When you hear the term “quality management systems” (QMS) applied to your business, your first thought might be, “Oh no! More paperwork to push, eating more of my time (and reducing my profits)!” Fear not the paper dragon. The fact is that many contractors already have informal QMS systems built into their business based on the expectations and beliefs of the owner. So, if formalizing some of these systems would improve top and bottom line performance, why wouldn’t a contractor implement them? QMS systems can improve the performance of your business by increasing sales, increasing customer retention and ultimately the bottom line. It makes sense to formalize these processes, even when the paperwork isn’t required by government energy efficiency incentive programs, as is often the case.

Corrective Action Request (CAR)
Most QMS systems for multiple industries use CARs to identify a problem found in the field or during an on-sight inspection. Documentation of the problem is then formally submitted to the contractor or designated party for corrective action follow-up that must be responded to in writing. Click here to view an example of a Contractor Corrective Action Report.

Major or Minor Finding: Each program may have a slightly different definition of how they define major or minor findings for items like safety, workmanship, installation of wrong measures, etc. If a contractor wants to use this same system for improving their business they might define a major finding as anything that impacts Sales, Profits or Customer Retention.

Root Cause: What was the problem?

Interim/Short Term Corrective Action: What can I do to fix the problem at least short term? If a customer complaint, perhaps it’s just a formal phone call or meeting with the customer, combined with itemized repair of the work completed.

Preventative/Long Term Corrective Action: How do I make sure this problem does not happen again to this customer or any other customer? Formalizing this step helps eliminate the same type of problem from occurring in the future and negatively impacting customers. Example: A new crew was put on a job and did not properly follow test-out procedure, which would have detected the problem. The crew will be re-trained on proper test out procedures before being assigned to the next job.

Objective Evidence: Programs usually want proof that the preventive corrective action was completed (e.g., training the crew on test out procedures and having the crew sign a document indicating the training was completed). Internally, as business owners we want to make sure the follow up gets done and the supervisor completes it so the same problems don’t happen to future customers. The construction and home performance market will continue to implement more rigorous quality assurance systems that many industries, including automotive, consumer products, medical, information technology and others have had in place for decades. With the home still being the largest single asset of many families it only makes sense that the construction industry will follow.

Customer Retention
We all know the high costs of attracting new customers. The importance of repeat business cannot be over emphasized. Why not formalize a system to make sure our existing customers get quality service, and avoid future problems? With Entela, my testing and engineering firm, many industries required us to develop corrective action responses based on audits, accreditation requirements and the like. We used some of these systems not just to meet the lowest bar required by the audits, but to improve our customer satisfaction and retention rates. After implementing an internal corrective action system for customer complaints, our post-complaint customer retention rate jumped from 60 percent to over 97 percent - this means our customers continued to do business with us even after their complaint! All employees were required to document any type of customer complaint, no matter how small. This became the internal culture and expectation of our company; there were only negative consequences if the company found that an employee did not document and process a corrective action. Employees took pride in knowing that we were committed to resolving any customer issue, and overall customer complaints decreased.

In June the New York State legislature passed historic legislation that will make New York the first state in the nation to implement on-bill financing for energy efficiency retrofits statewide. The Power NY Act of 2011 will dramatically expand the state’s energy efficiency retrofitting program, Green Jobs/Green NY. The new law will provide moderate-income property owners access to loans for retrofits, using the resulting energy savings to repay the loan via their utility bills.

The legislation is expected to significantly increase consumer demand for energy retrofits, creating thousands of new jobs in the state’s contracting and manufacturing sectors. It will also allow NYSERDA, New York State's energy authority, to raise an estimated $5 billion in private investment in the state's energy economy. Utility bills’ low default rates and strong collections leverage provide security for green capital investing in building retrofits.

"This is a big win for working families. On-bill financing makes it so easy for people to finance energy retrofits that will save them money on their utility bills, and make their homes safer and more comfortable. And it’s a win for New York’s home performance contractors, who will see a major surge in demand for energy efficiency upgrades,” says Larry Zarker, CEO of the Building Performance Institute, Inc.

On-bill financing makes energy-saving retrofits accessible to moderate-income homeowners even if they don't qualify for conventional bank loans. Default rates are low because homeowners pay off their loan as a line item on their utility bills over time, using the savings generated from the retrofits.

