TANK AND VESSEL · SPECIALTY · FIXED BY STEP 08

Year Two Blisters Come Back to a Closed Job

The liner blistered in year two, the utility will only let you drain that tank in a low-demand window, and the job closed out two fiscal years ago.

WHY IT'S A TANK AND VESSEL PROBLEM

For most trades a callback is a truck, a man, and a day. Yours is a complete recoat cycle on a structure that has to come out of service first, priced like a small job of its own. It also comes two fiscal years after you recognized the revenue, so there's nothing left on the balance sheet to absorb it and the current year pays for it.

WHAT IT COSTS

The size of it

A single lining callback on a $600K repaint costs $150K to $300K in containment, blast media, coating, disposal, and disinfection, on a job whose entire margin was $90K.

OVERHEAD AT $1M to $5M

15%

CFOS target 14% for tank and vessel.

GROSS MARGIN AT $1M to $5M

23%

CFOS target 25.5% for tank and vessel.

NET PROFIT AT $1M to $5M

CFOS target 11.5% for tank and vessel.

Two tails follow a tank off the site. An NSF/ANSI 61 potable interior lining blisters or disbonds 12 to 36 months after acceptance, and the cause traces back to surface preparation or dew point at application, both of which were yours. Fixing it means taking the tank out of service on the utility's schedule, full containment, re-blast to SSPC-SP10, recoat, recure, re-disinfect, and re-sample. The structural tail is differential settlement that turns up on the API 653 Annex B survey 6 to 18 months in, and the argument over whether the ringwall or the shell caused it defaults to you, because you built the visible thing.

WHAT TO DO

Three moves, in order

STEP 01

File a complete coating QC record on every job: ambient and dew point readings, surface temperature, blast profile, dry film thickness, and holiday testing, signed daily. That file is the only thing that moves a year-two argument off your desk.

STEP 02

Book a warranty reserve as a set percent of coating revenue every month it's earned, so the callback is charged to a reserve and not a good quarter.

STEP 03

Perform the Annex B settlement survey at turnover and give the owner a copy as the baseline, so the ringwall conversation starts from data you own.

THE FIX

Step 08: Standards and accountability

Five hours a month of owner time, spent projecting the work.

CFOS-08 · CHAPTER 8

Five hours a month, spent projecting the work

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

BENCHMARKS

Tank and vessel 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

PMs aren't accountable for margin

Your PMs are measured on schedule and on the client being happy. No role in the company is measured on the number at the bottom.

SAME TRADE

What else costs tank and vessel contractors money

TANK AND VESSEL · CFOS-04

The Plate Quote Expired Before You Won the Job

You bid the tank in March, won it in July, and bought the plate in August against a mill quote that expired in April.

TANK AND VESSEL · CFOS-06

Late Plate Puts a Certified Crew on the Bench

The plate is six weeks late and there's nothing else on that site your welders are allowed to touch.

TANK AND VESSEL · CFOS-01

You Pay for Coupons Before You Bill a Weld

Four welders spent two weeks cutting and testing coupons, and none of that time had a job number behind it.

TANK AND VESSEL · CFOS-07

You Finish First and You Get Paid Last

The tank has been holding water for eighteen months, the city loves it, and the owner still has your retainage.

TANK AND VESSEL · CFOS-04

You Sell in Gallons and Buy in Pounds

Seismic revisions bumped two shell courses, your plate order grew by 25,000 pounds, and the owner still calls it a 500,000-gallon tank.

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 tank and vessel owners ask

Tank lining warranty callback cost two years later?

The liner blistered in year two, the utility will only let you drain that tank in a low-demand window, and the job closed out two fiscal years ago.

What does it cost?

A single lining callback on a $600K repaint costs $150K to $300K in containment, blast media, coating, disposal, and disinfection, on a job whose entire margin was $90K.

What do I do first?

What are tank and vessel contractors supposed to be making?

Tank and vessel 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 08, standards and accountability. Five hours a month of owner time, spent projecting the work. It comes from chapter 8 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 tank and vessel contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.

What a fractional CFO does for tank and vessel contractors

AUTHOR

JOSH LUEBKER

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

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