The Contractor's Compass March 2016

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ASA’s

THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION

WWW.ASAONLINE.COM

MARCH 2016

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Happy 50th Anniversary, ASA! Using ASA’s Subcontract Addenda The SLDF: ASA in the Courts What ASA Does— And What You May Not Know Legally Speaking: Mythbusters

Happy 50th Anniversary ASA!

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ASA’s

March 2016

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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.

Features Happy 50th Anniversary, ASA!................................................ 10

by American Subcontractors Association

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).

Using ASA’s Subcontract Addendum and Short-Form Addendum.................................................................... 12

EDITORIAL STAFF Editor-in-Chief, Marc Ramsey

by Eric Travers, Esq.

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.

The SLDF: ASA in the Courts........................................................... 14

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

by American Subcontractors Association

What ASA Does—And What You May Not Know..................... 18

by American Subcontractors Association

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

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

CONSTRUCTION IN THE COURTS.................................................... 8

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

LEGALLY SPEAKING.......................................................................... 20

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.

Mythbusters

by Joseph L. Katz, Esq.

Quick Reference

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.

ASA/FASA CALENDAR..................................................................... 22 COMING UP....................................................................................... 22

LAYOUT Angela M Roe angelamroe@gmail.com © 2016 Foundation of the American Subcontractors Association, Inc.

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Contractor Community

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ASA Asks California Supreme Court to Review ‘Strict Liability’ Decision

House Approves ASASupported Veterans Affairs Construction Reform

In a Jan. 29 letter, ASA and ASA of California petitioned the California Supreme Court to review a lower court decision that created strict liability against construction subcontractors.

In December 2015, a California Court of Appeal held in Jovana Hernandezcueva v. E.F. Brady Company, Inc. that a subcontractor can be held “strictly liable” for installing material on a project that complied with specifications which the subcontractor did not write, and which was approved by the architect. In its petition to the Supreme Court, ASA and ASAC wrote that the Court of Appeals decision “unduly broadened Strict Liability by adding subcontractors whose primary purpose is installing material specified and approved by others” thus adding “new and substantial risks on numerous California subcontractors.”

ASA argued that that lower court decision “is not supported by either prior law, or public policy because it imposes a risk on parties that cannot control the risk.” In a “friend of the court” brief with the Court of Appeal in September 2015, ASA argued that “[S]trict liability on subcontractors would place liability on a party who does not control the risk. It would also broaden liability in construction thereby raising insurance rates to contractors throughout California, which in turn would unnecessarily raise construction costs in a still struggling economic environment.”

The underlying dispute involved litigation by an individual dying of cancer allegedly caused by asbestos in products that E.F. Brady installed in a commercial building project as a drywall subcontractor in the 1970s.

The House of Representatives, on Feb. 9, approved H.R. 3106, the “Construction Reform Act of 2015.”

The ASA-supported bill would shift the U.S. Department of Veterans’ Affairs major construction program to another government entity.

Under the bill, VA construction projects over $100 million would be managed on a cost-reimbursable basis by another agency of the federal government, most likely either the U.S. Army Corps of Engineers or the General Services Administration, depending on the nature of the project. The Committee’s bill also includes language that gives the VA and any agency managing its construction program unambiguous statutory standards for the timely processing of change order requests from contractors arising under contracts for the construction or alteration of VA facilities.

In support of the H.R. 3106, ASA Chief Advocacy Officer E. Colette Nelson said, “Existing governmentwide regulations, and the mandated contract clause, authorize the contracting officer to unilaterally direct the contractor to make changes to its performance under the contract. The same contract clause imposes upon the contractor specific deadlines during which the contractor must make a request to the contracting officer for a decision.

The contractor’s request must include the contractor’s estimate of the costs to effect the government-directed change, as well as any adjustment to the time of performance. The contract clause imposes no deadlines on the contracting officer to render a decision regarding the contractor’s change order request.”

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ASA has suggested that a substantial portion of the cost overruns and schedule slippage on many troubled VA major construction projects can be attributed to the failure of the VA to take timely action on requests for change orders from the contractor.

Nelson added, “H.R. 3106 is an essential first step to addressing this fundamental problem at the VA. It may encourage similar improvement on a government-wide basis.”

The VA operates the nation’s largest integrated health care system with 150 medical centers, nearly 14,000 community-based outpatient clinics, community living centers, Vet Centers and Domiciliaries.

Nelson said, “ASA will continue to work with Congress to assure that the VA fully cooperates with the Army Corps, or other federal agency, at each stage of design and construction and both agencies have incentives to make timely decisions.”

ASA President Explores the Subcontractor-Surety Relationship “Construction subcontractors have a love-hate relationship with sureties,” ASA President Letitia Haley Barker, president, Haley-Greer, Inc., Dallas, Texas, told a gathering of representatives of Old Republic Insurance Group on Feb. 16.

Barker addressed the prequalification process, prime contractors’ untimely demands for subcontractor bonds, and prime contractor demands for on-demand terms in subcontractor surety bonds. Barker pointed out that prime contractors often report that their sureties require them to make these demands on construction subcontractors. Barker also addressed the value of payment bonds as a means of subcontractor payment assurance.

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“Subcontractors love payment bonds, wanting with all our hearts to believe that payment bonds will assure our payment if the prime contractor can’t or won’t pay us,” she said. “To the dismay of many in the surety industry, subcontractors refer to payment bonds as ‘a payment assurance of last resort.’ And too many subcontractors who have had to file a payment bond claim outright hate sureties.”

Barker went on to describe subcontractor difficulties with determining if a proper bond is in place, getting copies of their prime contractors’ payment bonds, prime contractor bond forms that make it almost impossible to file a successful claim, and surety foot-dragging on the review and investigation of subcontractor claims.

Barker thanked the surety industry’s principal associations, The Surety & Fidelity Association of America and the National Association of Surety Bond Producers, for their collaboration with ASA on numerous public policy issues, including regulating individual sureties and assuring that public-private partnership arrangements require that their construction portion of such contracts are bonded. However, she noted that “many subcontractors perceive that their association— ASA—works with the surety industry to enact laws to require payment bonds, and then sureties demand that their prime contractor clients require subs to waive their rights under a bond before they’ve even gotten paid.”

Barker called on the surety industry to continue to work with ASA on common interests, saying, “If subcontractors prosper, the surety industry will as well.”

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ASA Members Elect Robert Abney to Serve as 2016-17 President ASA members elected Robert Abney to serve as the Association’s 2016-17 President. Abney’s term will begin on July 1. He will succeed Letitia “Tish” Haley Barker, Haley-Greer, Inc., Dallas, Texas. Abney is the division president for the Southaven, Miss., branch of F.L. Crane, a contractor specializing in interior and exterior finishes.

ASA members also elected Jeff Banker, Banker Insulation, Chandler, Ariz., as vice president; Courtney Little, ACE Glass Construction Corporation, Little Rock, Ark., as treasurer; and Anthony Brooks, Platinum Drywall, Maumelle, Ark., as secretary. Officers serve a one-year term, July 1, 2016, through June 30, 2017.

ASA members elected Jason File, Les File Drywall, Inc., Albuquerque, N.M., and Jeff VanderLaan, Kent Companies, Inc., Grand Rapids, Mich., to the Board of Directors. These directors serve a three-year term, July 1, 2016, through June 30, 2019.

Abney joined F.L. Crane in 1994 while still in college and served in a variety of positions until he was promoted to division president in 2001. Abney is a past president of ASA of West Tennessee and led its merger into the now statewide ASA of Tennessee. F.L. Crane maintains membership in ASA of Alabama, ASA of Mississippi, and ASA of Tennessee.

At the national level, Abney first joined the ASA board in July 2008.

As ASA President, Abney will preside at meetings of ASA’s Board of Directors, Executive Committee and the membership of the Association.

He also will serve as the principal spokesperson for the Association and appoint the chairs, vice chairs and members of ASA committees and task forces.

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In his acceptance speech during ASA’s annual business meeting on March 5, Abney was honored and humbled to have been chosen as the Association’s next president.

“ASA has helped me prepare for my journey from naïve estimator to division manager,” he said. “One of the phrases that make me cringe is ‘we have always done it this way.’ The Cranes have always extended me the courtesy of great independence when it comes to running their division.

I found myself always seeking out better processes and sound practices to build upon.”

Abney noted that since his first ASA convention in Philadelphia, he has been connected with a group of non-competing peer subcontractors to discuss broad subjects including subcontract issues, technology options, and new tools to boost production to help him with his business plan. “These like-minded professionals are willing to share their successes and failures to help me and my team to grow best practices and be successful,” he said.

“For those of you that are attending for your first or second time, I highly encourage you to seek out your peers within our Association for the same reward.”

Abney said he is committed to continuing the “Build It Bigger” ASA membership drive, promoting the updated “ASA’s Professional Standard of Practice for Construction Subcontractors,” and furthering ASA’s industry-leading advocacy efforts.

