Buying a testing lab or environmental firm in Florida

Environmental labs test water, wastewater, soil and air samples. Consultants assess sites for property deals and cleanups. Construction materials testing firms check concrete, soil compaction and asphalt on job sites. Others inspect for asbestos, mold and radon.

Customers include utilities and local governments that must test drinking water and wastewater on a schedule, industrial plants whose permits require sampling, engineers and contractors on construction projects, buyers and lenders who need environmental site assessments, and property managers dealing with mold or asbestos before renovations. Much of the work repeats: required sampling and multi-year testing contracts go on whatever the economy does. Construction testing and site assessments rise and fall with building and real estate activity.

A small firm has field technicians who collect samples or run tests on site, lab analysts, a quality manager, and licensed professionals (engineers, geologists, asbestos consultants) who sign reports. Lab instruments are expensive and need constant upkeep and calibration.

• Sampling contracts with utilities, local governments and industrial clients, renewed several times.
• Current certifications that cover the tests clients actually order, with clean recent audits.
• Solid quality control that passes proficiency tests (unknown samples the lab must get right), because one failed audit can stop a lab from reporting results.
• Several licensed professionals who can sign reports, so the firm isn't stuck if one leaves.
• Well-kept instruments with service records, and room for more samples without hiring.
• Reliable turnaround, tracked and reported, especially on rush construction tests.
• A mix of steady required testing and project work, so a construction slowdown doesn't empty the lab.

Many licenses belong to people, not the company:

• Labs testing drinking water or other environmental samples for state programs need Department of Health certification (sections 403.0625 and 403.863). Report a change of owner to the department within 30 days (rule 64E-1.102), and ask whether certification carries over or needs a new inspection.
• The Department of Business and Professional Regulation (DBPR) licenses asbestos consultants and contractors individually (chapter 469). A firm also needs its own business license through a licensed qualifying agent, with liability insurance and proof of financial responsibility. It must report changes such as new officers within 45 days (section 469.006).
• The DBPR licenses mold assessors and remediators only as individuals (part XVI of chapter 468). An assessor's company generally can't clean up mold in a building it assessed within the past 12 months (section 468.8419).
• Radon testing and mitigation require Department of Health certification of the people and their business (section 404.056).
• Offering geology to the public takes a Florida-licensed geologist of record (section 492.111), and offering engineering takes a licensed engineer qualifying the firm (section 471.023).
• After a sale, a lab that generates hazardous waste files an updated EPA ID notification (form 8700-12FL) with the Department of Environmental Protection and asks whether its number carries over.

• Certifications: which tests and methods they cover, recent audit findings and proficiency test results. A lapse can stop the lab from reporting results clients need for their permits.
• Who holds each license and whether they'll stay. Consider agreements that keep them through the transition.
• Instrument age and upkeep, and the cost to replace the main equipment.
• Contracts with utilities and governments: terms, renewal dates and whether they transfer.
• Professional liability insurance and claims. Reports relied on in property deals or cleanups can lead to claims years later.
• How lab chemicals and samples are disposed of, and the lab building's condition.
• Reliance on a few big customers, especially in construction testing.
• The system that tracks each sample from collection to report, which auditors and clients rely on.

• Which certifications does the lab hold, and when was the last audit?
• Who signs your reports, and what licenses do they have?
• How much of your revenue comes from regular sampling contracts?
• Which instruments will need replacing in the next few years?
• Has anyone challenged your results or made a claim over a report?
• Could you handle more work without hiring?
• Which tests do you send to other labs, and why?