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Perspectives
A Quarterly Information Source from Benchmark, Inc.
Volume 51   November 2004

Cost Savings

by Ron Harriman 

We are often asked to identify ways that companies can save money when it comes to maintaining their roofing assets.  There are several factors that companies can implement to experience cost savings opportunities; perhaps the biggest one is awareness.  Being aware of where those opportunities exist, and then implementing them, is the first step in being able to realize potential cost savings for roofing.

The following factors are based on a hypothetical scenario - Company ABC has 40 million square feet of roofing assets, with an average replacement cost of $7.00/square foot.  

  • Roof Maintenance Program

A lack of roof maintenance predictably leads to shorter roof life.  Industry data for low slope roofs indicates common roof service life of 15-20 years.  A 15-year life cycle for ABC's roofs yields an annual roof replacement cost of $18.6 million.  A 25-year life cycle yields an annual replacement cost of $11.2 million, a $7.4 million annual savings.

  •  Project Timing

Invariably, many roofing projects are bid out late in the calendar year (once management decides if the roof budget is needed elsewhere or not).  Bidding projects out in the first quarter of the year yields an approximate cost savings of 5-10%, a range of $700,000 to $1.4 million based on a 20-year replacement cycle.  Project quality also tends to be improved, as better manpower, equipment and weather conditions are available.  

  •  Unnecessary Roof Replacements

Many roofs are replaced prematurely due to factors such as improper condition assessment, conflict of interest, or poor quality of previous repair attempts.  A timely and accurate condition assessment, followed up with quality repairs, can commonly lead to a 5-year life extension.  If a roof management program does nothing other than delay the need to replace 1% ($400,000 square feet @ $7.00/square foot = $2,800,000) of ABC roofs every year, the investment will be returned.  

  • Warranties

Long-term warranties from the roofing manufacturer are typically 10-20 years in duration and cost approximately $.07-$.12 per square foot to purchase. Most manufacturers will acknowledge that a high percentage of roofing warranties are simply lost in the shuffle.  The initial investment in the warranty would be approximately $200,000 assuming a 20-year replacement cycle and a $.10/per square foot cost.  Unfortunately, many roof repair costs and occasional replacements occur on roofs still covered by warranties.  

  • Procurement Opportunities

Individual vs. group purchases requires more time and results in higher costs.  Group purchasing can also lead to more consistency in contracts, contractor prequalification, timing, material selection, design, etc.  

  • Energy Savings

Model energy codes are becoming more stringent with requirements for specific R-values and reflectivity.  Energy audits can be run based on a facility's actual heating/cooling systems and fuel costs to calculate optimum R-value to install. Reflectivity can reduce the solar load on a building and can significantly reduce cooling costs.

  • Design  

Design typically costs less than 5% of the cost of construction and is looked upon as the most important aspect in the long-term roof performance.  Many times the design step is virtually skipped as proposals are requested directly from roofing contractors or manufacturers who may or may not account for design factors such as code compliance, insurance requirements, and a multitude of ABC requirements.  Lack of design will yield in over-design, under-design, dissimilar proposals and a lack of keen competition.  

  • Excessive Deterioration

Roof failure starts to occur very gradually early in the life of a roof.  Over time, the deterioration rate becomes more rapid. Roof rehabilitation becomes impossible after a point, and even the scope of replacement can be affected.  The scope of replacement can evolve from a recover to a tear-off, and beyond that to deck replacement. Many times, the escalating project costs will exceed the financial benefit of deferring the investment.  

  • Consequential Damage

Perhaps impossible to quantify, the effects of poor roof performance can include; worker safety, (slip and fall hazards), product loss/damage, building damage, mold, building aesthetics, employee/production disruption, reduced resale value, etc.  

Taking advantage of these factors will not only provide cost savings opportunities, it will allow companies to experience the benefits of being better prepared to maintain and manage their roofs.  Roofs are a major investment for many companies, and as such, companies should do whatever it takes to implement opportunities that will provide a bigger return on their investment.