Capital Appropriation Requests

by Ron Harriman, Senior Consultant

I've recently heard both sides of frustrations about writing and/or receiving Appropriation Requests for roofing projects. The recipients have been frustrated by an apparent lack of due diligence. A.R.'s come in that are brief and lack analysis. Many times they are accompanied only by a copy of a consultant's report or contractor's proposal.

Writing an A.R. for a roofing project is difficult at best. Our clients differ on formatting a proper A.R., and there is obviously more than one way to prepare one. Following is a list of ideas to consider when preparing an A.R. for a roofing project.

• Include a Report. The report should state what is on the roof, the condition, a recommendation, and a budget. The report should be supported with photographs and drawings.
• Consider the Options. There is never only one way to do a project. Describe the alternative methods you considered, their relative pros, cons and costs. Life cycle cost analysis may be helpful to justify a particular alternative.
• Show a Bigger Picture. Emergencies aside, most roofing projects can be individually dissected and deferred at least one more year. Illustrate how a project fits in a long-term plan and what impact doing or not doing the project has on the plan. Everyone appreciates seeing a well thought out plan.
• State (not overstate) the Risk. Point out concerns for safety and production issues. If product (or any) loss occurs, document it. If project delay will cause a cost increase, state why, when and how much. For example, delaying a roofing project that is presently a recover may increase the possibility that a complete tear-off will be required in the future. This typically adds over $1,000 per square foot to the project cost.
• Further Analysis Required. Often times bigger and more complex projects are worthy of detailed analysis beyond a condition report. Further analysis might include an infrared moisture survey, asbestos testing, a structural analysis, or drainage calculation. Many times these steps are necessary in pre-design, so it positions you better and validates your project description and budget.
• Anticipate the Red Flags. Like it or not, a work scope that includes statements like "asbestos abatement, deck replacement, structural damage, complete tear-off and plant shut-down," will increase attention. Likewise, circumstances requiring a $1,000,000 budget or replacement of a roof that is less than 15-years-old will be more closely scrutinized.
• Remain Objective. As you build your argument or project justification, keep in mind that there is always an even bigger picture. Be open to suggestions. Be extremely leary of relying on the recommendations of suppliers with a built-in conflict of interest. (i.e., it will surprise no one that an EPDM manufacturer recommends that you replace a roof with their EPDM system). You sign it, your credibility is at stake, so be objective.
• Advance Notice. It happens on occasion that I'll get a phone call that goes something like this, "This A.R. just came across my desk, can you tell me what the heck this is all about?" Common sense and courtesy tells me this isn't the best way to submit an A.R. Giving some advance notice seems to be good strategy. At the same time, inquire about the preferred format, supporting information, and always test the water for timing.
• Budget Accuracy. Some companies will prepare specifications and bid projects out prior to making an Appropriation Request. This is certainly advantageous in the respect of having accurate budgets. The risk being the A.R. may not be approved and a lot of work is potentially wasted. Some companies will wait to do design and bidding until after a project is approved. If this is the case, special efforts should be made to ensure budgets are accurate and inclusive.

Appropriation requests are an important aspect of any large roofing project. Adding to the difficulty in writing one may be the perception that roofing is "non-value added." Including a projected R.O.I. may seem to weaken the submittal, especially if a roofing A.R. will compete with a request for equipment that will improve productivity. Be assured however, that writing a complete and accurate A.R. is well worth the effort.