Making Sense of the REAC Scoring System

The REAC scoring system has long baffled site owners and managers. With its algorithms, weights, criticalities, and levels of severity, you might think you need a degree in advanced mathematics to understand it. Not so, says REAC inspections consultant Michael Gantt.

“All of the calculations are done with simple arithmetic,” Gantt explains. “The problem is that hundreds of variables come into play.”

The Insider asked Gantt to discuss the general principles that make the scoring system easier to understand. What follows are his observations after conducting hundreds of REAC inspections before becoming a trainer and eventually heading up his own consultancy firm.

Four Numbers Form Foundation

The deduction value of any deficiency is calculated by multiplying four numbers together: the Inspectable Area value, Inspectable Item weight, Deficiency Criticality, and Level of Severity factor. If it were as easy as looking up these four numbers, anyone with a pocket calculator could calculate a deduction value. This is complicated by the fact that Inspectable Area values and the weights vary in thousands of combinations. Inspectable Area values depend on hundreds of choices made by the inspector—for example, which Inspectable Items are identified as “NA,” or Not Applicable. Each choice during the inspection modifies all Inspectable Area values, and weights of Inspectable Items within a given area.

Insight from Past Scoring Reports

A study of past REAC Inspection Summary Reports from sites with different scoring profiles can make this much clearer. A single high-rise building inspection report reveals much higher deductions for Exterior, Systems, and Common Areas than one from a site with five garden buildings or 10 townhome buildings. Building-level defects produce higher deductions for sites with fewer buildings, and lower deductions for sites with many buildings. For example, single-building sites can lose 8 points for one exterior door defect, 17 points for a sprinkler head or circuit breaker issue, and 7 points for one fogged window in a community room. A site with 10 identical buildings would lose one-tenth of each value for similar defects in one building.

Common Area deductions vary most surprisingly. A site with a dozen garden-type buildings and very few common areas to inspect may have an overall Common Area value of 4 points and only 0.3 points per building. In this case, no Common Area defect can be worth more than 0.3 points, making it wasteful to do $10,000 in repairs in a building to save 0.3 points. Yet, at a single-building site, the replacement of one insulated window pane in a common area might save 7 points.

A comparison of scoring reports demonstrates that Site defects produce more consistent deductions. With the most common Site defects valued at 2 to 5 points for Level 2, and 5 to 10 points for Level 3, any site can lose 12 to 18 points on a few Site defects.

Close study reveals that only 35 to 45 percent of the site's overall score depends on Unit defects. The site's total value for the Units Inspectable Area is divided by the number of units inspected, so that any individual unit can typically only lose 1.6 to 2.4 points. REAC preparations are frequently focused much too closely on Units without consideration to Site, Exteriors, Systems, and Common Areas.

Unit preparations also often focus on the wrong issues, neglecting the scoring values. Many managers focus on cable TV trip hazards, smoke detectors, and call-for-aid devices, when a review of the scoring report shows that Unit trip hazards and smoke detector defects result in no deduction at all. Call-for-aid defects are typically only worth one-tenth of one point.

A complete paint job in a unit saves as little as 0.1 point. Assuring that all burners on a gas stove function saves 0.6 or 0.8. Eliminating a unit's fire exit hazard saves up to 1.8 points. Working according to defect values, unit pre-inspections can get the most “bang for the buck” by concentrating efforts on higher-value defects like inoperable ground fault interrupters (GFIs), water heater pressure relief valves, and emergency egress issues.

Hierarchy of Unit Defect Values

While deficiency values vary greatly from site to site, there's a dependable relationship between the values of defects in a given Inspectable Area. If the value of sprinkler defects is twice that of an inoperable auxiliary light, this is always true, whether they are worth 16 and 8 points, respectively, or 4 and 2 points. If a bad GFI in a unit is worth 10 times as much as a disabled call-for-aid, this relationship will be the same, regardless of Unit value. With this principle in mind, we can predict the scoring relationship between defects in any given Inspectable Area.

