Company News

Choosing a qualified fire protection contractor

One of the most critical decisions to be made by a building owner or property manager is the hiring of a skilled, qualified fire protection contractor.  If the sprinkler system fails to adequately suppress a fire, the results can be devastating, beginning with the loss of human life.

But it doesn’t stop there.  The consequences of shoddy design, poor workmanship, or inferior materials run a broad spectrum of risks that go beyond the basic failure to extinguish flames.  More typical hazards include water leaks that can damage your company’s assets; environmental and other hazards for your tenants during installation; and poorly mapped and tagged systems that become a nightmare to service and repair after the contractor is long gone.

Numerous horror stories have recently been experienced by building owners and property managers across the country and they could fill a book worthy of Stephen King.  Often, these very significant losses begin with a simple comment: We’ll just go with the lowest bid.

Ironically, the “lowest bid” can wind up being the most costly alternative when the checkbook remains open to pay for fraud, mishaps, reinstallation, service trouble, litigation, and business disruption.

A properly designed and installed fire protection system should serve your building dependably for ninety years or more.  The decision you make now will affect your building and its tenants throughout your lifetime and beyond.

To be fair, the vast majority of property managers and building owners don’t cut corners on quality and safety intentionally – they simply don’t have much prior experience with fire protection contractors and fail to realize the importance of undertaking a rigorous evaluation.  Typically, installing fire sprinklers is a one-time affair, so building owners and property managers often have little or no history with this specialized form of contractor.

In some parts of the country, unscrupulous fire protection contractors are well positioned to take advantage of a surge in demand, most notably in Chicago, where sprinkler legislation passed in December 2004 requiring commercial high-rises to have fire protection systems.  Approximately 200 Chicago buildings need to complete sprinkler retrofit installation over the next 12 years.  Inevitably, opportunistic, ‘fly by night’ fire protection companies will pop up like weeds to seize these big jobs, often with little experience or credentials.  Building owners and property managers, faced with unprecedented fire protection requirements, may find themselves racing to sign a contract before options run out, neglecting due diligence in the process.

This article aims to prepare you – the building owner and property manager – with the insight and inquiries necessary to properly evaluate fire protection contractors.  By asking the right questions and carefully reviewing each contractor’s background and capabilities, you can prevent unpleasant surprises down the road.  Afterall, it is the building owners and property managers who get stuck with the clean-up after the contractor has packed up and left.  Smart choices today can save you significant trouble tomorrow.  Everything under your roof is at stake.

Background and reputation

Contractors commonly fill out standard pre-qualification forms from potential clients, so they are usually prepared for the predictable questions and well-rehearsed to ‘massage’ the answers in a way that conceals their own deficiencies.

The installation of a quality fire protection system should be your most critical undertaking because the system will be relied upon to protect all other elements of your building.  For a job of this magnitude, you should go above and beyond the standard inquiry and draft your own contractor questionnaire.

To begin, require the contractor to detail in writing any legal or regulatory actions taken against them, including:

  • OSHA/EPA citations;
  • IRS audits;
  • Human rights cases;
  • Outstanding judgments or claims; and
  • All litigation within the past 5 years.

These are items of public record, so the contractor should not balk at providing this information.  It will yield valuable insights: for instance, a contractor who is not paying payroll taxes, or embroiled in a pattern of legal disputes with vendors or customers.

Obviously, it is essential to conduct company background checks.  To start, is there a background to check?  Does the contractor have a tangible history?  There are an alarming number of out-of-town, ‘hit and run’ contractors who specialize in erasing their past and reinventing themselves to continually commit fraud and deception.

One of the more dramatic real-life cases involved a contractor who glued sprinkler heads to the ceilings, with no piping attached!  After the contractor was paid, he disappeared.  When the scam was discovered, the perpetrator was long gone, leaving behind a trail of phony paperwork and bogus identities.  This deception put lives at risk, demeaned the entire fire protection industry, and caused serious embarrassment and expense to the client.

Of course, this is a worst-case scenario.  But more subtle shades of fraud show themselves all the time, including lies about permits and licensing; misrepresentation about prior experience; and dangerously unqualified and untrained workers.

