The Contractor's Compass February 2015

THE

ASA’s

THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION

WWW.ASAONLINE.COM

Creating an Organization Focused on Achieving Operational Excellence

FEBRUARY 2015

Improving Productivity

Managing the Prequalification Process Case Study: Acing Energy Efficiency Improving Prefabrication and Field Productivity with Design Standardization Centralized Document Management Systems Help Boost Productivity Are Your Employees Happy?

Register Now!

Legally Speaking: What Is a Construction Attorney Good For?

March 26-29, 2015 Seattle, WA • See page 18

THE

ASA’s

February 2015

Features EDITORIAL PURPOSE The 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.

Creating an Organization Focused on Achieving Operational Excellence................................................. 6

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).

The Concrete Curtain: An Observation of the Construction Industry............................................................ 8

by Gregg Schoppman

by Gregg Schoppman

EDITORIAL STAFF Editor-in-Chief, Marc Ramsey

Managing the Prequalification Process..................................... 10

MISSION FASA was established in 1987 as a 501(c)(3) taxexempt 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.

by Steven Yapdiangco

Case Study: Acing Energy Efficiency in New Howard University Residence Halls.................................... 11

by Thomas J. Breslin

Improving Prefabrication and Field Productivity with Design Standardization.................................. 12

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

by Stephane McShane

Centralized Document Management Systems.......................... 16

by Jeff Burmeister

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

Are Your Employees Happy?.......................................................... 19

by Jamie Hasty

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

EDITORIAL SUBMISSIONS Contributing authors are encouraged to submit a brief abstract of their article idea before providing a fulllength 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 ASA ASA 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.

Departments CONTRACTOR COMMUNITY............................................................ 4 LEGALLY SPEAKING.......................................................................... 22 What Is a Construction Attorney Good For?

by Todd R. Nectoux and Richard Thomas

Quick Reference

LAYOUT Angela M Roe angelamroe@gmail.com © 2015 Foundation of the American Subcontractors Association, Inc.

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ASA/FASA CALENDAR..................................................................... 24 COMING UP....................................................................................... 24

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Contractor Community FMI Anchors SUBExcel 2015 Education Program

For a full schedule — complete with workshop descriptions — and other information, visit SUBExcel 2015.

FMI principal Gregg Schoppman will present four education modules anchoring the education program during SUBExcel 2015, ASA’s annual convention, which will take place March 26-29 at the Renaissance Seattle Hotel in Seattle, Wash.: • “Building Your Backlog — Regardless of Market Conditions.”

• “Leveraging Your Competitive Advantage by Improving Productivity.”

• “Elements of Cash Flow Management and Getting Paid, Turning Your Project Managers into Business Managers.”

• “Key Principles in Building an Enduring Organization.”

Registrants may wish to plan to arrive early to attend the President’s Welcome Reception from 5:30 p.m. to 7:30 p.m. on Wednesday, March 25. The Banquet Reception & Dinner will take place from 7:00 p.m. to 10:00 p.m. on Saturday, March 28, so registrants may want to schedule their departure flights on Sunday, March 29.

Keynote speaker Monroe Porter, president, PROOF Management Consultants, Richmond, Va., will present: • Opening General Session: “Confessions of an Industry Consultant — Industry Changes and What You Have to Do to Prosper.”

• “How to Find, Train and Motivate Employees.”

• “How to Sell and Negotiate Jobs.”

Be sure to read the brochure, watch the ASA video produced by Harrison Law Group, and “Like” the SUBExcel 2015 Facebook Event Page. For questions, please contact ASA Director of Chapter Services Linda Wilson or ASA Director of Communications Marc Ramsey.

ASA Chief Advocacy Officer E. Colette Nelson will present: • “Changing the Business Environment for Subcontractors: The Missing Element.”

Stephane McShane, Maxim Consulting Group, will present: • “Increasing Project Profitability With Effective Preconstruction Planning.”

• “Improve Prefabrication and Field Productivity With Design Standardization.”

Scott Wolfe Jr., CEO, zlien, New Orleans, La., will present: • Saturday General Session: “Is Your Computer Smarter Than You?”

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Reserve your room at the Renaissance Seattle Hotel, 515 Madison Street, Seattle, WA 98104 at the special rate of $169 single/double. The cutoff date for the room block is on or before 5:00 p.m. on Monday, March 2. Or, call 1 (877) 9016632 and identify yourself as a member of the “American Subcontractors Association 2015.”

General Contractors Invited to Participate in National GC Expo in Seattle In conjunction with SUBExcel 2015 in Seattle, ASA will host a national GC & Vendor Expo for general contractors and other exhibitors. SUBExcel 2015 is expected to attract more than 100 decision-makers from subcontracting firms across the county. General contractors are invited to participate in a reception from 4:30 p.m. to 6:30 p.m. on Thursday, March 26 and the Expo & Lunch from 12:15 p.m. to 1:30 p.m. on Friday, March 27.

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Additional networking and exhibition show hours include breakfast from 7:30 a.m. to 8:30 a.m. on March 27 and the Banquet Reception & Dinner from 7:00 p.m. to 10:00 p.m. on Saturday, March 28, giving GCs and subcontractors several opportunities to get to know each other.

For details, visit the GC & Vendor Expo section of the SUBExcel 2015 Web page.

ASA Asks Congress to Pass Legislation Improving Regulatory Process On Jan. 13, the House approved by a vote of 250 to 175, H.R. 185, a bill that would improve how federal agencies develop and publish regulations. ASA has long supported legislation that would make the regulatory process more transparent, agencies more accountable and regulations most costeffective. The bi-partisan “Regulatory Accountability Act of 2015” would amend the 69-year-old Administrative Procedures Act to enhance the regulatory process by: • Increasing public participation in shaping the most costly regulations before they are proposed.

• Requiring that agencies must choose the least costly option, unless they can demonstrate that public health, safety or welfare requires a more costly requirement.

• Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act. • Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well-tested and reviewed.

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Restricting agencies’ use of interim final regulations where no comments are taken before a regulation takes effect and providing for expedited judicial review of whether that approach is justified.

Providing for a more rigorous test in legal challenges for those regulations that would have the most impact.

ASA told the Congress: “Enactment of H.R. 185 would help agencies to narrowly tailor rules supported by strong and credible data and evidence, while imposing the lowest possible burden and still implementing Congressional intent.”

New OSHA Reporting Requirements Go Into Effect Effective Jan. 1, employers covered by the Occupational Safety and Health Administration are required to report all work-related fatalities within eight hours and all inpatient hospitalizations, amputations and losses of an eye within 24 hours of finding about the incident.

Previously, employers were required to report all workplace fatalities and when three or more workers were hospitalized in the same incident. Employers have three options for reporting these serious incidents to OSHA: • Call the nearest OSHA area office during normal business hours.

• Call the 24-hour OSHA hotline at 1-800-321-OSHA (1-800-321-6742).

• Report online at https://www.osha. gov/report_online.

