Introduction & Spray Polyurethane Foam (SPF) Industry Background - [top]
Neogard is a manufacturing company that produces urethane coating with the highest documented performance over the past twenty years. They have used quality raw materials to produce a urethane coating for sprayed polyurethane foam roof systems that has documented performance of over 25 years. Neogard is the only manufacturer who has issued a joint and several warranty with its high performing roofing systems. - [top]

Neogard began to see the roofing marketplace exhibit the Quadrant I low price, commodity environment in the 1990s. It became harder for them to compete as their competitors were issuing warranties with twice the service period with less coating material. Neogard realized that to stay profitable and maintain its high performance, they would have to find a new way to sell their products. They could not sustain themselves in the SPF roofing industry without moving from a Quadrant I low price environment to a Quadrant II high performance environment. - [top]

In 1995, Mike Steele, the CEO of Neogard, realized that the same technology that building owners used to minimize the risk of nonperformance could be used to help Neogard minimize the risk of price based owners and non-performing contractors. He approached PBSRG with the objective of designing a delivery system that could deliver high value to intelligent building owners with risk (Quadrant II). Steele also realized that by maintaining high quality, Neogard could become more efficient, minimize their risk, and thus resulting in very satisfied owners, and maximize their profit. He realized just like building owners, he could not minimize risk by using minimum standards and regulation. It was too risky and too costly. He requested PBSRG to use IMT concepts and an understanding of PIPS to transform Neogard into a company that could leverage the high performance of the Neogard roofing systems instead of low price. - [top]

Sprayed Polyurethane Foam Industry Background - [top]
The construction industry has attempted to use specifications and minimal standards to regulate performance of construction services and systems (Quadrant 1). Without any motivation to increase value, construction materials and systems are made as economical as possible. The materials are installed with the most economical workforce. The Quadrant I environment has shifted the risk from the manufacturer to the owner without the owner’s perception. This is well documented by the many marketing schemes involving warranties. - [top]

The impact of this environment on the spray polyurethane foam (SPF) roofing industry has been to make the SPF roof system an inexpensive system with inconsistent performance results. This has resulted in roof failures and the minimization of market share (3-5% over the past ten years). Documented performance information has shown that when high quality contractors install the SPF roof system with performing materials, the SPF roof system performs as well as a traditional BUR or modified bitumen system. - [top]

Coated sprayed polyurethane foam (SPF) roofing has been commercially installed since the 1960s. Performance studies of the SPF roofing systems in 1983-1997 identified the following performance results (Kashiwagi and Moor 1992, Kashiwagi 1996):

1. When installed by “quality oriented” contractors, the SPF roofing systems have proven performance periods of 15 to 20 years. Recoating the SPF roof systems could extend the service period.
2. The SPF systems can be installed successfully in all regions of the country. However, in areas with frequent rain showers, the SPF system is not the most economical system due to the dry conditions required for installation.
3. The SPF system is a more complex roofing system (equipment and installation), which requires the contractor’s craftsmen to have a higher level of training and to make more technical decisions. The lack of trained craftspeople affects the quality and performance of the SPF roofing systems. - [top]

Historically, the SPF system was sold as a “cheaper” roofing system than the conventional “built-up” roofing systems. SPF can be installed cheaper than the traditional systems due to the capability to be installed over an existing waterproofing membrane. The SPF roof system is also monolithic, seamless, lightweight, and has the largest insulating capability of any roofing material. The rationale used by the industry, was that more facility owners and designers would select the SPF roof system to save money. This strategy was not successful over the last 20 years due to the following factors:

1. Premature failures.
2. SPF material system problems.
3. Changing formulations.
4. The lack of proven performance and research into system performance.
5. Perceptions of SPF systems not being durable.
6. A lack of trained, business oriented contractors who minimized risk and maximized their profit. - [top]

These results have stayed relatively constant over the last 20 years. In an attempt to gain a larger share of the roofing market, SPF and coating manufacturers have:

1. Altered the material content to make the coating system more “economical”.
2. Reduced the amount of required coating material to warranty a system to make the system cheaper.
3. Sold coatings that could not resist weathering, ponding, or traffic.
4. Allowed contractors with inadequate training to install systems.
5. Used past performance of other manufacturers’ high performance to convince a new owner that their installations would have the same performance.
6. Altered the formulation of the coating and SPF and sold the systems without proper field-testing. - [top]

These practices led to the following results:

