The estimated installed market value of fire alarm systems in commercial facilities is valued at nearly $3.3 billion. It is estimated that systems installers account for more than half of this market value (55 percent). This information is based in part on the “U.S. Fire Alarm Systems Market Analysis—2002-05” released by FIREPRO® Inc. and Sandra Jones & Company.

Typically, buildings having between 50,001 and 100,000 square feet of floor space offered the greatest opportunity for fire alarm systems installation in 2002 and appear to be where these installations will grow in 2003 and 2004.

According to that same report, four companies dominate fire alarm equipment sales: Honeywell (Pittway Companies), Tyco (SimplexGrinnell), SPX (EST) and Seimens (Cerebrus/Pyrotronics). It is estimated that these four international holding companies represent approximately 73 percent of the U.S. fire alarm systems equipment sales.

Opportunities

Even though there is a slowdown in new construction, the fire alarm systems market holds promise for the electrical contractor in 2003-2004. Recent fires continue to make owners aware of the need for reliable and increased fire protection. Fire alarm systems are continually being retrofitted in existing buildings either due to code updates or owner awareness of their importance to their life safety goals.

Retrofit installations are also needed to replace aging systems installed 20+ years ago. Many of these aging systems are causing nuisance alarms, disturbing occupants and owners who then must decide whether to repair an old system or install a new, more advanced product. In fact, in many parts of the country the fire alarm system retrofit market is the most active.

According to the FIREPRO report, system installations are grouped into three types of installation activity: new building construction, building modernization and systems upgrades. Of these three types of installation activity, modernization represents an estimated annual sales volume of $1.8 billion and upgrades $600 million. The modernization and upgrade of 255,000 buildings in a year only represents 5 percent of the country’s inventory of commercial buildings, meaning on average, buildings are upgraded once every 20 years.

The market analysis report states, “Factors driving upgrade requirements for existing systems are a result of market consolidation, advancements in system technology and codes and standards.” Some manufacturers have acquired competitors while other manufacturers have ceased operation and others have discontinued the manufacture and support of older product models. In addition, codes have increased the requirements for systems, and standards have changed how these systems are applied, installed and tested.

The increased market for the replacement of aging systems is a result of an increased enforcement of system testing and an increasing intolerance for nuisance alarms by local fire officials. This intolerance to nuisance alarms puts pressure on owners to address the problems through system upgrades or total system replacements.

Increasingly the fire alarm market is moving to more sophisticated, computerized equipment. As recently as five years ago, the market share of conventional zoned fire alarm systems was still close to half of the systems sold. John Haynes and Bruce Fraser—both of SimplexGrinnell, a leading fire alarm equipment manufacturer and sales organization—said conventional zoned systems now represent only 10 percent of the overall fire alarm systems market. In part this is due to the wide acceptance of the addressable analog fire alarm systems. Although the controls are more sophisticated and complicated, contractors find the installation of the cabling, devices (smoke detectors, heat detectors, etc.) and notification appliances in these systems less difficult.

New addressable systems now have automatic ground fault detection allowing electricians to rapidly find and repair the fault, thus saving labor costs. New fire alarm control units provide a feature allowing the viewing of notification appliance loading to give the electrical contractor a built-in method to determine the systems expansion capability. In addition, some systems allow remote interrogation of fire alarm systems using the Internet. Companies also offer other products that allow the electrical contractor to set themselves apart from the masses through the use of special new products, such as addressable notification appliances. According to Haynes, the sales of addressable notification appliances now represent 25 percent of SimplexGrinnell’s market.

In addition, these new systems are being designed to allow phased replacement of older conventional systems. The electrical contractor can replace the fire alarm control unit and then phase the installation of replacement devices and notification appliances, providing assurance of future work for the contractor. An owner looking for ways to spread fire alarm system replacement costs over a period of time welcomes the contractor who can offer this choice. This feature also makes it easier to accommodate office tenant “fit-out” changes.

The newer systems provide for more serviceability as well. Often electrical contractors will install fire alarm systems but avoid the on-going service requirements of the systems. Typically, electrical contractors would advise owners to call the manufacturer or some local alarm service company to maintain the system after the warranty period. With the self-diagnostics provided in the software of new computerized systems, electrical contractors may want to take a second look at providing these services.

Computerized fire alarm systems also allow contractors to offer choices to the owner to control more than just fire-alarm-related safety functions. The trend toward integrating the fire alarm system with building automation and control systems also provides additional opportunities for the electrical contractor. Owners see systems integration as a cost-effective way to improve building systems operations. For the electrical contractor these high-end systems offer the opportunity to develop larger projects with increased profits.

Challenges

Although the fire alarm systems market offers more opportunities for the electrical contractor, he or she must also be aware of the market’s associated challenges.

In large buildings, electrical contractors will discover that fire alarm systems will be designed using performance-based codes. Unlike prescriptive codes, contractors will need to work much closer with the design professionals to ensure compliance with their design. Code-based design and engineered analysis and design are NOT the same.

An engineering approach to fire protection design is based on:

• Agreed-upon fire safety goals, loss objectives and performance objectives,

• Deterministic and probabilistic evaluation of fire initiation, growth and development

• Physical and chemical properties of fire and fire effluents

• Quantitative assessment of design alternatives against loss and performance objectives

For example, a specification for fire detection may contain statements such as, “Sufficient initiating devices shall be installed so that their operation provides adequate egress time before the occurrence of untenable conditions at any point along the normal path of egress for all design fire scenarios specified in applicable codes.”

Some of the problems associated with this alternative approach are:

• Key players may be unfamiliar with methods used in alternative approaches

• There is no “standard” approach

• It is difficult to determine how much safety the prescriptive code provides, and

• It is difficult to assess how much uncertainty is associated with the proposed approach.

When electrical contractors deal with performance-based designs of fire alarm systems it should be obvious that pre-planning of the raceway and wiring installation and understanding the design takes on even more importance.

Although “systems integration” has not developed as was predicted, there are still some common interfaced systems that electrical contractors must deal with. Typically in large buildings the fire alarm system will be interfaced with the automatic sprinkler system, elevator recall system and smoke control system. Just dealing with these systems can cause a great deal of difficulty unless someone is assigned to coordinate the trades associated with these systems. If no one is assigned as a coordinator, then the electrical contractor should take charge to ensure that all trades who need to interface with the fire alarm system do so under his or her direction.

When a contractor takes on the challenge of integrating the fire alarm system with building automation systems and security and access control systems, he or she should seek direction from the general contractor or the electrical engineer as to who will be responsible for ensuring that all of the integrated systems installations will be coordinated. The only two systems installations that are regulated by codes and standards are the electrical and fire alarm systems. The building automation systems and security and access control systems are not regulated and if they are being installed by someone other than the electrical contractor, problems can and will develop that will affect the fire alarm system.

In conclusion, the fire alarm system market continues to offer opportunities to increase your business in a slow economy. Unfortunately you will also find increased competition. Reportedly electrical contractors have found that previously when the economy was strong there might be four bidders on a fire alarm system installation. In today’s economic climate they are finding 10-15 bidders more the norm. However, for those willing to accept the challenges, fire alarm system installations continues to be a convenient way for electrical contractors to increase sales.

MOORE, a licensed fire protection engineer, frequent speaker and an expert in the life safety field, is a co-editor of the current National Fire Alarm Code Handbook. Moore is a principal with Hughes Associates Inc. at the Warwick, R.I., office.