Establishments located in states that operate their own safety and health programs (State Plan States) should check with their state agency for information on the implementation date of the new requirements. For more information, see ASA’s Frequently Asked Questions on OSHA Rule on Reporting Fatalities and Severe Injuries/Illnesses.

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Will the 114th Congress Consider ACA Reform?

With major business associations, including the U.S. Chamber of Commerce, indicating they intend to forgo efforts to repeal of the Affordable Care Act in the 114th Congress, ASA expects the focus to shift to targeted legislative reforms, including: • Amending the Definition of FullTime Employees for the Purposes of the Employer Mandate. The ACA defines a full-time employee as an employee who works 30 hours or more per week. Some businesses have raised concerns that this 30 hour definition will cause employers who are subject to the ACA to reduce employees’ hours below 30 hours in order to avoid providing them health coverage.

• Eliminating Excise Tax on High Cost Health Plans (“Cadillac Tax”). The socalled Cadillac Tax is a 40 percent tax on health insurance premiums that exceed certain thresholds, currently set at $10,200 for individuals and $27,500 for families. The original purpose of this tax was to eliminate high-cost plans and equalize health insurance coverage. For fully insured plans, this tax will be paid by the insurer, though most expect that the cost will be passed through to the consumers. The tax takes effect in 2018.

• Eliminating the Medical Device Tax. The ACA imposes an excise tax on manufacturers and importers on the sale of certain types of medical devices. Such businesses have raised concerns that this tax could impede innovation and hurt small business manufacturers.

of legislators, they are likely to stall.

Further, it remains unclear whether these amendments will be acceptable to the Administration.

Small Business Legislative Council Identifies Top Priorities for 2015 The Small Business Legislative Council’s top priorities for 2015 are tax reform, health care, regulatory relief and infrastructure. The SBLC will continue its efforts to support meaningful tax reforms that provide simplification and certainty for small businesses while opposing tax reforms that place an unequal burden on small and closely held businesses. The SBLC will also be focused on advancing legislation and regulations to improve the Affordable Care Act, as well as promoting infrastructure investment to protect the American economy and ensure that all businesses have the tools and systems needed for success and growth.

On the regulatory level, the SBLC will work to engage administrative agencies to address the high regulatory burdens which are stifling small business growth.

The SBLC is an independent, permanent coalition of 60 diverse national trade and professional associations whose goal is to maximize the advocacy and presence of small business on Federal legislative and regulatory policy issues, and to disseminate information on the impact of public policy on small businesses. ASA Chief Advocacy Officer E. Colette Nelson is a past chair of SBLC and currently serves on its Board of Directors.

These three proposals already have garnered bipartisan support and would likely pass in a stand-alone format.

However, if they are packaged with provisions less attractive to a majority

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Feature Creating an Organization Focused on Achieving Operational Excellence

by Gregg Schoppman If the recession taught the construction industry anything, it was to become razor sharp relative to productivity. Best of class laborintensive contractors understood that arbitrarily slicing margins and costs without the semblance of a true productivity improvement plan was short-sighted and ill-advised. All it achieved was adding low margin backlog with increased risk. As the economy continues to improve and firm backlogs grow steadily healthier, the same tenets that served contractors well in the rough times help them maintain competitiveness, and more importantly, improve the bottom line long-term. Often referred to as the “blocking and tackling” principles within the operations world, productivity best practices are as fundamental building blocks as dieting and exercising are to losing weight and becoming healthy.

For every fad diet, there are also ill-fated productivity improvement methodologies that promise quick transformation and dramatic results.

Ultimately, the only true productivity improvement comes from discipline and a commitment to organizational and individual behavior change.

The primary building blocks of any productivity improvement revolve around three specific areas — proper planning, collaborative communication and a steadfast ability to maintain accountability across the various stakeholders. True planning requires forethought and time. So often, managers and superintendents view planning as a distraction to the “true work” and fail to dedicate the appropriate level of resources.

Excuses abound when it comes to why they don’t plan — not enough time, things change too much to plan,

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job is too small/big, etc. Furthermore, the pervasive belief is that planning is simply a BOGSAT (bunch of guys sitting around talking) with no true action generated. The second element — collaborative communication — requires that the project team generate meaningful solutions and truly brainstorm from the project in totality to the daily planning.

Lastly, there must be a mechanism to ensure adherence otherwise the tools and processes will simply be viewed as “recommendations” rather than mandatory management best practices.

While there are many elements that encompass true project management and supervision, the foundation that all productivity improvement efforts should focus on include the following items in Figure 1: To provide additional context, the following definitions should

Figure 1 — The Foundation of Best of Class Productivity Improvement

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be applied so there is a true understanding of the elements within this foundation: • Pre-Construction Planning — This is a collaborative and structured set of planning meetings with not only the estimating and project management team but more importantly the field leadership.

Enough time is allowed for the individuals to do the requisite amount of preparation and “homework.” At the conclusion, the project team has a solid gamewinning strategy and everyone understands his or her role in that plan.

• Short Interval Planning — Not to be confused with scheduling, planning requires the field manager to storyboard the work over a week or two-week stretch and assign appropriate labor or trade partner resources. Peaks and valleys in said resources can be identified and key impediments to the plan can also be identified. Lastly, if the work is truly too dynamic to game plan, contingency or “Plan B” can be drafted. The planning tool is consistent across all field managers to eliminate variability from the dry erase board to the legal pad to the plan that only resides in the superintendent’s head.

• Daily Huddle — Paralleling a huddle in sports, this quick meeting in the field simply establishes the goal of the day. Using the aforementioned short interval plan and project budget, the field manager sets the target goal for the day (i.e.

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lengths of pipe, bays of steel, painted rooms, sheets of drywall, squares of roofing insulation, etc.). Additionally, the field manager can cover real time safety issues in conjunction with safety protocol such as job hazards analyses. Lastly, material and equipment needs in the shortterm are percolated to avoid work stoppages.

• Exit Strategy — Similar to preconstruction planning, the exit strategy can be considered the brainstorming associated with the last 10 percent of the project.

What is normally a pain point for contractors, the exit strategy allows for a structured approached to finishing strong. Done correctly, punch lists are done, closeout documents collected and ultimately the customers are satisfied that the project finished and did not linger like holiday leftovers.

• Post Job Review — This process allows for a thorough analysis of all projects not just the ones that fail to meet internal or external expectations. The process should be designed to gather customer intelligence, construction nuances and intricacies not shown on plans or specifications, internal personnel development, etc.

Lastly, this is an excellent vehicle to share the “final score” of the project.

As is depicted by the loop in Figure 1, each of these productivity elements feeds the other and ultimately becomes part of the next project. The lessons learned on one project should be exploited on other project by other project teams.

When examining a firm’s best practices, careful consideration should be given to the processes and the tools within the process.

Think of a process as the road map or

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illustration. For each of the elements above, there should be a starting point and termination point. Each step in the process should have an “owner” or someone within the firm that is ultimately responsible for its completion. Step by step, a veteran or new associate can follow the script for each process. By having a process, the firm not only has a tool that can be trained throughout, but also a way to enforce accountability.