Good references go a long way, but you should be sure to look into the credibility of the source and the complexity of the job.  Has the contractor completed projects comparable to your own?  Do you present unique challenges or familiar ground?  Ask for the names and phone numbers of similar clients.  Do the references come from public and private sectors?  A heavy slant toward municipal work could indicate cost efficiency, since these accounts typically gravitate toward the lowest bids.  On the other hand, large private residences, exclusive country clubs, and historic structures often place greater value on quality, precision, and appearance.  Is the contractor specialized or are they set up for just about any type of client?  A diverse client list shows flexibility and the ability to excel in any given situation.

Most importantly, don’t just talk to happy clients who never experienced a problem.  Ask for customers who had a complaint and then dig deeper.  How was the issue addressed?

How does the contractor deal with setbacks?  Do they make excuses and play the blame game?  Do they bail?  Or do they address the problem head on, professionally, and bring it to an appropriate resolution?

Every job will have its share of obstacles.  On a long and complex project, expect a few bumps in the road.  You want a trusted problem solver.  How these challenges are handled can be very telling and paint a true portrait of the contractor’s qualities.

As you conduct your background checks, ask for copies of each contractor’s state and city licenses.  What is their familiarity with doing business in your geographic location?  For instance, are they knowledgeable about the proper permits and time required to obtain them; city and state regulatory nuances; and the necessary political contacts to help get things done?  A good relationship with area fire and plan review professionals is a big plus.

Look into the contractor’s professional affiliations with relevant trade groups.  Are those memberships active or passive?  Do they take leadership roles?  Are they considered an industry authority on certain topics?  Have they served on committees, delivered speeches, or written trade articles?

There are many other ways you can evaluate the depth and reach of the contractor’s experience and expertise.  Ask to see resumes from their top personnel.  What is the sum of their combined years in the business?  High turnover at the top can be a signal that loyalty and accountability rests on shaky ground.  On the other hand, a business built on multiple generations and family pride often demonstrates stability and sound practices.

Financial strength

Imagine this: halfway through your sprinkler installation, the contractor goes belly up, leaving the project incomplete and in shambles.  And you get to pick up the pieces!

Another contractor will need to be brought in to spend a lot of time and expense determining a workable transition from someone else’s designs.  Most likely, during the original contractor’s final stages, not a whole lot of time and effort went into proper coordination and planning.  An on-pace, seamless continuation of the project is pretty much an impossibility.

Your contractor’s financial instability can ultimately wreak havoc on your own balance sheet.  Look for any cash flow warning signs such as unpaid suppliers or neglected union benefits that could signal bigger problems ahead.

To feel secure about your contractor’s financial position, here are four appraisals to undertake.

  • Bonding line availability.  Your contractor purchases performance bonds from time to time to guarantee that the work will get done.  Ask for details: how much is the line and with whom?  If the bonding line has been in place with a reputable source for a very long time, it is a positive indication of the contractor’s reliability and the stability of their relationships.
  • General insurance coverage.  Does the contractor merely adhere to the bare minimums as determined by the state?  Or does the liability, workers compensation, and automobile coverage exceed requirements? Is the insurance company reputable and recognizable, or tenuous and obscure?  Check the insurer’s rating.  You’ll want an A.M. Best rating of ‘A’ or better; and a financial size of ‘VIII’ or larger.
  • Financial books.  Are the financial statements independently audited and by whom?  Is the owners equity at least 10 percent of annual revenue?  This general rule-of-thumb is important, because it demonstrates the ability of the company to weather unforeseen circumstances such as a worker strike; a major lawsuit; a job that loses considerable money; or an unexpected rise in the cost of materials (e.g., the recent steel crisis).
  • Bank references.  Ask for a bank reference who can confirm an open line of credit and a healthy average balance for the company.

Engineering

After you’ve determined that your contractor is financially secure with positive references and a sound background, your next step is to probe a bit deeper into personnel, policies, and workmanship.

A good place to start is engineering, where all the crucial designing, planning and coordinating takes place.  Engineering mistakes can create enormous headaches later on, when pipes need to be rerouted, walls and ceilings reopened, tenants inconvenienced all over again, and days or weeks of labor undone to correct a problem that started in the drafting stage.