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ASA Honors Individuals and Companies in Awards Gala During SUBExcel 2016 ASA presented the John H. Hampshire Distinguished Lifetime Service Award, the Outstanding Service Award, the President’s Award, the Excellence in Ethics Award, and the National Construction Best Practices Award during an awards gala on March 5 on board the luxury yacht The Biscayne Lady in Miami, Fla. The gala was held in conjunction with ASA’s annual convention and 50th anniversary celebration, SUBExcel 2016.

John H. Hampshire Distinguished Lifetime Service Award ASA bestowed its highest honor, the John H. Hampshire Distinguished Lifetime Service Award, for lifetime service to ASA and the construction industry on Walter Bazan Jr., Bazan Painting Co., St. Louis, Mo. John H. Hampshire, Inc., was a Baltimore, Md.-based subcontractor that helped found ASA, and the prestigious Hampshire award is presented to an individual who shares the vision of ASA’s early leaders and dedicates his or her lifetime working to achieve that vision. Bazan served as the 2012-13 ASA President and received this same award in 2007. The ASA Executive Committee was compelled to grant this award once again to Bazan because of his continued devotion and hard work on behalf of ASA. Outstanding Service Award ASA honored Anne Bigane Wilson, P.E., CPC, Bigane Paving Company, Chicago, Ill., and Richard B. Usher, Hill & Usher, LLC, Phoenix, Ariz., with ASA’s Outstanding Service Award.

This award recognizes an individual

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or individuals for “exemplary service to ASA.” Wilson served as the 200203 ASA President and continues to actively advocate for ethical contractor behavior, the end of predatory contract clauses, and the fair treatment of subcontractors and specialty trade contractors. Usher earned an Outstanding Service Award in 2002 and was the recipient of the 1990, 2007 and 2009 ASA President’s Award. He received the Hampshire award in 2001. Usher remains extremely involved in ASA and has been a leader on insurance and surety issues. He served on a risk management panel discussion on March 4 during SUBExcel 2016.

ASA President’s Award 2015-16 ASA President Letitia “Tish” Haley Barker, president of Haley-Greer, Inc., Dallas, Texas, presented the ASA President’s Award to Jason Wroblewski, vice president of project management, Haley-Greer, Inc. The ASA President’s Award is given annually by the current ASA president on a discretionary basis to an individual who has helped the president the most during his or her term. “For me,” Barker said, “there is one particular individual who has, in so many ways, made it possible for me to juggle both my job as president of Haley-Greer and serve as president of ASA.” Wroblewski began his career with Haley-Greer, Inc., in August 2004 as a project engineer. After learning the ropes, he was promoted to project manager, senior project manager and recently vice president of project management. With more than 20 years experience in the construction industry, Wroblewski has managed many of Haley-Greer’s larger projects, including BP Project Rodeo, GeoSouthern Energy, Texas Children’s Hospital NRI, Hall Arts Center, and the new One Legacy West and 1900 N. Pearl. Wroblewski has served on the

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Board of Directors at ASA–North Texas Chapter for the past two years. He also attends the national ASA events representing Haley-Greer, Inc., and ASA–North Texas Chapter.

Excellence in Ethics Award ASA presented its national Excellence in Ethics Award to 13 construction subcontractors for achieving “the highest standards of internal and external integrity for a subcontracting firm.” The recipients of the ethics award were: • Air Masters Corporation, Fenton, Mo. • Banker Insulation, Chandler, Ariz.

• Bazan Painting Company, St. Louis, Mo. • EyeSite Surveillance, Inc., Chandler, Ariz.

• F.A. Rohrbach, Inc., Allentown, Pa. • Haley-Greer, Inc., Dallas, Texas • Holes Incorporated, Houston, Texas • Kent Companies, Grand Rapids, Mich.

• Marek Brothers Systems, Inc., Houston, Texas • Markham Contracting Company, Inc., Phoenix, Ariz.

• Sorella Group, Inc., Overland Park, Kan. • South Valley Drywall, Littleton, Colo.

• Western Engineering Contractors, Inc., Loomis, Calif.

Applicants of the ethics award are required to respond to questions concerning the firm’s corporate ethics, policies and procedures, its construction practices, and its general business practices. Each applicant is also required to submit detailed documentation, including sealed letters of recommendation from a customer, a competitor, and a supplier.

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National Construction Best Practices Award ASA presented its National Construction Best Practices Award to Alberici Constructors, Inc., St. Louis, Mo., and Poole Anderson Construction, LLC, State College, Pa., for demonstrating “an extraordinary level of commitment to best industry practices.” General contractors and specialty trade contractors that have signed a contract within the past year directly with a construction owner under which it performs construction services are eligible to apply for ASA’s best practices award. This award honors general contractors and specialty trade contractors for their commitment to such practices as safety management, prompt payment, prompt processing of change requests and claims, and effective project scheduling and coordination.

Barker presented the Hampshire award, the Outstanding Service Award, and the President’s Award.

ASA Task Force on Ethics in the Construction Industry Chair Shannon MacArthur, MEMCO, Spring, Texas, announced the ethics and best practices award winners. Special thanks to Harrison Law Group, Towson, Md., for producing the awards video for ASA.

Senate Committee Approves ASA-Supported Construction Procurement Reforms The Senate Committee on Homeland Security and Governmental Affairs approved the “Construction Consensus Procurement Improvement Act” (S.1526) on Feb. 10. The bill, which was sponsored by Sen. Rob Portman (R-Ohio) and Sen. Maize Hirono (D-Hawaii), would limit one-step design-build procurement and require reporting on its use

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on a government-wide basis. The committee also approved a watereddown amendment to curb the use of reverse auctions on federal design and construction.

“ASA will continue to work with its industry partners to eliminate federal owner bid shopping through reverse auctions,” said ASA Chief Advocacy Officer E. Colette Nelson.

The Portman-Hirono bill is based on proposals by the Construction Industry Procurement Coalition, which is committed to improving the way the federal government purchases and manages design and construction services. ASA is a founding member of the coalition.

Electronic Logging Devices to Be Required Across Commercial Truck Industries The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration final rule requiring commercial truck industries to use electronic logging devices took effect on Feb. 16, although most companies are eligible for phasedin compliance. The rule is intended to improve roadway safety by employing technology to strengthen commercial truck drivers’ compliance with hours-of-service regulations that prevent fatigue.

Federal safety regulations limit the number of hours commercial drivers can be on-duty and still drive, as well as the number of hours spent driving.

These limitations are designed to prevent truck drivers from becoming fatigued while driving, and require that drivers take a work break and have a sufficient off-duty rest period before returning to on-duty status.

The four main elements of the ELD final rule include:

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• Requiring commercial truck drivers

who currently use paper log books to maintain hours-of-service records to adopt ELDs within two years. It is anticipated that approximately 3 million drivers will be impacted.

• Strictly prohibiting commercial driver harassment. The final rule provides both procedural and technical provisions designed to protect commercial truck drivers from harassment resulting from information generated by ELDs. • Setting technology specifications detailing performance and design requirements for ELDs so that manufacturers are able to produce compliant devices and systems— and purchasers can make informed decisions.

• Establishing new hours-of-service supporting document (shipping documents, fuel purchase receipts, etc.) requirements that will result in additional paperwork reductions. In most cases, a motor carrier would not be required to retain supporting documents verifying on-duty driving time.

Between Feb. 16, 2016, and Dec. 18, 2017, carriers and drivers subject to the rule can use paper logs, logging software, automatic on board recording devices, or ELDs that are registered on and listed on the FMCSA Web site for records of duty status. Between Dec. 18, 2017, and Dec. 16, 2019, carriers and drivers can use AOBRDS that were installed prior to Dec. 18, 2017, or certified, registered ELDs following rule publication on Dec. 16, 2015. After Dec. 16, 2019, all drivers and carriers subject to the rule must use certified, registered ELDs that comply with the requirements of the ELD regulations.

Further information, including a comprehensive, searchable list of frequently asked questions and a calendar of upcoming free training webinars is available at www.fmcsa. dot.gov/elds.

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Construction in the Courts Edited by R. Russell O’Rourke, Esq., partner and chair of the Construction Law Group, Meyers, Roman, Friedberg & Lewis, Cleveland, Ohio.

A brief review of recent cases that affect your business Arizona. Design professionals now join the ranks of construction contractors protected under Arizona’s prompt pay statutes, which create a standard payment billing cycle for Arizona contracts.

The recently enacted Arizona Design Professional Prompt Pay Act (see House Bill 2336) now applies to “design professionals” performing work on construction projects.

See A.R.S. §§ 28-411, 34-221, 34227, 41-2571, 41-2577 and 41-2583.

“Design professional services” include “architect services, engineer services, land surveying services, geologist services or landscape architect services…” Although several statutory schemes cover public construction projects, the Prompt Pay Act applies to all private projects.

How the Prompt Pay Act Works Step One: For applicable construction contracts, the general contractor submits payment applications to the owner every 30 days.

Step Two: Once the general contractor submits an invoice to the owner, the owner has 14 days to issue a written statement detailing those specific items that are not approved and certified. If the owner fails to

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issue a written objection within 14 days, the invoice is automatically certified and approved.

Step Three: Once the invoice is certified and approved, the owner must pay the general contractor within seven days.

