EIFS AND STUCCO · ENVELOPE AND STRUCTURE · FIXED BY STEP 01

A Hairline Crack Costs You a Whole Elevation

It's a hairline off a window corner and the industry calls that normal, and you still rent a lift to refinish the elevation to the nearest control joint.

WHY IT'S AN EIFS AND STUCCO PROBLEM

Most trades get callbacks on defects. You get called back on something the industry itself defines as normal, on a monolithic surface where the cosmetic repair is bounded by control joints and has nothing to do with the size of the crack. The call comes in a year after close, so the cost goes to overhead and never touches the job that caused it.

WHAT IT COSTS

The size of it

A $250 crack turns into a $5,000 to $9,000 elevation refinish, and warranty work in this trade is routinely 1 to 3 points of revenue.

OVERHEAD AT $1M to $5M

15%

CFOS target 14% for EIFS and stucco.

GROSS MARGIN AT $1M to $5M

23%

CFOS target 25.5% for EIFS and stucco.

NET PROFIT AT $1M to $5M

CFOS target 11.5% for EIFS and stucco.

SMA's crack policy says owners should expect hairline cracks and diagonal cracks extending from window and door corners, and that industry practice is to repair cracks exceeding a sixteenth of an inch. The catch is that cured, weathered stucco can't be patched invisibly, so a spot repair reads as a patch under the same critical light the acceptance walkthrough used. The honest fix is a fog coat or a full refinish of the elevation to the nearest control joint, plus access equipment to get back up a three story wall, plus mobilization for about one man day of real work. Those calls come in after the first full thermal and freeze cycle, six to eighteen months past acceptance, which is well after you closed the job in your books.

WHAT TO DO

Three moves, in order

STEP 01

Open a warranty cost code under the original job number and keep the job open in job cost for two years past acceptance, so callbacks get charged where they belong.

STEP 02

Tag every callback with the crew that did the elevation, the GC, and the detail the crack came off, then sort that list quarterly to see which of the three keeps repeating.

STEP 03

Put the SMA crack language in both your proposal and your closeout letter, and set a fog coat unit rate so the ones you choose to do are priced before the phone rings.

THE FIX

Step 01: Job cost structure

Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.

CFOS-01 · CHAPTER 1

Job cost codes that match how you bid the work

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

EIFS and stucco by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

Cost codes the field ignores

You have 200 cost codes. The crews use four of them, and one is called Miscellaneous.

SAME TRADE

What else costs EIFS and stucco contractors money

EIFS AND STUCCO · CFOS-01

Your Finish Coat Lot Is Cash You Bought in Week One

You buy the whole building's finish in one production lot and cut the foam profiles to approved shop drawings, then warehouse it for weeks before you can bill a square foot of finish.

EIFS AND STUCCO · CFOS-06

The Lath Inspection Owns Your Crew's Calendar

Lath is done Tuesday, the inspector gets there Friday, and eight skilled plasterers wait three days that never get coded to anything.

EIFS AND STUCCO · CFOS-04

Control Joints You Never Bid a Lineal Foot Price For

The elevations came without control joints, you bid the layout you assumed, and the architect drew the real one at submittal.

EIFS AND STUCCO · CFOS-07

Acceptance Happens Before the Wall Finishes Curing

They walk the building at dusk with a side light, write up shadowing that's gone by mid morning, and that walkthrough is what releases your money.

EIFS AND STUCCO · CFOS-03

You Bid One Mobilization and Paid For Five

Lath, scratch, cure, brown, cure, and finish adds up to five or six trips to the same building, and the bid priced one.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

Trench dips appear inside the bond window

The parking lot settled over your sewer line eighteen months after acceptance, and who pays comes down to whether the density test for that station and that lift is in a file.

DEMOLITION

They Found A Tank A Year After You Demobilized

An old UST turns up under the pad twelve months after your last load left, and every finger points at the contractor who isn't on site anymore.

DRYWALL

The eleven-month callback is paid by this year's payroll

It's March, two of your best guys are in a truck all month fixing houses you finished last spring, and none of those hours bill.

QUESTIONS

What EIFS and stucco owners ask

How do I track stucco warranty callbacks after the job is closed?

It's a hairline off a window corner and the industry calls that normal, and you still rent a lift to refinish the elevation to the nearest control joint.

What does it cost?

A $250 crack turns into a $5,000 to $9,000 elevation refinish, and warranty work in this trade is routinely 1 to 3 points of revenue.

What do I do first?

Open a warranty cost code under the original job number and keep the job open in job cost for two years past acceptance, so callbacks get charged where they belong.

What are EIFS and stucco contractors supposed to be making?

EIFS and stucco has 23% gross margin, 15% overhead and 8% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.

Which part of the system fixes it?

The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 of CONTROL: C.F.O.S. Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for EIFS and stucco contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.

What a fractional CFO does for EIFS and stucco contractors

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.