We repeatedly witness roofs installed by a low-bid contractor begin to have issues within a few years post-installation. During the course of our investigations regarding these issues, we have usually found that the contractor failed to install the roof in accordance with the manufacturer's specifications. The school calls the contractor to pursue the warranty that the contract guarantees, only to find the roofing company is out of business, leaving the school solely responsible for the expensive damage and repairs the problems have caused, not to mention the cost of repairing the improper installation of the roof.
Last winter, our team encountered this exact situation at several sites, and most accounts of events were consistent. One example is a roof installed five years ago that had been unknowingly leaking for some time. The company was out of business, and the damage left behind was multiple classrooms and offices with mold problems, dry rot, damaged carpet and ceiling tile, and a roof that needed to be installed per specifications. Just the interior problems alone amount to well over $100,000.
The SBA (Small Business Administration) reports that 80% of roofing companies are dissolved within the first two years. In 5 years, 96% are entirely out of business. Whether this is a predatory business practice or a reflection of the difficulties in the industry, one thing is clear: roofing proposals need to be thoroughly vetted and awarded based on multiple factors, not just price. Your Facilities manager should approach roofing replacements with an RFP and grade on numerous factors: references and reviews, contractor warranty, manufacturer warranty, cost, and timeline.
With this said, just because a business hasn't been around for a long time doesn't mean they're not the right contractor. There are many outstanding young roofing businesses out there; they should be vetted the same as all companies. In the end, do research and be thorough in the procurement process, and if the price is dramatically lower than competing bids, it's usually for a good reason.