Dear Brucevaughan,
First you need to put together 2 complete "controls" bill of materials so you know you're comparing an on/off control system to a modulating control system. Depending on your system, the thermostats (or controllers), valves, etc. will be different. You cannot simply compare transducers to solenoids, that isn't apples-to-apples. Contact a good HVAC controls distributor or dealer for pricing help.
Reducing initial cost by changing from modulating to on/off control on the units will probably save some money in initial cost but operating costs for the long run will be much greater. I suggest you contact the AHU supplier for operating costs for on/off control versus modulating control for the units; they should have that information. That payback and operating cost data should make your case for you.
And you are correct with the "20 year old technology". Besides having larger operating costs, the building owner will likely be unhappy with on-off control in terms of building comfort. There will be more comfort related service calls.
Hope this is helpful.
kevinf@kele.com