NAFED is pleased to announce the appointment of Dave Pelton as the association’s new Vice President–Technical. Possessing a substantial background in the fire protection and life safety industry, Dave has demonstrated proven expertise across multiple business disciplines including team leadership, product knowledge, and industry advocacy that will enable him to effectively transition into the association industry and garner immediate results.

Dave will oversee training and programs, committee administration, and industry advocacy, as well as provide technical expertise, participate in industry activities to develop opportunities for NAFED, ascertain member’s technical needs, and promote NAFED’s goals in adherence to the organization’s long-range plan.

“I’m excited to start this new chapter in my fire protection/life safety career in working with Danny Harris and becoming part of the team. NAFED has long been the industry’s backbone when it comes to associations serving companies that sell, distribute, and service fire/life safety equipment. I look forward to giving back, advancing the industry, and supporting our valued partners,” stated Dave Pelton.
​
Feel free to reach out and welcome Dave or direct your questions to dpelton@nafed.org

Save the Date!

2023 NAFED Conferences

60th Anniversary

March 9-10, 2023
Las Vegas
Bally’s/Paris Hotel

April 13-14, 2023
Atlantic City
Caesars Atlantic City

May 25-26, 2023
Chicago
​Swissôtel Chicago

Effective immediately, NAFED's new address is:
55 E. Monroe Street
Suite 1440
Chicago, IL 60603

Our phone number is still:
(312) 461-9600

by Drew Slocum

It has been an interesting last few years in the world of fire protection and security. Many other industries throughout the globe have been severely impacted by the pandemic and economic conditions. Fire and life safety did not see much of a downtick, however. Service providers have hit record numbers. Manufacturers, even with slow innovation, have seen nice growth. Authorities Having Jurisdiction are pushing better compliance in their municipalities to keep buildings and people safe.

Mergers and acquisitions have also hit an all-time high. According to Dave Pelton and John Mackey on The Mackey Group blog, "As the fire protection industry emerged from the recession, the FLS [fire protection and life safety] companies standing tall were the ones with a strong ITM [inspection, testing, and maintenance] service-focused book of business." Service providers, manufacturers, and technology providers are all being valued higher than ever. The stability of recurring revenue as a business model is attractive to investors, and software technology plays a big part in helping manage this end of the business.
 
Jurisdictional Compliance
The adoption and enforcement of NFPA, UL, and ICC codes and standards pushes forward a jurisdiction’s fire protection compliance standards. However, there is a lag between the three years NFPA codes update and the five or more years it takes for a jurisdiction to adopt the new code language into their own fire and building codes. AHJs are becoming more informed about the latest in codes and standards with the implementation of third party compliance platforms like The Compliance Engine. These software platforms have been around for more than ten years but in the last few years have been seeing increased integration into more and more towns and cities. Because of this information, the AHJ can now make sure building owners are compliant while fixing critical deficiencies and pushing more service revenue to fire protection service providers.

Fire protection service providers must understand the process and how to take advantage of the service opportunity in front of them. This opportunity does not come without some costs, however. Data management and uploading are the hidden costs to these third party systems. Currently, fire alarm, sprinkler, and suppression systems are managed through third party systems for some municipalities, but recently we have seen more third party systems reviewing fire extinguishers and hood inspections.

How does a fire protection company manage new workflows set forth by the AHJ? One issue that has cropped up with AHJ compliance is certain discrepancies on some jurisdictional forms. Municipalities can dictate what their fire protection inspections entail as well as their frequency. These don't always line up precisely with what NFPA or other standards require. This heavily complicates things for the fire protection service provider because the building owner often separately needs to meet certain NFPA, FM, or Joint Commission inspection standards for building insurance purposes.

​How does a fire protection company stay up-to-date on jurisdictional, national, or other AHJ codes?
 
Fire Protection Has a Niche Workflow
Creating an optimized workflow for your recurring fire protection revenue is a must these days. Inspections drive compliance, but they also drive deficiency sales. Deficiencies are reported to the AHJ and building owner via a report which can be turned into a proposal to resolve the deficiencies for the building. Once the work is booked, getting accurate material out to technicians on time is essential. Invoicing and payment processing must happen quickly to make sure accounts receivables stay in check. Days Sales Outstanding (DSO) for top fire protection performers are 45 or more days. How does a fire protection company optimize its internal workflows to generate the highest return on service repair?

