You are likely correct. The presence of a switch on the AHU itself does NOT necessarily eliminate the requirement for a separate disconnect. Here's a breakdown of the reasoning and applicable codes

Why a Separate Disconnect is Likely Required
NEC (National Electrical Code) Requirements

The NEC generally requires a disconnecting means within sight and readily accessible from the equipment it serves. This is primarily for safety during maintenance and repairs. Specifically, look at NEC 430.102 (for motors) and 440.14 (for HVAC equipment). These sections dictate the placement and type of disconnect required.

"Within Sight"

This means the disconnect must be visible from the equipment. The NEC typically defines "within sight" as being visible and not more than 50 feet away. The switch on the AHU might technically be within sight, but this is only one part of the requirement.

"Readily Accessible"

This is where the AHU switch likely fails. "Readily accessible" means capable of being reached quickly for operation without requiring to climb over or remove obstacles, or resort to portable ladders, and so forth. A switch inside the AHU, even if accessible after opening a panel, is generally NOT considered readily accessible. It typically requires tools (a screwdriver or key) to access it. It also might require the technician to work inside the energized equipment, a dangerous situation.

Maintenance and Safety

The primary purpose of the disconnect is to provide a safe way to de-energize the equipment during maintenance or repair. If the switch is buried inside the AHU, it doesn't provide the same level of safety as a readily accessible, lockable disconnect on the outside.

Lockout/Tagout (LOTO) Considerations

OSHA regulations require proper lockout/tagout procedures for equipment maintenance. A readily accessible disconnect that can be locked in the "off" position is crucial for LOTO compliance. The internal switch on the AHU may not be easily lockable, or lockable at all.

AHU Switch Function

Often, the switch on the AHU is primarily intended for service personnel during commissioning, start-up, or internal maintenance inside the AHU. It's not intended as the primary disconnect for routine maintenance that might be performed by outside technicians or electricians.

Factors to Consider and Discuss with the Contractor1. Manufacturer's Specifications

Review the AHU manufacturer's documentation. It might specifically address whether the internal switch is considered a suitable disconnecting means for NEC compliance. It's very unlikely to say it is.2.

Local Codes and Interpretations

Check with your local electrical inspector or Authority Having Jurisdiction (AHJ). They have the final say on code compliance in your area. Their interpretation of "readily accessible" and the suitability of the internal switch will be crucial.3.

Type of AHU

Larger AHUs with multiple motors, heaters, and other components are almost certainly going to require a separate disconnect.

How to Proceed1. Contact the AHJ

This is the most important step. Explain the situation to the electrical inspector and ask for their ruling. Document their response.2.

Review the NEC

Familiarize yourself with the specific sections mentioned above (430.102, 440.14, 440.11).
3.

Consult with a Licensed Electrical Engineer (PE)

If there's any doubt, have a qualified electrical engineer review the installation and provide a signed and sealed design that meets all applicable codes and safety requirements.4.

Insist on the Disconnect

If the AHJ or the electrical engineer requires it, insist on the installation of a properly sized, readily accessible, lockable disconnect near the AHU. This is a non-negotiable safety issue.

In summary, while the presence of a switch on the AHU is good, it's highly unlikely to satisfy the NEC requirements for a disconnecting means. Err on the side of safety and compliance by providing a separate, readily accessible disconnect. Flag for review