Fire Alarm System: Economic Impact

Updated: Dec 13, 2019



Information is key to boosting efficiency, and lowering steep maintenance costs. Fire alarm systems present a unique, but manageable dynamic of maintenance cost-structure. Through a systems perspective, life-cycle cost analysis, an industry-standard method for determining overall economic impact, is the best method to accurately stipulate expenditure for commissioning, maintaining, repairing, and salvaging fire alarm parts over its entire usage time. Understanding cost patterns inadvertently promotes maintenance options that target investment opportunities to receive the most benefit from system improvement while reducing steep costs associated with unscheduled repairs. Simply put, it is mission critical to: 

Present a realistic total cost of ownership (TCO) model that projects how much it costs to maintain and upkeep a system and presents the economic benefits of obtaining a robust maintenance program for the next 10-years. 



As seen in the process diagram above, the three major cost patterns to focus on are: annual inspections (fixed), 24/7 fire alarm & sprinkler monitoring (fixed), and intermittent corrective services (variable). However, before breaking down cost patterns, it is important to determine current value of the existing system. Initial investment amount is forth-telling of owner’s value placed on the importance, design-complexity, scope of devices to maintain, building-specific risk precautions, and quality of system installed. Initial investment, also categorized as asset-valuation, represents the total cost of installing (or replacing) an entire system, with respect to labor and material. Asset-valuation is also a key metric for establishing budgetary goals and serves as a constraint factor to limit maintenance expenditures. Consider a commercial retail store initial investment (“sunk cost”) breakdown for installing a 2020 up-to-code fire alarm and life-safety system. See Table 1. 



In this scenario, the 'Estimated Total Initial Investment' determines the worth of the system, and consequently, the expected attention and maintenance responsibilities to keep the system in satisfactory condition. If roughly $32,500 has been invested to commission this fire alarm and life-safety system, how much money should reasonably be spent to maintain the system in peak-performance for the next ten-years?

Let's first understand the scope of this system. It contains 97 fire alarm units and 52 life-safety devices, one notifier (NAC) booster, one radio/cellular communicator, and six sprinkler monitoring modules. The facility is classified as a mid-size commercial building, sprinkler integrated, and because there are more than fourteen (14) fire alarm devices, 24/7 monitoring is mandated by the local fire department. Translating the requirements into set of actionable services, four cost patterns are described here to represent this facility's maintenance cost. 


24/7 Monitoring and annual inspections are required activities and can are considered fixed costs on the TCO model. Periodic corrections, on the other hand, represents the likelihood of a number of devices requiring replacement/repair on a yearly basis. For this system, there's a likelihood that up to three devices will require servicing (replacing/troubleshooting) each year. Causation include, but are not limited to: unintentional damages, backup battery drainage, failure associated with aging hardware, unauthorized personnel tampering with system, extreme environmental conditions, and/or general accidents. It’s important to note that periodic corrections are typical for any commercial building due to the high level of foot traffic. Such corrections are typically non-emergency calls and can be corrected during annual inspection visit.