Step Four: The general contractor must pay the subcontractors (which include design professionals and material suppliers) within seven days after payment is received from the owner.

Step Five: The owner must provide final payment within seven days after the general contractor completes the work and the owner certifies and approves the work.

Though seemingly contained in five easy steps, the Prompt Pay Act is riddled with nuances, exceptions, and technicalities. Whether an owner, general contractor, design professional, subcontractor, materialman or supplier, a party contracting in Arizona must be familiar with these provisions.

Rick Erickson and Nicole Sornsin are attorneys in Snell & Wilmer L.L.P.’s Construction Law practice group in Arizona. They can be reached at Rick’s email and Nicole’s email or (602) 3826000.

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Ohio. Friedrich Nietzsche once said, “It is impossible to suffer without making someone pay for it; every complaint already contains revenge.” Litigation, however, is no place for revenge, especially for employers. A question often asked by clients after they are sued, besides “How much is this going to cost me?” and “After I win can I collect my attorney fees?” is “How do I countersue?”

For various reasons, counterclaims against former employees against whom you are pitted in discrimination litigation are bad ideas. For one, unless you’ve suffered real harm, there exists a real risk that a jury will punish you for a perceived pettiness. Secondly, under wellestablished law, employees and ex-employee is protected from retaliation-by-counterclaim from suits that are objectively baseless.

In Lucarell v. Nationwide Mutual Ins. Co. , an Ohio appellate court took an employer’s protection from these retaliation claims one step further, by concluding that Ohio’s antiretaliation statute does not extend its protections to ex-employees, and that the filing of a counterclaim against an ex-employee cannot constitute an adverse employment action.

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That opinion, however, neither jives with the statute itself (which speaks of retaliation against any person, not any employee), nor other key judicial decision that permit an ex-employee to pursue a claim for retaliation.

Yet, merely because a company has a right to file a claim does not mean it will succeed on that claim. Indeed, the decision whether to pursue a claim against one who has brought a discrimination claim must be carefully thought out, and not merely done as a knee-jerk reaction to being sued.

Depending on the strength and merit of the counterclaim, its filing very well might result in more harm than good.

Or, as the great thinker Eddie Vedder said, “The best revenge is to live on and prove yourself.”

Jon Hyman is a partner in the Labor & Employment group at Meyers, Roman, Friedberg & Lewis. He is also the author of the Ohio Employer’s Law Blog, which the ABA Journal recently named to its legal blog Hall of Fame. Jon can be reached via email or (216) 831-0042.

Ohio. Do you have the right to enforce an arbitration clause in your contract? Yes, unless you “act inconsistently with the right to arbitrate,” or in English, if you have an arbitration clause in your contract, but file a lawsuit instead, you may not be able to enforce your right to arbitrate.

In the case, 84 Lumber Co v. O.C.H. Construction LLC v. Martin, 84

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sold materials to O.C.H. for the construction of a home for Martin.

While the contract between O.C.H. and Martin contained an arbitration clause, the purchase agreement between 84 and O.C.H. did not. 84 sued O.C.H. due to non-payment of the money owed for the materials used in the construction of the Martin house. O.C.H. had no defense to the 84 claims, but tried to dissuade/delay 84’s collection efforts by naming Martin as a third-party defendant.

O.C.H.’s claim was essentially, yes, I may owe 84 the money for the materials, but Martin owes me for the same materials, so get the money from them (such a claim may work to permit the O.C.H.s of the world to collect the money to pay the 84s of the world, but does not transfer the liability for the payment to 84 from O.C.H. to the Martins.

After O.C.H. filed its third-party claim, the Martins filed an answer and counterclaim against O.C.H. After the counterclaim was filed O.C.H. filed a motion to enforce the arbitration clause.

The Trial Court denied O.C.H.’s motion and the case was appealed.

The Court of Appeals found that the question of waiver is “fact-driven” and uses an “abuse of discretion” standard to determine whether the Trial Court’s decision should be reversed. O.C.H. argued that it filed its motion only 73 days after it filed

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the third-party complaint and 43 days after the Martins filed their counterclaim and that no discovery had been exchanged, so there was no prejudice to the Martins. It also argued that in a similar case Stoner v. Salon Lofts, the Trial Court ruled in favor of enforcing arbitration even though the motion was filed within give months of the responsive pleading and before the discovery cut-off, so the same should apply here.

The Court of Appeals disagreed on both counts holding that O.C.H. had waived its right to arbitrate. First, because it is an “abuse of discretion standard” so the trial court has wide latitude; Second, because in Stoner it was the defendant, not the (thirdparty) plaintiff, that filed to enforce arbitration; and Third, because the Martins were forced to file a response to the complaint and “forcing such a response defeats one of the primary objectives of arbitration.”

If you want to enforce your right to arbitrate, be careful not to act inconsistently with your right to arbitration or you leave it in the Court’s discretion as to whether you can change your mind.

Russell O’Rourke is a partner and Chair of the Construction Law Practice Group of the Cleveland, Ohio law firm Meyers, Roman, Friedberg & Lewis. He may be reached via email or (216) 831-0042.

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Feature Happy 50th Anniversary, ASA!

by American Subcontractors Association ASA’s 50th anniversary is a remarkable milestone, filled with countless accomplishments and successes as the Association has worked diligently to represent the rights and interests of construction subcontractors, specialty trade contractors and suppliers!

For 50 years, ASA has been dedicated to improving the business environment for subcontractors— through legislative and regulatory advocacy initiatives, representation in the courts, industry collaboration, improved contract terms and conditions, and providing valuable tools and resources, subcontractor education programs and webinars, model contract documents negotiation tips, and so much more!

The following is just a sampling of the great things ASA accomplished in 2015. For a complete look at ASA’s 50-year history, including milestones celebrated in 2015, be sure to check out ASA’s commemorative 50th anniversary book at the end of this edition of The Contractor’s Compass: • Fought for and won legislation that will ensure that subcontractors and suppliers on federal construction projects will have assurances that adequate and reliable security is in place to assure that they will be paid. In November, President Obama signed into law two key surety bond provisions as part of the National Defense Authorization Act of 2016. One provision requires individual sureties to pledge known and reliable assets to back their bonds, and to relinquish

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control of those pledged assets to the federal government. The second provision increases the bond guarantee from 70 percent to 90 percent to sureties in the bond guarantee program sponsored by the U.S. Small Business Administration.

• Supported the U.S. Small Business Administration’s proposed rule to simplify guidelines for determining affiliation for eligibility based on size for its Surety Bond Guarantee Program and four loan programs.

• Celebrated a “big win” for subcontractors in an Alabama CGL insurance case when an appeals court reversed an earlier court ruling that threatened the coverage for which subcontractors pay substantial premiums. The U.S. appeals court in the case of Pennsylvania National Mutual Casualty Insurance Company v. St. Catherine of Siena Parish affirmed that unexpected and unintended property damage is an “occurrence.” ASA filed an amicus brief in the case in July 2014.

• Filed an amicus brief in July 2015 in a major insurance coverage court case in Texas that has widespread implications for contractors and subcontractors as to coverage for defective construction and installation of particular parts, products, and equipment into construction projects. ASA, ASA of Texas, and other industry organizations filed the brief in the case of U.S. Metals, Inc. v. Liberty Mutual Group.

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• Called for “targeted Congressional

intervention” to improve the federal contracting process, saying specialty trade contractors continue to face obstacles to participation on federal construction projects.

• Petitioned with other construction industry associations the Office of Federal Procurement Policy to modify the Federal Acquisition Regulation to “make explicit” that before ordering a change to a construction contract the contracting officer must assure that funds are available to pay for additional work being ordered.

• Reviewed state laws authorizing construction projects to be financed by public-private partnerships and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds, and updated a comprehensive guide, “Public-Private Partnership Laws in the States, including Surety Bond Requirements” (2015 Edition), that will help subcontractors determine whether they have payment protections before they bid on a P3 project.

• Published “Anti-Forum Selection Clauses in the 50 States,” a comprehensive manual to help subcontractors understand how forum-selection clauses are treated in the 50 states and the District of Columbia.

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The Association’s work, however, is not done! Together, each and every one of us can continue to make a difference in our industry. We can educate ourselves about the issues that most impact our businesses— issues such as retainage, slow or non-payment, bid shopping, onerous contract terms, and many others!

We can volunteer, both at our local chapters and through service on national ASA committees and task forces. We can join grassroots ASA advocacy initiatives to fight legislation that negatively impacts our businesses and advocate for legislation that protects us and preserves our rights. We can donate to ASA’s Subcontractors Legal Defense Fund to ensure that subcontractors’ rights are represented in precedent-setting court cases. We can contribute to ASA’s Political Action Committee to ensure that we have funds to help elect members of Congress who support subcontractors on key issues like federal government procurement, occupational safety and health, and economic and tax policy.

And, we can participate in chapter and national ASA meetings, like SUBExcel, contributing and sharing our perspectives and expertise!

ASA members are the driving force behind all of ASA’s success! Whether it be at the local chapter level or through service at the national level, the more ASA members put into their membership, the more they get out of it! With members’ continued active involvement, ASA will do great things for the next 50 years and beyond!

