Price List Commentary & New Line Items
September 2019

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Price List Commentary

20 New Line Items in September – 11 of which are red hot. Let’s work through them in order this month.
There is a new line item that provides concessions for the extra labor associated with distressing or hand scraping wood floors. Here are the additional line item info:

Here is our take on it. This is a line item that would only be warranted in an obscure scenario. That scenario would generally require the flooring to be solid wood, the existing solid wood floor to have been affected by a recent loss, and the contractor to be restoring/refinishing the floor to pre-loss condition. 

In other words, if the flooring is hand scraped and it is being replaced, then it will typically be written up using one of these three line items:

FCW HIKDIS Hickory floor – pre-distressed / hand scraped
FCW BAMP++ Bamboo flooring – scraped – pre-finished
FCW AVPFD Pre-finished – pre-distressed / hand scraped

As such, the application for FCW HSADD+ is rather obscure but we do appreciate the humble approach they took as it relates to pricing this line item; clearly admitting they have limited data on the pricing front and creating space for contractors to make updates to the price/yield as warranted. Hopefully this notion extends to the entire managed repair ecosystem as the opportunity presents itself.

In other news, the Pricing Department turned millwork up a notch and chose to include 7” baseboard in grades ranging from FNC B7M (Baseboard 7 ¼” MDF – Flat Profile) to FNC B7H++ (Baseboard – 7 1⁄4 hardwood – molded w/intricate detail). This is a nice addition for both contractors and carriers as we continue to encounter larger-and-larger millwork out in the wild. How big is too big for baseboard? Every year, it seems that baseboard gets an inch taller. At this rate we are going start conflating baseboard with judges paneling by 2025…  

So here is a nuanced line item: FNC TRIMR (Trim – Reset). According to the additional item info it is clear this is intended to be used when another contractor detached it. Now, in reality I have difficulty seeing that play out on a regular basis. If I am coming in to take over a project on the repair side, I am not going to be terribly keen to reset a bunch of door trim that some other mitigation contractor detached. There is a minute chance that we will have all the pieces that we need, and to the extent that we do, it is just as likely as not that some portion of the detached and retained trim is compromised beyond repair. It is probably better for the restoration ecosystem to have the option to leverage this line item as the opportunity presents itself, but I would hate to be locked into a contract were I had to reset trim that was detached by another contractor. I mean baseboard is one thing, but resetting door casing is a whole different animal. Perhaps we need line items exclusively for resetting door jambs, or door casing? Especially since the yield associated with this new Trim Reset line item is [42%] greater than the yield associated with the Baseboard – reset line item FNC BR (Baseboard – Reset). Something seems off, according to the image associated with FNC TRIMR (Trim – Reset) this line item seems to be organized around door trim – see the image in the right column associated in Figure 2.

Figure 2:  FNC BR (Baseboard – Reset) FNC TRIMR (Trim – Reset)
Additional Item Info    
Components Build-Up    
Labor Yield 75.313 106.875

There are some undeniable similarities between the trade codes, supporting events and down to the exact same linear foot concession for 6d nails (0.017LNFT). Here is what I am struggling. Is it really 42% easier (more efficient) to reset door casing than baseboard? I guess we will leave it there.

Now let’s talk Vacuuming exposed framing. The Pricing Department chose to add essentially two new line items, one for floors, and one for walls – they incorporated these two line items into the HMR and WTR category. What surprised me is that they chose to avoid adding these to the CLN category. This may be for the best, because I think most of us remain unsure when to apply HMR vs. WTR vs. CLN (there is a lot of room for interpretation here). Between the three categories, there exist significant deltas in terms of cost/yield (see Figure 3).

Figure 3:  CLN HEPA (Light) WTR HEPA (Light) HMR HEPA (Light)
Additional Item Info      
Components Build-Up    
Labor Yield 183.647 183.647 174.688

Note the reduced yield as it relates to the HMR category. This is an unfamiliar pattern. Typically the more expensive the trade code, the more productive that technician is – thus the yields are higher. This is not the case with most HMR line items. This can likely be attributed to either one of the following factors. If the direct yields are lower for the HMR sister WTR line item, then it is likely being contemplated that HMR technicians are at all times donning full PPEs.  Working in full PPEs typically encumbers production. More commonly, the direct yields are the same (as is the case below) however, the supporting events associated with HMR result in a larger delta between the Direct Yield and Yield. This is done to contemplate the additional planning required to plan an abatement project and subsequently deploy a Hazardous Material Remediation Technician. That said, it is interesting to note that the CLN-R trade code (Water Technician) is often assigned to the CLN (cleaning technician) supporting event. This is due in large part to the fact that CLN-R does not have an associated supporting event category. It would probably be optimal if CLN-R was assigned its own supporting event category. This is especially true since WTR is the most commonly used category code. Now don’t go drawing any fantastic conclusions about inequalities emerging in terms of total underwritten loss value, because many of the WTR line items are assigned to other more favorable supporting events to include PLM and FNC as is the case with several of the new WTR line items that hit this month. We explore these line items in great detail below.