The project engineer has a lot resting on his or her shoulders.  He needs to determine the precise placement of sprinkler heads for proper coverage, while coordinating his diagrams with the building’s existing infrastructure.  That means working alongside a thicket of other systems, including electrical, heating, air conditioning, plumbing, insulation, and phone and computer lines.

Quite often, to maximize building space, all of these elements are tightly condensed in restricted perimeters in the ceiling.  Adding something brand new to the equation “thousands of feet of sprinkler pipe” rarely entered into the original building plans.  The engineer must design around all of these things including impenetrable structural elements, such as steel and concrete while minimizing disruption to the building’s day-to-day business operations.

You don’t want just anybody handling this responsibility.  An experienced, trained engineer is essential to the project.  You do not want a basic “draftsman” in this role.  You want someone with a professional designation or degree that speaks to the integrity and quality of his or her drawings (for instance, certification from NICET, the National Institute for Certification in Engineering Technologies).

An engineer who is technologically savvy is key.  Growing numbers of engineers are utilizing software that enables them to organize, archive and distribute their work electronically to ensure easy retrieval of drawings well into the future.  For instance, if a leak develops 15 years in the future, the electronic files will offer a quick, easily accessible reference to promptly locating the right valve with precision and accuracy.

The project engineer should also be equipped with professional liability coverage for errors and omissions.  At least $1 million in coverage in force is essential.

Materials

One of the biggest risks of going with the lowest bid is that you get what you pay for.  Often, this means cheaper, inferior parts that may serve you adequately for the short-term, but create long-term breakdowns.  And bringing back the contractor to replace what’s broken or defective is always more costly than paying the price for quality up front.

Aside from the enormous risk of the sprinkler system not functioning correctly in the event of a fire, other failures pose threats as well.  Most of them center on water leakage.  Industry horror stories include water destroying computers and ruining carpets, and mold running rampant behind walls.  False fire alarms create misadventures as well, unnecessarily evacuating tenants from their offices and creating costly work stoppages.

In the fire protection industry, the finest parts are domestically produced.  The United States has the best die-casting procedures, steel foundries and pipe mills in the world.  Manufacturing standards are higher here than anywhere else.  Stick with quality.  Be sure to specify “Made in USA” parts.

Quality products can be identified by the stamps and approvals of UL (Underwriters Laboratories) and FM (Factory Mutual).  ANSI (American National Standards Institute) is the approval authority for pipe, including pressures and hydraulic flows, to ensure proper performance.  Experience has shown that some of the poorest quality steel piping comes from China and Taiwan.  Look for the ANSI certification on a random sample of pipes.

Every component of your system should be reliable, without a weak link in the chain: sprinkler heads, valves, alarm devices, pipe, pipe coupling parts, and hanger assemblies.

Some of the biggest trouble originates from pipes joined improperly.  The culprit can be faulty materials, but sometimes the contractor unwittingly creates his own problems.  At every job site, a portion of pipe cutting and grooving takes place on location, as size adjustments are needed due to unforeseen circumstances, like pathway obstacles.  All grooves and threads must be gauged perfectly to guarantee a leak-proof system.

The pipefitting tools and equipment used by the contractor to undertake this task should be exact and state-of-the-art.  There’s little margin for error.  Even a small drip can create enormous problems when left unattended, hidden behind a wall, over a long stretch of time.

In addition to the contractor’s use of the right tools and materials, you’ll want to feel confident about their availability.  It can become very expensive for the client if the contractor is not well-stocked with parts and has to special order many items, creating added costs and delays.

Also, you’ll want to determine upfront the amount of work being performed “in-house” by the contractor and the amount being subcontracted to a third party.  The latter typically brings more scheduling problems and added costs to the job that you should be able to avoid.

Quality control

Quality control means more than choosing the right parts and installing them the right way.  It is a continued monitoring and testing of the system to make sure everything will operate precisely as it should.

Your contractor should have a procedure for regularly checking every component of the system from the valves and gauges to the pipe grooves and threads.  Quality control should not just be random, haphazard spot checks.  Ask to see documented, formal procedures.  If they don’t have such a thing, why not?

One of the most effective ways for a contractor to ensure quality control is through assigning a project manager to the job.  Unfortunately, many contractors allow projects to more or less run themselves, often resulting in a job site that is in total disarray.  For the client, a project manager provides a daily, central point of contact on site to address issues as quickly as they surface, ensuring a smooth and coordinated team effort.

