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Case Study: A National Hotel Chain and the Right & Wrong Way to Award a Shingle Roofing Project

Case Study: A National Hotel Chain and the Right & Wrong Way to Award a Shingle Roofing Project

With shingle roofing, you really do get what you pay for. In the case of a large national hotel chain with multiple properties in Hampton Roads, it was a hard lesson learned. [Note: To prevent embarrassment due to the poor decisions of the General Manager of these properties, this hotel chain asked us not to publish their name in this case study.]

How It All Began

Recently the management decided it was time to re-roof one of its properties in Hampton Roads. So they hired a roof consultant and put the project out for bid. The consultant stressed the importance of hiring a Hampton Roads commercial roofing contractor who would make the hotel eligible for triple warranty coverage on labor, materials and contractor workmanship, with a final inspection by the manufacturer to ensure that the new roof was installed per manufacturer and National Roofing Contractors Association (NRCA) standards. After the final inspection was passed, then and only then would the roofing manufacturer award the “20-year, no-leak warranty which covers even misapplied flashings.”

The maintenance manager was tasked with gathering proposals and meeting with contractors. The maintenance manager understood why triple warranty coverage from a single point of accountability – the roofing manufacturer – was so important. And he realized that with 20-year coverage for leaks, the hotel would be able to rent out more rooms during busy seasons.

It was time for the busy hotel general manager to make the decision. Which contractor would be hired to replace the roof?

What the General Manager Didn’t Understand

The NRCA and the roofing manufacturer’s installation manuals have all the details necessary for a proper roof installation. Each step which must be followed in order to pass the inspection from the roofing manufacturer is explained in full.

The reason inspections have become so important – and required by most sensible property managers and property owners – is when the installing roofing contractor knows there will be an inspection and has trained his crews to properly follow all the steps necessary to pass an inspection, everyone wins! The property owner receives a correctly installed roof, the roofing contractor is happy and proud of his work, and the roofing manufacturer has a happy customer who will probably use their products for future projects.

A Decision is Made

Unfortunately, the General Manager decided he was smarter than the roof consultant. He sent his recommendation to the hotel owners to go with a cheaper roofing contractor, one that he believed was offering a comparable warranty at a cheaper price than the other bids. The maintenance manager tried one last time to convince the General Manager that there were huge differences in the installation details and the contractor workmanship coverage after successful completion of the inspection by the roofing manufacturer, but the General Manager had made his decision and was sure the owners would be happy with the money he had saved.

The owners of the hotel decided to follow the recommendation of their General Manager, but not the recommendation of the maintenance manager – the one person who understood the difference between the proposals presented by the competing roofing contractors.

The Consequences of the Decision

Fast forward to six months after a new “lifetime” architectural shingle roof has been installed on the hotel. The less expensive roofing contractor has already been paid in full, and the roof received a manufacturer warranty on labor and materials.

After a severe rainstorm, leaks show up in many of the same locations that leaked prior to the installation of the new roof. To make matters worse, several new leaks have appeared. The General Manager asks the maintenance manager to call the installing roofer to fix the leaks. The roofer comes out and explains it’s not his fault – the leaks are the responsibility of the roofing manufacturer.

So the General Manager has the maintenance manager call the roofing manufacturer. It takes a few more weeks for the manufacturer’s representative to get to this part of his territory for an inspection. But because the roof is too high, the manufacturer’s rep has to reschedule the inspection at a later date, when a much longer ladder can be rented in order to access the roof. The General Manager agrees to pay the additional expense to rent a longer ladder for the inspector to access the roof leak areas.

In the Meantime…

… more weeks pass and more damage occurs from additional rainstorms.

At the inspection, the rep determines that the leaks are not covered by the warranty for labor and materials since there is not any material failure. Instead, the leaks are all related to reused flashing and misapplication of flashings which would be covered by the contractor workmanship. The inspector suggests that the maintenance manager and the General Manager should have ensured that the job met the roofing manufacturer’s installation standards and requested any inspection be part of the original job specifications.

The roofing manufacturer rep went on to explain that, in his experience, over 70% of new shingle roofs leak – but it’s not from the shingle roofing materials! Instead, the culprits are most often the flashing details and lack of accountability with an inspection. It’s the inspection by the roofing manufacturer that ensures that a property owner receives a properly installed roof.

By inspecting the flashing, the roofing manufacturer rep can tell the roofing crew that installed the shingle roof was never trained properly, and makes more notes to protect the roofing manufacturer in the future when more leaks occur from poor contractor workmanship.

The roofing manufacturer rep suggests getting in touch with a different roofing company he knows that can properly fix the leaks. Funny thing, the same roofer that the rep recommended was the same roofer the maintenance manager had tried to get the General Manager to use!

Things Go From Bad to Worse

But the General Manager is hard-headed and convinced the maintenance manager is just not doing a good job. Since the General Manager’s bonus is affected by not being able to rent all the rooms which currently have water damage due to a leaking roof, he is highly motivated to get these leaks repaired as soon as possible. So the General Manager decides to handle this himself and get the original roofer out there and fix the work ASAP, threatening to get the hotel’s attorneys involved.

The roofer comes out again and meets with the General Manager and the maintenance manager. He explains the written contract between the roofer and the hotel. The only warranty that the roof has is the labor and material warranty from the roofing manufacturer and no contractor workmanship warranty. Since the General Manager agreed to take out the specifications necessary to pass the roofing manufacturer’s inspection, the roofer was able to lower the price of the job.

Now the General Manager realizes his mistake: awarding a roofing job that he really didn’t understand and not listening to the roof consultant and the maintenance manager. So the General Manager has the maintenance manager call the roofer that has specified the correct installation in his proposal (the one that would have gotten the job if the General Manager had not focused on going the “cheap” route).

The Final Price Tag – and a Lost Job

[GAF commercial shingle installation] Originally there was only a $19,000 “savings” by not doing the job with proper flashing, in accordance with the NRCA and per the roofing manufacturer specifications for inspection approval. Now, because a large amount of the new roof will have to be removed to make repairs around the walls and dormers, the repair cost is over $40,000!

All the leaks were fixed by the second roofer, since then the General Manager has realized that all Hampton Roads commercial roofing contractors are not the same. But the hotel also had the expense of repairing all the rooms which had been damaged by water intrusion so they can again rent out those rooms.

In the end, the General Manager was fired after the hotel owners realized they spent almost $60,000 (over $40,000 for roof repairs plus over $15,000 for ceiling damage repairs and painting in the rooms) for what should have cost them only $19,000.

The Moral of the Story

Unfortunately, now the roof only carries a five-year contractor’s workmanship warranty on the repair areas. The new roofing does not match the existing shingle roofing in color due to the amount of time which passed from original installation, and the changes in manufacturing processes from one run to the next  from that particular shingle roofing manufacturer.

Now the national hotel chain – which has a large amount of driveway traffic since it’s located close to an interstate – has an unattractive roof, forcing the hotel owners to set aside monies to re-roof the entire building in the near future. They want a properly installed roof which is all one color and carries a 20-year, leak-free warranty backed by a multi-billion dollar roofing manufacturer.

From this lesson, the hotel owners have decided on their five properties in Richmond, the Hampton Roads area and Southeastern Virginia, the only roofing specification they want in the future will be the inspected installation.

Only a rigorous inspection by the roofing manufacturer which passes will ensure you really do get what you pay for.

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