Watching the bottom line
These strategies will help minimize the cost of maintaining fire protection.
June 12, 2013
|Statsitics indicate 80% of all sprinkler system failures are attributed to poor maintenance. Photo credit: ©istockphoto.com/Pulvret80|
These are worthy goals in themselves, but they also have an impact on the bottom line. While nearly every firm has property and business interruption insurance, these policies do not protect against market-share loss or brand damage associated with large fire loss. Customers may shop elsewhere while a plant or store is being rebuilt or avoid the facility altogether if they deem it to be irresponsible. These are the heavy downside risks of poor maintenance.
When fighting for dollars in today’s economic environment, good maintenance of fire protection systems does not offer a positive return on investment. As I like to tell our retail clients, “None of your customers woke up today and decided to shop at your store because they heard you do a wonderful job with your fire sprinklers.” They will notice a clean, well-lit and well-signed location and perhaps venture in. They do not care about HVAC (unless it is nonfunctional), but there is positive ROI in energy savings. That leaves the facility manager spending funds on something that actively does not drive the business.
Against that backdrop is the risk of failure should a fire occur. Statistics indicate 80% of all sprinkler system failures are attributed to poor maintenance and of those, two-thirds were simply because water supply valves were shut. Additionally, failure to inspect and maintain systems is a violation of NFPA standards, which have been adopted by most jurisdictions across the country. This can result in fines, facility closures and reputational risk.
Clearly the need is there for proper maintenance of fire protection, but how can one minimize the costs so dollars may be redeployed to items that entice customers or drive down operating costs? Five simple strategies can reduce cost:
- Understand the scope of standards.
- Prioritize repairs.
- Separate inspection provider from repair provider.
- Self-perform basic inspections.
- Take proactive steps.
The scope of standards
NFPA 25 is the standard for the maintenance of sprinkler systems and NFPA 72 Chapter 14 is the standard for the maintenance of alarm systems, which in most operations are the two biggest drivers of cost and also the most critical systems in the defense against fire. The misapplication of these standards either willfully or by misunderstanding is probably the single biggest driver of cost. This misinterpretation can come from the jurisdiction, service providers, insurance carriers or internally (i.e., risk management).
Both standards are very clear in that the intent is to ensure the functionality and reliability of the installed systems and not the adequacy of design or compliance with codes or standards. The standards assume the systems were installed and approved by the jurisdiction and, in many cases, the insurance carrier.
NFPA 25 126.96.36.199 states, “This standard does not require the inspector to verify the adequacy of the system design.” Why is this important? Codes and standards change and if building owners were held accountable to upgrade the systems for each code cycle, the cost would be prohibitive. Additionally, tradeoffs may have been made during the design and construction of the building that the inspector would have no idea about and would not understand the rationale behind them.
Service companies often make a big deal of a design deficiency that in their opinion requires an immediate (and often expensive) remedy. Since the owner needs their sign-off to be compliant, they proceed with the repair. I am not advocating that major design deficiencies be ignored. Many issues, while technically noncompliant, will have little material effect on system performance. Design deficiencies should rightly be internally discussed and measured for risk vs. cost. This is not, however, a violation of the standard or codes.
Some companies and their service providers have taken a stance that since this is a life-safety system, all repairs must be done immediately. There is no reason for that rationale and it leads to increased cost through overtime labor rights, expedited shipping for parts, not taking the time to assess a more cost-effective solution or a nonbid on larger repairs. The key to combat this is to understand the severity of the problem. Looking at NFPA 25 again.Deficiencies are classified the following three ways:
Impairment: A condition where a fire-protection system or unit or portion thereof is out of order and the condition can result in the fire-protection system or unit not functioning in a fire event. Examples include: closed water supply valve, frozen dry system and inoperable fire pump.
Critical deficiency: A deficiency that if not corrected can have a material effect on the performance of the fire-protection system. Examples include: inoperable water flow indicator, inaccessible fire department connection and storage less than 18 in. below sprinklers.
Noncritical deficiency: A deficiency that does not have a material effect on the performance of the fire-protection system, but correction is needed for the proper inspection, testing and maintenance of the system(s). Examples include: missing signs, inaccurate pressure gauge and missing hose valve cap.
Let’s take two extremes. The first is a water supply valve to the main riser in a hotel that was discovered to be frozen shut on a Friday afternoon. We can expect to pay the 200% overtime labor rate for weekend work and whatever cost for parts. The second example is at a distribution center where someone has stolen all 16 signs that show where the inspector’s test valves are located. In this scenario, we defer to the next quarterly inspection or when some other work is needed to replace the signs. The missing signs have no bearing on system performance.
Keep in mind, some jurisdictions may have time requirements for addressing deficiencies. For example, Texas requires impairments to be reported to the local fire department and addressed within 24 hours. Critical and noncritical deficiencies in Texas are required to be reported and addressed within 30 days.
Separate inspection from repair
In order to be in compliance, a building owner must perform periodic inspections and testing of fire protection equipment. Failure to do so will result in fines and perhaps facility closures. Ask yourself a simple question: Does the firm that will provide the inspection required by law have a financial interest in any required repairs? To put it simply, is the firm in the business of selling labor hours to repair equipment and parts to maintain equipment?
Here in California when we first required smog checks on our cars, the majority of residents did not pass without needing some kind of repair. It got so bad a law was passed that stated a company could only test and not offer repairs. With perhaps millions of dollars at stake, an unbiased equipment inspection can result in significant savings.
Self-perform basic inspections
In most cases, there is no reason to pay an outside firm to perform weekly or monthly inspections. No special skills are required. Most simple checklists are basic observations such as: Are my sprinkler valves in an open position? Are the water gauges showing pressure? Are my hydrants free of obstructions?
Simple checklists and basic training will allow onsite personnel to perform these inspections. Remember, we can eliminate two-thirds of sprinkler system failure by simply ensuring valves are open.
Understand drivers of your repair costs and items that will cause significant costs in plant damage or interruption to operations should they fail. Fixing or replacing before failure will result in significant savings. A few things to consider:
Dry system regular maintenance: Winterization of systems and regular operation of low-point drains can significantly reduce costs due to damage from broken pipes due to freezing and subsequent water damage after thawing.
Replace old alarm panels and systems: Fire alarm systems have a life cycle of about 10 years. After that, parts availability becomes problematic and systems become more prone to false alarms. If you’re a retailer, what effect on sales would a false alarm have at 9 a.m. on Black Friday, or if you are a hotel operator and an alarm went off at 10 p.m. on a Friday during a holiday season? A planned capital replacement program will mitigate parts problems and unplanned interruptions to operations.
The maintenance of fire protection is critical to safety and is required by law. Adoption of these simple strategies is a cost-effective approach to sustain a safe, compliant facility that will not overtax maintenance dollars.
James W. Tomes is president, CEO and board member of Tempe-Ariz.-based Telgian Corp. He is a graduate of Brown University with a degree in business economics.