The tools within the process are equally as important as the process.

Rather than live with a litany of disparate spreadsheets, documents and agendas, the firm creates one body of consistent tools. Reinventing the wheel on every project becomes times consuming to develop and also complicated to translate to every combination of individuals within the firm. Imagine a firm with five managers, 10 superintendents and 20 foremen. If every person had his or her own “operational tool kit,” consider how many permutations would exist within one firm. This is hardly a replicable model, nor is it one that follows a single “brand identity.” What if a Walmart, Apple, and McDonalds not only operated individually across their franchisees, stores and factories but also allowed individuality to exist within every associate within those singular locations?

A productivity best practice must be universal and firm-wide, not limited to one or two individuals within the firm. Often firms confuse great results by one individual with the existence of best practices. The end game of productivity improvement should be the inculcation of one standardized approach that the firm employs. “The Brand X” way becomes a replicable model that future generations expound upon and enhance. No different than the applications that reside on a smartphone, each of these processes will require enhancements

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and modifications. A firm must regularly evaluate the efficacy of its processes to ensure they are in fact driving better productivity.

Preconstruction Planning Version 2.0 or 3.0 is not uncommon and ensures each productivity element is germane to the current state of the business and ultimately guarantees long-term adoption.

While improving productivity within a firm may lack the glamour or allure of entering a new market, developing a new niche or even opening a new subsidiary, the long-term gains achieved in some cases provide more to the firm’s health. There is no silver bullet that drives better productivity.

Best of class firms should not be defined by their annual volume but by how they execute. Achieving operational excellence is the pinnacle every contractor should strive to achieve.

As a principal with FMI, Tampa, Fla., Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Schoppman will present four education modules at SUBExcel 2015 in Seattle. 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 multifamily 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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The Concrete Curtain: An Observation of the Construction Industry

by Gregg Schoppman Normally most consulting business trips begin and end with little fanfare.

From the fun associated with airport security to the monotony of the typical business hotel, business travel rarely looks as fanciful as George Clooney presents it in his Academynominated performances. However, many of the industry’s challenges are fun to triage and the solutions are equally rewarding to discover.

Imagine the intrigue associated with a consultative trip to Moscow during the chilliest international relations since the Cold War. Exit George Clooney, enter The Bourne Identity.

What might normally be a 10-minute travel search for a domestic flight and hotel, became an arduous two-week exercise to simply acquire work visas.

How different would the Russian construction marketplace be relative to our own? Ideologically speaking, there are only a few countries that might be as far apart from the United States. Would this parallel the construction industry?

Interestingly enough, there is quite a bit more in common than one might think. As part of the engagement, it became important to document observations and provide solutions. What began as a seemingly impossible task to assimilate in a new culture, muddle through a complicated language and

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navigate the quagmire of bureaucratic red tape, quickly morphed into an engagement with all too familiar a theme. The observations below are three of the most commonly aired observations from the client’s perspective.

“We don’t have time to plan on at the project outset — things happen too quickly to plan.”

Apparently, things eight time zones away are no different. Projects are awarded and in our fervor to get things done, we send crews, materials, equipment, trade partners, etc., to job sites with little to no planning. Why does any firm think this model will be successful? Even those contractors that create a “Job Book” for their field manager are leaps and bounds ahead, but it is imperative that some level of planning and face-to-face occurs.

There are those customers that will insist of having boots on the ground — in those cases, planning has to occur in tandem.

Excuses abound when it comes to preconstruction planning. Things happen too fast, the project is too small, the project is too big, the customer won’t allow us to plan, etc.

If firms expect to be more productive and more profitable, the excuses must

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cease. One of the primary reasons customers fail to buy into the notion of planning is because contractors fail to buy into planning. Planning is not simply “checking the boxes” but a constructive, collaborative dialogue that occurs between the office and field, estimating and operations, etc. with the end game being a winning project strategy.

“We get to the end of a project and just have enough time to start a new project, barely thinking of the one we just finished.”

The “Superintendent Shuffle” is not a dance exclusive to Western contractors. The superintendent that started a project rarely gets to finish his/her project as they are swooped away to begin the next big thing.

Getting to the end of a project and finishing string requires as much planning as the start. While analogies of a “Two-Minute Warning” may have been lost with the Russian contractor, contractors must develop an effective strategy to close out projects, cognizant of items such as demobilization plans, utility transfers, equipment returns, punch list completion, close-out documents, etc.

Often these items are afterthoughts that lead to margin erosion.

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The flip side to close-out is the project post mortem. If there is little time to close-out a project effectively, it is a safe bet that there is little done to evaluate the successes and challenges of a completed project. In this case, failing projects were only examined in the cases of catastrophic failure. A post-job review is less about sharing the wins and losses with the people that lived the project and more about sharing those lessons with the rest of the firm. Think of a post-job review as an opportunity to populate the firm’s “Wikipedia” of best practices. The “Lessons Learned Library” becomes an essential resource in training new associates wherever they are located.

“We have a real labor issue.

Most of our labor comes from outside of the country. Young, local ‘kids’ don’t want to be in the construction industry.”

It was easy to see the parallels of this conundrum. There is a distinct shortage of labor, worldwide, particularly amongst the trades.

Simply put, construction is a “dirty job” and regardless of your zip code, young people are not as interested in being part of this industry. While no one can argue the fact that construction is a rewarding career and one in which a decent living

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can be made, it is far from being the most desirable occupation.

While the Russian market might be lagging at this moment, the American construction market is on fire. So as backlogs surge, who will do the work?

While there may be no immediate solution to a large systemic problem, firms can work to secure the people they do have. First, it is important to realize the value of training and career development. Invest in the people within the firm. This doesn’t mean everyone has to have college tuition reimbursement, but spend the time to grow talent within the confines of the firm. Secondly, communicate with the people within the firm. This doesn’t mean leaving the income statement on the break room table, but it does mean sharing the direction of the firm with them. Additionally, it means listening to the firm. In many cases there is an awful lot of telling but very little in the way of true listening. Lastly, reward the top talent. Develop a sound, incentivebased compensation system that rewards the right behaviors.

Superstars should be compensated like superstars. The simple fact is, with a strong infrastructure built on talent development, robust internal communication and performancebased incentives, employees are content. It is when the first two areas become unsatisfied that associates

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look to one another and say, “I put up with all of this AND I only make $____.”

Moscow offered an insight into a world that many only read about in the news. To see the city from a business perspective rather than a simple tourist provided a glimpse into a construction industry far closer to its American peers than most would think. For all its bluster, once the Iron Curtin was pulled back, it was easy to see the similarities of the construction world.

