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THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION

ASA’s

WWW.ASAONLINE.COM DECEMBER 2016

Forecasting Construction

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March 15-18, 2017 Denver, Colorado

Looking Ahead: Construction in 2017

Construction Industry Contemplates Impact of Contentious Election

It’s a Crazy, Crazy World and We’re Just Building It—A Glimpse of the Trends Shaping the Strategy in the New Year

2017 Dodge Construction Outlook

Planning: The Key to Growth

‘The Networking Here Is Awesome!’ ASA Video Offers Reasons to Attend SUBExcel 2017

Legally Speaking: Eliminate or Reduce Financial Impact of Retainage

www.SUBExcel.com

March 15 – 18, 2017Denver Marriott City Center

Denver, Colorado

Register Now!

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ASA’s December 2016

Quick Reference

ASA/FASA CALENDAR ..........................................................................26

COMING UP ............................................................................................ 26

EDITORIAL PURPOSEThe Contractor’s Compass is the monthly educational journal of the Foundation of the American Subcontractors Association, Inc. (FASA) and part of FASA’s Contractors’ Knowledge Network. The journal is designed to equip construction subcontractors with the ideas, tools and tactics they need to thrive.

The views expressed by contributors to The Contractor’s Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association, Inc. (ASA).

EDITORIAL STAFFEditor-in-Chief, Marc Ramsey

MISSIONFASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. FASA provides subcontractors and specialty trade contractors with the tools, techniques, practices, attitude and confidence they need to thrive and excel in the construction industry.

FASA BOARD OF DIRECTORSRichard Wanner, President Letitia Haley Barker, Secretary-Treasurer Brian Johnson Robert Abney Anne Bigane Wilson, PE, CPC

SUBSCRIPTIONSThe Contractor’s Compass is a free monthly publication for ASA members and nonmembers. Subscribe online at www.contractorsknowledgedepot.com.

ADVERTISINGInterested in advertising? Contact Tony Kozak at (716) 844-8174 or advertising@asa-hq.com.

EDITORIAL SUBMISSIONSContributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article. Feature articles should be no longer than 1,500 words and comply with The Associated Press style guidelines. Article submissions become the property of ASA and FASA. The editor reserves the right to edit all accepted editorial submissions for length, style, clarity, spelling and punctuation. Send abstracts and submissions for The Contractor’s Compass to communications@asa-hq.com.

ABOUT ASAASA is a nonprofit trade association of union and non-union subcontractors and suppliers. Through a nationwide network of local and state ASA associations, members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team. For more information about becoming an ASA member, contact ASA at 1004 Duke St., Alexandria, VA 22314-3588, (703) 684-3450, membership@asa-hq.com, or visit the ASA Web site, www.asaonline.com.

LAYOUTAngela M Roe angelamroe@gmail.com

© 2016 Foundation of the American Subcontractors Association, Inc.

FeaturesTM

Departments

CONTRACTOR COMMUNITY .... ........................................................... 4

LEGALLY SPEAKING .............................................................................. 24Eliminate or Reduce Financial Impact of Retainageby Lee Brummitt, Esq.

Looking Ahead: Construction in 2017 ...............................................8by Matthew Lubin

Construction Industry Contemplates Impact of Contentious Election .......................................................................10by Lenore Marema and E. Colette Nelson

It’s a Crazy, Crazy World and We’re Just Building It—A Glimpse of the Trends Shaping the Strategy in the New Year ............................................................16by Gregg Schoppman

2017 Dodge Construction Outlook ...................................................18by American Subcontractors Association

Planning: The Key to Growth ............................................................20by Larry Silver

‘The Networking Here Is Awesome!’ ASA Video Offers Reasons to Attend SUBExcel 2017 ........................................22by American Subcontractors Association

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Contractor Community

ASA’s New Resource Manual Charts States with Anti-Indemnity Laws

Does your state have anti-indemnity laws? You can easily find out with ASA’s updated Anti-Indemnity Statutes in the 50 States: 2016. This chart serves as a resource for identifying which states have anti-indemnity laws and indicates which states prohibit indemnity for partial fault or sole fault of the indemnified party. The chart also indicates in which states a party is prohibited from requiring a subcontractor to name it as an additional insured, thereby closing the additional insured loophole.

Anti-Indemnity legislation is important to subcontractors because too often contractors and owners shift their own liability and risk to the subcontractors. Specifically, “hold harmless” and “additional insured” provisions in a construction subcontract seek to hold the subcontractor accountable for worksite accidents or other losses that are not the fault of the subcontractor. These “hold harmless” and “additional insured” provisions are problematic to subcontractors because they may unfairly shift the financial responsibility for claims to the subcontractor or its insurance company. As a result, a party who is indemnified by the subcontractor may use less care to avoid injury or loss because the indemnified party is not liable for its own actions. This carelessness may result in more accidents on the worksite that could have been avoided.

Many states have enacted laws that address at least some of the issues in shifting the burden of liability to a subcontractor. Forty-three states have some form of law which prohibits a construction contract that requires a subcontractor to indemnify another party for its negligence (but some of these states limit the application of the law, for example, only to public projects). Only 28 states prohibit a subcontractor from indemnifying another party for its sole or partial fault, meaning 15 of the states with some form of anti-indemnity legislation only prohibit a subcontractor from indemnifying another party for its sole fault. Even fewer states have addressed the additional insured dilemma so far. Only six of the states prohibit a party from requiring another party to name it as an additional insured under a policy of insurance, but the trend is moving in this direction.

The ASA Anti-Indemnity Statutes in the 50 States: 2016 is located in the “Insurance and Risk Management Documents” in the members-only section of the ASA Web site.

Special thanks to ASA general counsel Kegler, Brown, Hill & Ritter, Columbus, Ohio, for preparing this manual for FASA.

Revised ‘Contingent Payment Clauses in the 50 States’ Answers Your Questions About Pay-if-Paid

“Pay-if-paid” contract clauses can cause big problems for unpaid construction subcontractors and suppliers. Such clauses specify that a

subcontractor or material supplier will not be paid for the work it performed or the supplies or services it provided “if” the general contractor doesn’t receive payment from the project owner. Pay-if-paid is not enforceable in all circumstances, however, and the Foundation of ASA’s 2016 edition of Contingent Payment Clauses in the 50 States helps subcontractors and suppliers understand their risk. Pay-if-paid is enforceable in some, but not all, states, and the states in which pay-if-paid is enforceable differ as to when a contract clause creates a true “condition precedent to payment” threatening the right of unpaid subcontractors to be paid for satisfactory work. Contingent Payment Clauses in the 50 States is available as a free, downloadable PDF document only to ASA members.

The manual explains for each state, the District of Columbia, and the U.S. Virgin Islands:• Whether a “pay-if-paid” clause

will be enforced in that state if it is unambiguously drafted.

• Whether the state distinguishes between “pay-if-paid” and “pay-when-paid” provisions.

• Whether “pay-when-paid” clauses allow a contractor in the state to only delay payment to its subcontractors for a reasonable time.

• Key statutes and cases that describe the state’s position on contingent payment clauses.

Special thanks to ASA general counsel Kegler, Brown, Hill & Ritter, Columbus, Ohio, for preparing this manual for FASA.

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Minimum Wage on Federal Contracts to Increase to $10.20 on Jan. 1

The U.S. Department of Labor announced that beginning on Jan. 1, 2017, the hourly minimum wage paid by contractors to workers performing work on covered contractors will increase to $10.20 per hour from $10.15 per hour. The DOL is required to provide notice to the public of the new minimum wage rate at least 90 days before such rate is to take effect.

Federal Contractors and Subcontractors to Provide Paid Sick Leave as of Jan. 1

On Sept. 30, the U.S. Department of Labor published a final rule requiring federal contractors and subcontractors to provide paid sick leave to employees who work on or in connection with certain federal contracts. The rule will allow these workers to use paid leave if they are sick, need to take care of a sick family member or must see a doctor or take a family member to a medical appointment. Workers may also use paid sick leave for reasons related to domestic violence, sexual assault or stalking. The final rule implements Executive Order 13706 signed by President Obama on Sept. 7, 2015. When fully implemented, the final rule:• Requires federal contractors and

subcontractors to provide up to 56 hours of paid sick leave per year to employees working on

covered contracts. This includes an estimated 594,000 employees who currently receive no paid sick leave.

• Provides employers with choices in how to best adapt the paid sick leave requirement to their businesses. For example, employers can choose to allow workers to accrue leave over time, or to frontload leave for ease of administration.

• Provides flexibility related to integration with employers’ existing paid time off policies and leave provisions in existing collective bargaining agreements.

The final rule applies to four major categories of contractual agreements:

1. Procurement contracts for construction covered by the Davis-Bacon Act.

2. Service contracts covered by the Service Contracts Act.

3. Concessions contracts, including any concessions contracts excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b).

4. Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public.

Furthermore, any subcontract of a covered contract that (like the upper-tier contract) falls into one of these four categories is subject to the paid sick leave requirements. The rule does not apply, however, to contracts that are subject only to the Davis-Bacon Related Acts—that is, laws under which federal agencies

provide financial and other assistance to construction projects through grants, loans, guarantees, insurance and other methods, but not to directly procure construction services. The rule will apply to new contracts and replacements for expiring contracts with the federal government that result from solicitations issued on after Jan. 1, 2017, or that are awarded outside the solicitation process on or after Jan. 1, 2017. For more information, see the ASA Fact Sheet (4 pages) and the ASA Frequently Asked Questions on the Final Rule on Paid Leave for Workers on Federal Contracts and Subcontracts (17 pages).

