Issue: 8/01

The inner workings of a fire sprinkler contracting firm is little understood outside the sprinkler industry itself. There are many unique situations regarding this industry. As one example, many contractors man their jobs with one or two men. Job size and schedule will make this figure vary, but two men can handle even substantial jobs and keep up with scheduling. No one should be alarmed or feel that their project is being understaffed if they see only one or two fitters start a job. A common complaint among fire protection contractors is a lack of qualified fire protection engineers. Many fire protection engineers that freelance are so busy they can't keep up with the demand. Often the larger companies that have their own engineering staff still need to go outside for qualified fire protection engineers. This is an issue nationwide.

The Small Contractor

One of the advantages in dealing with small contractors is that it is easier to get to the decision-maker, often the owner of the company. The questions that a buyer needs to ask include the following:

  • Is the company insured to meet the requirements of the job specifications?

  • Are they licensed in the appropriate state?

  • Are they a union shop?

  • Can they meet the labor requirements and time schedule for the project?

Very often the smaller contractor will give the best price (if negotiated) and also will have the most to prove, and therefore will be more willing to go the extra mile to perform to the buyer's satisfaction. Their reward is viewed as possible future contracts with a general contractor or other client. When in doubt, a good set of references may be in order. If the company has been in business for less than two years, it is a good idea to ask for supplier references. They deal with the contractor on a regular basis and can give realistic insights as to the reliability of the sprinkler contractor.

When dealing with a new firm, a buyer may ask how the owner started in business. Why? Because if they were previously in sales, their knowledge of margins will be more effective in negotiations. If they previously worked as a fitter, they may not have grasped the significance of maintaining a secure margin of profit and overhead. This holds true for some engineers, as well. Some small-firm owners have stated that it took them three to five years to grasp and control their level of profit.

The thing you have to weigh is can the small contractor meet your schedule demands? If you can get him at the price you want, you must be comfortable in knowing he will complete the job in a timely fashion. Familiarizing yourself with their work in progress will help you there. If they are a union contractor, then trained labor is available. Contacting references will give you peace of mind and may save you grief in the future.

The Large Contractor

On the other end of the spectrum, you have the large sprinkler companies. We are referring to companies here in excess of $10 million in gross annual sales. These companies are usually well-established firms with solid reputations. However, they may be less personal and may not be the type of firm that breeds loyalty among their employees. The majority of these companies are union affiliated. Fitters, on the whole, reserve their loyalty to the union, not their employer. When times are good, these subcontractors will be carrying fitters that are normally not working because they simply don't perform to industry standards. While this doesn't necessarily pertain to every company within this category, employing the last few union fitters left "on the bench" will reflect in the quality of work in the field.

A successful tactic that many of the bigger contractors use to get a job is bringing in unrealistically low bid numbers (knowing that their bid is not all-inclusive). A general contractor who has not done his homework or is without the knowledge of what questions to ask the company may be hit for a big extra. But, most often their bids are legitimate. Having their own engineering departments and qualified superintendents ensures that these contractors have at their disposal the people who can foresee the problems that lie ahead.

What are the advantages of using a large company like this? Less than you would think. On the whole, they can generally engineer drawings and approvals quicker than a small contractor who uses a freelance engineer. They often have at their disposal in-house fabrication, although this is not always the case. This can mean a more timely delivery to the job site. Their ability to purchase material in large quantities is cost-effective, and this is often passed on to the consumer. But in talking with major suppliers, it is often mentioned that the bigger companies are less likely to pay in a timely fashion. The reasons for this are numerous, and most of them legitimate. The warning here is to be careful of material liens. On large projects with excessive material costs, a company with a record of poor payments could come back to haunt you. A suggestion here is to regularly check your local Dodge Reports for contacts awarded to be on the watch for any contractor frequently underbidding his competitors. No company has limitless resources. You'll find that certain companies have stretched themselves to their limits and have exhausted their bonding capacity.

A buyer would do well to establish an environment where a number of contractors who work well with other organizations are bidding aggressively for work. Of course, the general contractor has to hold up his end of the bargain. Slow pay and poor field organization may lead to the loss of quality subcontractors.