As a principal with FMI, Tampa, Fla., Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Schoppman will present four education modules at SUBExcel 2015 in Seattle. 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 multifamily 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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Feature Managing the Prequalification Process

by Steven Yapdiangco Subcontractor qualification programs are becoming much more formal and sophisticated as general contractors step up their efforts to mitigate risk exposures in the projects they manage. As part of that shifting landscape, proactive qualification management is increasingly common, with subcontractors being asked to provide a great deal more information on their operations early in the bidding process.

Make no mistake: This trend will continue, and qualification management will increasingly play an important role in subcontractors’ dealings with general contractors — and a key determining factor in whether work ultimately is awarded.

By taking an active and collaborative approach, subcontractors can help steer the process to bring about the best possible outcomes for all stakeholders.

As qualification continues to evolve, several best practices have emerged that can help subcontractors present their organizations in the best possible light and ensure that qualification information is not misunderstood, misinterpreted or ignored.

Best Practices An important first step is to understand each general contractor’s priorities and key concerns with regard to subcontractor qualification.

In some cases, the GC may share such information up front. If no such information is provided, ask for it.

While qualification management seeks to address risks common to most projects, GCs still may have different primary concerns and objectives. Understand both the “how” and the “why” of the process.

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Determining such information is critical to ensuring a smooth, efficient and productive process for subcontractors.

For example, if financial stability is the paramount concern, make sure to present financials in sufficient detail. Likewise, if experience is most important, think about ways to tell a powerful story in communicating your organization’s bona fides.

In addition, provide complete and accurate information to the GC — and deliver it on time. Failure to do so prolongs the process and creates delays, which can lead to frustration on the part of the GC and possibly cost you the job. Ask for feedback — are you giving the GC what it needs? And, meet deadlines. General contractors are taking qualification seriously, and they expect the same of their potential project partners.

Another best practice is to ensure that a senior person at your organization reviews the entire submission before it is sent. Due to time constraints, a subcontractor may task an administrative employee with gathering and organizing all of the information requested. And, while having a point person for qualification efforts is helpful, it is important that all information is reviewed by the right person or people at the company. Failing to take that step can result in problems if incorrect or inadequate information is provided.

Additionally, don’t think you can rely just on your existing relationships at a general contractor firm, such as an estimator with whom you’ve worked in the past. Given the growing importance of qualification managers, subcontractors would do well to forge strong relationships with those individuals as well. They can help

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guide you through the qualification process — and may ultimately make the call on whether work is awarded.

Finally, ensure that the GC received the materials and that the information is complete. If you are using a qualification management technology solution, this step — and much of the processes described here — can be automated, ensuring everyone knows status in real time.

Open Discussion Above all, subcontractors need to be honest in reporting qualification information to general contractors.

While you will want to emphasize your strengths, you also should be up front about weaknesses, and you should engage the qualification manager to discuss them. When subcontractors are willing to have these conversations, general contractors more often than not will work with them to understand the story behind the numbers. Consider what qualification managers are thinking when they look at you.

Imagine what you would do in their situation, and try to tell your story accordingly.

If you fail to win the business due to qualifications, find out what went wrong and what you can do better next time. General contractors respond well to subcontractors that want to understand and improve, and they are likely to remember your organization going forward.

Steven Yapdiangco is a senior consultant and business development manager for Textura Corp.’s PreQualification Management (PQM™) solution. He can be reached at (847) 457-6510 or steven.yapdiangco@ texturacorp.com.

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Feature Case Study: Acing Energy Efficiency in New Howard University Residence Halls

by Thomas J. Breslin When it comes to earning high marks for energy efficiency in the mechanical construction of college dormitories, two new residence halls at Howard University in the District of Columbia are ranked at the top of the class. The high-efficiency heating and cooling system used in both buildings was built by Shapiro & Duncan, Inc.

Structural Setting College Hall North and College Hall South are the two newest student residence halls at Howard University.

Owned by the university and developed by Campus Apartments LLC, the new buildings house more than 1,300 students and staff in 700 units. The Clark Construction Group was the general contractor and Greenman-Pedersen was the mechanical engineer.

College Hall North, a seven-story building with basement, has 231,750 square feet of space; College Hall South, with six stories plus a terrace level, provides 138,477 square feet of space. The ground floor in each residence hall is a partial public space area with two classrooms plus several dorm rooms. From the second floor up, the configuration is dorm rooms with study lounges and a central social lounge on each floor.

Both facilities are designed to provide additional dorm room space in the future, as needed.

Students began moving in on Aug. 1, 2014. Both buildings were fully occupied in time for the start of Fall Semester classes on Aug. 25, 2014.

Challenges From an energy efficiency standpoint, the biggest engineering design challenge was finding a way to

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maximize efficiency while maintaining individual control in the dormitory setting. It was not enough to install high-efficiency equipment; proper control and use was needed.

Solution The high-efficiency solution started with 852 Daikin vertical stack water source heat pumps, each working off a central plant that uses cooling tower condenser water cycle. A cooling tower is one of the most efficient heat exchangers because it uses large fans blowing air over cascading water utilizing the heat of vaporization process to cool the water.

Each dorm room, classroom and study or social lounge has its own individually controlled heat pump.

Scheduling of heat pump operations is a major concern because classrooms and lounges will be unoccupied or have low occupancy at various times. The design team configured the HVAC system to reduce any waste of energy when a room is not being used.

The solution was to design a central control loop calibrated to provide a “deadband,” the temperature range in which the HVAC system is turned off.

The wider the deadband, the less the equipment turns on and off allowing it to run steadily at a more efficient level.

The second part to the solution was to limit the control the students have across the system. The central plant’s design in conjunction with a limiting thermostat control the space temperature to plus or minus 3 degrees allowing for the central plant to operate in its most efficient range.

Meanwhile, the hot water system uses Aerco high-efficiency condensing

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boilers that are 99.3 percent efficient.

Efficiency of standard boilers is in the low 80s.

Water flow is controlled by pumps with variable frequency drive that regulate how much water is used by each of the 852 Daikan heat pumps.

These VFDs are governed by pressure sensors. Water temperature is regulated by fans mounted with VFDs modulating the airflow across the cooling tower.

The end product is a HVAC system that gets the utmost in energy efficiency out of state-of-the-art technology, within the limitations imposed by the college dormitory setting.

Typically, a building owner is looking for the highest efficiency at the best price. High efficiency equipment is typically not cheaper and has a longer payback period.

Howard University was looking long term and was willing to pay a higher initial cost in return for substantial lower energy bills over an extended period.

Turning Green into Gold District of Columbia building codes now require all new construction to achieve at least LEED Silver certification. College Hall North and College Hall South, thanks in large part to the high efficiency HVAC system, are on track to receive LEED Gold certifications.

Thomas J. Breslin is a project engineer at Shapiro & Duncan, Inc., in Rockville, Md., a third generation family-owned mechanical contracting business serving customers in the D.C. area since 1976.