Industry-specific software platforms handle many of the questions asked above. Handling the third party systems can be a burden, but deficiency and inspection management can help ease the pain. Jurisdictional compliance seems to be growing throughout the U.S. and Canada. A company cannot easily keep up with these different requirements without hiring specific resources to ensure this. Fire protection has a niche workflow because we are so tied to the fire codes, therefore your software and process should be niche as well.

All in all, the fire protection industry is a great spot to be these days. It has proved to be a decent investment for recurring revenue businesses. Because compliance never goes backward and AHJs are becoming savvier with technology, our businesses continue to drive forward. Yes, there are problems such as the labor shortage, the supply chain, and other economic issues, but some of this is cyclical or an aftereffect of the pandemic.  If we stick to our strengths, keep up with the codes, and manage our workflows, the future will be bright as we adapt.

by Jeff Wyatt
 
Every conversation I have with business leaders inside, and outside, our industry about business challenges ends up on the topic of labor. There is no doubt we have labor issues. But are the labor issues as bad as you think they are? Should we really be hiring as fast and aggressively as we might think? Are we focusing on the work that needs to be done without thinking about the type of work itself? What other things should we be thinking about as they relate to this challenge in our business? And, by the way, are you sacrificing your own profitability blindly by not addressing the math in this equation?

One of the most important things you can do right now is make the most of the labor force you have. Here are the areas we will briefly cover in this article:

• Prioritizing your revenue
• Evaluating your margin by job
• Terminating customers
• Technician utilization

 
Prioritizing Your Revenue
What is the math we should know in business? Revenue minus cost of goods sold (COGS) equals gross margin. Margin minus overhead (the SG&A or selling, general, and administrative expenses) equals net profit. Net profit ultimately should become positive cash flow. So, this all starts with revenue. And the labor you need to deliver your revenue.  

Let’s take a close look at what steps you should take to prioritize your revenue. This will determine how much labor you need.

First, you need to consider the level of urgency amongst your customer base for the month. This includes the size, scope, and value to your business of each customer and each job. It is important to separate work accordingly so you are utilizing your labor, first and foremost, where it must be. Second, consider if that work is profitable work. You are in the business to make a profit, aren’t you? Don’t feel like you must service anyone who calls. Third, what is the business aspect of the customers you prioritize? How easy are they to service? How easy or difficult are they for your office staff to manage? And, perhaps most importantly, what is their payment history? By evaluating your customers who are due for service next month, you can determine which customers remain on your schedule and which ones fall under the “to be reviewed” category for subsequent months.

There’s a theory that 80 percent of revenue comes from 20 percent of customers. I see so many companies struggling to hire qualified labor only to see the work itself isn’t qualified by the company as good business. On the other hand, if you focus on the good business, you might not need to hire as much.
 
Evaluating Your Margin by Job
After being involved in nearly fifty transactions throughout my career where a business is being acquired, I found it surprising how many companies were not making any profit on a service call when real cost was factored in.  Some of us in the industry have inspection software that helps us see the margin by job. Others must do this manually. This is important: PLEASE calculate the profit margin even if you have to do it manually. It is not that hard to do. Each day, you should know and understand what each completed job entails. At a minimum, you should know the hours, parts, and travel cost. Come up with a burden rate for your labor so you can include benefits and overhead. With these combined items, look at what you plan to charge the customer and calculate a gross margin. Each person must decide what is acceptable to them, but we can all agree it should be more than zero percent, right?

By doing this exercise, you might identify issues with your workload that need to be addressed. Please consider downloading a “margin vs. mark-up chart” so your team knows how to properly calculate the right margin for your business.  
 
Terminating Customers
I often hear people say they don’t service a certain kind of customer for a variety of reasons. Maybe it is because the customer is difficult to service or they demand a low price that makes you wonder why you would do the job in the first place. Or perhaps they didn’t pay you in a reasonable timeframe. Now think about all your customers today. How many fit that description?

We tend to focus on these questions when we are considering adding these customers. In reality, most of us already have lots of these customers. If you eliminated customers that fit your “do not service” list, consider how many would get terminated today. For those of us in the acquisition world, how many of those customers did we inherit and now must service because we paid for them?