Now let’s examine these new line items for exposed framing HEPA Vacuuming (see Figure 4):

Figure 4:  WTR HEPAW (Exp Walls) HMR HEPAW (Exp Walls)
Additional Item Info    
Components Build-Up    
Labor Yield 160.171 152.357

In summary analysis, it is being assumed that a technician can vacuum exposed framing walls/floors about twice as productively when compared to detailed HEPA vacuuming by sqft (HMR HEPAVAS). In that vein, it is being assumed that a technician is slightly less productive when vacuuming exposed framing when compared to light HEPA vacuuming. See Figure 5

Figure 5:  HMR HEPAVAL
(Vac Light)
HMR HEPAVAS
(Vac Detailed)
HMR HEPAW
(Exp Walls)
HMR HEPAF
(Exp Floor)
Direct Yield SQFT 215 110 187.516 132.638
Labor Yield SQFT 174.688 89.375 152.357 107.768

Irrespective of yield and the resulting cost per square foot, I think the majority of the time when we add line items for HEPA vacuuming we are referring to open framing activities. Thus, these new line items are huge in terms of noble and swift claim settlement – hats off to the Pricing Department for the addition of these complex line items.

Now let’s get into some fun stuff. For years it has bewildered Actionable Insights that there was a line item to install an undermount sink, yet there was not a WTR line item that contemplated the additional labor required to detach an undermount sink. Working with an undermount sink is immensely more difficult and time consuming, irrespective of whether the technician is detaching or resetting the sink. Well folks, clearly the Pricing Department saw the benefit of adding a new line item to help capture the cost associated with detaching an undermount sink. Perhaps it will help to explore this new line item relative to the long standing WTR SNKD (Sink – single bowl – Detach). See Figure 6

Figure 6 WTR SNKD
(Sink – single bowl – Detach)
WTR SNKUD
(Sink – undermount – Detach)
Labor Yield 2.045 1.238

For those of you new to yields, here is what you need to know. The new undermount sink detach line item affords a 60% increase in labor cost in an effort to accommodate the reduced productivity associated with performing this function. The yields are dialed in and they reconcile roughly with the adjustment in Yield that has been a part of private training curriculum for years. We are pumped on this addition.

The last line items we will explore acutely embody the adage that one-thing-leads-to-another. Since the Pricing Department chose to include FNC TRIMR (Trim – Reset) they were likely forced to consider simultaneously introducing a sister line item, WTR TRID (Time – Detach). The logic behind this incorporates the reality that if we are going to create a line item for resetting trim, then we need to create a line item that provides adequate labor concessions for the thoughtful detaching of trim, such that it can be reset at a later date. The yields are essentially halved if you compare detach trim to the long standing WTR TRI (Tear out trim). See Figure 7

Figure 7 WTR TRI (Tear out trim) WTR (Trim – Detach)
Labor Yield 120.000 70.313

This outsized delta in yields are realized through two major adjustments, the Supporting Events and the Direct Yield. As one might expect, the Direct Yield associated with WTR TRID (Trim – Detach) is considerably lower. In addition the Supporting Events have been updated from DMO-LAB to FNC-LAB. See Figure 8

WTR TRI (Tear out trim) WTR TRID (Trim – Detach)
   

We think that the Pricing Department nailed these new trim detach line items in terms of the updated yields and supporting events. We still remain dubious about how practical it is to detach MDF door casing and reset it at a later date, but heck it’s worth a shot. The industry is going to continue to push restorers to operate in a more sophisticated way that results in reduced claims cost. If restorers want to take the position that their water technicians should be invoicing at rates similar to plumbers and electricians then they are going to have to find new ways to prove value, as our cost should always be commensurate with our value. Thus, if your mitigation crews want to charge top dollar, stop breaking countertops, stop throwing away door stops and outlet covers, and find ways to thoughtfully detach trim and label the original locations accordingly. My concern is that mitigation contractors may start overusing WTR TRID (Trim – Detach) – either erroneously or nefariously while the new FNC TRIR (Trim – Reset) line item is rarely employed as it is remarkably difficult to reset MDF door casing and deliver a final product that would be representative of pre loss condition. If this transpires on scale, the addition of both WTR TRID (Trim – Detach) and FNX TRIMR (Trim – Reset) could actually encumber our ability to swiftly settle claims. 