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Feature Improving Prefabrication and Field Productivity with Design Standardization

by Stephane McShane

Subcontractors and specialty trade contractors may be on the lookout for that silver bullet that will quickly and easily solve the problems of accelerating prefabrication and field productivity, but unfortunately, there is no quick and easy fix. There is, however, widespread agreement that prefabrication can save money. The percentage may vary, but the truth is the solution requires a focused effort and a bit of a paradigm shift.

Prefabrication allows for assemblies to be manufactured in controlled conditions, utilizing specialized tooling and equipment to expedite fabrication. Escalating the use of prefabrication can save significant labor dollars, but many contractors have difficulty making this happen.

Challenges can usually be solved with an enterprise level shift in how prefabrication operations are managed.

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When does your firm begin selecting the assemblies to prefabricate on a project? The most common answer is that the products to be prefabricated are determined by those who will be installing them.

In other words, the contractor bids a project, perhaps even designs the project, wins the project, and then turns it over to the operations group to build. Then, the operations team determines what could be prefabricated. Many even have a “prefab catalog” to help them visually flip through and choose products. This methodology has put a cap on what will run through your prefabrication shop, limited by the knowledge of the person looking through the catalog.

In the case of this example, does this particular foreman know everything that the prefab shop can do? Does the foreman have confidence in the ability of the design and prefab group

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to produce a high quality, usable assembly? Is there an adversarial relationship to overcome between the prefabrication shop and the field?

Stated differently, is there an “us vs. them” mentality entrenched in the notion that the prefabrication shop is taking work away from the field?

Organizations that have one or more of these challenges normally have severe limitations on how much they can prefabricate.

Regardless of what markets your organization serves, the choices on what products can be built in a prefabrication shop should be made prior to the award of the job, prior to designing the job, even prior to estimating the job. This should be done with some internal analysis by determining who your customers are, what their needs are, and how your design group, prefabrication shop and field installation teams can solve them.

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The Path to Design Standardization STEP 1: Define Your Customers Who are your customers? When is the last time you ran an analysis of your clients to see who you work for, and the revenue for each? How many projects did you build with them? What was the average project size? What scope or service did you provide to those clients?

STEP 2: Determine Your Customers’ Needs Next, identify your clients’ needs.

What vertical markets do they serve?

Some examples of vertical markets may be health care, industrial, commercial, institutional, and educational. Is the market changing?

Will their needs change? Are certain markets decreasing while others are on the upswing? Which markets do you want to focus on moving forward? This is critical, as the products you would install inside a

hospital may be entirely different than those products that you would install inside a strip mall.

STEP 3: Discuss What Products to Prefab Next, define standard assemblies.

This involves having structured conversations with all levels of operations, including those who install the actual products, to determine what could be regularly prefabricated within a vertical market.

Remember, the desired result is an increase in field productivity, so ask the installation experts for their ideas.

STEP 4: Create Standard Assemblies Now, develop standard designs for these products. Using a team approach comprising a cross section of operations staff, discuss and develop the parts and pieces to be utilized in each assembly.

The team should have some field personnel involved, because they

have tremendous insight as to what materials work well.

How many standard assemblies should you develop? Design standardization simply boils down to the standard assemblies that you will utilize in the majority of the projects inside any given vertical market sector. This does not mean thousands of assemblies whose pictures appear in a 3-inch thick catalog of prefab materials. Start by finding the 80 percent solution. Within a given vertical market, identify those assemblies that can be used in 80 percent of the projects within that market. From there, develop a standard design for that assembly.

A standard assembly should have the ability to have options, or slight changes to the design that can be noted as optional equipment, not designated as a completely new standard design. This enables you to limit the quantity of “standard assemblies” by allowing the use of options on a limited amount of

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assemblies. For example, a standard electrical box assembly might include a wall bracket, a box, ½-inch plaster ring, a ground pigtail, and a 15-foot piece of MC cable with a connector at the end. An option to this standard assembly might be to have a 20-foot piece of MC cable in lieu of the 15-foot piece, or a 5/8-inch plaster ring in lieu of a ½-inch mud ring. This would limit the amount of standard designs and give you the ability to build repeatable, scalable, productive processes in your prefabrication facilities and only manage the changes of options from the standards.

During this process, you should also establish your preferred manufacturer for each of the parts and pieces used in the standard assemblies. The fewer manufacturers you can utilize, the better. Although there will be exceptions where a different manufacturer or product must be used, these will become the company standard materials and all efforts will be made to utilize this standard whenever possible.

The use of consistent materials has some significant benefits. The first is that the workers in the field will see the same products over and over, thus reducing the learning curve on efficient installation of the product.

Second, it becomes easy to include the standard materials in a purchasing agreement with the vendors for orders for the prefabrication shop and the field across the entire portfolio of similar work, thus increasing the buying power of the organization.

Third, this will limit the amount of materials in the submittal package.

While engineers may push back, requiring whatever products they specify, you may choose a material that is equal to, or even superior to the average required by that vertical market. In doing an analysis, you may find that the cost of a more expensive or higher quality material item is more than offset by the labor savings in the prefab shop and in the field.

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The field and the prefab shop should utilize the same manufacturer and material in order to minimize the time spent on the learning curve.

By doing this for each vertical market you intend to serve, you will quickly come up with your standard assembly lists, complete with standard manufacturer’s part numbers and quantities needed to build these assemblies. You can then design the workflow, specialized tooling, material handling, and kitting/ packaging requirements for these standard assemblies to maximize the productivity inside of your prefabrication operation.

Driving the Throughput Now, it is time to drive the use of these standard assemblies into the design and estimating process.

Move the decision-maker for what will be prefabricated from the field operations team to the estimating and design group.

Estimating Database Synchronization The standard assemblies should be created inside your estimating database and used as the standard for takeoff. When an estimator has completed his or her work, you can quickly and easily obtain a preliminary count of those assemblies that could be manufactured for a project, broken down by the phases and areas that the estimator utilized.

Design Standardization The standard assemblies can be built into the design department’s standards and utilized during the design-build, design-assist, value engineering, or internal design and layout process. Since design occurs prior to field installation, this is the prime time to determine what should and should not be prefabricated. In that way, drawings that are designed for the field can be created with

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your standard assemblies already incorporated into them, thus facilitating their use and driving significantly higher throughput in your prefabrication operations.

By following this process, you have identified your customer base, what vertical markets they serve, what products can be used in the majority of those projects, and defined standard assemblies that fit the needs of those markets. You have standardized the manufacturers and products to be utilized in the organization to maximize the benefit of vendor partnership agreements.

You have embedded these standard assemblies into both your estimating and design departments in order to drive the increased use of prefabrication and standardization earlier in the lifespan of the project.

When you couple this long list of benefits with the increase in field productivity by them seeing the same assemblies created from the same materials, packaged in the same way, delivered in the same manner, and shown on the design drawings in a consistent fashion, the return on investment becomes ever more attractive.

Stephane McShane is an associate director at Maxim Consulting Group responsible for the evaluation and implementation processes with her clients. She works with construction-related firms of all sizes to evaluate business practices and assist with management challenges.