Take the time and figure out who you should consider eliminating from your service schedule. Take a look at labor costs being spent on these customers. Consider the hiring front and how many people you’re hiring to service this particular type of customer. All things need to be considered when re-evaluating whether to terminate or keep a customer.   

Technician Utilization
I’ve looked at many businesses through the M&A world and found that the average business has a gross utilization of below 70 percent.

Utilization is simply how many hours you paid for the labor you have each day versus how many hours a customer was charged. So, on average, companies utilize 70 percent of the labor they pay for. Do you know your number? Take a week and figure this out. You will either be impressed or shocked by your findings.

Here’s the thing. When you consider how well you schedule this labor, or how well they schedule themselves, and what you do and don’t charge for, you will soon realize what percent of your day is paid by the company versus the payments the serviced company should be paying you but are not. The best rates are over 90 percent.

You will always have some lost time for training, PTO, and various other reasons. But imagine if every day your labor team was servicing customers 7 hours out of every 8-hour business day compared to the 5.5 hours out of an 8-hour business day that is more typical across the industry today. Consider how much labor you would then need (or not need) to hire.

​When you look at your business and truly consider these items discussed above, you just might find you do not need as many technicians as you thought. I certainly hope this helps in one way or another. We owe it to ourselves as business owners to make sure we have the right labor for the right business in all the right places. 

​Jeff Wyatt is region three director and the CEO of CertaSite headquartered in Indianapolis, Indiana.

​It is with sadness in our hearts that NAFED has to relay the news of Norb Makowka's sudden passing on January 26, 2022. The cause of his death is not known at this time, but we didn’t expected this, as he seemed to be in good health. Norb was a much beloved father, grandfather, husband, co-worker, and friend and will be incredibly missed.

As many of you know, Norb was very much a part of NAFED’s foundation. He was always a dependable source of knowledge for everyone, not just for NAFED members but anyone he had contact with throughout our industry. After his years in the fire equipment distributor industry, he joined the staff of the association in 1992. For thirty years he has been a phone call away when people have had questions or concerns. He has been our point person on over a dozen NFPA technical committees, DOT compliance, and federal regulations. He helped create and manage our robust certification program. His hard work has been a large part of what makes NAFED the successful and essential association it is today. It is hard to know what we will do without him.

We know that many of you had a personal relationship with Norb, so know that you are in our thoughts as we hope we are in yours. The world just lost a generous bright light of a human being, and that is something hard to recover from. Please take the time to mourn and look out for one another.

He is survived by his wife Sue, daughter Kristen and son Michael, and granddaughter Lucy.

Funeral arrangements will be announced at a later date.

Mark your calendar for the NAFED 2022 conferences.

Las Vegas
March 10–11, 2022
Bally’s/Paris Hotel
3645 S. Las Vegas Blvd.
Las Vegas, NV 89109
(877) 603-4389
Conference Meeting Space: Bally’s Hotel
Hotel accommodation: Paris Hotel
NAFED Discounted Hotel Rate: $125
Reservation Cut-off Date: February 6, 2022

Atlantic City
April 7–8, 2022
Caesars Atlantic City
2100 Pacific Avenue
Atlantic City, NJ 08401
(888) 516-2215
NAFED Discounted Hotel Rate: $119
Book hotel online here.
Reservation Cut-off Date: March 6, 2022

Indianapolis
May 12–13, 2022
JW Marriott Indianapolis
10 S. West Street
Indianapolis, IN 46204
(888) 236-2427
NAFED Discounted Hotel Rate: $189
Reservation Cut-off Date: April 6, 2022

The U.S. Department of Transportation has made a major revision to CFR 49 Section 173.309 Fire Extinguishers. The revision was made to the opening section which describes what the US DOT classifies as fire extinguishers. This DOT description is not based on product use, NFPA, or other fire-related definitions. The DOT regulates the manufacturing, testing, and transportation of what it describes as fire extinguishers.

This revision makes pre-engineered and engineered fire extinguishing system cylinders "fire extinguishers" for transportation purposes. With this being the case, pre-engineered and engineered system cylinders would be required to be marked, labeled, and entered on the shipping papers as Fire Extinguisher, UN1044, Hazard Class 2. NOTE: this does not include any carbon dioxide cylinder, extinguisher, or cartridge. Carbon dioxide must transported, labeled, and marked as Carbon Dioxide, UN1013, Hazard Class 2.

