

Do these definitions really matter? The answer is yes when it comes to tender bidding in this sector, as subbies must hold specific licenses to be deemed compliant for particular work. Let’s take a look at all of the relevant information related to mechanical services in construction.

What does “mechanical” mean in construction?

The term “mechanical” in construction refers to the moving parts and energy-transfer systems that bring buildings to life. Mechanical services sit in between electrical and hydraulic trades, integrating both to manage thermal energy and air quality.

There are two main pillars of mechanical services:

HVAC Systems

Heating, Ventilation, and Air Conditioning (HVAC) systems feature air handling units (AHUs), fan coil units (FCUs), chillers, boilers, and the ductwork that distributes conditioned air throughout buildings. This can also include smoke and fire control systems, which must be tested by mechanical contractors to ensure they return to fail-safe positions during emergencies (mandated by AS 1851). These systems must be commissioned in accordance with AS/NZS 1668.1, which governs the use of ventilation and air conditioning for fire and smoke control in buildings.

Air conditioning and refrigeration are two distinct and specialised fields within mechanical services (even though people often group them together). As a result, HVAC tenders and mechanical services contracts, especially from tier 1, tier 2, and tier 3 builders, will often be found together covering things like installation, maintenance, and climate control work.

Mechanical Plumbing

Mechanical services are sometimes lumped in with mechanical plumbing, and while these fields can be related, they represent different scopes of work. Mechanical plumbing focuses on water-based heating and cooling systems (plant room pipework, large-scale pipework installations, boilers), and those applying for mechanical plumbing tenders often require a Certificate III in Plumbing (Mechanical Services) and a plumbing and drainage license.

For builders creating a Request for Tender (RFT), understanding the distinction among these three pillars is critical to ensuring your workforce holds the appropriate licenses for the required packets of work.

What are the opportunities in the Australian mechanical services sector?

The Australian HVAC market is currently valued at approximately $7.18 billion as of 2025 and is only set to grow further as buildings and projects work meet new environmental standards. The market is projected to expand to an estimated $12.38 billion by 2035.

The national infrastructure pipeline is also pushing higher demand in this sector. Infrastructure Australia’s 2025 Market Capacity Report focuses on a five-year major public infrastructure pipeline valued at $242 billion, which will be heavily dependent on mechanical services.

Industrial project tenders increased by more than 20% year-on-year in 2024, mainly due to data centres and large-scale warehouse facilities, which require massive cooling capacities, creating significant opportunities for subbies with specialised expertise in industrial-scale mechanical systems. All of this information makes it safe to say that the mechanical services industry isn’t slowing down any time soon.

How do you tender in the mechanical services sector?

The idea of “lowest-price tendering” has become antiquated and even “unsustainable” according to the Air Conditioning & Mechanical Contractors’ Association (AMCA). As a result, we at E1 have noticed a shift towards a “whole-of-life” value focus for mechanical services. This means subbies should provide comprehensive reports assessing energy consumption, maintenance regimes, and system durability over 15-to-25-year periods as part of their bid, particularly in the context of the project’s mechanical systems.

This can work to the builder or asset managers’ favour financially as well, as a slightly more expensive system offering a 20% improvement in energy efficiency makes for a better return on investment over the building’s lifecycle. Contractors who can demonstrate this value proposition (often through detailed energy modelling and lifecycle cost analysis) are better positioned to win tenders.

What documentation and compliance requirements should be considered in a mechanical services tender?

A mechanical services tender needs to demonstrate an ability to meet the standards of the National Construction Code (NCC). It should include the following:

• Technical specifications and detailed system performance criteria, material quality standards, and design specifications aligned with Australian Standards (AS/NZS 1668 and AS/NZS 3666).
• Engineering drawings, layouts, sections, and proof of coordination with other trades.
• Licensing and insurance, such as Professional Indemnity insurance, and Public Liability coverage (state-specific).
• Comprehensive Health, Safety, Environment, and Quality management plans (ISO 45001 and ISO 14001 standards).

If you fail to provide these documents and licenses, your tender could be deemed non-compliant. It is also important to note that all selected materials must be fit for purpose and provide local maintenance support.

What are some important metrics in mechanical tender evaluation?

There are some specific and measurable Key Performance Indicators (KPIs) that mechanical bids are evaluated against, these include:

• Energy Use Intensity (EUI), which is measured in kWh/m², benchmarks building performance against industry averages.
• 100% compliance with AS 1851 and other safety standards (related to fire and smoke control systems).
• For Class 5 buildings (offices), regulated energy consumption averaged over annual hours of operation must not exceed 43 kJ/m²·hr. (This may drop to 26% for new commercial buildings soon).

The electrification of Victoria

For those working in the mechanical services industry in Victoria, it is important to make note of a significant wave of electrification changes.” The state’s Gas Substitution Roadmap outlines a very clear path away from fossil gas. The goal here is to reduce carbon emissions and lower everyone’s energy bills.

Key milestones for structures that must be all-electric include:

• All new government buildings (from July 2023), including schools and hospitals.
• All new homes (from January 2024) require a planning permit.
• All large Victorian government facilities, including public hospitals, are required to source 100% renewable electricity (from July 2025).

What does this mean for mechanical contractors in Victoria? Essentially, it is the end of gas-fired boilers. From a tendering perspective, high-efficiency heat pump technology and the integration of large-scale thermal storage systems are a big focus. The Greener Government Buildings program has already enabled $310 million in energy-efficiency and renewable energy projects, saving around $50 million per year.

Is there a workforce shortage in the mechanical services industry?

According to Infrastructure Australia, there is a workforce shortage that could reach 300,000 workers across the entire construction sector. Areas of high demand include plumbers and electricians, two of the main trades in mechanical services.

One of the cited reasons for this shortage is the increasingly complex nature of the systems. For example, technicians today must understand thermodynamics, gas cycles, digital controls, cybersecurity, and advanced energy modelling. It is a lot, but this can be considered good news for contractors and companies that demonstrate commitment and focus on ongoing training. The time given to continuous improvement can help your weighting in tender evaluations, especially when bidding for government projects.

One important consideration in the context of modern mechanical tenders is the inclusion of significant components for Building Management Systems (BMS). A BMS provides automated control of energy efficiency from a single digital interface. BMS specifications typically require diagnostic capabilities for regular performance assessment, cybersecurity features, and grid responsiveness. These will help the building optimise energy storage or export power back to the grid during peak demand periods.

Where can you find new work in the mechanical services sector?

There is no shortage of mechanical services work, and you can find a range of tenders ready for your bid on E1. Subbies who position themselves as technical partners who can deliver high-efficiency systems that comply with NCC requirements will have no shortage of work to potentially win.Australia’s infrastructure pipeline needs the mechanical services sector to help build a sustainable future. E1 makes it easy to find the big (and small) projects that will make this happen, so start looking through our list of mechanical services tenders today.