With a large depth of experience working in the construction industry, McShane is keenly aware of the business and, most specifically, operational challenges firms’ face. Her areas of expertise include leadership development, organizational assessments, strategic planning, project execution, business development, productivity improvement, and training programs.

McShane is an internationally recognized speaker, mentor, author, and teacher.

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Feature Centralized Document Management Systems

by Jeff Burmeister There’s no denying that the inherent risk in a construction project has never been greater. From design errors and omissions to incomplete drawings, unexpected site conditions, delays, cost overruns, disputes and claims, every project today has the potential to become a financial and legal nightmare.

Yet today, the lines of responsibility are blurred. Owners continue to aggressively transfer more of the project’s risk to their contractors.

And as this unwanted “hot potato” is passed down the chain, subcontractors end up bearing the brunt of today’s increased project risk.

Pressure from Above At the same time, owners, general contractors and construction management firms have become masters of documenting every project detail. To enable flawless and efficient document creation and control, these organizations long ago adopted document management software systems that allow them to protect their interests and continue shifting project risk downstream.

Furthermore, a new generation of young construction professionals is entering the industry. Unlike previous generations, these young, motivated construction professionals grew up around computers; they feel comfortable using technology in their work. And, by the time they enter the workforce, most have already been trained on how to thoroughly document projects using specialized software.

Realizing how critical document management has become to project and financial success, subcontractors have been placing a greater emphasis on project document management.

Yet, many are finding that effective document management is also very time consuming.

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Spreadsheets and Three-Ring Binders Razor-thin margins have forced the industry to cut costs and be more productive with a leaner team. And the homegrown manual systems most of these organizations are using to manage project documentation — word processing software, spreadsheets, paper, three-ring binders and expanding rows of filing cabinets — make it difficult to enable both thorough and efficient document management.

These approaches force alreadyoverworked project managers to spend more time in the office managing paper and less time making job site visits, developing creative solutions to project challenges or growing client relationships.

Manual approaches are also error prone and risky. Documents are rarely centralized in one location.

Project files or binders are often pulled from their locations and not returned. Document numbering and logging require separate log files.

Project managers develop tracking methods and systems others cannot easily follow. And, no reliable form of reporting or “flagging” can be created when thousands of documents are tucked away in file folders and file cabinets.

With so much at stake, subcontractors of all sizes and in virtually every trade need a better solution to this document management dilemma.

Centralized Document Management Systems Fortunately, there is a better alternative — one that enables the subcontractor to document projects more thoroughly yet spend less time managing paperwork. The solution: a

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centralized and subcontractor-tailored document management system.

A document management system designed for subcontractors allows organizations to document, communicate and archive project information in a consistent manner across all projects. These system help create, manage and track everything from RFIs to transmittals, submittals, general project correspondence, project-related emails, change order requests, daily reports, phone conversations logs and much more — all through a single, centralized database. These systems provide a number of critical benefits.

Improved Productivity In a business that is already plagued with low productivity, document management applications can greatly help project management staff get more done in less time.

In fact, companies that adopt a system find that productivity improvement is often the single biggest driver of return on investment.

That’s because these systems today automate time-consuming, yet important steps such as document numbering, entering of repeat data (e.g., project name, number and information; the contact’s name, address and phone number) and other necessary but ordinarily timeconsuming steps.

This allows project managers to spend less time behind their desks and more time managing projects and client relationships. In many cases, it also means fewer weekends in the office and more leisure time, leading to happier, more loyal employees.

Lower Risk The saying, “If it’s not on paper, it didn’t happen” accurately represents the realities of today’s construction

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business. No contractor can afford to be casual about generating and tracking project documentation. A document management system that streamlines the entire process of generating and tracking both incoming and outgoing project documents can greatly reduce a subcontractor’s risk of costly disputes, claims and litigation.

Centralizing this business-critical data prevents physical file folders and documents from being misplaced or lost. It also enables the entire project management team to work on the same set of data. This reduces the chance of generating conflicting information. Plus, it allows team members to more easily assist coworkers who may be on vacation or out of the office.

Reduced Legal Costs A system that automatically tracks, numbers and sorts every projectrelated document — and that can also easily link all documentation pertaining to specific issues — can help a subcontractor effectively defend his or her position and sometimes even prevent the escalation of the disagreement to a costly claim.

It also enables attorneys to spend less time reviewing and searching for documentation and more time preparing the case. With legal fees running from $200 to $400 per hour, every minute saved helps reduce costs and improve the bottom line.

Increased Revenue For overworked project managers, properly documenting change order work can be a challenge. Poor tracking of change order requests, however, often leads to unbilled work.

The right document management system can help prevent this all-toocommon scenario by simplifying the generation and tracking of change order requests. A centralized system allows the project manager to log a verbally issued change order in a matter of minutes, even seconds. He or she can also call the change in from the field to the office, and any user with remote access to the system can easily log the change order request.

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Once the change order request is in the system, project team members and senior management can easily see outstanding change order requests across all projects. They can even drill down to determine which change order requests need to be followed up on, decreasing the probability that any work goes unbilled.

Improved Company Image When all documentation coming out of a subcontractor’s office is consistent, organized and professional, it demonstrates to others that it is a well-run operation that takes project documentation seriously.

In an industry that sometimes stereotypes subcontractors as unprofessional and disorganized, having clean and consistent documentation can build client confidence and repeat business while preventing disagreements.

The message is clear: In today’s fiercely competitive construction landscape, subcontractors of all sizes and in all trades need to find new ways to create much-needed differentiation, competitive advantage and improved profitability. Document management systems hold the key to achieving this level of operational improvement.

Jeff Burmeister is president at Project DocControl, where he leads product implementation, marketing, development, partnership alliances, sales and client research of Project DocControl, a project management documentation and collaboration tool for specialty contractors. Project DocControl has been an ASA Gold Sponsor for more than 10 years.

He can be reached at (813) 9039446 or jeff.burmeister@ projectdoccontrol. com.

Faster Return on Investment The tangible and near-immediate benefits f a subcontractor-tailored document management system can enable subcontractors to enjoy a fast and significant return on their system’s investment. And unlike accounting or estimating systems, which tend to creep into the $20,000 to $30,000 range, most subcontractortailored document management systems require a much smaller investment.

That is why most subcontractors that implement a document management system enjoy a return on investment in just six to twelve months.

Moreover, users of subcontractor-tailored document management solutions point to their ease of use, their shorter learning curve and their ability to effectively tackle a pressing problem as key reasons for their high acceptance and adoption rates.

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IN THIS ARTICLE . . . �

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Subcontractors are placing greater emphasis on project document management.

Centralized and subcontractortailored document management systems are a solution.

Document management systems can help staff get more done in less time.

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Feature

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Feature Are Your Employees Happy?

by Jamie Hasty An organization’s employees are among its most valuable assets and managing them can be one of the most important, yet challenging, tasks required. Regardless of the size of the organization, management must be attentive to the motivation, productivity and satisfaction of employees, as these issues can have a direct impact the organization’s bottom line.