Editor’s Note Re: Doing the right thing is always the right thing.
[However, doing the right thing is usually the hard thing.]

Over the last several years, Actionable Insights has worked with many of North America’s largest and most influential restoration contractors. This experience has given us unique perspective. As an extension of our private training engagements these contractors entrust Actionable Insights with their financials. Unfortunately, a troubling and remarkably consistent pattern has emerged: The outsized net profits of the mitigation side of the house are consistently propping up the inadequate margins associated with the repair side of the house.  Actionable Insights does not tackle pricing or advocate for change in either direction because we simultaneously serve the interest of both sides of the claim. We merely want to bring these prevalent inequalities to light. History shows that all sorts of nefarious nonsense emerges when contractors are precluded from making a reasonable profit in one way, and are thereby induced to make it up elsewhere. If you find yourself saying “but we will make it up on mit…”, well, we want to inspire a bit of pause, and introspection. There is tremendous pressure from all materially interested parties to function in full-service capacity – this trend is only gaining momentum (i.e., it is becoming increasingly difficult to exclusively perform mitigation). For the property insurance ecosystem to work as intended, we all need to work together to preserve an environment of reasonable profits and well-managed claims. We know we are not alone, let’s do the right thing – the obstacle is the way.

September 2019 Price List Changes Report

Major changes and new items added

  • FCW (Floor Covering – Wood) – Item added for extra labor charge to distress/hand scrape wood floors.
  • FNC (Finish Carpentry / Trimwork) – Items added for various styles of 7 1/4" baseboard.
  • HMR (Hazardous Material Remediation) – Items added for HEPA vacuuming exposed framing.
  • PLM (Plumbing) – Item added for resetting an undermount sink.
  • WTR (Water Extraction & Remediation) – Items added for HEPA vacuuming exposed framing, detaching undermount sinks, and detaching trim.

New items added for the September 2019 price lists

  1. FCWHSADD Add for labor to distress/hand scrape wood floors
  2. FNCB7Baseboard – 7 1/4"
  3. FNCB7+Baseboard – 7 1/4" stain grade
  4. FNCB7HBaseboard – 7 1/4" hardwood
  5. FNCB7H+Baseboard – 7 1/4" hardwood – molded w/detail
  6. FNCB7H++Baseboard – 7 1/4" hardwood – molded w/intricate detail
  7. FNCB7MBaseboard – 7 1/4" MDF – flat profile
  8. FNCB7M+Baseboard – 7 1/4" MDF w/profile
  9. FNCB7SBaseboard – 7 1/4" w/shoe
  10. FNCB7S+Baseboard – 7 1/4" w/shoe – stain grade
  11. FNCTRIMR Trim – Reset
  12. HMRHEPAFHEPA Vacuuming exposed framing – Floor – (PER SF)
  13. HMRHEPAWHEPA Vacuuming exposed framing – Walls – (PER SF)
  14. PLMSNKURSink – undermount – Reset
  15. WTRHEPAFHEPA Vacuuming exposed framing – Floor – (PER SF)
  16. WTRHEPAWHEPA Vacuuming exposed framing – Walls – (PER SF)
  17. WTRSNKUDSink – undermount – Detach
  18. WTRSNKUDASink – undermount – Detach – after hours
  19. WTRTRIDTrim – Detach
  20. WTRTRIDATrim – Detach – after business hours