ASA Chief Advocacy Officer E. Colette Nelson noted that DOL’s final rule adds the federal government to a growing list of state and local jurisdictions that have enacted paid sick leave laws. This includes four states—California, Connecticut, Massachusetts and Oregon. In addition, the California cities San Francisco, Oakland and Emeryville; Washington, D.C.; Montgomery County (Md.); the New Jersey cities of Newark, Jersey City, Irvington, Passaic, East Orange, Paterson, Trenton, Montclair, Bloomfield, New Brunswick and Elizabeth; New York City; Philadelphia; and the Washington cities of Seattle and Tacoma also have laws that allow workers to earn paid sick days. Additional jurisdictions have enacted laws that will take effect in later in 2016 or 2017, including Spokane (Wash.), Vermont, Minneapolis and St. Paul (Minn.), Chicago (Ill.); Berkeley, Monica, and Los Angeles (Calif.); and Morristown and Plainfield (N.J.).

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Submit Your Electronic Entry for ASA’s Excellence in Ethics Awards by Dec. 16

Entries for ASA’s Excellence in Ethics Awards will be accepted electronically through Dec. 16, 2016, but the required sealed letters of recommendation still must be submitted by mail by then. Subcontractors that are committed to professionalism and sound business practices are encouraged to apply. ASA provides a timeline and resource guide to help applicants meet a number of critical milestones that must be met leading up to the deadline. The timeline and resource guide can be particularly useful for those subcontractors who have not yet developed a formal ethics program and policy. The guide, for example, contains model documents, such as sample recommendation letter requests and model policies on topics ranging from competition and conflicts of interest to internal procedures and whistle blowing. Each applicant is required to respond to questions concerning the firm’s corporate ethics policies and procedures, its construction practices, and its general business practices. Each applicant also is required to submit detailed documentation, including sealed letters of recommendation from a customer, a competitor, and a supplier. ASA will present the 2016 Excellence in Ethics Awards during SUBExcel 2017, which will take place March 15-18, 2017, in Denver, Colo. For details and information about the ethics awards, visit “Education & Events” on the ASA Web site.

OSHA Proposes Amendment to Respiratory Protection Standard

The Occupational Safety and Health Administration, on Oct. 7, issued a Notice of Proposed Rulemaking to add two quantitative fit-testing protocols to the agency’s Respiratory Protection Standard. Appendix A of the standard contains mandatory respirator fit-testing methods that employers must use to ensure their employees’ respirators fit properly and protect the wearer. The standard also allows individuals to submit new fit-test protocols for OSHA approval. TSI Incorporated submitted an application for new protocols for full-facepiece and half-mask elastomeric respirators, and filtering facepiece respirators. The existing standard contains mandatory testing methods to ensure that employees’ respirators fit properly and are protective. The proposed protocols are variations of the existing OSHA-accepted PortaCount® protocol, but differ from it by the exercise sets, exercise duration, and sampling sequence. The protocols would apply to employers in the general, shipyard and construction industries. This proposed rulemaking is intended to allow employers greater flexibility in choosing fit-testing methods for employees. The proposed rule would not require an employer to update or replace current fit-testing methods, as long as the fit-testing method(s) currently in use meet existing standards.

OSHA Delays Enforcement of and Issues Guidance on Injury/Illness Tracking and Reporting Rule

In response to calls by ASA and others for additional guidance and educational materials to assist employers with compliance, the Occupational Safety and Health Administration delayed enforcement of its new injury and illness tracking rule until Dec. 1. Under the rule, employers are required to inform workers of their right to report work-related injuries and illnesses without fear of retaliation; implement procedures for reporting injuries and illnesses that are reasonable and do not deter workers from reporting; and incorporate the existing statutory prohibition on retaliating against workers for reporting injuries and illnesses.

In addition, on Oct. 19, OSHA issued additional guidance that is intended to clarify what policies may violate the anti-retaliation provisions of the rule. The new guidance states that a violation occurs when an employer has no procedure for reporting work-related accidents or has an unreasonable policy. OSHA defines an unreasonable policy as one that is unduly burdensome or disciplines an employee for late reporting or when the employee could have reported the injury earlier. The new guidance provides several examples of an “unreasonable policy,” including disciplining employees for failing to report before they realize they have a

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Contractor Community

work-related injury they are required to report, disciplining employees for failing to report “immediately” when they are incapacitated because of the injury or illness, requiring ill or injured employees to report in person if they are unable to do so, or requiring employees to take unnecessarily cumbersome steps or an excessive number of steps to report.

To help subcontractors prepare to comply with the new OSHA rule on tracking and reporting, ASA is offering a free video-on-demand, “OSHA Illness/Injury Data Collection Requirements” (Item #8094), presented by Jamie Hasty, SESCO Management Consultants.

OSHA Finalizes ACA Whistleblower Rule

On Oct. 13, the Occupational Safety and Health Administration published a final rule that establishes procedures and time frames for handling whistleblower complaints under the Affordable Care Act. The ACA protects employees from retaliation for receiving Marketplace financial assistance when purchasing health insurance through an Exchange. It also protects employees from retaliation for raising concerns regarding conduct that they believe violates the consumer protections and health insurance reforms found in Title I of the ACA. This rule also establishes procedures and time frames for hearings before Department of Labor administrative law judges in ACA retaliation cases; review of those decisions by the DOL

Administrative Review Board; and judicial review of final decisions. In 2013, OSHA published an interim final rule and requested public comments. The final rule responds to the comments and updates the rule to clarify the protections for workers who receive financial assistance when they purchase health insurance through an Exchange. See OSHA’s Affordable Care Act fact sheet for more information regarding who is covered under the ACA’s whistleblower protections, protected activity, types of retaliation, and the process for filing a complaint.

EEOC Issues Guidance on Retaliation

The U.S. Equal Employment Opportunity Commission, on Aug. 29, issued its final Enforcement Guidance on Retaliation and Related Issues, to replace its 1998 Compliance Manual section on retaliation. The guidance also addresses the separate “interference” provision under the Americans with Disabilities Act (ADA), which prohibits coercion, threats, or other acts that interfere with the exercise of ADA rights. EEOC also issued two short user-friendly resource documents to accompany the new guidance: a question-and-answer publication that summarizes the guidance document, and a short Small Business Fact Sheet that condenses the major points in the guidance in non-legal language. The guidance addresses retaliation under each of the statutes enforced by EEOC, including Title VII of the Civil Rights Act of 1964, the Age

Discrimination in Employment Act (ADEA), Title V of the Americans with Disabilities Act (ADA), Section 501 of the Rehabilitation Act, the Equal Pay Act (EPA) and Title II of the Genetic Information Nondiscrimination Act (GINA). Topics explained in the new guidance include:• The scope of employee activity

protected by the law.• Legal analysis to be used to

determine if evidence supports a claim of retaliation.

• Remedies available for retaliation.• Rules against interference with the

exercise of rights under the ADA.• Detailed examples of employer

actions that may constitute retaliation.

Since EEOC’s 1998 Compliance Manual section on retaliation, the U.S. Supreme Court has issued seven decisions addressing retaliation under EEOC-enforced laws, and the filing of EEO claims that include a retaliation allegation has continued to grow. Charges of retaliation surpassed race discrimination in 2009 as the most frequently alleged basis of discrimination, accounting for 44.5 percent of all charges received by EEOC in FY 2015.

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likely be positive news for the industry, as projects that have been put on hold pending election results will hopefully move forward as candidates from both major parties have pledged support for infrastructure improvements. (See related story, page 10.)

However, the news is not all positive for contractors. The industry faces several challenges moving into 2017 as well.

Among them, low barriers to entry into the construction industry continue to translate to a highly competitive marketplace. Heavy competition, in turn, tends to shrink profit margins and discourage reinvestment in technology and other needed improvements.

In addition, low unemployment, while it spurs spending, also translates into higher wages and difficulties finding workers. Trade labor contractors continue to be stretched, struggling to replace Baby Boomers who have retired and those who left the industry during the recession. A shift away from vocational and technical programs and a lack of interest in related careers has made the task even more difficult. In addition, a lack of educational focus on science, technology, engineering and math has contributed to a shortage of engineers and project managers.

In fact, 86 percent of respondents in a 2015 Associated General Contractors of America survey said they are having difficulty filling hourly craft or salaried professional positions.

This labor shortage produces more than just the higher costs of securing workers. One of the most worrisome

side effects is workplace safety issues. In the 2015 AGC survey, 15 percent of respondents attributed an increase in the number of reportable injuries and illnesses to workforce challenges. Another 13 percent linked an increase in the number of jobsite hazards identified in inspection reports with worker shortages. The private construction sector recorded 899 fatalities in 2014, according to the Occupational Safety & Health Administration. Falls continue to be both the largest cause of fatalities, and fall protection the most frequently cited violation. The convergence of less experienced workers with more complex projects also holds greater potential for mistakes that can lead to construction defects if workers on understaffed projects feel rushed or are tempted to cut corners.

What’s on Horizon for 2017? Against this good news-bad news

backdrop, several trends will likely play out over the coming year. Among the most significant:

Talent will remain at a premium. Perception has historically been a problem for the construction industry, which has been viewed as dangerous or limited in opportunity. Many firms are actively challenging that perception by creating a culture that promotes values such as innovation, safety, and professional development. They are placing a priority on recruiting and retention, including actively seeking women and minorities for both hourly and management positions. Construction firms are also pursuing

Construction Outlook 2017by Matthew Lubin

Feature

The construction industry appears poised to finish 2016 strong and head into 2017 in a similarly positive position. Economic growth, low interest rates, low unemployment, and low inflation have all contributed to steady growth in the industry—growth that is expected to continue, if perhaps at a slower rate.