Many organizations are using employee surveys several times a year to create positive, proactive communications that will help identify potential service and morale issues. Management can then address those issues and improve the quality of service and develop a culture that retains employees.

However, not all employee surveys available on the market today are alike, and simply conducting regular employee surveys does not deem an organization proactive, nor does it make an organization effective, efficient or provide management with the necessary information to truly

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assess the health and culture of the organization.

There are several reasons why an employer may want to use an employee survey. A well-designed and effective employee survey can provide answers to critical management questions: • What are our strengths — what are we doing right? So many surveys focus on the negative.

Organizations must understand and/or emphasize what the organization is doing right.

• How can we improve our recruiting and employee retention practices?

So many employers are concerned about finding and keeping the right and best employees and a good survey will help answer these questions.

• What suggestions do employees and management have to improve efficiency and quality of service or production? An effective survey needs to focus on the total organization and not just what employees dislike.

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• How can we, as an organization,

improve our employee relations, thereby creating an organization and community perception of “a great place to work” and thereby allowing us to attract and retain a high-quality workforce, which equals efficiency and bottom line profitability?

Characteristics of Poor Surveys • The survey uses a 5-point scale

commonly ranging from strongly disagree to strongly agree. These surveys simply water down the results, producing skewed results.

The information provided is distributed across the 5-point scale and does not provide management with clear, understandable results.

Many organizations and managers like the 5-point scale simply because it does, in fact, skew the results and doesn’t provide an accurate report card.

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• The survey doesn’t ask the tough

questions specifically related to levels of management, including frontline supervisors. Most employee relations issues stem from an ineffective frontline supervisor and employee relationship.

• Employees perceive the survey to be a waste of time. Ineffective survey questions, over-surveying, lack of feedback or lack of action planning by management can turn employees off to the usefulness and value of conducting employee surveys.

• Employees believe their answers may be traced back to them. Most surveys ask non-threatening questions, and it is easy for employees to complete the question, especially on a 5-point scale, where they can pick a nonthreatening answer, re: “in the middle.”

• The survey is conducted online.

Online employee surveys may be cheaper or easier to conduct, but many employees fear the process and the lack of the organization’s ability to ensure confidentiality.

• The president and/or chief executive officer, or top management, is not visible during the process or in control of the process. If top management or leadership is not visible or involved, employees are unlikely to take the process seriously, and worse, responses are not being reviewed by the level of management that truly has the ability to drive change.

• Employers provide candy, gift cards, time off or other incentives for employees to complete surveys. If an organization needs to provide incentives, then the survey process is not working.

Employees will simply complete the survey in a non-threatening manner simply to receive whatever gift is being offered.

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Characteristics of Effective Surveys • The survey uses a favorable/

unfavorable response system.

• The survey asks tough questions,

but in a manner that employees feel 100 percent comfortable that their answers won’t be traced back to them.

• The survey is conducted no more than every 18 months to two years.

• Employee feedback sessions are conducted by the survey consultant.

• Management provides detailed follow-up action planning.

• Communications about what the organization plans to do with the results.

• The survey is administered onsite by an outside third-party consultant.

• Mail-in surveys are carefully planned and administered utilizing an outside third party and the outside third party is introduced onsite.

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• The survey has been validated by

an outside third party.

• The survey allows employees to respond and provide their opinion about the survey process itself. For example, “Is filling out this survey a good way to let management know how you think and feel about your job?”

• The survey allows for multiple attitude categories.

• The survey provides for satisfaction/morale ratings.

• The survey can be customized to include questions that are critical to your organization.

• The outside third party specializes

in human resources and is experienced helping organizations understand the survey results and how to effect change within the organization.

• The survey provides for openended responses that are typed verbatim.

• Employee surveys can be valuable communications tools for both large and small employers.

The difference is night and day between an ineffective survey that simply goes through the motions without capturing essential,

accurate data and one that effectively assesses a true picture of an organization’s culture and leads to positive culture change.

Avoiding a few critical missteps and making a few wise choices early on can make a world of difference.

Jamie Hasty is a Vice President with SESCO Management Consultants, Richmond, Va., and can be reached at (804) 931-6281 or Jamie@ sescomgt.com.

ASA and SESCO Team Up to Help Members Identify Issues That May Impede Productivity Employee morale is at the core of whether a company is profitable and successful.

SESCO Management Consultants and ASA have teamed up to provide a discounted employee satisfaction survey program to ASA members as an additional member benefit.

“One of the most effective communications programs an employer can engage is conducting an employee opinion or satisfaction survey,” said William E. Ford, president and CEO, SESCO Management Consultants, Bristol, Tenn.

“For 45 years, SESCO’s battle-tested survey has provided business owners and management with information to assess the level of morale in each department and the organization as a whole.”

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2014-15 ASA President Brian Johnson, Soil Consultants Inc., Charleston, S.C., added, “ASA is committed to helping its members identify employee relations issues that may be impeding optimum productivity and quality customer services.”

For each ASA member that joins the Management/ Employee Satisfaction Survey Program, SESCO will customize a survey that will be sent to the subcontractor’s employees.

The survey can be performed on- or off-site, by mail or online. SESCO receives the confidential survey responses, then supports each company in reviewing, understanding and addressing survey results.

The analysis will also include exclusive benchmarking to an ASA-member database.

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“SESCO consultants are fieldconsultants and as such, have the practical hands-on experience to assist members in properly understanding and utilizing the survey,” Ford noted. “The survey has been very successful in determining issues that cause absenteeism, questionable work performance, production-related issues and quality concerns. The survey also helps identify whether there are issues management is not aware of that could possibly be creating liability, such as illegal harassment, discrimination, or workers’ compensation and safety issues.”

ASA members interested in participating in the program may contact a SESCO consultant directly at (423) 764-4127 or sesco@sescomgt.com and identify themselves as ASA members.

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21

Legally Speaking What Is a Construction Attorney Good For?

by Todd R. Nectoux and Richard Thomas A good construction attorney can help a subcontractor make good decisions that impact the day-today and long-term success of the subcontractor’s business.

A subcontractor may wonder, “Why can’t I just use the attorney that prepared my will or incorporated my business?” A construction attorney is a lawyer whose practice focuses on representing businesses that work in the construction industry, such as contractors, subcontractors and suppliers. They are experts with specialized knowledge and experience (gained from analyzing and solving a variety of

IN THIS ARTICLE . . .

• Construction attorneys focus on representing businesses in the construction industry.

• Construction attorneys have specialized knowledge to help clients make good decisions.

• Construction attorneys can help subs gather information and evaluate the risks and benefits.

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construction-related legal issues) to help their clients make good decisions.

A subcontractor can and should make many business decisions without any input from a construction attorney. A subcontractor does not need legal advice to know how to pick which projects to pursue, how to estimate a project or how to install something. There are times, however, when legal advice from a construction attorney is helpful, and getting that advice doesn’t necessarily mean paying a lot of attorney fees. Pursuing an expensive lawsuit is not always the right decision. Many times a phone call or meeting to discuss a particular decision is all that is needed to get helpful information and insight from a construction attorney.