Additionally, fire extinguishers and systems cylinders that are cartridge or cylinder operated may be transported as a fire extinguisher with the following limitations: the cartridge/cylinder must be part of the full assembly and as referenced in the DOT Interpretation 19-0052, the cartridge/cylinder must not contain carbon dioxide.

For additional information on packaging, please refer to DOT Interpretation 12-0075 which describes what the DOT considers as acceptable packaging of non-specification (cylinder) fire extinguishers.

Below is the text of the updated CFR 49 Section 173.309. The underlined areas are the revisions. For reference, you can access the full text here.

CFR 49 §173.309 Fire extinguishers.
This section applies to portable fire extinguishers for manual handling and operation, fire extinguishers for installation in aircraft, fire extinguishers for installation as part of a fire suppression system, and large fire extinguishers. Fire extinguishers for installation as part of a fire suppression system include cylinders charged with either a compressed gas and an extinguishing agent or a gas which comprises the sole fire extinguishing agent in the system. A fire extinguisher does not include cylinders pressurized with a gas for purposes of expelling a separately stored extinguishing agent in the fire suppression system. Large fire extinguishers include fire extinguishers mounted on wheels for manual handling; fire extinguishing equipment or machinery mounted on wheels or wheeled platforms or units transported similar to (small) trailers; and fire extinguishers composed of a non-rollable pressure drum and equipment, and handled, for example, by fork lift or crane when loaded or unloaded. Cylinders filled with a compressed gas whose purpose is to expel a separately stored extinguishing agent may not be transported under this section when offered for transportation or transported apart from a suppression system.

We want to thank everyone who participated in our end-of-year survey. Here is a summary of the responses with 79 responses logged.
​
1. How is your staffing?

Other:

• Fully staffed but looking to hire at least 2 positions
• Only an owner/operator. No other employees before or since pandemic started. Use a specific group of subcontractors to perform some of my work.
• Always need to find GOOD employees!

2. How many of your employees have been sick with COVID-19, if any? Have you had a workplace shutdown or interruption of service due to positive cases?

37 respondents say they were unaffected by illness or shutdowns.

Other responses included:
​

• 3, no shutdowns
• 5 employees, no shut down due to cases only quarantine
• At this point, we have 10 employees off sick for the Covid. This number represents 1/6th of our team
• 4
• We have seen a significant increase in employees with Covid in Q4 compared to Q2. Roughly 20 staff members tested positive while another 30 were quarantined but did not test positive. This created significant disruptions to normal business production in November and December
• None sick - but been tested multiple times due to possible exposures.
• One employee tested positive. We had two employees to quarantine but tested negative. Have not had to shut down in 2020.
• less than 10 positive cases. Shutdown a branch office for a week.
• Two positive. Neither exposed other coworkers. Contained within those exposed outside of work environment
• 1
• 1
• only 1
• 1 confirmed case of Covid 19. Several quarantine situations during the year, but all were negative for Covid
• 4
• 12 positive cases. No shut down and no interruption of service, however had to juggle previously scheduled appointments with the technicians for 2.5 weeks.
• 9 - 10% of workforce, mostly field. No impact to jobs. Closed office a couple times and had office employees work remote though. Had rotating office schedules.
• 2 - Techs got it, both back to work doing well! No shutdown just protocol in place.
• We Had one person in late February early March sick at the time and was diagnosed with Covid-19 about 10 days later he was on vacation at the time and was in the hospital for 3 weeks
• 2 and they quarantined. No shutdown or interruption
• 3, No Interruption
• 20
• 4 sick out of 45
• 2 People, some work pushed back because of this.
• Zero, however, we have had to have people quarantine which hurt our business.
• 1
• 4 out of 20
• We have had six employees come down with Covid. It is definitely affected the flow of service.
• 1, no
• One contracted COVID on a personal trip, and took two weeks off. No contact with other employees. Two others have quarantined due to exposure, but never tested positive for COVID. No shutdown, nor interruption of service.
• One covid positive employee. Using multiple tactics to avoid a workplace shutdown
• Ten
• 2
• We had one employee who was sick with COVID-19
• 5 no shutdown or interruption
• 5%. No shutdowns or interruptions.
• 58 (5.5% of our workforce) as of today.
• 8-10 sick with COVID. No business shutdown or interruption
• A few have had it but we haven't shutdown and they have been back to work within 14 days.
• 20+ some interruption with quarantining the close contacts. Also, customers postponing work due to their staff having cases.

