Infrared Asphalt Repair: Pay-Per-Day or Pay-Per-Repair?

A Property Manager's Comparison Guide

A comparison for property managers when reviewing quotes from infrared asphalt repairs companies in New Jersey.  In New Jersey, you will encounter two different pricing models for infrared asphalt repair. Some contractors will quote you a "rate per day," while others will quote you a "cost per repair."    This blog post will discuss both pricing models outlining the pros and cons of both to help you make an educated decision that best fits your budget and needs.  

As a property manager in New Jersey, you are well aware that maintaining your asphalt surfaces is crucial for the safety, appearance, and longevity of your property. The harsh weather conditions and heavy traffic in New Jersey can damage asphalt, leading to cracks, potholes, and other damage that can quickly escalate if not addressed promptly.

Infrared asphalt repair has emerged as a popular choice among property managers due to its efficiency in seamlessly blending repairs with existing surfaces and its effectiveness in extending the life of the asphalt. However, the options for pricing can be somewhat perplexing, leaving you to wonder which payment model best suits your needs.

Should you opt for a pay-per-day arrangement, where you pay a flat daily rate for the repair crew, or should you choose a pay-per-repair model, where you pay a fixed price for each individual repair? Let's delve into the pros and cons of each approach to help you make the best decision for your property.

Pay-Per-Day: It Can Be More Cost Effective At Times- But Final Pricing Can Be  Volatile

This model typically involves a flat daily rate for the crew, equipment, and a set amount of asphalt (e.g., 2-4 tons).

Pros:

• Potentially Higher Volume:

If the crew works quickly and efficiently, you might get a significantly higher number of repairs completed in a single day, particularly when dealing with smaller repairs that require less time and resources and are close together. This efficiency can be further enhanced if the parking lot is empty or not busy, as the contractor will have the freedom to move around the area more swiftly and cover more ground without the hindrance of waiting for cars to be relocated. This uninterrupted access allows the repair team to maximize their productivity, ensuring that more areas are addressed and repaired within the same timeframe, ultimately providing better value for the time and money invested in the project.

Cons:

• Unpredictable Costs: The lack of a guaranteed number of repairs means you might not get the value you expect, especially if unforeseen delays occur, such as extended delays in moving cars.  In addition, if repairs are not close together, it may take considerable time to move from one location to the next as the infrared unit has to remain at the last patch for the supply of fresh hot asphalt from the hot box.  If the repairs are close together, the crew can heat the next patch while having the asphalt hot box close enough to supply fresh hot mix asphalt for the current patch.  If patches are far apart it will cut the production in half for the day.  
• Time is Money: The daily rental for full-day (8 Hours) or half-day (4 Hours) is portal to portal, including travel time to the asphalt plant to load materials.   The clock keeps ticking even during travel time, asphalt plant waits, or when cars block access to repair areas. This can significantly eat into your repair budget and extend what you thought was going to be a $4,500 cost for an 8-hour rental into a 2-day job or a half-day rental to finish the project.  A $4,500.00 job can then turn into a $7,000-$9,000.00 job that has to be charged to Common Area Maintenance (CAM.
• Winter Woes: Long lines at asphalt plants during the winter months can lead to hours of unproductive time, further diminishing your return on investment.

Pay-Per-Repair: A Clearer Picture

With this model, you pay a fixed price per repair, which includes all costs: labor, materials, travel, and potential delays.

Pros:

• Predictable Budgeting: You know the exact cost upfront and can easily budget for your repairs.
• No Time-Wasting Surprises: Travel time, asphalt plant waits, and car relocations are factored into the per-repair price, so you're not paying for unproductive time.  If the contractor has to come back for a second day to finish, you are paying one flat rate no matter how many days the project takes.
• CAM-Friendly: Knowing the exact cost per repair simplifies accounting and charging back to tenants under Common Area Maintenance (CAM) agreements.

Cons:

• Potentially Higher Cost Per Repair: Individual repair costs might seem higher upfront, but remember that they include all associated expenses.

Making the Right Choice

The best pricing model depends on your specific needs and priorities. Here are some factors to consider:

• Scope of Work: For a large number of small repairs, a per-day rate might be tempting, but factor in potential delays and make sure the contractor is guaranteeing how many repairs they will get done while on-site.
• Budgeting: If predictable budgeting is crucial, pay-per-repair offers greater transparency and control.
• Time Sensitivity: If time is of the essence, pay-per-repair eliminates uncertainty about unproductive time.
• Project Complexity: For complex repairs or those requiring specialized equipment, pay-per-repair may offer better value.

Don't Hesitate to Ask Questions

When discussing your infrared asphalt repair project with contractors, don't hesitate to ask about their pricing models and how they handle potential delays. A reputable contractor will be transparent about their pricing and work with you to find the best solution for your needs.

The Author's Analysis:

The drawback of paying employees hourly vs. performance-based pay.  

When an employee is paid by the hour, there is no benefit to increasing production. In essence, you are paid the same rate per hour no matter the speed you work. My infrared team is paid a labor rate "per repair." The two-person crew is paid per patch, not per hour. They have a vested interest in getting as many repairs completed as possible in a workday.  

How this benefits the property manager/owner:

• Our team begins earning performance-based pay only when they reach the project site and start generating revenue for the company. Unlike other infrared repair companies that charge a daily rate, our trucks aren't idling at 7-Eleven or WaWa for 20-30 minutes after morning dispatch, checking live traffic on their GPS, and intentionally choosing the most congested routes to the job site. They avoid unproductive time upon arrival, such as searching for equipment, taking long and frequent bathroom breaks, and other inefficiencies often associated with hourly employees in the asphalt industry. They are paid a guaranteed $15.50 per hour for portal-to-portal or performance-based pay (whichever is greater) that can be $35-$45 per hour. They are motivated to be as productive as possible to hit performance-based pay daily.  

• When they arrive at the job-site they are triaging patches to get maximum production.
• They work more quickly and efficiently, minimizing traffic control and allowing them to leave the site sooner, restoring it to its normal traffic flow.
• When an emergency pothole repair job comes in at lunch-time they are more than eager to complete it the same day as it's a bonus

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