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11

Feature Using ASA’s Subcontract Addendum and Short-Form Addendum

by Eric Travers, Esq. Unfortunately, it is all too common for construction subcontractors to be asked to sign subcontracts that are not fair. Or reasonable. The increasingly common ‘proprietary’ subcontracts drafted by or specifically for general contractors are among the worst offenders. Such subcontracts try to offload risks on many issues (pay-if-paid language, broad form indemnity, etc.) that are more naturally borne by others. Even more significant, many of these clauses are even more significant because they transfer risks that the subcontractor may not have accounted for when it priced the work for its bid.

The question for subcontractors becomes what to do about this.

While many subcontractors are hesitant to stand up for themselves out of fear of losing a job, prudent subcontractors realize that they have leverage and the right to negotiate more favorable terms with their customers. Subcontractors must (1) educate themselves on trends involving the most common risk shifting clauses as part of an overall risk management strategy; and (2) look for ways to streamline their review of proposed contract language to ensure that the subcontracts they sign are fair, reasonable, and consistent with their expectations.

In this regard, ASA provides its members with some tremendous resources for risk management education and contract negotiations. Some of the most useful of these tools are compiled together in ASA’s new “Subcontract Documents Suite 2016.” The Suite includes a wealth of documents that give subcontractors what Brian Cubbage, the ASA Task Force on Contract Documents Chair, called the “ammunition to fight back” against unfair subcontract terms.

These documents include the: • ASA Subcontractor Bid Proposal; • ASA Subcontract Addendum; • ASA Short-Form Subcontract Addendum • ASA Wrap-up Insurance Subcontract Conditions; and • ASA Wrap-up Insurance Bid Conditions.

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This article will focus on the subcontract addenda, particularly the full form, to show how and why ASA’s efforts in preparing these documents give its members a tremendous negotiation and risk management tool to strengthen your business and bottom line.

ASA Subcontract Addendum (Full and Short-Form) The Suite includes both a Short-Form Subcontract Addendum for smaller projects, and a full Subcontract Addendum that ASA members can use to modify the terms of a general contractor’s subcontract to create more balanced contract language.

The subcontract addenda are drafted to redress most common risk-shifting clauses to better reflect subcontractors’ interests.

To best use them, subcontractors should begin by prioritizing their position on key issues. Doing this can help you create a negotiation hierarchy of the issues (1) most vital to you that you cannot or will not move on (the “killer clauses”); (2) that are important but may negotiable; and (3) that are either not applicable or less important to you.

To start this analysis you don’t even need to have a subcontract in front of you. Why? Because each paragraph of the subcontract addenda addresses key areas of importance that ASA has already flagged. Thus, on its own the Subcontract Addendum in the Suite provides a roadmap to not only highlight the most common clauses of concern, but gives sample language to consider with your counsel as a way to negate the risk consistent with how you have ranked the issues.

Read the Addendum, Understand and Rank ‘Killer Clauses’ The ASA Subcontract Addendum addressed 25 specific risk areas. All the 25 paragraphs raise issues that need to be considered by prudent subcontractors as areas that can significantly increase the risk and cost of doing business. The

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table at right reviews just seven of those risks to illustrate how you can use the ASA addenda to flag and discuss issues internally and with your counsel.

Obviously, not all of the 25 areas addressed in the ASA Addendum may be a “killer” to your business. But they do need to be considered. However, the Addendum helps subcontractors spot issues that your business and legal team should consider when determining: (1) what clauses you will see have the potential to significantly shift risks to you that you did not expect (or account for in your bid price); (2) whether the impact of such clauses on your particular business is worth taking a stand on; and (3) how you wish to handle the clauses when preparing your bid (e.g., bid conditions, build in a risk premium) and ultimately when negotiating your contract when you get the job and a subcontract entirely inconsistent with your expectations arrives in the mail.

Effective subcontractors read their subcontracts and know what they say.

They also understand that when they sign on the dotted line they are committing to do what the agreement requires. In a world of increasingly unfair and slanted subcontracts, prudent subcontractors will take steps to both understand the most common risk shifting clauses and how they impact their work, and establish a framework within which they can negotiate key terms consistent with their priorities.

The subcontract addenda in the Suite do not replace the need for subcontractors to independently review the clauses internally and with construction counsel licensed in their state. But they are an integral tool ASA members can use to more quickly and cost-efficiently review contracts, and set themselves up to negotiate from a position of strength.

Eric Travers, Esq., is a director with Kegler, Brown, Hill & Ritter, Columbus, Ohio, practicing primarily in the firm’s Construction Law area, representing subcontractors, general contractors, owners, suppliers, architects, sureties, construction managers, and others. Kegler, Brown, Hill & Ritter, serves as legal counsel for ASA. Travers can be reached at (614) 462-5473 or etravers@keglerbrown.com.

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Clause

What it Does and Why is this a Potential Problem?

Commentary/Tips

ASA Addenda

Pay if Paid/ Contingent payment

Under general contract principles, a party cannot disclaim contractual responsibility on the basis of actions by a 3rd party. As such, the risk of owner non-payment or insolvency generally belongs to the prime contractor. Pay if paid (aka “contingent payment”) clauses shift that risk to the subcontractor by tying its right to work properly completed to the actions (and solvency) of the owner.

• On public jobs or jobs with a reliable and financially stable owner, a pay-if-paid clause may be less of a concern or ‘deal killer’ due to the lessened risk of owner nonpayment.

§ 5 of the ASA Addendum provides a mechanism to determine when payments are due, and expressly disclaims the use of pay if paid clauses.

In many states lien rights can be waived in advance, before even setting foot on the project site. Subcontract clauses that contain ‘no lien’ provisions may be enforceable in your state. If they are, you have lost valuable security for your work.

• A waiver of lien rights may be less concerning if the owner or general contractor has a payment bond in place. But if not, the clause takes away one of the most important security tools a subcontractors has to ensure payment for its work.

Advance contractual Waiver of lien and bond rights

• In many states a “Pay if Paid” clause will not prohibit your ability to file/record a mechanic’s lien. But even in those states it may affect your ability to foreclose a lien or bond claim. Consultation with a construction attorney in the state(s) where you work is advised to determine the level of risk you may face if you agree to these clauses.

Addendum §22 gives subs language that seeks to nullify any subcontract term that attempts to waive lien and bond rights.

• In some states contract provisions that purport to waive rights under a surety bond are void and unenforceable.

But such provisions may be enforceable in other states.

A ‘no damage for delay’ clause typically provides that if its work is delayed for any reason not its fault, it is entitled to a time extension but not additional compensation. Some states enforce these clauses. Some prohibit them. Because time is money, if you are working in a state that enforces these clauses, you can suffer a severe financial blow if your time on the job is extended, even if the delay is not your fault.

• Knowing whether your state enforces or prohibits nodamages-for-delay clauses is important. It could make the difference between this being a ‘killer’ clause or a non-issue.

Unconditional lien waivers may apply as soon as you sign the document, regardless of whether you received payment. If you are asked to sign an unconditional lien waiver before receiving payment, you could be found to have given up your right to a lien for that work even if the promised payment never comes.

• Because of the harsh results, unless you have absolute confidence your customer will make the payment, unconditional waivers should be considered no different than advance waivers of liens.

Flow down provisions in subcontracts are common clauses that incorporate the prime contract into the subcontract and “flow down” the prime contractors’ obligations into the subcontract, to bind the subcontractor to the prime contractor as the prime contractor is bound to the owner.

• This seemingly innocuous clause can have grave consequences to subcontractors, including potentially subrogating mechanic’s lien rights of subcontractors by binding them to a prime contractor’s lien subrogation agreement.

OSHA Fines and Safety

Most proprietary subcontracts may, either separately or through a broad indemnification clause, seek to pass through safety responsibility on the subcontractor, including indemnity for fines from OSHA.

In an era of heightened OSHA enforcement and the announcement of a dramatically increased schedule of fines for OSHA violations, subcontractors must pay attention to the risks of paying for their customers prior history with OSHA and/or possibly accepting responsibility for site safety that was the general contractors’ responsibility.

Besides the indemnification restriction in §143 of the Addendum (discussed below) §18 reasonably limits a subs’ responsibility for safety to what it contractually agreed to, and gives an argument against paying enhanced penalties if assessed due to the upper tier’s history.

Defense, indemnity, hold harmless clauses

Many proprietary form subcontracts include “indemnification” clauses providing that the sub must “defend,” “indemnify” or otherwise “hold harmless” the upper tier for damages alleged to be caused by the sub. Many states have ‘antiindemnity’ statutes that void broad form indemnity provisions that purport to require a party to indemnify another for damages that arise out of the indemnified party’s negligence.

• If the indemnity clause you are asked to sign requires you to “defend” as well as indemnify your customer regardless of fault, even in states that otherwise void broad form indemnity agreements you may still be found to have agreed to pay for your customers legal and other defense costs before it is proven that you caused the damage. Though you may not be required to indemnify for a judgment for damages you didn’t cause, paying the freight on the defense costs can hurt. Big time.

