Use lifecycle models and cost analysis to raise the ceiling on your roof's value
Use lifecycle models and cost analysis to raise the ceiling on your roof's value.
To ensure that your costs don’t go through the roof, equip yourself with the tools to plan roofing initiatives effectively. Justifying capital funds for these jobs can be challenging, especially when competing for funds with projects that generate revenue for your company.
Because roof investments are rarely justified on the basis of ROI alone, it is important to consider asset management benefits, lifecycle costs, consequential damages, and other potential business risks as part of your funding request.
The following tools and analysis will help you plan effectively, avoid disasters, and justify the sizable investment that many roofing projects represent.
Lifecycle and Cost
Lifecycle costing gives facility managers a way to evaluate roof projects and management programs based on long-term payback, not just initial costs. It also provides you with additional financial information that can be used to justify roofing decisions and expenditures.
One lifecycle model comes from ASTM E 917,
Standard Practice for Measuring Life Cycle Costs of Buildings and Building Systems. The model incorporates variables such as time study period, inflation rate, discount rate, and combined tax rate. Results comparing various scenarios are provided in present net value and equivalent annual value.
To ensure the results are as accurate as possible when using lifecycle costing, the model incorporates building owner input regarding the discount rate and all critical assumptions. Accurate models of roof performance and projected costs should incorporate an initial evaluation of the facility roof(s), discussion with the building’s operators and representatives, and expert insight.
A lifecycle cost model does not replace the human thought process. It is simply another tool you can use to support your efforts in making sound business decisions. In a perfect world, facility managers could compare several lifecycle costs and make the right decision regarding their roofs.
Unfortunately, it is not that simple. A lifecycle cost model doesn’t provide right or wrong answers – it provides information. Each situation and facility is unique. To make the best decision for the specific situation, facility managers and building owners must weigh lifecycle cost information along with other factors such as available funding, location, contaminants, interior sensitivity, and many others.
The quality of the output of a lifecycle study is dependent upon the quality and accuracy of the assumptions and input. As shown in the example on page 55, making a relatively minor change to assumptions and inputs can have a significant impact on the outcome.
Using the provided example, you can equip yourself with a blueprint for how to analyze your situation and put your best foot forward. Replacement, repair, or a simple coating all may be viable options, but the best decision depends on your specific situation.
The model can help you decide which management strategy to take, whether that entails simpler maintenance and repairs or full-scale reroofing.
Replace, Recover, or Coat?
Determining if you should replace, recover, or coat a roof is a typical situation where lifecycle analysis can be useful. In this scenario, the existing roof is 15 years old and approximately 100,000 square feet. The existing roof consists of two layers of modified bitumen and a base sheet over a wood deck. The field membrane, seams, and flashings appear to be in maintainable condition and exhibiting normal weathering. There is no evidence of leaking, but ponding water is impacting approximately 5% of the roof.
Based on lifecycle costs alone, coating the modified bitumen roof immediately appears to make the most economic sense. However, there are some additional factors that should be considered before selecting the coating as the best option.
- Are you confident the coating will last 10 years and it can be coated a second time? Long-term performance of a coating depends on coating type, proper surface preparation, and correct application. If not applied properly, the likelihood of reaching 10 years with a coating is remote, especially when coating a second time.
- Precautions must be taken to ensure the ponding areas have been addressed as some coatings fail in standing water. These areas will likely require special materials that can tolerate ponding water.
- Repairing a coated modified bitumen roof can be more difficult and time consuming than repairing an uncoated roof.
Even if all these factors are adequately addressed, there are still other issues that may impact the outcome and decision-making process. For example, if short-term funds to coat the roof are not available, a facility manager may address emergency leaks as they happen and then replace the roof in five years – or, as seen in the chart
below, if it is determined that the replacement cycle can be extended by five years (from 20 to 25), then the
replacement scenario is the best option to consider.
A lifecycle model should be used carefully or poor decisions can result. A model doesn’t provide right answers – it simply provides additional information that helps to make informed business decisions.PageBreak
Manage Your Roof Assets
When properly designed, constructed, and maintained, a roof should perform for longer than 20 years. However, based on a roof longevity study conducted by Ducker Worldwide, a market research, strategy consulting, and financial advisory firm, the average service life of a commercial roof is approximately 17 years.
Many companies pay attention to their roofing assets only when it nears time for replacement. With the knowledge available and companies scrutinizing every capital and expense dollar, this is short-sighted and could cost you.