The numbers tell a positive story. Construction backlogs for large contractors (those with revenue of more than $100 million) hit a new high of 14.06 months for the second quarter of 2016, according to the Associated Builders and Contractors. The average backlog across all U.S. contractors for the same period was down slightly at 8.5 months, or 1.6 percent from the previous quarter. The slowdown in growth of smaller contractors has been attributed to several factors, including sluggish economic growth, slowing investment in energy and other businesses, and concerns over possible localized real estate bubbles.

The American Institute of Architects’ Consensus Construction Forecast released in July 2016 projects building construction spending will increase by just under 6 percent for the year. Forecasts call for an additional 5.6 percent gain in 2017. Commercial construction growth (forecast for 6.5 percent across all subsegments) is anticipated to be slower, but healthy, next year, while growth will rise in most institutional sectors (forecast for 5.8 percent across all sub segments), according to the AIA forecast.

On the political front, the completion of the U.S. presidential election will

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Millennials—who now represent the largest age-based group in the American workforce—with social media campaigns and access to on-the-job technology.

Leading firms are also using internships as a practical way to bring in new talent and evaluate whether these short-term employees might be a good longer-term fit for a firm. Career fairs, partnerships with local high schools and vocational schools, and mentoring programs can reach even younger prospective candidates.

Technology will continue to boost efficiency and safety while decreasing costs. Consulting firm BCG compares the opportunities for process and technological progress in the construction industry with that of the automotive industry, which is already in the midst of radical, technology-driven change. BCG estimates that within 10 years, full-scale digitalization in nonresidential construction will produce annual engineering and construction cost savings of $0.7 trillion to $1.2 trillion globally.

Building information modeling, once confined to use by large firms, is increasingly finding its way to small and mid-sized firms. BIM streamlines work flows by automating project planning, scheduling, estimating, and other processes. Because BIM enables all stakeholders to collaborate and share information from design through operations, it can speed projects, reduce mistakes, and diminish waste.

No longer stuff of the future, robots and 3D printing are combining to cut construction time and costs. In Amsterdam, robots are printing a 3D printed footbridge, while the BBC News reported on May 4, 2016, that a team in the School of Civil and Building Engineering at Loughborough University in the United Kingdom has fitted a 3D concrete printer with a robotic arm to help build concrete houses.

On the environmental front, construction and demolition produce about 40 percent of solid waste in the United States, according to the 2016 World Economic Forum’s report, “Shaping the Future of Construction.” Advanced materials

are being manufactured to respond to environmental concerns. From biobricks to engineered wood, more sustainable building materials are being made from naturally grown materials or recycled waste. For some owners, sustainability is a means of differentiation. For others, it’s a matter of compliance.

Subcontractor defaults will likely continue to challenge the construction industry. Historically, while defaults are a risk in times of economic decline, they are actually more common when the economy is strong and the subcontractor is taking on additional work. The delays and disruption resulting from a subcontractor default can have a ripple effect on an entire project.

Contractors can take several steps to help mitigate this risk. One of the simplest is engaging subcontractors the contractor has previous experience with, or if that’s not feasible, choosing firms with a good reputation or good references. Rigorous, consistent prequalification procedures should include, but not be limited to, reviewing financials, insurance, and bonding capacity. Monitoring subcontractors for red flags, such as a decrease in workforce or delay in materials, can help identify and address potential issues before they become catastrophic. If it becomes necessary to intervene, discussing the issue and next steps together typically produces the most effective outcome.

Growth will have its downsides. Contractors that aren’t convinced that the market is sustainable may accept work with thin margins in an effort to quickly take on new business. That increases the likelihood of getting involved in a challenging job or ending up sideways with an owner. Growth that happens too quickly can compromise cash flow and exacerbate the challenges of finding the right talent for the job.

Similarly, contractors that take on onerous terms and conditions as they grow will take on more contractual risk than needed, increasing the chance of project disputes or failures. The indemnification language in a contract for instance, may state that a

contractor shall indemnify the owner for property damage or personal injury arising from the contractor’s negligence. Some indemnification clauses, however, are written with broader indemnification language. Contractors that engage an attorney to advise and assist them with contract review could potentially save themselves thousands or even millions of dollars in the long run.

It’s also important to keep in mind that backlogs, while they’re synonymous with opportunity, also have a significant impact on cash flow. Careful cash flow planning will remain vital to contractors’ well-being. Contractors that manage, identify and address potential cash flow issues are more likely to experience greater economic health and better relationships with their banks and surety providers.

Surety market capacity continues. Profitability combined with plentiful, inexpensive reinsurance has drawn new entrants into the surety market. In some ways, plentiful capacity is good new for construction firms. At the same time, organizations that are evaluating their relationship with their surety provider should look for a proven commitment to the marketplace. Cultivating an ongoing relationship with a surety provider can yield the vital benefit of maintaining and increasing surety capacity.

A year of opportunityFor well-managed construction

firms, 2017 represents a year of opportunity for profitable growth. Organizations that focus on attracting solid talent, managing their financial position rigorously, and investing for the future are building a solid foundation for the future.

Matthew Lubin is an executive vice president for North America Contract Surety, Chubb. As the world’s largest publicly traded property and casualty insurance company, Chubb has been committed to providing surety solutions and services for more than 130 years and provides qualifying firms with the surety capacity needed to support virtually any size project. Lubin can be reached at MLubin@chubb.com.

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Construction Industry Contemplates Impact of Contentious Electionby Lenore Marema and E. Colette Nelson

Feature

The construction industry, like the rest of America, is contemplating the impact of the turbulent 2016 election. To the surprise of most pollsters, the Republican Party will dominate the government for at least the next two years. The art of governing is making choices and the choices are never easy. Leaders in both political parties know that it can be harder to fulfill promises made before cheering crowds once they return to the chambers of the Capitol.

Opportunity: Increased Spending on Infrastructure

President-elect Donald Trump built a business empire on development, so it is not surprising that he promised to launch a program to rebuild the nation’s infrastructure during his first 100 days in office. Trump has not provided much detail about his plan, other than the intent to provide $1 trillion over the next 10 years.

Two Trump advisors, Wilbur Ross, a private-equity investor, and Peter

Navarro, a professor at the University of California at Irvine professor, have suggested that significant funding could come in the form of tax credits to investors in infrastructure and recapture lost revenue through taxes on higher wages and contractor profits. Another way to attract investment is to give corporations tax breaks to repatriate assets held in foreign countries through their purchases of public activity bonds. If the new Trump Administration were to take either of these approaches, an infrastructure package could be part of a tax reform and reduction package the President-elect also has included in his first-100-days plan.

Any infrastructure bill is certain to face speed bumps in the Congress. While both Republicans and Democrats support infrastructure spending, they disagree on how to fund it. Fiscally-conservative House Republicans will not support infrastructure spending that increases the national debt. Just last year, a six-year $305 billion highway

reauthorization was enacted and many members of Congress are not anxious to repeat a partisan infrastructure funding battle. On Nov. 20, Rep. Bill Shuster (R-Penn.), chair of the House Transportation and Infrastructure Committee, told POLITICO, “We’re working very closely with his transition team and hopefully with the new transportation department head to figure out how we’re going to pay for it. It’s got to be fiscally responsible.” In the meantime, Senate Majority Leader Mitch McConnell (R-Ky.) recently said that more infrastructure spending was not a top priority in 2017.

One thing for sure is that any Trump proposal will include the use of public-private partnerships (P3s) with the federal government providing financial assistance and other guidance to state and local governments. The state P3 laws vary greatly, and the usual procurement laws with which contractors are familiar may not be applicable. In particular, subcontractors and suppliers on P3s should assess the security required

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from the private partner to secure its payment obligations to assure that surety bonds are in place. Some state P3 laws are silent on the payment security required, and a few states allow alternative forms of security such as parent-company or equity-partner guarantees. To the extent that the payment security required makes it difficult or impossible for subcontractors and suppliers to pursue claims, their risk of nonpayment substantially increases on a P3 project. For more information, see the sidebar, “Protecting Your Payment Rights on Public-Private Partnerships.” For more information on state laws, see Public-Private Partnerships in the States, including Surety Bond Requirements, published by ASA, the National Association of Surety Bond Producers and The Surety & Fidelity Association of America.

Challenge: Workforce Shortages and E-Verify

While industry excitement grows over the prospect of an expanding construction market, new opportunities bring new challenges. Perhaps the biggest challenge facing the construction industry remains workforce shortages. According to the Construction Labor Market Analyzer, 16 percent of all skilled trades will leave the industry during the next five years. This does not take into account the 1.1 million undocumented workers that the National Bureau of Economic Research estimates are employed in the construction industry.

President-elect Trump has promised to make major changes to the immigration system, including deportation on a major scale. In a Nov. 13 60 Minutes interview, Trump said he would immediately begin an effort to deport 3 million individuals. Yet many of the president-elect’s immigration proposals will take Congressional approval, including the authorization of funds for his call to triple the number of Immigration and Customs Enforcement agents and to build a wall on the southern border.

An immigration reform package also is likely to include placing more responsibility on employers to verify that those they hire are eligible to work in the United States. All signs point to the need for construction employers to take immediate steps to address what undoubtedly will be the deteriorating availability of skilled workers and to prepare to use E-Verify if they do not already.

Tax Reform: Details, Details, Details

The stars arguably are aligning for comprehensive tax reform. Already House Ways and Means Committee Chair Kevin Brady (R-Texas) has indicated that he intends to move tax reform during the first 100 days of the Trump Administration. He would like to build on the 35-page Tax Reform Blueprint, issued by House Republicans in June 2016. That package is remarkably similar to the plan set forth by Trump during the campaign. See sidebar on “Business Tax Proposals.”

