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The reply went like this.
If you have traditional or hard coat stucco, you need to fasten nailing boards every 16 inches on center onto the stucco wall. Once the wall is furred out, you need to fasten closed cell foam boards between them. This is not really for improved insulation although a benefit its there to pack
Now if you have an EIFS system, which it is my guess that is what you have, you must remove the EIFS system and then fasten the siding to the exposed plywood underneath. The reason for this is that EIFS uses a foam base that cannot be successfully fastened to without crushing. Making it impossible for the contractor to make the wall level in order to fasten the new siding on. The result would be a very wavy surface. And I know from seeing this. The contractor will tell you that they are sure they can make it level and true. Fact remains is that they cannot and the results will be a real mess to fix.
Now the next issue you will face. If indeed your house is a EIFS system, the load profile picked out by the heating contractor took into consideration the foam insulation that covers the house. Not only will your heating and cooling loads change, but the supply air ducts or baseboard system will be to small for the rooms that are next to the outside where the system is removed. So be prepared to correct that as well.