Addendum §13 mirrors the insurable (and reasonable) indemnification language in the ConsensusDocs and AIA subcontract and restricts the subcontractors liability to the risks in those widely accepted trade contracts.

No damage for delay

Unconditional lien waivers before payment

Flow Down Clauses

Addendum §8 deals with scheduling, and includes broad language designed to preserve your right to recover damages for delays.

• That said, even states that enforce no-damages-fordelay clauses typically have a number of exceptions to enforceability. But it is better to simply avoid the clause than rely on an exception.

Addendum §22 is designed to preserve a subs lien rights.

• A reasonable compromise if asked to agree to this is to propose giving a conditional lien waiver in advance, followed by a “trailing” unconditional lien waiver the following pay period.

Addendum § 1 clarifies the order of precedence regarding what terms prevail if there is a conflict. Addendum §3 makes any flow down obligations mutual by binding the contractor to you to the same extent the owner would be bound to it under the prime contract.

• You must request and review all ‘upstream’ documents incorporated into your contract and ensure that your subcontract contains clear language establishing an order of precedence to apply to any Addendum that contains your key or non-negotiable contract terms.

• Ensure that indemnity provisions you are signing are insurable by sending your insurance agent the actual indemnity provisions of the contract and ask your agent to affirm that the risk is insured.

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13

Feature The SLDF: ASA in the Courts

by American Subcontractors Association

The courts are a key battleground in the fight for subcontractor rights.

ASA’s Subcontractors Legal Defense Fund (SLDF) and the Foundation of ASA’s (FASA’s) Subcontractors Legal Research Fund (SLRF) support ASA’s critical legal activities to protect the interests of all construction subcontractors. Both funds invest in precedent-setting litigation to establish subcontractors’ rights.

This report summarizes ASA’s recent legal advocacy activities. For more information, including copies of the supporting documents for these cases, visit www.SLDF.net.

Joel Hernandezcueva vs. E.F. Brady Company, Inc. (strict liability for subcontractor installed product) On Jan. 29, 2016, ASA called on the California Supreme Court to review a Dec. 22, 2015, decision by the California Court of Appeals that a subcontractor can be held “strictly liable” for installing material on a project that complied with the specifications that the subcontractor did not write, and which was approved by the architect.

On Sept. 25, 2015, ASA, joined by two other associations, filed an amicus curiae brief with the appellate court, arguing that a subcontractor cannot be strictly liable for installing material that complied with specifications. “To impose a burden of strict liability on a subcontractor for installing material that complied with specifications because years later it is identified to have a dangerous component would impose liability on a party who did not specify or approve the material installed,” the organizations wrote. “Further, strict

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liability on subcontractors would place liability on a party who does not control the risk. It would also broaden liability in construction thereby raising insurance rates to contractors throughout California, which in turn would unnecessarily raise construction costs in a still struggling economic environment.

This would place undue burden on the Construction Industry that is unnecessary to protect the public.”

The underlying dispute involved litigation by an individual dying of cancer allegedly caused by asbestos in products that E.F. Brady Company, Inc., installed in a commercial building project as a drywall subcontractor to C.L. Peck Contractor in the 1970s. E.F. Brady purchased the products at issue (drywall, drywall compound, and fireproofing products) to complete its subcontract work on the building. Decades later, from 1992 to 1995, Joel Hernandezcueva was a janitor at the Fluor Daniels Building in Long Beach, Calif. Hernandezcueva’s job duties included cleaning up after improvement work and cleaning areas that contained the asbestos drywall and joint compound the subcontractor had installed in the 1970s.

Several years after leaving his job, Hernandezcueva was diagnosed with life-threatening mesothelioma. In 2013, Hernandezcueva and his wife sued numerous defendants, including the subcontractor. The plaintiffs claimed that Hernandezcueva contracted mesothelioma because of his exposure to asbestos in the Flour Daniels Building in the 1990s. They asserted several theories of recovery and sought to impose strict liability on

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the subcontractor. The subcontractor moved for Judgment of Partial Nonsuit, asking the court to dismiss the plaintiff’s strict liability claims against it. The subcontractor argued that strict liability does not apply to subcontractors. The subcontractor noted that the fire-proofing material was not its own product, it was not a manufacturer of the product, and it was not in the business of selling drywall, fireproofing or other construction products—it had merely purchased and installed the construction materials to complete its subcontract work.

The trial court agreed. It held that the subcontractor could not be strictly liable for installing the allegedly defective products at issue. The trial court allowed claims against the subcontractor to proceed only on the question of whether it was negligent when it installed the asbestos-related products. After a 17-day trial, the jury returned a verdict finding that Hernandezcueva suffered exposure to asbestos from products the subcontractor installed in the 1970s, but the subcontractor was not negligent.

ASA and the other organizations urged the California Court of Appeal to affirm the trial court ruling holding that E.F. Brady could not be strictly liable for installing material approved by the owner’s architect and required by its contract to comply with specifications that it did not write. “The decision of the trial court is in accord with established case law recognizing a clear distinction between a subcontractor, a manufacturer, and those who

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place a product into distribution,” the organizations wrote. “The equities courts have established through developing the doctrine of strict liability do not favor extending liability to one who installs materials that is (a) required by specifications prepared by others, (b) purchased from others, and (c) merely installed as required by Contract.” ASA and the others warned that if the appeals court reverses the trial court, “it will change long-standing California law and unfairly impose liability on California subcontractors for risks they do not control. This would be a severe inequity not only for E.F. Brady but for other future similarly situated subcontractors who call California home and help build this state.”

U.S. Metals, Inc. v. Liberty Mutual Group (CGL policy coverage) In a Dec. 4, 2015, opinion, the Texas Supreme Court limited commercial general liability coverage for contractors and manufacturers where a defective component is incorporated into a project, resulting in no physical damage, but nevertheless having to be replaced due to failure to met specifications or applicable industry standards.

On July 31, 2015, ASA, ASA of Texas, and other key construction industry organizations filed an amici curiae brief in a major construction insurance coverage case that has percolated through the court system.

The case involved the incorporation of a defective product into a refinery, but has widespread implications for contractors and subcontractors as to coverage for defective construction and installation of particular parts,

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products, and equipment into construction projects.

“Whether [contractors and subcontractors] can depend on their commercial general liability insurance policies for coverage for the many risks they face is a matter of continuing and urgent interest to them.”

In the underlying case, U.S. Metals, the insured, contracted to manufacture and supply 350 weld neck flanges for installation in Exxon refineries. U.S. Metals, in turn, subcontracted the manufacture of the flanges to Maass. The flanges were installed and welded in place by a separate contractor to Exxon. One flange leaked during pressure testing and Exxon contended that all of them were improperly manufactured and removed and replaced them all. Exxon sought damages from U.S. Metals for the costs associated with investigating the flange defect, requiring replacement flanges, removing and replacing the defective flanges, and the loss of use of its refineries, as well as incidental and consequential damages for a total of $20 million.

U.S. Metals eventually settled with Exxon for $6.3 million, and sought coverage from Liberty Mutual under its CGL policy. Liberty Mutual denied coverage based on the Your Product Exclusion, as well as the Impaired Property Exclusion. The case was removed to the U.S. District Court for the Southern District of Texas, and the district court granted summary judgment in favor of Liberty Mutual.

On appeal, the Fifth Circuit Court of Appeals, applying Texas law, certified

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several questions to the Texas Supreme Court as to the applicability of the Impaired Property Exclusion, even though certification was apparently not sought by either party.

Pennsylvania National Mutual Casualty Insurance Co. v. St. Catherine of Siena Parish et al. (CGL policy coverage) After ASA told a U.S. appeals court that construction insureds ought to be able to rely on their liability insurance to protect themselves from property damage arising out of inadvertent and alleged construction defects, on July 15, 2015, the appeals court agreed and reversed a district court ruling that threatened the coverage for which subcontractors pay substantial premiums. By affirming that unexpected and unintended property damage is an ‘occurrence,’ this common sense decision puts [the U.S. Court of Appeals for] the 11th Circuit solidly in the growing majority of states who are increasingly rejecting insurance companies’ attempts to use narrow policy exclusions to deny basic coverage for the very claims and damages that subs are told and expect will be insured when they buy that insurance.

In their amici curiae brief to the U.S. appeals court in July 2014 in the case of Pennsylvania National Mutual Casualty Insurance Company v. St. Catherine of Siena Parish, ASA, the Associated General Contractors of America, and the Alabama AGC noted: “Only a few months ago, the Alabama Supreme Court issued its opinion in Owners Ins. v. Jim Carr, a case that confirmed coverage for construction defects under Alabama

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15

New On-demand Video from FASA TM

When 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.