Comments:

• We have seen a significant reduction in work forces related to the food service and hospitality businesses. Their revenue has been significantly decreased
• My clients are closing every day. Not only small "Mom and Pop" restaurants, but very large chains. Wendy's, Waffle House, Long John Silvers, Subway, Red Robbin, ETC.
• Primarily small mom and pop restaurants however large hotel chains have stretched payments creating concern for those as well
• Very very tiny amount of them.
• Many closed temporarily but now in California some have closed for good.
• We have had a couple of place go out of business, but they were having trouble prior to the COVID outbreak
• Sad to watch so many small businesses that shut there doors thanks to our Governor. I feel so blessed to be still up and running.
• Forecasting to lose 40-50% of restaurant trade
• Not yet, but we have a lot in the restaurant sector and the restaurants are hurting terribly right now. Some may go under if they do not receive a second PPP loan
• Mostly restaurants.
• besides many retail customers going bankrupt many have also closed a number of locations
• Food industry especially
• Mostly small businesses, restaurants, and some large office space customers, that are working from home because its safer, less expensive and more productive. ( Approx. 50 accounts so far. )
• Restaurants and small businesses
• Many small bars with forced shut downs.
• Very few went out of business. All were small businesses. None of our larger customers went out of business - most of them are essential businesses and are exceptionaly busy.
• A number of restaurants.
• We have a large variant when it comes to this. I would say by and large the majority are restaurants.
• We have definitely lost some of the smaller businesses.
• Mostly restaurants.
• A few restaurants have closed. Some other closures driven by market conditions unrelated to COVID. New accounts have more than backfilled those closures.
• Mostly restaurants
• But then we haven't reached everyone yet
• Restaurants mostly
• RESTAURANTS
• Entertainment
• Several bankruptcies among non-restaurant customers and many other restaurants that are now closed and may not reopen
• Restaurants and hospitality industry partners.
• Restaurants, small specialty businesses, movie theatres,
• Not many...yet anyway.

7. In planning for 2021, is there anything you have to plan differently than you normally do?​

There has been growing concern about the presence of PFAS (per- and polyfluoroalkyl substances) in AFFF (Aqueous Film Forming Foam). PFAS have been associated with serious environmental, pollution, and health issues. This has been a topic of discussion at NAFED conferences for the past three years. The major areas of concern have been at civilian and military airfields, petrochemical facilities, and firefighting testing and training facilities where AFFF has widespread use.
 
This issue also includes AFFF fire extinguishers. Recently both Amerex and Ansul have stopped production and sales of AFFF fire extinguishers and recharge agents. Badger is in the process of redesigning their stainless-steel cylinders and, once completed, will be offering their AR-AFFF extinguishers. A Buckeye representative stated that they are developing an AFFF extinguisher that should be introduced in the future.
 
This development has a significant impact on the fire extinguisher service industry. The current NFPA 10 requires that these extinguishers be recharged every three years and hydrotested every five years. However, without the agents being available, the extinguishers cannot be recharged and should be removed from service. Depending on the hazard being protected, another Class B rated extinguisher may be substituted. However, dry chemical or clean agent fire extinguishers do not have the ability to suppress vapors like a foam extinguisher does.
 
What happens next? New agents are being developed but we do not know what the timeline is before they are approved and developed for use in fire extinguishers.

​The next edition of NFPA 10 is scheduled for release in 2021. The new edition contains a proposed revision to Section 7.8.2.3.1 that would read:

One fire extinguisher manufacturer stated at the NFPA 10 technical committee meeting that their agent does have a five-year life. Once this agent and extinguisher becomes available there should not be a need to recharge those extinguishers on a three-year cycle.

Make certain that if you are servicing or removing AFFF extinguishers from service, the foam solution should not be disposed of by pouring into the sewer system or pouring it on the ground. The solution is considered a hazardous material and an environmental hazardous substance. Disposal must be in accordance with appropriate federal, state/provincial, and local regulations.