Too often, the project manager role defaults to the client, who is not equipped or prepared to supervise the workers assigned to the site.

Only when the installation is complete, everything is functioning correctly, and the job site is cleaned up, do the duties of quality control begin their transition to the client.  Be sure that your contractor has a program to provide you with the proper training for turnover of the system.  Many contractors offer videotaped training instructions.

There should be proper signage throughout the building with valves, such as the inspector’s test valve, properly tagged and ID’d.  Detailed zone charts and maps should be placed on the wall of the control room, as well as on each floor, clearly indicating each valve’s location and purpose.

Once you feel confident that the system is correctly installed and complete, the proper test certificates need to be signed, dated, witnessed and accepted by the building owner and fire department.  Detailed “as-built” drawings, in paper form as well as in compact disc form should be tendered to the building owner at project completion.  Require a copy of the building permit and final fire department approval letter as well.  Retain these documents indefinitely.

Be sure to have a clear understanding from the contractor of how defective work will be handled under the conditions of the warranty.  In fact, since some minor glitches will almost certainly occur, especially on large-scale, multi-year projects, ask for examples of how warranty claims have been handled for other clients.

How the contractor responds after the job is done and if they even have a plan in place is an important measurement of their performance.  Do they abandon you when the installation is complete and the check has cleared?  Or will they be there for you when unforeseen challenges arise and you need assistance with troubleshooting?

Safety and training

The installation of a fire protection system in an occupied commercial building is a scenario that can lend itself to accident and injury if the project is not undertaken with great care.  Workers climb ladders, open up ceilings, and hoist heavy tools, pipes and equipment.  Sparks and debris will fly too as grinding and coring operations take place.  Falling materials have hurt contractors and building occupants alike, with lawsuits soon to follow.

As you evaluate contractors, their safety record should be an important factor.  It’s also relatively easy to investigate.  The state department of insurance rates every trade contractor annually, and the records are available to the public.  A workers compensation rating of 1.0 is ‘average’  Ratings below that mark are above average, meaning an 0.8 rating is very good, while a 1.2 rating should give you cause for concern.

Ask your contractor how many workers are OSHA, first aid and CPR certified.  Request a copy of their safety manual.  Is the manual comprehensive and specific to their work, or something poorly slapped together or pirated from other sources?  Has it been updated to keep up with regulatory changes?

Request the company’s safety training and accident reporting procedures.  Are they formalized?  Is there a safety award or incentive program for the workers?  Has the company received any special safety recognition or certificates?

Ask the contractor how they would conduct a formal Job Hazard Analysis for your particular environment.  How would they go about identifying special requirements related to, for instance, asbestos or lead exposure?  What kind of safety equipment do they own versus lease?

Depending on the nature of your job, you may desire a contractor with tailored safety certification such as from the FAA or Coast Guard.  The best contractors will have earned such fine credentials, separating them from the rest.  If the installation requires confined space entry, such as access to underground storage tanks or crawl spaces and shafts, your installers will require specialized training as well.

Get a list of the precautions and added measures they are prepared to take to ensure a safe installation.  For instance, do they apply fireproof caulk around the wall openings used to run pipe?  In the event of a fire, such an opening can become a dangerously easy way for flames looking to advance between floors of a high-rise.

Additionally, your contractor should have a strict lockout/tag out notification procedure for shutting off the building’s systems, such as electricity, when necessary during installation.  Failure to do so could result in a building maintenance employee unwittingly restoring power at the wrong moment, causing death or injury to a sprinkler fitter.

Not all safety precautions are matters of life and death.  Some are common sense and courtesy for the building’s occupants.  For example, taking measures to maintain a relatively dust and debris-free office environment.  No one wants to find plaster powder in their coffee mug or chunks of ceiling tile in the office aquarium!

The People

A fire protection installation in a commercial or residential high-rise is likely to be a multi-year undertaking, so you want to be certain you are comfortable with the people who will be roaming your halls and working among your tenants.

You can tell a lot about a company through the qualities of its employee policies and worker attitudes.  Ask to see the contractor’s employee manual.  Does it mandate a drug-free workplace?  Are harassment prevention policies in place?  Are there strong consequences for theft?

