FIRE ALARM · MECHANICAL AND LIFE SAFETY · FIXED BY STEP 01

Two hundred drafting hours with no cost code to hold them

You've got NICET time, riser drafting, and battery calcs stacked up on a job where you haven't set a single box, and no cost code holds any of it.

WHY IT'S A FIRE ALARM PROBLEM

Most trades submit cut sheets and move on. Fire alarm submits engineering, and that engineering goes through two reviews back to back, the second one held in a permit queue you don't control and can't schedule around. Every hour of it is real payroll and real fee money spent months before any schedule of values line will accept it.

WHAT IT COSTS

The size of it

You burn six to fourteen weeks of calendar with zero billable production, plus $8K to $25K of drafting, NICET, and permit-fee cost that most fire alarm shops expense straight to overhead and never see again.

OVERHEAD AT $1M–$5M

16%

CFOS target 15% for fire alarm.

GROSS MARGIN AT $1M–$5M

24%

CFOS target 26.5% for fire alarm.

NET PROFIT AT $1M–$5M

CFOS target 11.5% for fire alarm.

Nothing gets ordered and nothing gets installed until the stamped package clears the engineer of record and then the fire marshal, in that order, in series. That package is a point-to-point riser, device layout on reflected ceiling plans, a sequence-of-operations matrix, standby and alarm battery calculations, and voltage-drop calcs on every NAC circuit, stamped by a NICET Level III or a PE depending on your state. The AHJ isn't a party to your subcontract, so its queue time counts as no one's contractual delay and no one can be charged for it. The panel bill of material follows the approved point count, so one EOR comment that adds twelve addressable points resets the equipment order, and the drawing with it.

WHAT TO DO

Three moves, in order

STEP 01

Open a cost code called engineering and permitting on every job, and charge drafting hours, NICET time, PE stamp fees, and permit fees to it starting the day you're awarded.

STEP 02

Put a submittal and permit line on the schedule of values in the next bid you send, priced at what the package costs you to produce.

STEP 03

Log the date the package went to the EOR and the date it went to the AHJ on every open job, and bring the distance between those two dates to your next month-end review.

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

Fire alarm 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 fire alarm contractors money

FIRE ALARM · CFOS-07

Your panel ships months before you can bill a dollar

Sixty grand of control panel is on your shop floor and there's nothing on the pay application it can go against.

FIRE ALARM · CFOS-04

A 30-day quote can't hold a nine-month buyout

You bid the equipment off a quote good for 30 days, then bought it out eight months later at the new price sheet, with no second vendor to shop it to.

FIRE ALARM · CFOS-05

You gate the CO, which is why your retention pays last

The building can't get its certificate of occupancy without your acceptance test, and you're still chasing ten percent a year after you passed it.

FIRE ALARM · CFOS-06

You bid three trips and you've made nine

The estimator priced two mobilizations, and then the schedule gave you six: boxes, wire pull, trim, programming, pretest, acceptance, retest, and ERRCS.

FIRE ALARM · CFOS-03

A dirty detector at 2 a.m. isn't warranty work

The building is a year old, the detector is dusty, the fire department rolled, and you sent a tech in the middle of the night with no PO.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CIVIL

The grading permit clock isn't on your schedule

Third resubmittal on the grading permit, the power pole relocation is six months out, and your crew and iron cost money while no party in your contract chain is at fault.

CONCRETE

The 28-Day Break Decides a Pour You Already Billed

You poured in March on an approved mix, the cylinders came back low in April, and two floors have already gone up on the slab in question.

DEMOLITION

Four Clocks Own Your Start Date And You Own None

The machine is on the pad, the crew is standing around, and everyone is waiting on a letter from the gas company. None of the clocks that release your start belong to you.

QUESTIONS

What fire alarm owners ask

How to cost fire alarm submittal drafting and NICET time?

You've got NICET time, riser drafting, and battery calcs stacked up on a job where you haven't set a single box, and no cost code holds any of it.

What does it cost?

What do I do first?

Open a cost code called engineering and permitting on every job, and charge drafting hours, NICET time, PE stamp fees, and permit fees to it starting the day you're awarded.

What are fire alarm contractors supposed to be making?

Fire alarm runs 24% gross margin, 16% overhead and 8% net profit before taxes at $1M–$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: The Construction Financial Operating System.

OR HAVE IT HANDLED

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

What a fractional CFO does for fire alarm contractors

AUTHOR

JOSH LUEBKER

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

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