Codes versus Conduct versus Coin

When doing the right thing uncovers a $1.2 million fire safety problem.

War Stories | Facility Management | Fire Safety Compliance | Building Management

The Building That Had Always Passed

Here’s a situation that demonstrates just how uncomfortable facility management can become when regulatory compliance, professional responsibility and commercial interests collide.

The property was a fully occupied commercial office building in the heart of Sydney’s CBD. Constructed in the early 1970s, it had been operating for more than four decades and, importantly, had successfully completed its Annual Fire Safety Statement (AFSS) process year after year.

There was no obvious reason for concern.

At least, not on paper.

In 2017, our company was appointed to provide facility and building management services for the property.

Within our first 12 months, the building’s annual fire safety certification fell due, and the usual inspection and testing of its essential fire safety measures commenced.

Among those measures was the stair pressurisation system serving the building’s two fire-isolated stairways.

And that’s where things became interesting.

Something Didn’t Look Right

As the newly appointed facility management team, we made a point of observing the testing process, in particular the Stair pressurization.

We had considerable experience with fire safety systems, including mechanical smoke control, stair pressurisation and the associated electrical and mechanical interfaces.

We knew what these tests generally involved, having witnessed similar procedures across numerous commercial buildings.

But this particular test looked different.

The fire services contractor was testing the two fire stairs individually, one at a time, using a procedure that seemed unusually limited compared with the testing regimes we were accustomed to witnessing.

Naturally, we started asking questions.

It became apparent that the contractor was conducting the tests by reference to standards dating back to the early 1970s, reflecting the period when the building had originally been constructed.

Remember, this was 2017.

We then reviewed the building’s Annual Fire Safety Statement and its Schedule of Fire Safety Measures.

Of particular concern was the nominated minimum standard of performance for the applicable AS 1668 fire safety measure.

There was no year specified against the standard.

That omission created an important question.

Which edition of the standard should apply, and was the testing being undertaken sufficient to demonstrate the required performance of the system?

Codes: Which Standard Actually Applies?

This was not simply a matter of deciding that the newest standard should automatically apply to an older building.

Existing buildings can have fire safety measures installed and approved under earlier standards, and those historical requirements may remain relevant.

However, the applicable minimum standard of performance must be established, and the test methodology must be appropriate to the measure being certified.

We made enquiries and discussed the situation with people experienced in fire safety compliance and mechanical smoke control.

The advice we received raised concerns about the adequacy of the existing testing regime.

In particular, we were advised that the contractor had a duty of care to consider the more comprehensive testing requirements contained in AS/NZS 1668.1:1998, rather than relying solely on a procedure associated with the building’s original construction period.

The 1998 standard provided a substantially more rigorous basis for assessing the performance of the stair pressurisation system.

The issue was no longer simply whether the building had passed previously.

The question had become whether the testing being performed was adequately demonstrating the safety performance required.

And that was not a question we were prepared to ignore.

Conduct: What Does a Responsible Facility Manager Do?

We raised our concerns with the relevant stakeholders.

There were discussions, emails and requests for clarification.

We then arranged quotations from specialist fire safety consultants who could independently assess the situation and provide the technical advice needed to determine the appropriate way forward.

Eventually, a consultant was appointed.

A further stair pressurisation test was organised, this time using the more comprehensive 1998 testing methodology, with both our management team and the specialist consultant present to witness the process.

Then the results arrived.

Not a single fire door associated with the two fire stairs achieved the required result under the test conditions.

Not one.

A building that had been receiving its annual fire safety certification for years had now produced an extraordinary set of failures under the revised test regime.

The implications were significant.

There were questions about system performance, fire door operation, the interaction between mechanical services and the building’s fire safety measures, and the work required to achieve an acceptable outcome.

Most importantly, there was now a documented technical issue that the building’s owners and representatives needed to address.

Coin: The $1.2 Million Problem

The consultant reviewed the results and prepared recommendations for rectifying the identified deficiencies.

Professional fees were established, and the necessary building and mechanical services works were investigated and priced separately.

As the various components were brought together, the scale of the problem became clear.

This was not a minor adjustment to a fan, a pressure sensor calibration or an inexpensive mechanical repair.

It was a substantial fire safety rectification project.

By the time the full scope was developed and assembled into a business case for the building’s stakeholders, the anticipated expenditure had exceeded $1 million.

The final cost would exceed $1.2 million.

And that’s when the inevitable question arrived.

“Why Has This Happened Since You Took Over?”

Senior management within the asset management company wanted answers.

And quite reasonably so.

Their question was essentially:

The building has passed its Annual Fire Safety Statement every year until now. Your company takes over the facility management contract, and suddenly we’re facing more than $1 million in fire safety works. Why? Please explain.

It’s a fair question.

From the asset manager’s perspective, the building had been operating, its fire safety statements had been submitted, and its compliance expenditure had been relatively predictable.

Then a new facility management company arrived, questioned an established testing procedure, engaged specialists and presented a business case involving seven figures.

You can understand why that attracted attention.

But there is a fundamental difference between creating a problem and discovering one.

Our responsibility was to explain that difference clearly, professionally and with supporting evidence.