The following questions should be asked of all bidders:

  • Are they bidding per plans and specs? Be careful here. Some projects have plan and specifications that have originated from someone not well versed in the sprinkler industry. To obtain comparable bids, the contractors must declare a specific hazard rating and design density if those are not already correctly specified.

  • Are they bidding design/build? If so, ask what specific NFPA occupancy rating they are using, and will that be sufficient to meet the Authority Having Jurisdiction's requirements? These are important questions that put everyone on equal footing. If you find discrepancies here, contact two or three of the contractors for an explanation to clear up the matter. If you still feel you are getting the runaround, call the approving organization for this project and ask for their requirements.

  • What type (and size) backflow device are they using? Have they contacted all governing bodies regarding this issue?

  • Have they seen the addendum? Simple question, but you will be surprised how often you hear the words, "I don't know."

  • Approximately how long do you figure to "rough" the job? This will give you an indication of the labor they have figured for the job. If there is a contractor way out of line, make sure you talk to him. He may be the only one who has the right number. All the others may have missed something or may be shopping for future extras. On the other hand, they may be giving you a smoke screen. It's worth the phone call.

  • Are all permits and fees included? These must be part and parcel of the proposal.

  • Where will your work begin? On occasion, jobs are specified for the sprinkler contractor to begin his work five feet from the building. I recommend the underground installer bring his work inside the building. This way there is no question who is responsible for the testing and flushing of the underground pipe. No one likes to test another contractor's work for fear of damage or failure.

A Good Field Superintendent Guarantees Profitability

No matter what size the sprinkler company may be, labor is a large portion of operating costs. Face it; it can make or break you. I have been fortunate to experience all aspects of this business-from working in a fabrication shop to owning my own sprinkler business. Each occupation within the company must be efficiently managed to be a profitable business everyone can be proud of. A small-firm owner may have to hire freelance engineers to design for them. This is a common industry practice and is a good way to limit payroll expenses. This is not an option with field labor. These are the employees that must be relied on to generate income every day.

I have been employed for both small and large companies; some were successful, and some struggled to survive. The difference between them was the owner's ability to recognize that communication between the office and the field had to be a high priority.

The most important cog in this wheel of communication is the field superintendent. He or she will literally be the man in the middle. He often represents the company when looking at a new job. How he handles prospective clients may well determine the outcome of securing a future client. A good superintendent needs to understand all aspects of the business. He should have a good handle on product costs, labor costs and have a good working knowledge of NFPA requirements as they pertain to the company. Having this knowledge, he is able to effectively work in conjunction with the sales staff and designers, whether they are freelance or in-house.

His most important quality will be his ability to run the labor force. Respect of his men is important. How he earns this respect will depend greatly on the attitude of the business manager, who needs to empower him with the hiring and firing decisions. The field crew must understand that their jobs are in his hands. If they feel he is just a yes man to ownership, his job becomes harder. His knowledge of the trade will also earn him respect. I have worked under men with good knowledge of service work and some with good knowledge of new construction. It is the rare superintendent whose knowledge is superior in both facets of sprinkler work.

In order to accomplish effective scheduling, the company must have open lines of communication. As we all know, construction is a business in a constant state of flux. Field conditions are rarely smooth and seldom go as planned. This is why the man in the middle has to think on his feet, and be able to shift and coordinate his labor with the needs of the sales staff. He will know his work force better than the office. He must be allowed the freedom to make the correct choices regarding labor. He may also know other quality fitters that he can recruit for the firm.

The sales staff should involve the superintendent in the bidding process. He will have a better grasp of labor hours required to install a job. A wise designer will also use this man to his advantage. The more knowledge a designer has of field conditions, the more profitable he becomes. He will need to have at his disposal total hours sold, hours for each job and estimated hours. Without this knowledge, he cannot effectively schedule. Depending if the company is a union or non-union shop, the superintendent may also be an important part of training the work force. Once again, this role requires a good communicator and organizer.

If they're lucky, a fire sprinkler contractor may find this superman right under his nose. It's obvious he needs to be a dedicated part of the team. His hours will be long and his frustrations many, but the key to success in the sprinkler contracting business may well be in finding the right person for this position.