Price list items modified for the September 2019 price lists

  1. DRYPATCHJAdded text to Note field of (+) definition to clarify it may be more cost effective to replace more than the affected area of drywall in some scenarios where excessive joining to existing drywall would be required.
  2. ELEBRKMD*Added text to Excluded field of (+) activity to clarify meter base is not included.
  3. FCWBARRModified default Depreciation.
  4. FNCCLOSM*Modified labor component yield in (R) activity.
  5. FNCCLOSMRSModified labor component yield in (+) assembly.
  6. FNCCLOSW*Modified labor component yield in (R) activity.
  7. FNCCLOSWRSModified labor component yield in (+) assembly.
  8. FNHDORH*Modified text in (R) activity definition to reference activity covers detaching and resetting interior door knob/passage sets.
  9. FNHDORHRSModified text in description and Note field of (+) definition to reference item covers detaching and resetting interior door knob/passage sets.
  10. FNHLOKKM*Modified text in (R) activity definition to reference activity covers detaching and resetting interior door knob/passage sets.
  11. HMRSAND*Modified default Sketch Attributes, labor supporting events, and added text to Excluded field of (+) definition to reference item code for HEPA vacuuming.
  12. MASAB*Added text to Note field of (+) definition to clarify contractors will typically have their own equipment for one to two story applications and items will include assumptions for this in the unit price.
  13. MASBRK*Added text to Note field of (+) definition of brick veneer items to clarify contractors will typically have their own equipment for one to two story applications and items will include assumptions for this in the unit price.
  14. MASPOINTAdded text to Note field of (+) definition to clarify contractors will typically have their own equipment for one to two story applications and item will include assumptions for this in the unit price.
  15. MASSTN*Added text to Note field of (+) definition of stone veneer items to clarify contractors will typically have their own equipment for one to two story applications and items will include assumptions for this in the unit price.
  16. PNT*Added text to Note field of (+) definition of exterior painting items to clarify contractors will typically have their own equipment for one to two story applications and items will include assumptions for this in the unit price.
  17. PNTFHFAdded text to Included field of (+) definition to clarify item includes labor to seal and paint face frames, doors, and end panels.
  18. PNTFHF
  19. PNTFHFSAdded text to Included field of (+) definition to clarify item includes labor to stain and finish face frames, doors, and end panels.
  20. PNTFHFS1Added text to Included field of (+) definition to clarify item includes labor to finish face frames, doors, and end panels.
  21. PNTFHFSTAdded text to Included field of (+) definition to clarify item includes labor to strip and finish face frames, doors, and end panels.
  22. PNTLOWFModified Included field of (+) definition to reference labor to seal & paint doors would be included.
  23. PNTLOWF
  24. PNTLOWFSModified Included field of (+) definition to reference labor to stain and finish doors would be included.
  25. PNTLOWFS1Modified Included field of (+) definition to reference labor to finish doors would be included.
  26. PNTLOWFSTModified Included field of (+) definition to reference labor to strip and finish doors would be included.
  27. PNTSHTRModified text in description and Note field of (+) definition to clarify item is for sealing and painting surfaces of both shutters in a set.
  28. PNTSHTR1Modified text in description and Note field of (+) definition to clarify item is for painting surfaces of both shutters in a set.
  29. PNTSHTRSModified text in description and Note field of (+) definition to clarify item is for staining and finishing surfaces of both shutters in a set.
  30. PNTSHTRS1Modified text in description and Note field of (+) definition to clarify item is for finishing surfaces of both shutters in a set.
  31. PNTUPFModified Included field of (+) definition to reference labor to seal & paint doors would be included.
  32. PNTUPF
  33. PNTUPFSModified Included field of (+) definition to reference labor to stain and finish doors would be included.
  34. PNTUPFS1Modified Included field of (+) definition to reference labor to finish doors would be included.
  35. PNTUPFSTModified Included field of (+) definition to reference labor to strip and finish doors would be included.
  36. PNTVANFAdded text to Included field of (+) definition to clarify item includes labor to seal and paint face frames, doors, and end panels.
  37. PNTVANF
  38. PNTVANFSAdded text to Included field of (+) definition to clarify item includes labor to stain and finish face frames, doors, and end panels.
  39. PNTVANFS1Added text to Included field of (+) definition to clarify item includes labor to stain and finish face frames, doors, and end panels.
  40. PNTVANFSTAdded text to Included field of (+) definition to clarify item includes labor to strip and finish face frames, doors, and end panels.
  41. WTRSAND*Modified default Sketch Attributes and added text to Excluded field of (+) definition to reference item code for HEPA vacuuming.

Material components added for the September 2019 price lists

  1. FNCB7Baseboard – 7 1/4" finger-joint pine
  2. FNCB7+Baseboard – 7 1/4" stain grade softwood
  3. FNCB7HBaseboard – 7 1/4" hardwood
  4. FNCB7H+Baseboard – 7 1/4" hardwood – molded w/detail
  5. FNCB7H++Baseboard – 7 1/4" hardwood – molded w/intricate detail
  6. FNCB7MBaseboard – 7 1/4" x 7/16" MDF – square
  7. FNCB7M+Baseboard – 7 1/4" MDF w/profile

Green items added for the September 2019 price lists

  1. FNCB7MBaseboard – 7 1/4" MDF – flat profile
  2. FNCB7M+Baseboard – 7 1/4" MDF w/profile

Micellaneous changes to the September 2019 price lists

  • Re-mapped the default price lists for the following Canadian postal codes in Alberta: T0A from Fort McMurray (ABFM) to Edmonton (ABED) price list and both T0E and T0G from Grand Prairie (ABGP) to Edmonton (ABED) price list.

Future changes and additions to look for in upcoming price list publications

  1. Item for installing ductwork in a confined space.
  2. Item(s) for commercial air curtains.
  3. Item for a recessed dryer vent box.

* Signifies changes to multiple items with similar selectors.