The Fire Marshal Releases Money You Earned Two Years Ago
The lead-in you buried before the slab is still holding your retention, and it releases the day a fire marshal watches a test you can't schedule on your own.
No other trade spans the building like this. The concrete sub is off the site before your overhead rough starts and his retention ages against a milestone he controls. Yours ages against a witnessed test that another contractor's open punch item can hold up indefinitely, on money you earned before the building had walls.
The size of it
On a $900k contract at 10%, that's $90k parked for two years, and the underground share of it has been parked the entire time. Most contractors hold retention as one lump receivable with no aging by phase, so when they go ask the GC for it they can't say which dollars are old and which are current.
Your first day on site is the NFPA 24 underground fire main in month two, thrust blocks, PIV, and FDC, in the dirt with site utilities before the slab goes down. Your last day is the NFPA 13 acceptance test in month twenty four: 200 psi two hour hydrostatic, main drain test, forward flow on the backflow, and alarm and tamper verification, all witnessed by the AHJ. So 5 to 10% retention withheld on work earned in month 2 releases against an event in month 24 on an 18 to 30 month institutional build. Release is further conditioned on the signed Contractor's Material and Test Certificate and the as-builts, and the acceptance test can't pass until the fire alarm interface works, which lives in somebody else's contract.
Three moves, in order
Step 05: Software and bookkeeping alignment
Live job costs inside thirty seconds, with the bookkeeping cadence that keeps them current.
What else costs fire protection contractors money
The same mechanism in other trades
What fire protection owners ask
How to get sprinkler retainage released before final acceptance test?
The lead-in you buried before the slab is still holding your retention, and it releases the day a fire marshal watches a test you can't schedule on your own.
What does it cost?
On a $900k contract at 10%, that's $90k parked for two years, and the underground share of it has been parked the entire time. Most contractors hold retention as one lump receivable with no aging by phase, so when they go ask the GC for it they can't say which dollars are old and which are current.
What do I do first?
Split the retention receivable by phase in the ledger, underground, overhead rough, trim, and test, and age each bucket from the month it was earned.
What are fire protection contractors supposed to be making?
Fire protection runs 23% gross margin, 15% 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 05, software and bookkeeping alignment. Live job costs inside thirty seconds, with the bookkeeping cadence that keeps them current. It comes from chapter 5 of CONTROL: The Construction Financial Operating System.
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 protection contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.