As with all changes to the tax code, however, the devil is in the detail. Both the House Blueprint and the Trump plan have only been set forth in policy papers rather than in actual legislative language. Further, many key Republicans, including those in the House Freedom Caucus, insist that any tax reform package must be at least revenue neutral, if not designed to reduce the deficit. That may be a challenge if funding for the infrastructure program is included.

Repeal and Replace: Affordable Care Act

President-elect Trump promised to “repeal and replace” the Affordable Care Act, commonly known as Obamacare. The Republican Congressional leadership wholeheartedly agrees with the concept. The question is whether they can get agreement among a majority of Republican legislators on what the

“replace” element should look like. There appears to be agreement on certain elements, including:• Encouraging health savings

accounts.• Allowing insurers to sell policies

across state lines.• Converting Medicaid from an

entitlement program to a block grant to states.

As with tax reform, Republicans may struggle with developing a plan that is revenue neutral. According to the Congressional Budget Office, repeal of the ACA would cause the deficit to grow by $353 billion, while reducing the number of people with insurance by about 24 million.

Regulation Reduction: Confusion Abounds

Throughout the campaign, Trump promised to overturn many of the regulations that were implemented during the Obama Administration. Already, Republican leaders are compiling a list of rules that Congress can stop under the Congressional Review Act. That law allows Congress to review and reject any new regulation within 60 legislative days of its final publication. Thus, rules issued before May 2016, including the Department of Labor’s overtime rule and OSHA’s rule on crystalline silica, are no longer eligible for review under the CRA. However, several Members of Congress report they are drafting bills to stop implementation of other rules that cannot be addressed under the CRA.

Trump’s assertions on the campaign trail might lead one to believe that he would wipe out many of President Obama’s initiatives on Day 1 with a flick of a pen. However, almost all of the Obama programs, including most of those initiated through executive orders, were implemented through the formal regulatory process under the Administrative Procedures Act. Under the APA, a federal agency must make a determination that a regulatory change

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is necessary, write the proposed change and its justification, and open the proposal to public comment. In general, the time from public notice to the effective date of a new rule takes at a minimum 120 days, usually much longer. For example, this process would apply to recent final rules dealing with employee overtime, crystalline silica, reporting of employee injuries, and paid sick leave by federal contractors and subcontractors.

In addition, the new Trump Administration certainly will freeze action on many pending rules. The breadth of such a freeze may be subject to interpretation. Historically, such regulatory freezes have exempted defense and public safety. Further many new regulations are required to be issued by law. For example, ASA and other members of the Construction Industry Procurement Coalition have repeatedly called on the Office of Federal Procurement Policy and the Federal Acquisition Regulatory Council to promptly issue a rule to implement a law enacted in November 2015 to protect subcontractor payment by curbing abuses in the use of individual surety bonds. Specifically, the new law would require individual sureties to provide “eligible obligations” as defined in the current regulations and the assets must be deposited with the federal government.

OSHA: Less Enforcement, More Compliance Assistance

Under the new Trump Administration, OSHA is expected to take a less aggressive approach to enforcement than it did under the Obama Administration. This may include a review of OSHA’s current practices on repeat and severe violators. In addition, the new Administration is likely to reallocate resources, including staff, from enforcement to compliance assistance. OSHA regulations—recently finalized or newly proposed—also are likely to come under renewed scrutiny

by the new Administration and the Republican-controlled 115th Congress.

As a result, enforcement of new and the implementation of pending OSHA rules are in a state of flux. ASA advises construction subcontractors and specialty trade contractors to monitor closely changes in workplace safety and health requirements and be prepared to comply with their obligations as employers. For more information, see the sidebar, “Outlook for OSHA under the New Trump Administration.”

Human Relations Regulations: On Again, Off Again

For months, construction employers have been preparing to comply with a series of new human-resource related regulations and guidelines issued during the last few years. These include a rule updating which executive, administrative and overtime employees are entitled to the minimum wage and overtime pay protections, guidance on the misclassification of independent contractors, and a reinterpretation of the test used to determine whether a joint employment relationship exists. Employers that do business with the federal government have had to comply with the additional rules, including an increase in the minimum wage, payment transparency, and paid sick leave.

Some of these rules, including the overtime rule, are the subject of litigation. Other new human relations laws are likely to be the subject of the Congressional Review Act, Congressional repeal, or regulatory repeal. Again, ASA recommends that ASA members closely monitor changes and be prepared to adapt rapidly in order to comply with their obligations as employers.

Procurement Reform: Will Working for the Federal Government Be Easier?

The regulatory reduction process also is expected to impact the rules governing how the government purchases and administers its contracts for goods and services, including construction. In addition, to the human-resource related rules discussed above, the Federal Acquisition Regulatory Council will be looking at rules it can revoke without breaching statutory requirements. For example, while the requirements that the federal government pay its prime construction contractors within 14 days of receipt of a proper invoice and that prime contractors pay their subcontractors within seven days after they receive payment, is a statutory requirement and could be reversed only by Congress. However, the federal government’s no retainage policy was established through the regulatory process, and could be reversed by the same process.

The Construction Industry Procurement Reform Coalition already is in the process of compiling rules that it would like to see revoked and those that it thinks should be retained. The coalition consists of the major trade groups involved in construction representing prime contractors, subcontractors, design professionals and sureties. Since 2014, the coalition has worked together on legislation that the entire construction industry can support.

In addition, the coalition is set to propose construction procurement reform legislation in the new Congress. The coalition’s legislation will include transparency in contract administration, the management of change orders, elimination of the indexing of the Miller Act bond threshold, and establishment of a federal statute of repose for construction.

Lenore Marema is vice-president of government affairs for The Surety & Fidelity Association of America. E. Colette Nelson is chief advocacy officer of the American Subcontractors Association, Inc.

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TRUMP TAX PLAN HOUSE TAX REFORM BLUEPRINT

Business tax rate drops from 35 percent to 15 percent.

Active business income from pass-through entities and sole proprietors capped at 25 percent but income which is “reasonable compensation for services” taxed as regular personal income up to the 33 percent rate.

C corporations taxed at a flat 20 percent.

Corporate alternative minimum tax eliminated.

Same.

Repatriation of offshore corporate profits taxed at a 10 percent rate.

Current system where U.S. corporations pay U.S. taxes on income earned abroad would be changed to a “territorial” system where U.S. corporations would not pay a U.S. tax on dividends from their foreign subsidiaries.

Repatriation of offshore corporate profits taxed at 8.75 percent rate to the extent the assets held in cash or cash equivalents—otherwise taxed at 3.5 percent (companies can pay over an eight-year period).

Provides for border adjustments exempting exports and taxing imports, regardless of where produced.

3.8 percent tax on net investment income eliminated.

Not clear but seems intent is to repeal.

“Most corporate tax expenditures would be eliminated.”

Research and development tax credit would be retained.

Most “special interest deductions and credits” would be eliminated, including the deduction for net interest expense.

Research and development tax credit would be retained.

Manufacturers allowed to expense capital investments and lose deductibility of corporate interest expense.

Businesses permitted to expense investments in tangible and intangible property (except land).

Not addressed Net Operating Losses (NOLs) could be carried forward indefinitely cannot be carried back.

Business tax credit for on-site childcare would be increased from $150k to $500k a year. Employer contributions towards an employee’s childcare expenses could be excluded from the employee’s income

Not addressed.

B U S I N E S S TA X P R O P O S A L S

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published a final rule amending procedures for tracking and reporting workplace injuries and illnesses. OSHA began enforcing compliance on Dec. 1, 2016. Although the rule is not eligible for review under the Congressional Review Act, it is the subject of several court challenges. In any event, the Trump Administration is almost certain to revisit the rule.

Such a re-examination would likely focus on the procedures for employee reporting of workforce accidents and injuries, rather than on the new employer electronic reporting requirements.

EMPLOYER RESPONSIBILITY TO MAINTAIN ACCURATE RECORDS: OSHA is close to publishing a final rule to clarify that the duty to make and maintain accurate records of work-related injuries and illnesses in an ongoing employer obligation. If OSHA publishes the final rule prior to Jan. 20, 2017, Congress is likely to block implementation. After Jan. 20, the new rule is likely to be subject to the Trump Administration’s regulatory freeze.

The following provides an outlook on OSHA rules and activities of particular interest to construction subcontractors and specialty trade contractors:

CRYSTALLINE SILICA EXPOSURE: After years of controversy, on March 26, 2016, OSHA published its final rule on respirable crystalline silica. The rule applies to all occupational exposures to respirable crystalline

silica in construction work, except where employee exposure will remain below 25 micrograms per cubic meter of air (μg/m3), as an 8-hour time-weighted average under any foreseeable conditions. Construction contractors must comply beginning on June 23, 2017. ASA, in coalition with 22 other construction associations, filed suit to block implementation of the rule. Because the construction industry has done such a good job of demonstrating that compliance with the rule as finalized is not feasible, the Trump Administration may reconsider the rule.

TRACKING AND REPORTING OF WORKPLACE INJURIES AND ILLNESSES: On May 12, 2016, OSHA

OUTLOOK FOR OSHA UNDER THE NEW TRUMP ADMINISTRATION

CRANES AND DERRICKS IN CONSTRUCTION: In 2010, OSHA issued a final rule that requires crane operators on construction sites to meet one of four qualification/certification options. That rule is scheduled to and likely will take effect on Nov. 8, 2017. OSHA currently is preparing a proposal to correct and amend that rule; many of the new changes are advocated by the construction industry. Nonetheless, the corrections and amendments are likely to fall under the Trump Administration’s regulatory freeze.