The unfortunate reality is that most roof systems fail prematurely, not as a result of old age. Early failures are often the result of not having a roof management program that entails professional design, construction quality control, and ongoing preventive maintenance.
The lack of proper care and planning costs companies millions of dollars every year. It also increases risk of loss to property and production.
Implement a comprehensive roof management program that consists of planning, design, construction, and maintenance. Doing so provides a solid foundation for minimizing your expenditures while maximizing the service life of your roof assets.
Assess and Plan for Success
Start your plan with a solid foundation by completing a proper assessment and inventory of the existing roof conditions. By setting a baseline, you will have the necessary information and establish confidence to justify budget funding requests. You will be able to effectively track long-term roof performance and demonstrate good stewardship of company funds.
A comprehensive roof assessment should include the following information: a report including roof condition, history, construction, deficiencies, design plans, recommended actions, budgets, and photos. Facilities managers and owners who don’t have objective information may find themselves using products or systems that could be overpriced, replacing roofs that could have been repaired, or allowing damage to the structure to occur by not acting sooner.
Gathering accurate information during the assessment is extremely important, as it will impact all future decisions. It is important to qualify and verify that the individuals who are gathering information are objective, well trained, and technically sound.
After a comprehensive roof assessment, you have equipped yourself with information to rely and build on when requesting funding, tracking roof performance, and managing risk.
Maintain to Delay Replacement
The cheapest roof you will ever own is the one that already resides on your facility. Keeping it in serviceable condition will allow the roof to meet or exceed its intended service life.
But unfortunately, the old adage “out of sight, out of mind” can be applied to roof maintenance at many facilities. Employees are busy and have many responsibilities, and often have little training and understanding of all that roof maintenance involves. Thus, unless the roof is leaking or is negatively impacting operations, it is often forgotten.
Poorly maintained and leaking roofs can result in reduced roof life, significant structural damage, slip and fall safety hazards, lost revenues due to inventory damage, and conditions that allow mold and mildew growth. In addition to the obvious financial impact to your business, these issues can also negatively impact how the company is perceived by employees and the community.
Studies show that roofs comprise only approximately 5% of a facility’s construction cost, yet roof defects can account for up to 50% of legal claims related to a facility. Further, more than one-fourth of facility capital expenditures are dedicated to correcting roof problems.
Start by implementing a basic preventive maintenance program consisting of yearly inspections, identification of deficiencies, and timely and proper repairs. The sooner you begin maintaining your roof, the sooner it will begin paying off in reduced leaks, extended roof life, avoided repair or replacement costs, and fewer headaches.
Reroof Properly for Longevity
When it is no longer possible to maintain a failing roof, the replacement process begins. Designing and constructing durable, sustainable roof systems starts with understanding criteria such as building use, physics, climatic exposure, and occupancy influences.
Selecting the appropriate roofing components and making sure they conform to applicable codes and insurance requirements are part of the roof designer’s responsibility, but it is important for you to be well-versed in these guidelines as well.
During the design process, make sure the roof designer understands your goals and evaluates potential design criteria in the following five categories: code, compliance, energy performance, material selection, water management, and durability.
Incorporate into the specification the appropriate details for flashings, wall penetrations, and transitions. Poor detailing or lack of proper instructions can result in roof leaks, shortened roof life, and other performance problems.
Ensure Sound Installation
Prior to the construction phase of a reroofing project, develop a strategy to verify that the project is installed safely, on schedule, and as specified.
It has been well publicized that the contractor’s most challenging task is attracting and retaining skilled workers. Roofing is a demanding, difficult, and dangerous job. It’s important for all architects, contractors, and workers to be on the same page with you and your expectations.
To reduce the risk of having a poorly executed project impacting your business and to confirm that your roof system is installed correctly, consider using a quality assurance program.
Companies in the process of managing their roof assets should take the necessary steps and precautions to ensure they are spending available funds wisely while reducing potential risk. Implementing a roof management program, incorporating lifecycle costing alternatives, and identifying potential business risks doesn’t guarantee funding approval. However, having objective information can be persuasive in demonstrating the value of your roof assets and justifying funding for your efforts.
Eric Hasselbusch is an account manager with Benchmark Inc., a professional roof and pavement consulting firm, and has been in the roofing industry for over nine years. He can be reached at 319-393-9100 or email@example.com.