1. Extremely low prices. In some areas of the country, coated SPF systems are installed with a first price of $1.00 per square foot.
2. Premature failure of some SPF systems due to a change in raw materials or SPF composition.
3. Premature chalking of coating systems due to a lower percentage of elastomeric material.
4. Reversion and cracking of some high solids, aliphatic urethane coating systems.
5. Aesthetically unpleasing SPF roof system installations.
6. The inability for manufacturers and contractors to respond to problems due to inadequate profit margins.
7. A very low market share (approximately 3-5%). - [top]

Performance studies in 1980s and 1990s (Kashiwagi) identified requirements to stabilize the marketplace and identify the true value of the SPF roofing systems installed by quality oriented contractors and manufacturers. The requirements were:

1. SPF manufacturers should quality control production and distribution.
2. SPF and coating manufacturers and contractors should collect performance information on their systems.
3. A joint and several warranty should be issued by the SPF, coating manufacturer, and contractor.
4. A difference must be identified between systems with “high proven performance” and systems with “no documented performance.” - [top]

In a meeting at Arizona State University in the mid 1990s, the major manufacturers rejected these concepts. In the past ten years, these major manufacturers have not been able to increase their marketshare. - [top]

Alpha Program Design - [top]
SPF and coating manufacturers were approached in 1994 to participate in a performance based program, which would:

1. Rate the performance of each manufacturer’s product and contractor installation.
2. Identify the performance constraints of each system.
3. Develop an Alpha specification and warranty which is based on proven performance and which minimizes exclusions.
4. Produce quality control processes for the use of SPF on “performance oriented” projects.
5. Differentiate performance based project results from price based “commodity” project results.
6. Develop an information-based approach to marketing, warranties, contractor qualifications, and staff operations that can be successful in an “information environment.”
7. Invest funding into the research program to develop the above objectives. - [top]

Only one coating manufacturer agreed to participate in the research project. The coating manufacturer (Neogard) then persuaded a SPF manufacturer to join the program (BASF). The following reasons were given by other manufacturers for nonparticipation:

1. Owners are not interested in a “high performance” SPF roofing system.
2. Owners are only interested in economical roof systems, which have the lowest first cost.
3. There are not enough contractors who can meet high performance requirements. The lack of contractors will limit the manufacturer’s sales.
4. Not all manufacturers have performance information on their systems. Some of the past performance may not be conducive to marketing, based on performance.
5. Manufacturers are not used to fund research to identify performance. Funding is usually put into advertising, marketing, and getting sales.
6. Some manufacturers felt that the “information approach” would not work. - [top]

The SPF industry was not the only sector of the roofing marketplace that was invited to participate in the Alpha program. In the mid 1990s, a concentrated effort was made to involve BUR, modified bitumen, and single ply manufacturers to participate in the Alpha program. Several manufacturers showed interest, however the current “commodity” and “marketing” (flashy brochures, prepared specifications, and sales pitches) approach of most manufacturers made it very difficult to even consider an “information oriented” system. In the status quo marketplace, the most successful contractors were the ones with the largest sales. Moving to a system of performance instead of volume is a difficult step. Test results in the states of Hawaii, Maryland, and Texas verified that the majority of roofing manufacturers are not interested in identifying and improving the performance of roofing systems. - [top]

The Alpha program was created with the following objectives:

1. Develop a manufacturer and contractor roofing delivery system and environment that is based on performance information.
2. Identify the proven performance of SPF roofing systems installed by quality contractors and manufacturers.
3. Post the performance information on the Internet. (www.pbsrg.com).
4. Develop a process to quality control the SPF roofing product (material composition and installation) to maximize the performance period.
5. Develop a process that will increase the customer’s value by using the past performance of the contractor as a criterion for extended warranties.
6. Develop an information system whereby contractors can continuously monitor their performance and compare the performance against other performing contractors. - [top]

The participating manufacturers and contractors realized that the nonparticipating (less performing manufacturers and contractors) would also use the performance information to represent the capability of their products and installations. They would claim that their performance was the “same” as the Alpha vendors. However, the Alpha participants realized that in order to reduce their own risk of nonperformance, to continuously improve, and to service their customers in a manner that would lead to repeat business, a structure of performance information was necessary. - [top]

The Alpha Program was designed using the theoretical foundation of Information Measurement Theory (IMT). The Alpha program requirements include:

1. Contractor performance criteria and requirements.
2. Manufacturer performance criteria and requirements.
3. Contractor and manufacturer performance numbers that can be used by procurement systems that require documented performance information.
4. An information system maintained by third party university research group, that gives the contractor, manufacturer, and facility owner the same information.
5. Constant improvement of performance.
6. Disqualification from the Alpha program on failure to meet the requirements set by the performing contractors.
7. The ability to identify performing facility owners who require “best value” and risk minimization. - [top]