SLIPS, TRIPS AND FALLS—GENERAL INDUSTRY: After more than 15 years of work, OSHA published a final rule on Nov. 18, 2016. Although the rule would be eligible for Congressional review, such action is not expected.

STANDARDS IMPROVEMENT PROJECT, PHASE IV (CONSTRUCTION): On Oct. 4, 2016, OSHA proposed 18 revisions to existing standards in its recordkeeping, general industry, maritime and construction standards, with most of the revisions to its construction standards. The purpose of SIPs is to remove or revise outdated, duplicative, unnecessary and inconsistent requirements in OSHA’s safety and health standards. The proposed rule will likely be covered by the Trump Administration’s regulatory freeze.

BERYLLIUM EXPOSURE: After more than 15 years of work, OSHA is close to publishing a final rule to further regulate occupational exposures to beryllium, the relationship between exposure to monitoring methods,

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In states where the laws authorizing P3 projects do not require the prime contractor to require a payment bond, a subcontractor or supplier considering work on a P3 project needs to be extra cautious to protect its payment rights. This should include:

• Evaluating the authorizing statute, the P3 agreement, the concessionaire and the project. P3 agreements can cover a period of as long as 99 years. A concessionaire may be a single-purpose entity that is thinly capitalized. Contractors and suppliers at all tiers need to make sure that the concessionaire and the prime contractor are financially sound at all times.

• Determining whether the prime contractor has provided a payment bond or whether another contractor in the tiers above you has provided a payment bond. If not, determine whether any other subcontractor payment assurances (e.g., letter of credit, parental guarantee) are in place.

• Obtaining a copy of any payment bond provided by the prime contractor or other contractor higher in the tiers.

• Verifying the authenticity of the bond. The Surety & Fidelity Association of America’s Bond Obligee Guide contains a list of surety companies that have volunteered to be included on this list along with information as to how they can be contacted for the purposes of authenticating a bond. Subcontractors and suppliers also can determine if a surety is admitted in the jurisdiction of the project by checking with the state insurance department; the National Association of Insurance Commissioners’ Web site has an interactive map that links to each state’s department. The Department of Treasury’s Circular 570, commonly known as the Treasury List or T-List, contains a list of approved sureties for federal projects.

• Reading the payment bond and determine if it meets your needs. Are you covered? Is the bond for a sufficient amount? Can you meet notice and claims requirements? Are there any other terms that would make it difficult or impossible to meet claims requirements?

• If the concessionaire or prime contractor has provided other payment assurances in lieu of a or in addition to a payment bond, such as a letter of credit or a parental guarantee, determining whether it meets your payment assurance needs and whether you can meet notice and claims requirements, etc.

• Determining if the state’s prompt payment laws apply to the project and, if so, whether they provide adequate protection. It is unlikely that a state law governing prompt payment on public work will apply. However, in many states, the prompt payment law governing private work will.

PROTECT YOUR PAYMENT RIGHTS ON PUBLIC-PRIVATE PARTNERSHIPS

exposure control methods, and medical surveillance. If OSHA publishes the final rule prior to Jan. 20, 2017, Congress is likely to block implementation. After Jan. 20, the new rule is likely to be subject to the Trump Administration’s regulatory freeze.

OSHA PENALTIES: On Aug. 2, 2016, OSHA increased its penalties by 78 percent, as required by the “Federal Civil Penalties Inflation Act,” which Congress enacted in 2015. The top penalty for serious violations increased from $7,000 to $12,471. The maximum penalty for willful or repeated violations increased from $70,000 to $124,709. Because the increases were statutorily-required, they will stay in place unless Congress takes action. Such action is not expected.

EMPLOYEE WHISTLEBLOWERS: OSHA is responsible for enforcing more than 20 whistleblower statutes, including those protecting employees who report violations of workplace safety and health requirements. In recent years, Congress has enacted laws that relax the burden of proof on whistleblowers. No Congressional action is expected to roll back the new standards.

FAIR PAY/SAFE WORKPLACE: This new rule issued by the Federal Acquisition Regulatory Council and related guidance issued by the Department of Labor require federal contractors and subcontractors to certify their compliance with 14 federal labor laws, including regulations issued by OSHA. Congress is expected to take action to stop implementation of the rule.

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It’s a Crazy, Crazy World and We’re Just Building It—A Glimpse of the Trends Shaping the Strategy in the New Year

by Gregg Schoppman

Feature

The new year comes in with both an equal balance of guarded optimism and nervous trepidation. The election cycle will conclude and the only inalienable truth that everyone will agree upon is the satisfaction of no more political advertisements blotting the airwaves. However, regardless of affiliation or outcome, construction business leaders will need to rise up and lead their businesses through a new quagmire of obstacles, challenges and even opportunities in the new year. Industry changes seem to occur at the speed of light while adopting suitable strategies tends to lag. Some of the reluctance lies in perception that certain contextual or environmental factors will be short lived. On the other hand, there is also a fair amount of “behavioral inertia” that must be overcome. No one maintains a crystal ball, but best-in-class firms create a strategic plan that adequately sifts through the tea leaves to make decisions for the future.

Data Driven StrategyOrganizations sit on a treasure

trove of information, but they either lack the system or capability to mine that data successfully. Whether it is understanding the true costs associated with managing specific projects or even understanding which clients allow a firm to be the most profitable, firms must gather and analyze this data routinely. Furthermore, firms must continue to dig deeper and understand some of the factors below:• What drives your customers’

business—supply, demand, population growth, support businesses, etc.

• What KPI’s internal or external will drive a firm’s strategy—customer feedback, productivity performance, market penetration, etc.

• What macro-economic forces should a firm understand—GDP, AIA billings index, populations changes, etc.

• What triggers are in place to help a firm make fact based decisions—backlog growth/depletion, manpower histograms, equipment utilization, etc.

It is important to understand that one has to remove the emotion from reading the data. For instance, regardless of who is in the White House, what’s happening with the Supreme Court, who controls Congress, etc. decisions have to be made.

The Labor CrisisWhether it is good or bad, there

remains a labor crisis associated with the construction industry. In some cases, the ability to staff projects successfully has provided a “governor” for some firms to avoid overextension. However, there appears no real solution on the horizon. Market forces may well dictate the supply of labor thus limiting firm capabilities. However, there are examples of best-in-class firms maintaining a proactive stance within high schools, technical schools, vocational schools and colleges and driving the right people to their cause. Keep in mind, sourcing the labor is

only part of the dilemma. Having the right culture to retain them is also critical. Training, development, and performance driven compensation are also critical.

Performance Driven Compensation Systems

The “black box” approach to compensation or the year-end Christmas bonus are becoming antiquated and obsolete. Successful firms are migrating toward performance driven incentive compensation models. To be clear, this is not project-based compensation as that opens a whole host of additional issues. Today’s workforce wants to see transparency in their compensation. High performers also want to know that their efforts are being rewarded. It goes without saying that retention of high performers is essential for both short- and long-term strategic reasons. Firms that are reaching in both performance feedback, career pathing and true performance-driven compensations tend to attract better associates, thus becoming a talent-rich magnet.

InnovationHigh performers—young and

old—want to be on the cutting edge. This is not limited to technology, but it certainly does play a role. Social media, GPS technologies, prefabrication, modularization, automation, drone technology, etc., are not new, but certainly play a role

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in attracting talented individuals to either play a part of lead specific areas to leverage better productivity, enhanced job performance, or simply drive a better product to the end-user. Is your firm fully committed to innovating or are they just dabbling?

Succession WoesAs shocking as this may sound,

firms are not getting any younger, particularly the leadership. There are many firms that still resist developing a proactive succession plan for ownership. Keep in mind this is easily a 10-year process. Finding the right candidates is not enough—it is also important to consider the financial modeling that will allow ownership transfer to take place in a fair and equitable way. However, this trend is hardly limited to ownership. Firms across the board are getting older at the key stakeholder level—chief estimator, operations manager, general superintendent. Succession will remain a key factor for firms in the next five to 10 years, but it is only exacerbated by the state of the talent pool for the industry.

Being Attractive in the Now

Best-in-class firms are focusing on rebranding themselves. Simply being a contractor is not enough. Rebranding themselves as “solutions providers” sounds kitschy and clichéd, but the ones that do it successfully through deliberate and disciplined

planning have opened doors to new markets, customers, and more importantly, sources of labor. For instance, by taking a chapter from the professional services industry, trade contractors are using this rebranding to appear “gray collar” to potential customers and employees alike to find work in non-traditional areas.

MarketplacesOnce again, by employing a data-

driven strategy, firms are looking at geographies differently. For instance, port cities such as Jacksonville and Charleston continue to remain darlings because of the expansion of the Panama Canal. While not the only reason, thinking macro-economically has enabled firms to be positioned better to allow for successful growth and opportunities for superstars. Before everyone thinks about planting a flag in Jacksonville or Charleston, it is important to look at other drivers. For instance, look at the impact of Amazon and Jet (now owned by Walmart). Distribution centers will continue to be important areas of the American economy as the world of e-commerce morphs yet again. Furthermore, as innovation continues in the autonomous vehicle arena, there will be continued opportunities. Even if building millions of square feet of distribution space does not fit within your firm’s strategy, ancillary business opportunities will abound.

The one common denominator is uncertainty. For of the great new

things on the horizon, there is always the spectre of war, terrorism and other insidious outcomes that only shake the foundation of America. The term “black swan effect” came into vogue after the last great recession. While the financial crisis created one of the most devastating economic disasters in modern times, it too passed with time. It is difficult, if not impossible to plan for such events. However, best-in-class firms, use these projected trends to help drive a strategic plan that creates success, regardless of the world’s craziness.

