Better Roofs Are
Less Expensive
Article by
Richard A. Boon,
P.E., CCI
 The
ultimate
question for
roofing in hw
Atlanta metro
area is:
What is the
best roof? The
accountants will
tell you that
the answer is
simple: It is
the roof that
costs the least
over its life.
It really does
not matter what
material is used
or how the roof
is attached; the
answer is the
same. If the
roof fails, then
the cost of a
new roof is
added to the
cost.
When most owners
look at roofing,
they look at the
materials and
the systems, and
the only part of
the cost they
consider is the
initial cost.
But the cost to
install a roof
is only a
portion of the
total cost of
owning a roof.
The practice of
examining the
cost of owning a
roof over its
entire life is
called
life-cycle cost
analysis. This
is the best way
to truly compare
the cost/value
of roofing
systems.
Something that
is crucial is:
How long do you
expect to own
the building? If
the answer is
indefinitely,
then the
analysis should
be run for at
least 20 years.
Some people will
use 30 years.
The standard
depreciation for
roofing is 39
years. There are
very few systems
that are
functional at
the end of this
life expectancy.
In a basic
life-cycle cost
analysis, there
are several
factors that
need to be
considered. The
study period has
already been
mentioned. The
next
consideration is
the changing
value of a
dollar over
time. One common
method for
relating future
expenses to
today's costs is
to use the
t-bill rate,
minus the
inflation rate.
A time value of
approximately 5
percent is a
reasonable
number for use
in our analysis.
There are costs
associated with
other aspects of
roofing, such as
installation
inspections,
semi-annual
inspections, the
cost of
leak-related
repairs, costs
associated with
making the
warrantor live
up to the
warranty, and so
on. There are
also routine
maintenance
expenses to
consider, such
as cleaning the
drains,
recaulking the
flashings and
performing
general
housekeeping.
With some
systems, the
costs of
performing some
of these items
are covered by
the warrantor as
a part of a
comprehensive
service package.
They can also be
purchased from
some contractors
or roofing
consultants for
an annual
service charge.
All of these
costs need to be
known or
estimated for
the term of the
study period.
The last item
that needs to be
known is the
relative life
expectancy of
the roofs in
question. There
are sources for
this
information. The
most
conservative
approach is to
use the warranty
life as the
service life.
This is
generally
shorter than the
real life,
except where
there is no
routine
maintenance
done. Then the
life may well be
shorter than the
warranty.
Life-cycle Cost
Scenario
Let's create a
simple scenario
that illustrates
how these
factors combine
to produce a
life-cycle cost:
The roof in
question is bid
using two
different
systems. The
first is a
commodity-grade
roof with a
15-year
warranty; the
bid is $225,000.
The second
system is a
premium roof,
and the bid is
$300,000.
We are assuming
that the owner
is a public
entity, so that
taxes can be
ignored. We are
using our 5
percent for the
time value of
the funds.
The cost to
maintain the
commodity-grade
roof is at least
$1,000 per year,
to cover the
costs of the
required
inspections for
warranty and the
cost of a
consultant on
the project
during
installation
(many
consultants are
considerably
higher).
When that roof
is replaced, in
its 15th year,
its present
value cost is
$113,640,
representing the
initial cost
adjusted by the
time value of
the funds. When
you add the
continuing cost
of maintenance,
the
total-ownership
cost for the
commodity roof
becomes
$354,781.
With the second
system, assuming
that the premium
roof is replaced
in its 24th
year, the
present value
cost is only
$97,671. Since
the system
supplier
provides the
required
inspections as a
free service,
there are no
maintenance-related
costs for the
first 15 years
of the roof.
Let's assume as
much as $1,500
in annual
maintenance from
years 15 through
23. Let's also
assume roof
replacement in
year 24, a
conservative
estimate for a
roof that was
warranted for 20
years.
Even with these
conservative
estimates, the
total-ownership
cost for the
premium roof is
$346,273. As the
federal interest
rates drop, the
difference in
total-ownership
cost increases,
making the
premium roof an
even better buy.
Since the
premium roof has
a manufacturer's
rep on site
during
installation,
installation-related
problems and
add-on
inspection costs
are minimized.
In addition,
on-site
manufacturer
observation
provides the
benefit of
single-source
liability,
should problems
eventually
occur.
The figures used
in this
illustration are
in accordance
with ASTM E-917,
Standard
Practice for
Measuring
Life-Cycle Costs
of Buildings and
Building
Systems, which
provides
building owners
with an
excellent tool
for comparing
roofing options
on a sound
financial basis.
Other Factors
There are
other factors
that can be
included in a
model. These
include a simple
energy cost
savings as well
as the costs
that are
associated with
any leaks in the
system. If a
roof leaks, then
the wet areas
need to be
fixed, as does
the damage done
inside the
building. The
additional
energy lost can
be considered as
well.
There is also a
cost associated
with disrupting
the facility to
put a new roof
on. This should
be added to the
cost of the
roof. How much
does it cost to
clean up after a
leak? This too,
must be added.
It has been
reported that
the return on an
initial
investment of
$10 to $12 can
be justified
through the
savings of a
single dollar
per year in
maintenance.
So, which of
these roofs
saves the owner
the most money?
Clearly, the
higher up-front
costs of premium
roofing systems
can be fully
justified
through
long-term
savings.
By looking at
more than just
the initial cost
of the roof, the
owner is making
a better
financial
decision. This
same analysis is
useful for
making a
multitude of
construction-related
purchasing
decisions.
Are the
published life
expectancies of
high-performance
roofing products
truly
achievable?
There is no
question that if
someone
knowledgeable
looks at the
roof at least
once a year
(industry
recommendation
is twice a
year), and the
problem areas
are corrected
promptly, most
commercial roofs
will last
significantly
longer than
their
warranties. The
exception is
when defective
materials cause
the roof to
shrink
excessively or
to shatter.
Conclusion
Life-cycle cost
analysis is the
best way to
discuss making
roofing
decisions with
financial
people. The one
that makes the
final decision
is the one that
signs the
checks. Roofing
people are great
at providing
technical
information but
poor at
providing the
financial
information that
supports the
right decision.
Improve the
quality of your
data. Examine
your own roofs
or the roofs of
others in your
area and find
out what is
working and
what's not. This
data can then be
used to better
model the true
life-cycle
costs.
Roofing is often
seen as a
problem area in
building
construction and
maintenance.
This perception
is earned in
part by the
people who most
often complain
about it. The
designers and
facility
managers that
choose their
roofing systems
and contractors
based on an
assumption that
the lowest bid
for the least
expensive roof
is going to
provide
satisfactory
results. This
assumption is
based on the
idea that
roofing
specifications
are performance
based and that
all contractors
are equally
qualified to
install all
systems. This
assumption is
false.
Unfortunately,
it remains a
basic tenant for
some in the
industry.
About the
Author: Richard
A. Boon, P.E.,
is an
independent
roofing
consultant with
Construction
Support
Services, Inc.
of Littleton,
Colorado. He is
a past director
of The Roofing
Industry
Educational
Institute and
serves on
Roofing
Contractors
editorial
advisory board.
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