When it comes time to interview your applicant, instead of inviting the contractor to your place of business, ask to visit the contractor in their offices.  The environment will give you a good sense of the company’s work habits, quality control and management.

Observe how the workers interact.  Do you sense a “team spirit” and good morale or discontent?  Ask about the turnover rate (state unemployment rate).  Is there a sense of loyalty or is it “hire and fire” based on scheduling needs?

Take a good look at the office appearance.  Does it convey a commitment to excellence?  Is it clean, orderly and professional?  Or is it dirty, in disarray, with girly calendars, roaming pets and open smoking?

Ask the contractor about the length and quality of the relationship with the local union.  Follow up with a call to the union business agent for some additional insight.

Find out if the company is diversely staffed and able to handle Minority Business Enterprise or Women Business Enterprise projects.

You can also get a good sense of the company’s culture and leadership by reviewing its mission statement if it has one.  A mission statement, value proposition, or code of ethics will define how the company holds themselves accountable to themselves and customers.

A solid company with a sound business plan, positive service history, industry kudos, and impressive clients typically publicizes this information on its web site.  Review the internet presence of each contractor you are considering is it neatly arranged and does it convey a cohesive, professional image?  Are key contacts identified and accessible?

And while you’re online, drop the contractor’s name in a search engine like Google and see what comes up on web sites, in newsgroup chatter, in media articles and in public filings.  You may find a nugget of information that reveals a lot more about the contractor than they will ever tell you!

Prepared to choose

Information empowers you to make the best decision for your building.  The more research you undertake and the more questions you ask, the more equipped you will be to pick the company that best fits your needs.  Zeroing in on the right choice will save you from hassles, headaches and very significant avoidable expense.

The time spent on this effort up front and the dollars you invest beyond just nabbing the lowest bid will pay off handsomely in the years to come.  Your building, its people, and its assets will be safer and more secure.  Your fire protection installation will be completed like it should be: correctly the first time, on budget and on schedule.

That’s a victory that lasts a lifetime.

Fire protection contractor evaluation checklist

  • How many years have you been in business?
  • Provide resumes of your key personnel.
  • How many degreed engineers are on staff?
  • Do you invest in training for your workers?  What seminars are offered to employees? (for example, National Safety Council events)
  • Provide a copy of your safety manual and your state safety rating.
  • What is the largest project in your company history?  The longest?  The most complex?  Have you ever failed to complete a project?
  • Provide an example of when something didn’t go well on a job.  How was the situation handled?
  • Give five examples of cases where warranty claims were addressed.
  • How many workers have been OSHA 10-hour certified?  OSHA 30-hour certified?  First aid and CPR certified?
  • Has there ever been an on the job fatality?
  • Do you conduct new installations or do you also service, test, inspect and repair them?  Is service work performed in-house or subcontracted?
  • How fast can service be guaranteed in the event of an emergency?
  • Who will be my main point of contact if there is a problem?  Can I have the home telephone number of an executive officer to use if a critical situation arises?
  • Please describe any legal or regulatory action taken against you in the past five years.
  • Have you done work for public and private clients?  Give an example where cost efficiency was crucial.
  • Give an example where quality was the most important.
  • Can you provide references from satisfied clients, as well as clients who experienced a difficult problem that had to be solved?
  • In what states and cities are you licensed?
  • What trade groups do you belong to?  What is the extent of your participation?
  • Are you bonded?  How much and with whom?
  • What is your insurance coverage?  How much and with whom?
  • Are your financial statements independently audited?  Can you provide a bank reference who can speak to your financial stability?
  • Where are your pipes and parts manufactured?  How deep is your available stock of materials?  What kind of equipment is owned versus leased?
  • Will the job have a dedicated project manager?  What is his/her role and accountability?
  • When the project is completed, how will the system turnover to the client be handled?  What kind of training will take place?

Finally, your diligent review and selection of the right fire protection contractor will create significant value and pass the test when you refinance, sell, or transfer your building.

Tom Hartel is President of Valley Fire Protection Systems, a Batavia, Illinois-based fire protection contractor.  Please feel free to learn more about Valley by visiting www.Valleyfire.com or calling 630-761-3168.