As a principal with FMI, Tampa, Fla., Gregg Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex and sophisticated construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing, and multi-family markets. He has also worked as a construction manager and managed direct labor. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. He can be reached at (813) 636-1259 or gschoppman@fminet.com.

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New Construction Starts in 2017 to Increase 5 Percent to  $713 Billion, Dodge Data & Analytics Reportsby American Subcontractors Association

Feature

Total U.S. construction starts for 2017 will advance 5 percent to $713 billion, following gains of 11 percent in 2015 and an estimated 1 percent in 2016, according to Dodge Data & Analytics, which released its 2017 Dodge Construction Outlook in October during the 78th annual Outlook Executive Conference in National Harbor, Md.

“The U.S. construction industry has witnessed signs of deceleration in 2016, following several years of steady growth,” said Robert Murray, chief economist, Dodge Data & Analytics. “Total construction starts during the first half of this year lagged behind what was reported in 2015, raising some concern that the current construction expansion may have run its course. However, the early 2016 shortfall reflected the comparison to unusually elevated activity during the first half of 2015, lifted by 13 very large projects valued each at $1 billion or more, such as a $9 billion liquefied natural gas export terminal in Texas and a $2.5 billion office tower in New York City. As 2016 has proceeded, the year-to-date shortfall has grown smaller, easing concern that the construction industry may be in the early stage of cyclical decline. Instead, the construction industry has now

entered a more mature phase of its expansion, one that is characterized by slower rates of growth than what took place during the 2012-2015 period, but still growth. Since the construction start statistics will lead the pattern of construction spending, this means that construction spending can be expected to see moderate gains through 2017 and beyond.”

Murray noted: “On balance, there are a number of positive factors which suggest the construction expansion has room to proceed. The U.S. economy in 2017 is anticipated to see moderate job growth, market fundamentals for commercial real estate should remain generally healthy, and more funding support is coming from state and local bond measures. Although the global economy in 2017 will remain sluggish, energy prices appear to have stabilized, interest rate hikes will be gradual and few, and a new U.S. President will have been elected. For 2017, total construction starts are forecast to rise 5 percent to $713 billion. Gains of 8 percent are expected for both residential building and nonresidential building, while nonbuilding construction slides a further 3 percent.”

The pattern of construction starts by more specific sectors:• Single family housing will rise 12

percent in dollars, corresponding to a 9 percent increase in units to 795,000 (Dodge basis). Access to home mortgage loans is improving, and some of the caution exercised by potential homebuyers will ease with continued employment growth and low mortgage rates. Older members of the Millennial generation are now moving into the 30- to 35-year-old age bracket, which should begin to lift demand for single family housing.

• Multifamily housing will be flat in dollars and down 2 percent in units to 435,000 (Dodge basis). This project type now appears to have peaked in 2015, lifted in particular by an exceptional amount of activity in the New York metropolitan area, which is now settling back. Continued growth for multifamily housing in other metropolitan areas, along with still generally healthy market fundamentals, will enable the retreat at the national level to stay gradual.

“On balance, there are a number of positive factors which suggest the construction expansion has room to proceed. The U.S. economy in 2017 is anticipated to see moderate job growth, market fundamentals for commercial real estate should remain generally healthy, and more funding support is coming from state and local bond measures.”

—Robert Murray, chief economist, Dodge Data & Analytics

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• Commercial building will increase 6 percent on top of the 12 percent gain estimated for 2016. Office construction is showing improvement from very low levels, lifted by the start of several signature office towers and broad development efforts in downtown markets. Store construction should show some improvement from a very subdued 2016, and warehouses will register further growth. Hotel construction, while still healthy, will begin to retreat after a strong 2016.

• Institutional building will advance 10 percent, resuming its expansion after pausing in 2015 and 2016. The educational facilities category is seeing an increasing amount of K-12 school construction,

supported by the passage of recent school construction bond measures. More growth is expected for the amusement category (convention centers, sports arenas, casinos) and transportation terminals.

• Manufacturing plant construction will increase 6 percent, beginning to recover after steep declines in 2015 and 2016 that reflected the pullback for large petrochemical plant starts.

• Public works construction will improve 6 percent, regaining upward momentum after slipping 3 percent in 2016. Highways and bridges will derive support from the new federal transportation bill, while environmental works

should benefit from the expected passage of the Water Resources Development Act. Natural gas and oil pipeline projects are expected to stay close to the volume that’s been present in 2016.

• Electric utilities and gas plants will fall another 29 percent after the 26 percent decline in 2016. The lift that had been present in 2015 from new liquefied natural gas export terminals continues to dissipate. Power plant construction, which was supported in 2016 by the extension of investment tax credits, will ease back as new generating capacity comes on line.

ASA EXCELLENCE IN ETHICS AWARDS 2016

APPLICATION DEADLINE:

DECEMBER 16, 2016

ASA will honor selected firms that demonstrate the highest standards of internal and external integrity during an awards ceremony at the ASA annual

convention, SUBExcel 2017, March 15-18, 2017, in Denver, Colorado.

• Watch the Excellence in Ethics Awards Video.

• Download the 2016 Excellence in Ethics Awards Brochure.

• Download the 2016 ASA Excellence in Ethics Awards Application.

• ASA provides useful model documents to help with your submission and your ethics program. View the 2016 Excellence in Ethics Awards Resource Guide.

• Download the 2016 ASA Excellence in Ethics Awards Timeline.

• ASA’s Excellence in Ethics Awards Program Q&A LinkedIn Group—a forum for getting answers to your questions about the award and application process. This forum includes current award recipients who have been through the application process and are willing to help guide new applicants through their application process.

• Recipients of the 2015 ASA Excellence in Ethics Awards may re-apply for 2016 using the Re-Certification Form.

HELPFUL LINKS

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ASSOCIATIONSUBCONTRACTORS

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Planning: The Key to Growthby Larry Silver

Feature

Is your company reactive to everything that happens or proactive, seeking your preferred destiny? Most contractors are operations-driven and are just plain busy trying to accomplish the work right in front of them. Very few actually sit down to plan out where they want to be over the next year or two. When the bumps in the road come, most firms are not prepared. There are no contingency plans in place, no extra opportunities in the pipeline, and no plan B as a fallback position.

The best way to control your firm’s growth and to function as a healthy management team is to do regular planning. It is not that you will be unable to make money if you don’t. Of course, many firms never do planning and still do just fine. However, there is a difference in professionalism and leadership in the progressive companies that take the time to hash out and strategically think through their future direction. It is now a known statistic that over 80 percent of best-in-class contractors do regular and consistent planning.

Begin with Strategic Planning

The unique process of projecting your firm’s growth and changes in upcoming years is called strategic planning. It is both a current assessment of where you are and a future vision of where you would like to be in the future. To get from where you are (Point A) to your desired goal (Point B) is easier said than done. Therefore, the strategic planning process addresses the issues, risks, and action items needed to navigate these uncertain waters. It focuses on the inherent strengths of an organization and attempts to remove the barriers, hindrances, and impediments to growth.

The S.W.O.T AssessmentIf you have hired an outside

consultant, chances are good that you know the SWOT acronym. It stands for Strengths, Weaknesses, Opportunities, and Threats. Even if two firms had very similar strengths and weaknesses, the particular position and the makeup of each firm’s people will have a big impact on the differences between the two.

Another interesting observation is that the vast majority of contractors do not know their own SWOT very well. There is a simple test to verify this. If you brought the five key managers into a room separately and had them tell the company story, would it, in fact, sound like the same company from each person? This is something to consider. The best-positioned companies are those that know themselves and where they are positioned in their markets.

The Greatest StrengthAnother interesting exercise is to

flesh out all the strengths that the staff can think of concerning your company and to narrow them down to just one.

It should be an overriding strength that is true and a positive differentiator. This can be called a firm’s greatest strength. Very few know their greatest strength and even fewer actually market themselves based on it. It is like an iceberg in the ocean. It is only what is above the surface that can be seen. This is what every firm should major on in their promotional efforts. There are other strengths that are foundational and supportive of the greatest strength, and when you share the company story, these other strengths can be brought in as part of your story.

Competitive CommentaryEvery contractor in the construction

industry has competitors in their respective markets that nip at their heels and take work out off the table from them. Part of the assessment should indicate who your competitors are, how they compete, and the best approach to minimize this competition. This part of the plan does not need to be content heavy, but it needs to detail specific commentary on the players that affect your world.

TrendsThere are general industry trends

along with vertical niche trends that affect your overall strategic direction. Attempt to capture in succinct form, those trends that have direct impact on your business. For example, if you are in the public highway space, your trends will be affected by public policy, budgets already allocated and approved, etc. However, if you are in the retail space, your look at residential housing, consuming spending and the like will be major factors.

Chess Illustrates the Importance of Strategy

If you have never learned to play chess, now might be a good time to begin. It is the most strategic game on planet earth. A motivator for you may

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be to watch a well done movie based on a true story entitled “Searching for Bobby Fisher,” where a young New York City chess prodigy develops into a force to be reckoned with.

There are always reasons to make certain moves on the chess board at certain times. The game develops based on strategy to capture the opponent’s king. Certain strategies work well and others will bring the wrong result quickly. This is how it is regarding our contracting businesses. There are only so many moves in the contracting game that are the right and powerful strategic moves. We must practice and eventually master this if we are to make progress toward our future vision.

Strategic planning helps contractors evaluate their need to pursue niche markets and ideal client relationships, where issues and risks get critically discussed. Every year this planning should reveal fresh and new potential opportunities, threats to weigh, and significant changes to implement in your firm.

Hire a FacilitatorThe first step in strategic planning is

to hire an experienced facilitator who can draw out a current assessment of the firm’s strengths, weaknesses, opportunities and threats. They will also help identify the issues and risks, and lead the planning process to a clear path of implementation. This can normally be done in 30 to 45 days before year end.