When Green Jobs/Green NY passed into law in 2009 it was considered the nation's most far reaching energy efficiency program, with a goal of retrofitting one million New York homes and businesses for energy efficiency, and paying for it with energy savings from homeowners' utility bills. But the program lacked an important factor: a way for homeowners to obtain simple, low hassle financing that offers a secure investment to lenders. The Power NY Act provides that financing by creating a capital fund to jump start the program. Utility customers can then pay for the cost of making their homes and businesses more energy efficient by making regular payments on their monthly electric bills.

By targeting middle-income homeowners, Green Jobs/Green NY serves homeowners who earn too much to qualify for Weatherization Assistance Program (WAP) assistance funding but don’t earn enough to pay for the up front costs of energy saving retrofits. In Upstate New York, where the median income is lower, the cut-off for WAP is so low that most people can’t qualify. These disenfranchised New Yorkers will be able to qualify for Green Jobs/Green NY, and on-bill financing will provide them better access to financing programs and rates by attracting the broadest possible variety of financing and private sector involvement.

Congratulations to Joel Zook (pictured, right), a Home Energy Planner with Winneshiek Energy District in Winneshiek County, Iowa! Joel was the first person to provide the correct answer to last month’s stumper. As loyal readers will recall, last month’s problem was about a ranch house with brick veneer siding that had a rear screen porch converted to a heated all-seasons room. The first winter after the conversion, the house experienced major ice dam problems for the first time in years. Joel explained that if the cavity behind the brick veneer siding was open to the attic, heat from the newly converted room would transfer heat to the cavity which would vent to the attic, creating the ice dams that had not previously been a problem.

Kudos also to Lloyd Hamilton of Verdae, LLC in Rhinebeck, New York and Daniel Dempsey of Mo. Home Energy Audits LLC in St. Louis, Missouri for their thoughts on solving the problem by air sealing the cavity behind the brick veneer.

The Winneshiek Energy District is a non-profit organization in Winneshiek County, Iowa, focusing on energy efficiency and conservation. Joel Zook runs the Winneshiek Energy District’s Home Energy Planning program, which implements comprehensive audits and technical assistance to help homeowners follow through with plans and focus on projects with the best ROI.

Below is this month’s puzzler, a test of your home performance know how. Figure out what is going wrong with this house, write it up along with your prescribed solution, and send it to us at lmcdowell@bpi.org . If you’re the first person to get the right answer, we’ll feature you, your company and your answer in the next issue of Performance Matters!

The Problem:

Thanks to Macon Parker in Charlotte, NC for sending us this month’s stumper! A homeowner –we’ll call him Hank-- had recently bought a foreclosed 3,500 sq. ft. home, built in 2005, near Charlotte, North Carolina. The previous owner had gutted most of the light fixtures and appliances. During the home interview Hank mentioned that in the summer time an unusual smell sometimes came from a mechanical closet with a louvered door that contained a litter box and an atmospherically vented water heater adjacent to a laundry room and kitchen. The home had three Heating and AC units, one for each floor, with a central return design for each unit. The bathrooms were equipped with fans that discharged to the exterior of the home as did the kitchen.

A comprehensive assessment was conducted and diagnostic testing was able to determine the source of the unusual smell.

What caused this to happen?
Think you know the answer to the problem? Send it to us at lmcdowell@bpi.org.

Macon Parker, a Building Analyst and Envelope Professional in Charlotte, NC, works with home and business owners to reduce their energy and water consumption. Recent projects have included work with Habitat for Humanity of Charlotte's weatherization program, modeling the energy consumption for a resort welcome center, designing and installing a solar powered irrigation system supplied with condensate from HVAC units and discharge water from water cooled refrigeration units, and working on developing self-sustained, affordable housing from used shipping containers.

Send us your stumpers!
You know - that problem house, symptom or combination of symptoms that confounded the homeowner and challenged all your building science savvy to solve. Send us a description of the problem – and the solution, which we’ll keep a secret. If it’s a genuine stumper, we’ll publish it in the next Performance Matters e-newsletter. Send to lmcdowell@bpi.org, or call 202-223-9510 x208 to phone it in, and we’ll write it up!