Our Response to Asset Management

We set out several important points.

1. We were not responsible for historical management decisions.

Our appointment did not make us responsible for the actions, decisions or omissions of previous facility managers or contractors.

We could only assess the information available to us, investigate matters that raised concern and manage the situation appropriately from the time of our appointment.

2. We had our own duty of care.

Once we identified a potential deficiency in an essential fire safety measure, doing nothing was not an acceptable option.

We had raised the concern, sought specialist advice, documented the findings and communicated the implications to the building’s representatives.

3. Our experience had identified the initial concern.

We had not set out to find a million-dollar problem.

We simply observed a testing procedure that was inconsistent with what we had encountered on comparable buildings.

That observation led to further questions, independent testing and, ultimately, the identification of significant performance deficiencies.

4. We had no financial interest in the outcome.

We had no pre-existing commercial or personal relationships with the consultants, contractors or other parties involved in the proposed rectification works, beyond their involvement in this project.

We were not benefiting from the discovery.

Nor were we attempting to generate additional work for an associated business.

To remove any concern about potential conflicts of interest, we offered to make our relevant records available for independent third-party review if requested.

Our position was simple.

We had identified a concern, obtained independent technical advice and presented the findings to the people responsible for the building.

The decision about expenditure belonged to the appropriate stakeholders, supported by professional advice and the applicable compliance obligations.

The Outcome

The asset management team did exactly what it should have done.

It questioned the findings, scrutinised the expenditure and sought to understand why a building with a long history of annual certification now required such substantial investment.

That scrutiny was entirely appropriate.

More than $1.2 million is a significant amount of money, and asset managers have responsibilities to owners, investors and other stakeholders.

The necessary rectification works were ultimately completed, and the building’s Annual Fire Safety Statement was submitted following the resolution of the identified issues.

And what happened to our facility management contract?

We remained with that client for another nine years.

An interesting outcome, considering that the situation arose during the first 12 months of our appointment.

Perhaps the most valuable result, beyond the fire safety improvements themselves, was the trust established through dealing with a difficult issue transparently.

We hadn’t delivered good news.

We had delivered information the client needed to know.

And there is a difference.

Lessons Learned: Codes, Conduct and Coin

This experience reinforced several principles that remain relevant to building managers, facility managers, property managers and asset managers today.

1. Deliver bad news in writing, with evidence and a pathway forward

Nobody enjoys telling an asset manager that a building may require more than $1 million in unexpected expenditure.

But bad news does not improve by being withheld.

Document the observations, obtain appropriate expert advice, explain the risks and present a practical pathway to resolution.

A problem supported by evidence and a proposed solution is far easier for stakeholders to manage than an unexplained surprise.

2. An annual certification history is not a guarantee of performance

A building may have decades of signed Annual Fire Safety Statements.

That does not remove the need to question testing methods, clarify the applicable minimum standards of performance or investigate apparent deficiencies.

Equally, the fact that a building fails a test against a later standard does not, by itself, prove that earlier certifications were invalid.

The correct regulatory and technical requirements must be established.

A certificate is an important compliance document. It is not a substitute for informed technical scrutiny.

3. Independence matters

When a facility manager identifies a problem that could generate substantial expenditure, questions about commercial interests are inevitable.

Those questions should be welcomed, not resisted.

Transparent procurement, independent specialist advice, documented recommendations and clear disclosure of potential conflicts all contribute to confidence in the process.

4. Sometimes keeping the client means being prepared to lose them

There is a temptation in service industries to tell clients what they want to hear.

Good news. Minimal problems. No unexpected expenses.

But responsible facility management cannot operate on an endless stream of reassuring emails while serious issues remain unresolved.

Sometimes the correct professional decision creates commercial discomfort.

Sometimes it may even cost you the contract.

It is better to lose a client for raising a legitimate safety concern than retain one by knowingly remaining silent.

5. Safety and compliance cannot be determined by the available budget

Money is important.

Building owners and asset managers must manage expenditure, capital works, operating costs and investment returns.

But the available budget does not determine whether an essential fire safety measure is performing adequately or whether a legal obligation exists.

The applicable codes, approved performance requirements, professional responsibilities and safety outcomes must guide the decisions.

The commercial challenge is then to identify the most appropriate, defensible and cost-effective solution.

Final Thoughts

Codes. Conduct. Coin.

Three competing pressures that regularly appear in commercial building management.

Codes establish the technical and regulatory framework within which a building must operate.

Conduct determines how facility managers, consultants and contractors respond when something does not appear right.

Coin represents the commercial reality of owning, maintaining and operating a building.

The difficulty arises when the three do not sit comfortably together.

In this case, questioning a routine fire safety test exposed a problem that ultimately cost more than $1.2 million to resolve.

But the alternative — recognising a potential deficiency and choosing not to investigate it — was never a professionally acceptable option.

The role of a good facility manager is not to ensure that the client only receives good news. It is to ensure the client receives the information needed to make informed decisions, even when that information is expensive, uncomfortable or unwelcome.

And sometimes, the most valuable thing a facility manager can bring to a building is the willingness to ask a question that nobody else has asked.