The Strategic Planning Retreat

If the facilitator does a good job of assessing and identifying the issues/risks facing the business, then it is time to take the management team on a strategic planning retreat. This is best done over a two-day period away from the workplace. The agenda must be followed stringently, as the time will go faster than imaginable. The first day should clearly confirm the assessment without going into great detail.

Staff should agree on the firm’s greatest strength and regroup how best to promote this greatest strength at the retreat. It is necessary to also focus on the weaknesses, opportunities and threats. The balance of the first day

should concentrate on the four or five major issues facing the company in the short term.

The second day should be a time to select champions and discuss implementation goals to secure the needed changes.

Monitoring the Strategic Planning Process

As a follow-up to the strategic planning retreat, it should be mandatory for the champions to confer at least monthly on the progress of the plan. The facilitator should stay in the loop to bring some outside accountability to bear on the initially zealous retreat plans.

How Does Your Firm Rate?Contractor Marketing Inc. has

developed the “Strategic Planning Grade” as a diagnostic tool to assist contractors to rate themselves and to show areas to improve planning. The 10 categories are interrelated and have weighted point values:1. Written Strategic Plan (15 points)—It

is wonderful if the president has the plan in his or her head, but that hard drive can crash and leave everyone else in the dark as to future direction of the company. It must be written succinctly and practically.

2. Champions to Oversee Key Issues (15 points)—Each major objective stated in the strategic plan should have at least one champion to lead the charge to positive change. This champion agrees on a reasonable timeframe to carry out the needed change and will be held accountable by the management team running the company.

3. Implementation Ability (15 points)—How well does the firm/champions carry out the objectives jointly decided by the team? Many firms have learned the importance of planning, but very few do a good job implementing these plans. Only the progressive, innovative and empowering firms do a superb job moving forward with relative ease.

4. Healthy Human Resource Function (10 points)—The key issue that we observe in planning is the people issues. The ability to select, train,

retain, motivate, lead, compensate and change is rare, especially in the construction industry. We are more competent building structures than we are people.

5. Leadership Development/Training (10 points)—The leaders of a company determine the culture, the values, the business approach and philosophy. They set the tone for the rest of the staff to calibrate to.

6. Target Market Focus (10 points)—It is wise to consider new opportunities and target markets every time that you meet. Which market segments make the most sense to pursue with your firm’s experience and capability?

7. Clear Vision, Mission and Goals (10 points)—These items may seem soft to the reader, but perhaps they direct much like a small rudder does a huge ship. They need to be clear, distinct and relevant so that the staff is all pulling in the same direction.

8. Internal Communication/Morale (5 points)—How well do your employees communicate with one another? Does the office and field stay in sync? Does upper management let the troops know what the key issues are? This factor impacts the overall morale of the company and creates the energy for the client to be serviced and satisfied.

9. Monitoring Mechanisms (5 points)—Do you know when your plan or projects go off track or is it too late by the time you realize it? How well do you keep score on the foundational basics?

10. Marketplace Position (5 points)—Where do you stand in light of your competitors? What differentiates you from every other contractor in your market area claiming to be quality-oriented, on time, and within budget?

Larry Silver is president of Contractor Marketing Inc., a consulting/recruiting firm in the AEC Industry. Silver performs strategic planning, marketing/business development audits and training, and is currently the publisher/editor-in-chief of Business Development, an ezine that is distributed to more than 100,000 firms. Silver can be reached at (937) 776-7170 or larry@contractormarketing.com.

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many of our problems are really similar, and that really reinforces what I’ve been trying to teach them, and then they come back with new ideas themselves that we then implement.”

Brooks, who serves as ASA’s 2016-17 Secretary, values the opportunities to meet with his peers from across the country. “The networking here is awesome,” he says in the video. Brooks says that coming to the convention affords him the ability to “discuss things that are happening in my market with other people in the same business that my competitors at the local stage would never have those conversations with me.”

Of course, there are lots of other great reasons to participate in SUBExcel 2017, including high-energy speakers, like combat veteran and champion athlete Redmond Ramos and award-winning author and professional speaker Dr. Jerry Teplitz. In his opening general session on Thursday, March 16, Ramos will illustrate the power of positivity through his personal story. “I stepped on an IED and got out with a paper cut (single, below the knee amputation). Most people had it much worse, so I’m the luckiest man alive.”

‘The Networking Here Is Awesome!’ ASA Video Offers Reasons to Attend SUBExcel 2017by American Subcontractors Association

There are plenty of good reasons why you and your key employees should participate in SUBExcel 2017 this March in Denver. In ASA’s video, “SUBExcel 2017—Peak Performance,” Walter Bazan Jr., Bazan Painting Company, and Anthony Brooks, Platinum Drywall, share two reasons why they make the investment in their businesses and employees each year by participating in SUBExcel. ASA’s annual convention will take place March 15-18, 2017. Register online now and make your hotel reservations to stay in the ASA room block at the Denver Marriott City Center.

Bazan, a past ASA president, has been actively involved with ASA and has participated in its conventions for years. His experience and leadership are a tremendous resource for his company and his employees, but sometimes, employees just need to hear it from others. “My employees that come to the convention seem to get a lot out of [it],” he says in the video. “What I have been telling them before seems to be more real when they hear it from other people. They like hearing it from different sources, obviously from across the country,

In his opening general session, “Increasing Your Professional and Leadership Power to New Levels of Excellence,” on Saturday, March 18, Teplitz will explain how you can make every day a positive one using actual tools and techniques that will increase your energy level, resulting in more creativity, productivity, and effective leadership capabilities.

Education workshops presented by business and leadership experts will focus on topics to help subcontractors hone their business and leadership skills and improve their businesses, including:• Danny Creed, a real-word

business coach whose philosophy is that success should be measured by emotional results as much as hard numbers.

• Stephane McShane, a senior consultant at Maxim Consulting Group, who evaluates and implements business practices with construction-related firms of all sizes.

• Ian Blair, principal, The Blair Group, which focuses on aligning companies’ vision, strategy and people through leadership and management consulting services.

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• E. Colette Nelson, ASA’s chief advocacy officer, who manages all facets of ASA’s government and industry advocacy initiatives.

• Ike Casey, ASA of Metro Washington’s executive director, who will illustrate how the chapter increased its membership over 20 percent through collaboration with general contractors in the Washington Metro area.

• John Watras, vice president of Zurich’s Construction Industry Segment, responsible for the middle market commercial contractor’s space.

• Ashley Colburn, owner, Operate Lean, LLC, lean construction experts specializing in project team collaboration and organizational culture change.

• Anwar Hafeez, president, SDC & Associates, a national construction consulting company focused on helping clients increase profits and protect their bottom line through claims preparation, education, CPM scheduling, and litigation.

• Steve Antill, director of sales for Foundation Soft, construction accounting software that helps businesses streamline their office operations with integrated job cost accounting, payroll, project management, and mobile solutions.

• And more!SUBExcel 2017 will also feature two

panel discussions, one with attorneys

from the ASA Attorneys’ Council on hand to answer legal questions, and the other with representatives from three general contractors—Turner Construction Company, JE Dunn Construction, and Mortenson Construction. Subcontractors will have the opportunity to hear directly from these GCs about the qualities and characteristics they most want from their subcontracting partners.

New On-demand Video from FASAWhen it comes to managing your business, the Foundation of ASA is your partner in education. View and listen to FASA’s on-demand videos at an individual workstation or in a conference room for group training. Your order includes access to the on-demand video any time, and as many times as you’d like! This is just one of the on-demand videos available through the FASA Contractors’ Knowledge Depot to meet your business management training needs.

“OSHA Illness/Injury Data Collection Requirements” (Item #8094)

The Occupational Safety and Health Administration’s final rule on injury/illness data collection requires employers in high-hazard industries, including the construction industry, to send injury and illness data to OSHA for posting on the agency’s public Web site. In the complimentary video-on-demand, “OSHA Illness/Injury Data Collection Requirements,” Jamie Hasty, SESCO Management Consultants, explains what subcontractors should be doing to be in compliance with the new requirements.

Price: This webinar is free for ASA members and nonmenbers

TM

Retired Navy Hospital Corpsman 3rd Class Redmond Ramos (center) competed in a 100-meter sprint heat at the 2014 Invictus Games. The international competition brings together wounded, injured and ill service members in the spirit of friendly athletic competition.

Dr. Jerry Teplitz was selected as “Top Rated Speaker” by the International Platform Association.

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Legally Speaking

Eliminate or Reduce Financial Impact of Retainageby Lee Brummitt, Esq.

In the 1840s, the United Kingdom was constructing a massive railway system. The huge work demand brought unqualified and insolvent contractors to the fray. Defective and incomplete work was commonplace. To combat the losses and assure that work was completed, the government withheld 20 percent of the contract amount. Thus, the practice of retainage was born. Critics say its time has come and gone.

Advocates of the practice, such as the surety industry, argue that retaining funds offsets the risks of overpayment for quantity or quality of work actually installed, defective work, or insolvency. The practice was considered a sacred cow until the early 1980s when the federal government led what has become a slow erosion of the tradition. In 1983, the federal government proclaimed a new policy providing for the elimination of retainage on all federal construction projects. “Retainage should not be used as a substitute for good contract management, and contracting officers should not withhold funds without cause,” said the Office of Federal Procurement Policy. This “cause” standard was fully implemented in the Federal Acquisition Regulations in 1986 and the Department of Defense, the GSA, and the Department of Transportation all adopted a policy of

“zero” retainage. Using federal funds as a carrot, many state departments of transportation now have “zero” retainage policies.