Contractors’ Knowledge Network

“Negotiating Retainage” (Item #8086) Subcontractors can learn effective strategies for convincing general contractors to reduce or eliminate retainage in the FASA videoon-demand, “Negotiating Retainage” (Item #8086). Presenter Eric Travers, Esq., Kegler, Brown, Hill & Ritter, Columbus, Ohio, ASA’s general counsel, explains how subcontractors can broach the topic of reducing or eliminating retainage with their clients and how to negotiate from a position of strength. He also illustrates how subcontractors can modify their bids to reduce or wholly eliminate retainage, including discouraging withholding for closeout line items. $65 Members; $95 Nonmembers

Order online at www.contractorsknowledgedepot.com or call ( 703 ) 684-3450, Ext. 1321

law. The district court’s application of the Contractual Liability Exclusion supports a back door circumvention of that coverage through an unwarranted over-extension of the Contractual Liability Exclusion. Taken to its logical end, that over-extension will result in the elimination of the coverage preserved in Jim Carr.

Therefore, Amici Curiae request the court reverse the district court and render judgment in favor of St. Catherine’s ...”

In the underlying case, the dispute involved a project by the parish to replace the roof on two of its buildings with a 40-year roof shingle. The parish contracted with Kiker Corporation for the work, and Kiker obtained a commercial general liability policy through carrier Penn National. The policy provided coverage to claims for property damage caused by an “occurrence” and defined an occurrence as “an accident.” The policy also contained the standard “your work” and “contractual liability” exclusions.

Kiker subcontracted the roofing portion of the work and work was completed in March 2004 on one building and in February 2005 on the second building. The second building almost immediately began leaking and two years later the first building also began to leak, causing extensive damage to the gypsum substrate of the roof as well as the interior and ceiling of the buildings. Despite repair efforts, the problems were not fixed and the parish hired a roof inspector, who investigated and claimed the leaks were caused by installation errors, construction defects, and other

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breaches by Kiker. The parish sued and, though Penn National defended Kiker, it did so under a reservation of rights, claiming there would be no coverage under the policy for damages caused by a breach of contract or breach of warranty.

At trial, the jury awarded the parish $350,000 in compensatory damages for breach of contract. After the verdict, Penn National initiated a declaratory judgment action in federal court asking the U.S. District Court for the Southern District of Alabama to determine whether it was responsible to indemnify Kiker and pay the verdict. Penn National argued it had no such obligation because a breach of contract claim was not an “occurrence” under the policy and even if such claims were an occurrence, the contractual liability and/or “your work” exclusions would bar recovery. The U.S. District Court for the Southern District of Alabama held that there was coverage for the property damage caused by the leaks because an “accident” meant an unintended and unforeseen injury and the allegedly faulty workmanship led to damage to other areas of the structure and thus damage beyond simply the cost to replace the defective roof. The court held that the “your work” exclusion did not bar recovery for the cost of the defective roof replacement because the subcontractor had performed the roofing work. However, the court used the “contractual liability” exclusion to deny coverage of any claims

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arising from a breach of contract, stating “under binding Alabama law the breach of contract claim and the implied warranty claim are excluded from coverage under the contractual liability exclusion.” Kiker petitioned the 11th Circuit Court of Appeals asking it to reverse or certify the question of the breach of the contractual liability exclusion to the Alabama Supreme Court.

In their brief, ASA, AGC and the Alabama AGC wrote: “The proposition that an insurer should not be obligated to pay claims that are outside the coverage of the policy is not astounding. However, some insurers are extremely adept at finding reasons, some would say excuses, to deny what otherwise appear to be claims more than arguably within the coverage of the policy. This is particularly true as to claims involving allegedly defective workmanship by insured contractors under their commercial general liability policies, and if the position advocated by Pennsylvania National is adopted by this Court, insurers will invariably have yet another excuse to deny legitimate claims.”

ASA, AGC and the Alabama AGC further argued in their brief that “applying the Contractual Liability Exclusion to property damage to an insured contractor’s work simply because that property damage may breach its contract has a profoundly negative effect on CGL coverage for the construction industry. It is nothing short of a radical departure from the means by which CGL coverage has traditionally been marketed and provided by the insurance industry to contractors.”

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17

Feature What ASA Does—And What You May Not Know

by American Subcontractors Association ASA members know their membership provides numerous valuable opportunities, such as business education, networking, government advocacy and representation, and news and information about issues that most affect subcontractors. There are many benefits of membership, however, that members may not be aware of that ASA provides. Here are some highlights that you may not have thought about …

Legislative Advocacy ASA has amplified the voice of trade contractors to improve the construction industry for 50 years.

ASA commemorated its 50th anniversary this month during SUBExcel 2016 in Miami. Indeed, ASA represents subcontractors on issues of most importance to them before all branches of government—legislative, judicial, and executive—and all levels of government, federal, state, and local. There is no other association that focuses on subcontractor-specific issues such as prompt payment, retainage, contracts, liens and bond claims, bid shopping, and many others.

Judicial Advocacy Each year, courts across the country hand down hundreds of decisions on federal and state laws, as well as court-made or “case” law, that apply to subcontractors’ businesses. Some of these decisions are precedent-setting and carry significance for subcontractors across state lines. ASA’s Subcontractors Legal Defense Fund supports ASA’s critical legal activities in precedentsetting cases to protect the interests of all subcontractors. ASA taps the SLDF to fund amicus curiae briefs in

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appellate-level cases that would have a significant impact on subcontractor rights. No other subcontractor association has an active advocacy effort in the courts.

Executive Advocacy Improved tax and other regulatory requirements help subcontractors better manage their cash-flow intensive businesses. ASA educates public officials about how regulatory changes, including changes to the tax code, would impact subcontracting firms. ASA communicates with members of Congress and regulators at the U.S. Internal Revenue Service and other agencies, and works through coalitions such as the Small Business Legislative Council and the Government Withholding Relief Coalition. ASA also educates subcontractors about how new regulations will impact subcontractors’ businesses, including how these changes may impact contractual relationships.

Members-Only Resources ASA members are given access to an exclusive area of the ASA Web site containing resources and materials to assist them with their business needs—from model contract documents, including the ASA Subcontract Documents Suite, and negotiating tips to comprehensive manuals, such as “Contingent Payment Clauses in the 50 States” and “Retainage Law in the 50 States.” Members also have access to dozens of free audio podcasts and complementary white papers, as well as discount pricing on “Lien and Bond Claims in the 50 States,” videoson-demand, education webinars, and many other complimentary tools to help members improve their businesses.

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Annual Convention In addition to remote, online education offerings, ASA provides in-person education workshops and sessions during its annual convention, SUBExcel, giving subcontractors the opportunity to learn ways to improve their businesses, better understand advocacy and contract issues that are critical to their business’s success, develop leadership skills and cultivate future leaders for their companies, and network with colleagues, peers, and potential business partners and customers.

News & Publications ASA’s weekly e-news bulletin, ASAtoday, provides the latest news and information about issues that specifically affect subcontractors.

Articles are written by ASA staff experts on government advocacy and communications issues and are tailored especially for subcontractors.

The Contractor’s Compass, ASA’s monthly educational journal, contains feature articles that delve deeper into subcontractor issues, giving subcontractors a broad perspective and understanding about issues that are most important to them.

Articles are written by industry experts, hand-selected by ASA staff, to give subcontractors the most comprehensive guidance on particular topics and real information they can use immediately.

Online Membership Directory ASA helps foster networking among its members—and helps facilitate business opportunities—by offering a complimentary online membership directory that visitors to the ASA Web site can search by trade, organization, or member’s last name. It is a networking and advertising tool that gives members extra exposure and visibility to the construction industry.

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Human Resources ASA members are eligible to receive complimentary human resources services provided by SESCO Management Consulting, including telephone and email consultation, handbook review, and access to the monthly SESCO Report newsletter. SESCO also offers a discount employee satisfaction survey program to ASA members.

ASAdvantage Program ASA members are eligible for generous discounts and exclusive pricing on products and services provided by ASA sponsors and other companies participating in ASA’s affinity program, the ASAdvantage.

For example, qualified ASA members can save up to 22 percent off their corporate Verizon Wireless plans through ASAdvantage program participant National Purchasing Partners. These are tangible benefits that allow members to easily cover the cost of their annual membership dues.

Awards Through ASA’s Excellence in Ethics Awards program, ASA helps its members establish formal ethics programs, opening the door for them to bid on projects where such programs are required. The program also helps members distinguish their companies from their competitors that don’t have such ethics programs, while providing national recognition for their commitment to the highest standards of internal and external integrity. Through ASA’s National Construction Best Practices Awards, ASA facilitates best industry practices like prompt payment by recognizing superior prime contractors for such practices that are critical to subcontractors’ success. The criteria for these awards set an extremely high bar, making them intentionally difficult for most primes to reach, and

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serve as a bold incentive for primes to adopt these superior business practices that are so important to subcontractors.

ConsensusDocs ASA promotes best practices within the construction industry by working with other industry associations, like the ConsensusDocs coalition, to develop and publish project management best practices and model contract language that is equitable to all members of the construction project team.

ASA is a founding member of the ConsensusDocs coalition, a group of more than 40 industry organizations that collaborate to make contract language fair for all parties on a construction project. ASA members save 20 percent off ConsensusDocs’ library of 100-plus contract documents.

Community ASA amplifies the voice of and leads trade contractors to improve the business environment for the construction industry and to serve as a steward for the community.

The ideals and beliefs of ASA are ethical and equitable business practices, quality construction, a safe and healthy work environment, integrity, and membership diversity.

