The Fire Life Safety Cost Array Analysis is designed to provide the breakdown of costs associated with FLS Maintenance and Repair Services. Updates will occur at least semi-annually, but more frequent as market conditions change based upon market variability, criticality of events and velocity of market conditions, such as inflationary wage increases / scarce resource availability.
Overview
FLS Maintenance and Repair Services Expense Detail
0 %
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Materials / Purchases - 9.3%
SG & A - 35.2%
FLS-010 - Ver 1.0 (Jun 23)
Confidential & Proprietary | 2023 CBRE Inc.
Wages 37.9%
Operating Profit 17.6%
P & L Expense Materials / Purchases SG &A Wages Operating Profit TOTAL
Factor 9.3% 35.2% 37.9% 17.6% 100%
- Market prices have increased only slightly during the past three years due to declining investment from local and state governments, which restricted price growth during the period
- Fire safety inspection service prices are expected to increase during the next three years due to rising demand due to an increase in local and state government investments and an increase in the number of businesses in the US
- There is a moderate level of service specialization that largely depends on whether buyers are seeking standard fire suppression systems or if they require more advanced fire suppression systems for certain machinery or flammable substances
- Price driver volatility is high in the market, driven primarily by fluctuations in the price of gasoline
Key Takeaways
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Suppliers / Pricing
Fire Life Safety
Cost Drivers
Suppliers / Pricing
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FLS-Suppliers / Pricing
Trends & Pricing Models
Market Characteristics
Pricing Models
Market Trends
Market Share concentration:
LOW
Supply Chain Risk:
LOW
Product Specialization:
MEDIUM
Availability of Substitutes:
LOW
Price Driver Volatility:
HIGH
Average Vendor Risk:
HIGH
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Confidential & Proprietary | 2022 CBRE Inc.
Ver 1.0 (May 23)
Top 4 vendors in the market control less than 30%
Little risk of price swings, shortages and delays due to supply chain disruptions
Customized solutions are sometimes used in this market thus potentially restricting the pool of qualified suppliers
There are few or no substitutes available to buyers in this market
Key price drivers have fluctuated sizably in recent years
In this market, there is a sizable risk of vendor insolvency
Fixed Price
Pros
Cons
- Suppliers maintain set prices to inspect each type of fire safety device
- Many providers charge a flat rate for certain services, such as inspecting a fire sprinkler system's wet pipe
- Buyers have the ability to clearly budget for the costs of the product or service
- Suppliers are more likely to charge higher prices to compensate for the risk inherent in this pricing model
- Each additional sprinkler inspected charges buyers an additional amount
Pros
Cons
- The supplier can usually provide an estimate based on an initial consultation
- For standard inspections, buyers will often only be subject to labor costs
- Buyers can make additional requests and change the scope of service
- If the inspector discovers that a component of the fire suppression system is not code compliant or is malfunctioning, the supplier will also charge the buyer for the parts required for repairs
- While this pricing model offers buyers the benefit of not being locked into a contract, it also exposes buyers to the possibility of cost overruns
The fixed price model is based on a set price for a defined scope of work, regardless of the time frame and the amount of time spent
The time and materials model is based on the amount of time spent and the input costs incurred