As a result of the economic downturn, retainage reform has accelerated over the last decade. The downturn has caused state legislatures to understand more clearly that retainage causes cash flow problems, provides gratuitous financing for owners, and allows owners and generals less incentive to properly inspect and manage a project’s progress. Where retainage at 10 percent was the prior norm, a number of states have stripped retainage to 5 percent or less, particularly on public projects. New Mexico banned retainage on most public and private projects in 2007. Some states such as Kansas, Michigan, Nevada, Ohio, Oregon, Tennessee, and Texas require owners to place retained funds in interest-bearing accounts. Additionally, states such as Missouri require retainage to be held in trust accounts restricting the owner’s ability to use and consume those funds for other purposes. Many states such as Colorado, North Carolina, Missouri, and Kansas have procedures for the release of retainage to early-completing subs or upon a percentage of completion. Some states also allow a subcontractor to post alternative security such as certificates of deposit, letters of

credit, or bonds in lieu of withholding retainage. Most states and contract forms require the prompt payment of retainage to the sub once the owner releases retainage to the general or once a project is “substantially complete.”

Despite the current climate, subcontractors still need to take steps to lessen or eliminate the financial impact of retainage or to, at a minimum, insure that contract language complies with applicable laws and regulations.

Educate yourself on the retainage regulations governing your work. Many owners, generals, or subs often do not know the current status of retainage statutes or regulations governing the work. As a result, contract language frequently defaults to the 10 percent standard and violates other applicable legal standards. Before you enter into any contract, educate yourself on the retainage laws and regulations applicable in the location of the work. They vary significantly from state to state.

Subcontractors should never accept retainage terms or practices which are less favorable than the relevant law. It is hardly unusual for the subcontract form provided by the general to contain more onerous retainage terms and conditions than allowed by the jurisdiction governing the project. While the ConsensusDocs

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standard contract form states that the retainage percentage “shall not exceed statutory requirements,” the AIA standard form does not contain such language. Neither form provides for strict compliance with the retainage rules and regulations where the project is located. If the contract does not comply with the law in every instance, educate the general and make sure the contract you sign is in strict compliance.

Subcontractors should never accept retainage terms which are less favorable than the general construction contract. “Flow down” clauses make the general construction contract’s terms and conditions part of the subcontract. A sub should always obtain a copy of the general construction contract and review, among other things, the retainage provisions before signing. A subcontract should never have more onerous retainage provisions than the owner is requiring from the general. For instance, a subcontract should never allow a general to withhold more retainage from the sub than the owner is withholding from the general. The standard ConsensusDocs form provides some protection in that it requires any percentage withheld by the general from the sub to be “equal to the amount retained from the Constructor’s payment by the Owner for the Subcontract Work.” Additionally, the ConsensusDocs form requires that “the Subcontractor’s retainage shall also be reduced when the Constructor’s retainage of the Subcontract Work has been so reduced by the Owner.” The AIA standard forms do not contain these basic protections.

More favorable contract terms supersede statutory requirements. The terms and conditions of a construction contract relating to retainage can and, depending on the state where the work is located, should be more favorable than the applicable law. Many generals are willing to negotiate retainage terms, especially with a subcontractor that they trust and with whom they have had positive experience. One of the best arguments for reduction or elimination of retainage is that all contract forms allow the owner, design professional, and/or general to withhold funds based for any number of reasons including defective

work, insolvency, or evidence that the work will not be completed on time or at all. In other words, owners and generals which manage a project appropriately already have the contractual means to protect themselves from those very things that retainage was meant to address. The following are some of the items that should be the subjects of negotiation:• Reduction or elimination of retainage

once a project has reached a certain percentage of completion, such as 50 percent.

• Release of a portion of retainage already withheld once the work gets to a certain percentage of completion, such as release of half of the retained funds once the project is at 50 percent completion percentage.

• Release of retainage upon successful completion of work, including completion of a separately identifiable “line item” on the Schedule of Values.

• Deposit of withheld retainage funds in a segregated interest-accruing trust account.

• Payment of all interest on retained funds.

• Elimination of retainage where the subcontractor is required or willing to purchase performance and payment bonds for the project.

Early-completing subcontractors should always request a release of retainage upon completion of work. If you are an early completing trade, always request a release of retainage upon completion of work whether those terms are in your contract or not or whether state law provides for such a remedy. This rule also applies to the subcontractor which has completed a separate line item scope of work on the Schedule of Values even if it has additional line items to complete.

Take caution not to waive lien or bond rights. Lien and bond rights can easily be waived through partial or final lien waivers. If waived, the ability to protect and leverage your right to receive retainage may be sacrificed. Subcontractors should exercise extreme caution and never sign contracts containing broad waivers of lien or bond rights, lien waivers which are not conditioned on actual receipt of

payment, and lien waivers that expressly waive all liens/bonds as of a specific date. It is recommended that each time a sub signs a lien waiver, the following language should be affixed to the lien waiver above the signature line:

This waiver shall apply only to work for which payment has not been received in full; shall not apply to retention; shall not apply to unbilled changes, claims which have been asserted in writing or which have not yet become known; and shall be conditional upon receipt of funds.

Protect and perfect your lien and/or bond rights. If your request for release of retainage on completed scopes of work is rejected, you should always protect your lien and/or bond rights and immediately file a mechanic’s lien or payment bond claim if the time for doing so will or is likely to expire before your retainage is expected to be paid. Early-completing subcontractor are frequently required to wait several months, if not years, before retained funds are to paid. It is not uncommon for retained funds to simply go unpaid or become “unavailable” at the completion of the project because of other problems having nothing to do with the early completing subcontractor’s work such as poor project management, defective work by others, or the insolvency of the owner or general. An ASA study in 2007 cited “slow final payment” as a “very serious concern” and a majority of subcontractors responded that they do not collect 75 percent of the retainage they are owed. Filing a lien or bond claim will not only assure that your claims do not become stale, it may also have the desired effect of compelling the owner, general, or surety to pay retainage in a more timely manner.

Lee Brumitt is a director and shareholder with the Kansas City law firm of Dysart Taylor Cotter McMonigle & Montemore, P.C. He has more than 30 years of experience in construction law and litigation. He represents subcontractor trades and specialty contractors on public, commercial and residential projects. He currently serves as the attorney for the ASA-Greater Kansas City chapter. He can be reached at (816) 714-3027 or lbrumitt@dysarttaylor.com. This column originally appeared in the May 2015 edition of The Contractor’s Compass.

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ASA/FASA Calendar Coming Upin the January 2017

Issue of ASA’s

THEME: Construction Forecasting

• OSHA Silica Rule—Applications for Subcontractors

• Shapiro & Duncan YOUniversity

• OSHA Transgender Bathroom Requirements

• SUBExcel 2017— Denver Education Programming

• Tech Deployments to the Field

• ASA Webinars Remaining in 2017

• Legally Speaking: eDiscovery

Look for your issue in January.

PAST ISSUES:Access online atwww.contractors

knowledgedepot.com

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December 2016

13 – Webinar: U.S. Election Outcome & Potential Impact (Complimentary)

January 2017

10 – Webinar: Most Popular Benefits Employees Are Purchasing Without Employer Contribution

12-14 - ASA Mini-Committee Week: Executive and Finance Committee and Rap Council Meetings, Napa, Calif.

24 – Webinar: OSHA Transgender Bathroom Requirements (Complimentary)

February 2017

14 – Webinar: Cost Coding Made Simple

March 2017

1 – Webinar: OSHA Silica Rule—Applications for Subcontractors (Complimentary)

15-18 – SUBExcel 2017, Denver, Colo.

April 2017

11 – Webinar: Incentive Compensation Plan Best Practices

May 2017

9 – Webinar: Prompt Payment and How/When to Suspend Work

June 2017

13 – Webinar: Killer Contract Clauses

Contact information for all ASA and FASA events/programs:www.asaonline.com education@asa-hq.com

That’s a win-win situation.To advertise in The Contractor’s Compass,

contact Richard Bright at (703) 684-3450, Ext. 1335 or rbright@asa-hq.com

Win.Win.Sell your products and services. Advertising reaches industry leaders and decision-makers who spend $11+ billion annually on products and services.

Support ASA. Advertising supports ASA, the industry voice of trade contractors.

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D E C E M B E R 2 0 1 6 T H E C O N T R A C T O R ’ S C O M P A S S26

“The flow and consistency of the documentation in Project DocControl was exactly what we had been looking for. We needed a tool that would allow employees to generate documents easily and consistently.”—Stephen Rohrbach, CPCPresidentF.A. Rohrbach, Inc.Past ASA National President

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IN AN INSTANT,CALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280,000 drivers are involved in serious accidents every year, Calvin Berger of Calberg Contracting took CNA’s recommendation to heart, and posted placards restricting cell phone use in each of his company’s vehicles. Now Calberg Contracting is filing fewer claims, and Calvin’s enjoying a handsome bonus for worker safety and performance.

When you’re looking for risk control programs that keep workers dialed in to relevant industry trends … we can show you more.®

JUNE 5TH, 11:08 A.M.

The examples provided in this material are for illustrative purposes only and any

similarity to actual individuals, entities, places or situations is unintentional and purely

coincidental. Please remember that only the relevant insurance policy can provide the

actual terms, coverages, amounts, conditions and exclusions for an insured. All products and

services may not be available in all states and may be subject to change without notice. “CNA”

is a service mark registered by CNA Financial Corporation with the United States Patent and

Trademark Office. Certain CNA Financial Corporation subsidiaries use the “CNA” service mark in connection

with insurance underwriting and claims activities. Copyright © 2016 CNA. All rights reserved.