Being a successful subcontractor is no easy task and requires one to continually make decisions with consequences both large and small.

How does a subcontractor go about making these decisions?

Most advice on how to make a good decision includes, at least, the following two items: 1) Obtaining as much relevant information as possible and 2) Evaluating the risks and benefits of a potential decision.

Benjamin Franklin once said, “When confronted with two courses of action I jot down on a piece of paper all the arguments in favor of each one, then on the opposite side I write the arguments against each one. Then by weighing the arguments pro and con and cancelling them out, one against the other, I take the

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course indicated by what remains.”

A construction attorney can help a subcontractor gather relevant information and evaluate the risks and benefits of a particular decision.

Gathering Relevant Information The many laws that affect the construction industry are relevant information needed to make many decisions that subcontractors face. A general understanding of a particular law can often lead to a bad decision.

A construction attorney can provide an in-depth understanding of how the law will be interpreted and applied in a construction case. Construction attorneys are familiar with the numerous, potentially conflicting and constantly changing federal, state and local laws that affect the construction industry. They can efficiently gather and analyze the various statutes, codes and cases that apply to various construction issues such as delays/ accelerations, payment disputes and disputes over scope of work. Many times the particular area of law is one that the construction attorney has already spent a considerable amount of time analyzing, so advice can be provided quickly.

Understanding how a particular law is interpreted and applied is relevant not only to decisions that arise when there is an allegation of a failure to comply with a particular law. Such expertise is also relevant to decisions that arise when initially deciding how to comply with a particular law. Many disputes can be avoided by consulting a construction attorney BEFORE a dispute arises.

For instance, in Texas the mechanic’s lien laws are complicated.

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It can be very difficult for a subcontractor to know what has to be done in order to have a valid lien on a project. Calculating the deadlines for filing notices regarding nonpayment is frustrating without specialized knowledge. It would be logical to assume that you don’t have to notify an owner that payment has not been made until an invoice has remained unpaid for 60 to 90 days.

While logical, such an assumption for Texas project would probably cause the subcontractor to miss its notice deadline and lose its lien rights. A construction attorney is familiar with the subcontractor’s state lien laws and can ensure that the subcontractor preserves its lien rights and leverage for payment.

A construction attorney can also explain how construction contract documents, such as AIA and Consensus Docs contracts and proprietary subcontracts drafted by general contractors, are interpreted and applied by courts when a dispute arises. This expertise is valuable during a dispute, but it is also valuable when revising a proposed subcontract so that it is fair and reasonable.

As the old saying goes, “An ounce of prevention is worth a pound of cure,” consider contract reviews to be prevention therapy that a construction attorney can provide with minimal expense in order to minimize the odds of needing an expensive cure (lawsuit) later on. A construction attorney will make you aware of the rights and obligations that are contained in a subcontract and can also suggest revisions that can make the terms more fair and reasonable.

Construction law expertise is necessary to suggest effective

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revisions. Construction attorneys are a valuable source of relevant information when a subcontractor is making contract negotiation decisions.

A construction attorney can also assist a subcontractor with decisions regarding performing work outside your home state, terminating employees, purchasing software licenses, challenging insurance coverage, quitting a project, responding to the termination of a general contractor and calculating and asserting delay and labor inefficiency claims.

Evaluating Risks and Benefits In order to evaluate the risks and benefits of a particular decision, a subcontractor needs to identify those risks and benefits. In other words, the subcontractor needs experience dealing with the subject matter of a particular decision. Mark Twain said, “Good decisions come from experience. Experience comes from making bad decisions.” Why not benefit from a construction attorney’s experience?

A construction attorney has experience helping subcontractors — of various sizes and types — analyze and make numerous types of decisions that arise in running a successful subcontracting business.

Many times this means trying to avoid or minimize the consequences of past bad decisions. This experience typically includes understanding how and why the bad decision was made. This unique experience with construction issues allows a construction attorney to identify and

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understand risks and benefits of particular decisions that may face a subcontractor.

Obviously, for decisions that have only benefits and no risks or decisions that have extreme, unreasonable risk and no discernable benefit, a construction attorney is likely not needed. In many circumstances, however, the right decision is not so obvious or easily determined. Rather the circumstances are often complex and often contradictory, and the right decision is not initially obvious. A classic example of a complicated and complex decision for which a construction attorney can be of assistance is the decision to walk off a project. While the benefits of escaping from a bad project seem obvious, in many cases there are risks (costly liabilities) lurking in the shadows.

By getting help from a construction attorney, a subcontractor will be fully aware of the risks and benefits when making the decision, and possibly can minimize risks.

While construction attorneys do not perform construction work on a daily basis, they do assist subcontractors and suppliers with difficult constructed-related legal issues and decisions on a daily basis.

As such, construction attorneys have a wealth of relevant information and experience that can be valuable when making important decisions.

Todd R. Nectoux is a partner Thomas, Feldman & Wilshusen, L.L.P., a Dallas, Texas, law firm that concentrates in the area of construction law and related litigation. Richard Thomas of TF&W is legal counsel for ASA—North Texas Chapter. Mr. Nectoux can be reached at (241) 369-3008 or tnectoux@ tfandw.com.

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ASA/FASA Calendar Coming Up . . .

May 2015

26–29 — SUBExcel 2015 in Seattle, WA

12 — Webinar: Managing the Life Blood of Contracting - Cash Flow

April 2015

June 2015

1 — Webinar: Non-Negotiators’ Strategies for Negotiating Outstanding Results

9 — Webinar: Bidding from the Other Side: How GCs Use GradeBeam to Find Subcontractors

in the March 2015 Issue of ASA’s

THE

March 2015

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

Theme: Negotiating Strategies • The Ins and Outs of

Contract Negotiation

• Using the ASA Bid Proposal, ASA Addendum to Subcontract and ASA Short-Form Addendum to Subcontract

Win. Win. THE

• Non-Negotiators’ Strategies for Negotiating Outstanding Results

QQ

QQ

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.

That’s a win-win situation.

• Negotiation Strategies • Legally Speaking

Look for your issue in March.

Past Issues: Access online at www.contractors knowledgedepot.com

To advertise in The Contractor’s Compass, contact Tony Kozak at (716) 844-8174 or advertising@asa-hq.com

24

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T H E

C O N T R A C T O R ’ S

C O M P A S S

JUNE 5TH , 11:08 A .M .

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE IN AN INS TANT,

C A LV IN B ERGER SAW THE VA LU E O F IN - C A B B EH AV I O R TR A ININ G FRO M CN A

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.

To learn more about CNA’s coverages and programs for building contractors, contact your independent agent or visit www.cna.com/construction.

The examples provided in this material are for illustrative purposes only and any similarity to actual individuals, entities or places is 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 registered trademark of CNA Financial Corporation.

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