ASA participates in several industry coalitions and collaboratives on behalf of subcontractors. For example, ASA representatives meet annually with officials from the Associated General Contractors of America to discuss top industry and public policy issues. In April 2015, the two organizations discussed the U.S. Department of Veteran Affairs’ construction program, federal procurement reform for construction, the impact of tax reform on passthrough entities, infrastructure funding, OSHA activities, labor shortages in the construction industry, and ConsensusDocs.

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Chapter Services ASA is committed to helping its chapters across the country succeed.

ASA’s talented and experienced staff members serve as valuable resources in government advocacy, association management, membership recruitment and retention, marketing and communications, and more!

ASA also provides a Chapter Toolbox containing a robust library of tools and resources to help chapters and their members achieve their goals— without having to reinvent the wheel.

Furthermore, ASA offers its Direct Collect Program to relieve chapters of the administrative and financial burdens of invoicing and managing member renewals, giving chapters the ability to focus on other priorities important to their chapters.

Local Chapters Of course, each ASA chapter or affiliated organization also offers special, local programming, events, networking opportunities, and many other benefits for subcontractors.

Committees and Task Forces ASA members are eligible to volunteer to serve on several chapter and national committees and task forces, which allows them to get involved, build relationships with each other, and exponentially increase the value of their membership in ASA, both professionally and personally. When members work on committees and task forces, they have a broader and deeper understanding about the issues that most affect subcontractors, a sense of community and accomplishment by participating in something greater than themselves and making a difference in their greater industry community, and create lifelong friends.

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19

Legally Speaking

Mythbusters

by Joseph L. Katz, Esq. In my practice, I regularly encounter clients—both newcomers to the construction industry as well as veteran, second- or third-generation players—who have a firmly-held belief which is not always soundly based in the law. The reasons for this abound; but often, it is because a similar situation happened to a colleague, friend, or even competitor and that outcome has entrenched itself as “The Law” in my clients’ mind. There can be a myriad of factors, however, that contribute to any specific outcome, and a one-size-fits-all approach simply does not work in the construction industry.

Often, a legal ruling will turn on nuanced subcontract language, the placement of a comma versus a period in the spec book, or the contents of a one line email sent sometime during the project. There are, however, certain common misconceptions which I believe hold subcontractors back from fully asserting and protecting their legal rights during and after a project. Worse, some of these missteps can significantly prejudice their case by the time they come to me for help. I would like to take this opportunity to explore—and debunk— the four most common legal myths I have encountered in 10 years of representing subcontractors.

20

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Myth #1—Email Communications are not legally binding.

Today, email has virtually replaced the old-fashioned letter, or even fax, for all but the most important of communications. It is instantaneous, effective, efficient, and easily accessed from anywhere in the world. Yet, many still believe that email cannot suffice to provide notice, make or accept change orders, or otherwise have much legal effect. This cannot be further from the truth.

In my practice, I advise my clients to make use of email specifically to memorialize oral conversations or agreements they have reached with the project manager or superintendent, to provide notice of any condition delaying or impacting their work, and to follow-up on unmet commitments or missed deadlines.

When a critical email is ignored, I urge my clients to resend it in its identical format, but with a bold “SECOND REQUEST” header, and to continue day after day until answered. I don’t think anyone reached a “FOURTH REQUEST” without having received a reply.

I also caution my clients not to ever write anything they would not want read aloud in a courtroom, because that is a virtual certainty to occur if the email is relevant—and damaging—to their trial position. Be aware that published cases have held an electronic signature—which can be as simple as your name appearing at the end of your message—meets a

T H E

contractual requirement for a signed change order. Note, I do not advise email as a complete replacement to the traditional signed change order, notice of delay, etc. Rather, email should be used routinely to follow-up and confirm your understanding of the situation, and in this way it can serve as a stopgap measure in the event of any future disputes.

Definitely do not delete emails once litigation becomes a reasonable possibility, which is essentially any dispute-related item, as that can be deemed by the court as destruction of evidence and sanctionable. In fact, when I collect the relevant documents I will need to review and pursue a case, one of the first things I ask for are all the emails on the job, both to develop the case strategy and/or defense, and to ensure their preservation throughout the length of the case.

In short, email has become perhaps the most widely utilized tool in construction litigation cases and can single-handedly win, or lose, cases.

Use it wisely.

Myth #2—As long as the owner has not paid there is nothing I can do.

Thanks in large part to the ASA’s advocacy on both a national level and grassroots, state-by-state lobbying efforts, more and more is being done about draconian “pay-if-paid” and “pay-when-paid” provisions. California, Delaware, Nevada, New York, North Carolina, and South Carolina ban the provision outright.

C O N T R A C T O R ’ S

C O M P A S S

Other jurisdictions, including Maryland and now the District of Columbia, have passed a law that while a pay-if-paid provision can be enforced by a general contractor, it cannot be used by an owner or surety in defending a mechanic’s lien or payment bond claim. Illinois and Indiana have similar statutes, as does Ohio (as to a mechanic’s lien only). In all jurisdictions, timely preservation of those rights is critical to ensuring a successful outcome and ultimately, payment of your claim regardless of whether the owner has paid the GC. Many owners—and even more so their lenders—become loathe at the idea of a mechanic’s lien against the property, and a lien notice can often speed up the owner’s payment.

Options remain, however, even in those jurisdictions which have not (yet!) legislated against the pay-if-paid clause. One avenue used successfully around the pay-if-paid clause is the prevention doctrine, which provides that if a party to a contract is itself preventing the fulfillment of the contract, that party becomes liable for that which it “prevented.” Applied in a pay-if-paid situation, depending on the particular facts, a subcontractor may successfully argue that it is the general contractor itself who is preventing payment from the owner and as such, cannot shelter behind the pay-if-paid clause to avoid paying its subcontractors.

Stopping work may be another option, if permitted by your subcontract and/or other applicable law. Of course, negotiating a pay contingency out of your contract—or at the very least, inserting a stop work provision in the event payment is not effected within 30 to 45 days of your invoice—is the best way to avoid payment failures, which leads to Myth #3.

Myth #3—I must sign the GC’s boilerplate contract if I want the work.

It is often difficult to successfully negotiate or redline a subcontract yourself, and indeed, my clients are often told, initially, that no changes will be accepted. However, I am

T H E

C O N T R A C T O R ’ S

usually able to obtain the most critical changes, or at the very least, insert enough “workaround” clauses to significantly even the playing field. For example, broadening an attorney fee provision to apply to the prevailing party, and not just the GC, dramatically shifts the home-court advantage previously in favor of the GC. Coupled with a few other modifications and other insertions, specifically concerning payment, the ability to stop work if invoices are not paid by a date certain and that a subcontractor’s tort liability is limited to the extent of its negligence only, a somewhat fair balance is ordinarily achievable.

If you cannot obtain these crucial changes yourself, consider hiring an experienced construction lawyer in your area for the limited purpose of negotiating more favorable terms.

As the old medical proverb goes, “an ounce of prevention is worth more than a pound of cure.”

Myth #4—A partial or conditional lien release only releases the funds previously invoiced.

I have seen subcontractors get burned on this one over and over again. Something about the words “partial” and “conditional” seem to send a message to the brain to ignore the rest of the words on the page because, after all, it says partial right up top, doesn’t it? Wrong. Here more than ever, the devil is in the details.

Most payment releases being used

by GCs today—while being labeled a “partial lien release”—contain language that is much broader than a simple lien release for invoiced work only.

Often they will release the GC and owner from payment for all work performed on the project through the date of the applicable payment application, or even worse, through the date the lien release is signed.

And, yes, this can readily become a legal obstacle to receipt of future payment for unpaid change work that has already been performed but not yet billed, and/or accepted. Many “partial lien releases” don’t even contain an exception for retainage,

C O M P A S S

and by executing the “partial release” you have just signed away your legal entitlement to your retention. Of course, if you have asserted a claim in writing, be it for extra work, a changed condition or any other matter on which you are claiming a right to payment and do not specifically reserve that claim within every “partial lien release” thereafter, you have waived and released that claim as well.

For this reason, it is best to modify the language of any payment release—be it for lien claims or any claims—to indicate the release is being provided “only to the extent of payment received” for the work performed. Better yet, ASA has a great sticker titled “Lien Waiver Reservation of Rights,” which you can easily slap on to every “partial” lien release.

The sticker specifically carves out retention, unbilled changes and claims which are either unknown or not yet asserted in writing. It also makes clear that the release is effective only through the date of the subcontractor’s last pay application.

Make it a habit to know, preserve and most importantly to assert your rights, and you will reap the success that savvy subcontractors are accustomed to.

Joseph L. Katz, Esq. is a senior associate at the construction litigation firm Huddles Jones Sorteberg & Dachille, P.C. in Columbia, Md. Katz regularly represents subcontractors and suppliers on federal, state and municipal construction projects and has specialized expertise in guiding his clients through the various regulatory requirements unique to government contracting. He also frequently represents clients involved in private sector construction, including housing, commercial, retail and industrial projects. He is experienced in all facets of construction litigation, including mechanic’s liens, Miller Act payment bond claims, arbitration, and civil actions in both state and federal court.