So, let's demystify Unit deficiency values. This list of Unit defect values is based on a unit worth about 1.8 points, representing one of 22 units inspected at a site where units are worth 40 points overall:

Highest-value Unit defects: 80 percent of Unit value. It's no surprise that emergency exit issues, misaligned furnace chimneys, and shock hazards at the breaker box have high deduction values. With each at 1.45 points out of 1.8, these “Life Threatening Health and Safety” issues represent the highest Unit deductions. What may be surprising is that clogged toilets and inoperable kitchen sinks are also among the highest value defects. The REAC inspection places great emphasis on unsanitary and unhygienic conditions as well as life safety. If every unit had just one of these defects, the overall scoring loss would be about 32 points out of 40!

High-value defects: about 50 percent of Unit value. A Level 3 defect for an inoperable GFI, a misaligned water heater chimney, a missing water heater pressure relief valve extension, inoperable water heater or bathtub components, a clogged drain or leak in the bathroom, and missing radiator covers are each worth between 0.9 and 1 point.

Moderately high-value defects: one-third of Unit value. Most of the general “Health and Safety” defects result in deductions of about 0.7, including infestations, sharp edges, and flammable materials defects, along with Level 3 kitchen leaks and inoperable stoves.

Defects worth less than 25 percent of Unit value. Level 3 Unit missing door and fogged window defects are worth about 0.4 points in this example. The remaining kitchen defects are mostly around .36 points at Level 3. Door hardware and surface defects each typically take about 0.2 points off the score.

Very low-value defects. Even at Level 3, most damage to structural surfaces (ceilings, walls, and floors), missing handrails, and missing outlet covers are worth only 0.1 to 0.2 points per unit, per type of defect. Level 2 defects score at half the value of corresponding Level 3 defects. Level 1 defects are half the value of Level 2, so that Level 1 paint damage on a wall or ceiling may be worth <0.05, which REAC rounds down to “zero.”

Certain defects do not result in a scoring deduction at all. Smoke detectors and Unit trip hazards have “zero” scoring impact. While it's very important to maintain life-saving devices like smoke detectors, and to eliminate trip hazards, these have absolutely no effect on your numerical REAC score. You lose no points at all on these issues.

Base REAC Prep on Scoring

Gantt advises managers to prioritize their activities when preparing for a REAC inspection by addressing those defects that carry the highest deduction values. Here are his top rules to bear in mind:

Since Site defects always result in a predictable, moderately high deduction value, close attention to Site deficiencies always pays off in making REAC preparations. Nearly every low REAC score includes some losses on Site. Careful pre-inspection and preparation of the Site Inspectable Area is one important key to better scores.

The values of Building-level defects—Exteriors, Systems, and Common Area issues—depend on how many buildings and units are inspected. So concentrate efforts on preparing the largest buildings first to get the most scoring improvement. When a site comprises a single building, Building-level defects can result in deductions of 7 points for an exterior door defect; 17 points for a sprinkler or electrical defect; and 8 points for a Common Area window defect. The fewer buildings inspected, the more important it is to ferret out and address Building-level defects.

Common Areas defects can have shockingly low values on some sites with multiple garden and townhome buildings, so try to determine the Common Areas value for each building. When Common Areas are worth as little as 0.1 to 0.8 points per building, Common Area defects produce an extremely low deduction. Divert your efforts away from wasteful preparations that have an insignificant effect on the site's score.

Unit defect deductions are fairly predictable, so address those defects accordingly. “Life Threatening” defects like emergency egress, shock hazards, and carbon monoxide hazards produce the largest deductions, and Severe sanitation defects like clogged toilets score as much as life safety issues. Sanitary hygiene (bathroom) and food preparation (kitchen) defects have more scoring impact than structural damage to walls and ceilings. General health and safety defects like mold, infestations, and sharp edges come next. Window and door defects are near the bottom of the list, unless they create an emergency egress hazard. Call-for-aid devices and cosmetic issues like damage to paint and structural surfaces are some of the very lowest scoring defects. Cable TV trip hazards and inoperable smoke detectors have no effect at all on Unit scores.

Always consider human safety a high priority, but learn the unique scoring values for defects. Use this knowledge to set logical, scoring-based priorities. This will save thousands of dollars, and will increase your REAC score without breaking the bank.

Insider Source

Michael Gantt: President, REACSolutions, 3812 Houcks Rd., Monkton, MD 21111; (410) 935-6136; solutions@reacsolutions.com.

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