He can be reached at katz@constructionlaw.com, or (410) 720-0072.

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ASA/FASA Calendar April 2016

June 2016

12 – Webinar: The Payment Dance in the Construction Industry

14 – Webinar: Damages For Lost Labor Productivity

in the April 2016 Issue of ASA’s

THE

May 2016

Coming Up

10 – Webinar: Websites, Email, Social Media and Your Domain Name

THEME: Defining Your Company’s Legacy

Contact information for all ASA and FASA events/programs:

www.asaonline.com education@asa-hq.com

THE

Win. Win. QQ

QQ

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

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Defining—and Living by—Your Vision, Mission and Values

•

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•

Strategic Marketing That Works

•

Leveraging the Service of Service Contractors

•

Legally Speaking PAST ISSUES: Access online at www.contractors knowledgedepot.com

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

That’s a win-win situation.

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

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M A R C H

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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

MAY 7 TH, 8:10 A .M.

A HANDY REFERENCE TOOL BRINGS HIGHER PROFIT WITHIN REACH IN AN INS TANT, A R IK M U LLEN R E A LIZED THE VA LU E OF M OTION IS M ONE Y ®

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When you’re looking for programs that help keep workers safe and businesses strong … ® we can show you more.

To learn how CNA’s insurance programs for contractors can help your business grow more profitably, 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 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.

Our Vision

The American Subcontractors Association is recognized as the united voice dedicated to improving the business environment in the construction industry.

Our Mission

The American Subcontractors Association amplifies the voice of and leads trade contractors to improve the business environment for the construction industry and to serve as a steward for the community.

Our Values

The ideals and beliefs of the American Subcontractors Association are ethical and equitable business practices, quality construction, a safe and healthy work environment, integrity and membership diversity.

The leading voice for construction subcontractors for

years

Table of Contents Welcome Letter from ASA President

7

ASA Professional Standards of Practice for Construction Subcontractors

8

ASA Founders and Patrons

10

ASA Board of Directors (2015-16)

11

ASA Chapters

12

ASA Chapter Executive Directors

13

ASA Staff

14

Past ASA National Presidents

14

John H. Hampshire Distinguished Lifetime Service Award

16

President’s Award

17

Outstanding Service Award

18

National Construction Best Practices Award

19

Excellence in Ethics Award

20

Key Accomplishments Through the Years

24

Dedication Letter from ASA Chief Operating Officer

73

About the Foundation of ASA and The Contractors’ Knowledge Network

74

Dear ASA Members & Friends Happy Anniversary! I am so honored to serve as ASA’s president during this truly special occasion! Indeed, ASA’s 50th anniversary marks a remarkable accomplishment, representing construction subcontractors, specialty trade contractors and suppliers, who without ASA would have no united voice on the national front!

As you read this special keepsake book, I hope you’ll notice the many milestones ASA has achieved over the years to improve the business environment for subcontractors—from legislative and regulatory accomplishments, favorable judicial rulings, industry collaboration, improvements in contract terms and conditions, and providing numerous resources, contract documents and negotiation tips!

Our work, however, is not done!

Together, each and every one of us can continue to make a difference in our industry. We can educate ourselves about the issues that most impact our businesses—issues such as retainage, slow or non-payment, bid shopping, onerous contract terms, and many more! We can volunteer, both at our local chapters and through service on national ASA committees and task forces. We can join grassroots ASA advocacy initiatives to fight legislation that negatively impacts us and advocate for legislation that protects us and preserves our rights. We can donate to

ASA’s Subcontractors Legal Defense Fund to ensure that subcontractors’ rights are represented in precedentsetting court cases. We can contribute to ASA’s Political Action Committee to ensure that we have funds to help elect members of Congress who support subcontractors on key issues like federal government procurement, occupational safety and health, and economic and tax policy. We can participate in chapter and national ASA meetings, like SUBExcel, contributing our perspectives and expertise and sharing with each other our experience with general contractors and best practices in our industry! We can also actively participate in the election of ASA members to lead our organization over the next 50 years.

I encourage you to get involved in ASA. Whether it be at the local chapter level or through service at the national level, the more you put into it, the more you get out of it! With your active involvement, ASA will do great things for the next 50 years and beyond!

Sincerely,

Letitia “Tish” Haley Barker 2015-16 ASA President

7

Professional Standards of Practice for Construction Subcontractors

8

Specialty trade subcontractors operate in a challenging business environment.

Constructing quality buildings on time requires an infinite amount of cooperation between all parties from owners through to field employees. At the same time, each of the parties often has competing interests with other construction team members.

ASA encourages responsible conduct through adherence by subcontractors to the following standards of practice.

These standards represent subcontractor obligations which also are sound business practices that prove to be in the enlightened self interest of prudent subcontractors.

The Professional Subcontractor will normally: Prior to bid

• Become familiar with job requirements in sufficient detail to assure that it has the expertise, finances, people and time to complete its portion of the work as prescribed.

• Recognize that not all general contractors and construction managers are the same and plan accordingly to consider such positive factors as efficient job coordination, prompt pay record and competent supervision, and such negative factors as inequitable business practices, unfair contract terms, and lack of competency.

• Provide expertise in its specialty area and point out any serious problems with technical specifications or time allowed for completion, particularly where impact on quality or cost seems inappropriate.

• Seek clarification of any requirements that are unclear, ambiguous or inconsistent so that pricing of the job can be accomplished with as much certainty as possible.

• Provide a written confirmation of the scope of work to its customer prior to bid.

During the bid and negotiation stage

Contract performance

• Assign promptly a qualified field supervisor to participate in coordination of plans for orderly performance of work and to represent the subcontractor through management of its on-site labor, making adjustments to plans and participating in all project meetings.

• Furnish quickly a schedule of values confirming the dollar amounts of subcontractor’s work from mobilization services through final adjustment for the customer representative to use in evaluating performance and progress billing amounts.

• Provide specialized expertise in a coordinated approach for solving technical problems related to its work, bearing in mind that the design professional has final responsibility for overall engineering decisions.

• Coordinate the performance of its work to avoid delays, obstruction or damage to itself or to others, with emphasis on informal solutions to problems through mutual exchanges of services and the prompt, fair settlement of any disputes with other contractors.

• Expedite completion of its work by all reasonable means, but minimizing major scheduled overtime programs because of counter-productive, inherent efficiency losses when overtime is used for extended periods.

• Avoid practices that might be considered in violation of the letter and spirit of anti-trust laws.

• Assure that all of its invoices and change order requests are presented on time with complete documentation to meet project payment requirements and thereby promote orderly payment procedures and prompt receipt of remittances for its work each month.

• Sell the merits of its firm by stressing its strong points instead of making any statements that would harm the reputation of a competitor unnecessarily.

• Treat its own subcontractors and suppliers as it wishes to be treated by processing their billing and change orders promptly and passing on progress payments without delay.

• Avoid divulging its price to a competitor or seeking information on a competitor’s price directly or through a general contractor.

• Maintain safe, clean work places for its field employees and assure compliance with the letter and spirit of laws relating to working conditions, equal employment opportunities and pay practices.

• Support a bidding system that deals fairly with all parties and furthers open competition for construction work.

• Submit bids promptly with the terms of its offer clearly defined, including any obligations of others that are not made clear in the bid documents.

• Negotiate equitable subcontract terms including the subcontractor's performance obligations without waiving any protections afforded by law or good business practice, and conditioned upon prompt payment as contained in recognized authoritative contract documents such as those published by the ConsensusDocs.

• Provide timely notice of delays, interferences, damages and other factors that will become claims if prompt corrective action is not taken.

• Upon completion, prepare its own punchlist and complete those items before requesting an inspection of its work. Correct promptly any work not in compliance with specifications as well as furnishing as-built drawings, warranties and other required documents without delay.

9

ASA Founders and Patrons Gold Founders I. Sharon Dobson Priceless Industries, Inc. Baltimore, Md.

10

Sally Hottle Springfield, Va. Maynard Hulm Hulm Construction Specialties Parker, Colo.

Gerry and Linda Graff Graff Flooring Contractors, Inc. Albuquerque, N.M.

Martin Knott Owing Mills, Md.

Silver Founders

David Miller Newark, Ohio

William H. Cooper WACO Steel Charlotte, N.C.

Wayne T. Ruth Hunt Valley, Md.

Robert B. Johnson Skaneateles, N.Y. Arthur C. Meushaw Alexandria, Va. Tommy Parker Parker Marine Contractors Corp.

Charleston, S.C. Floyd and Barbara Warkol KSW Mechanical Services, Inc. New York, N.Y.

Founders Dan Biedenbender Atlas Iron & Wire Works Inc. Milwaukee, Wis. Frank and Diane Butler Custom Masonry Corp.

San Antonio, Texas Patricia Cumor First Capital Insulation, Inc. York, Pa.

James Speedy Houston, Texas

Patrons Peter Aiello, Sr. Barber Colman Aiello, Inc. Yonkers, N.Y. ASA – Central Ohio Chapter Columbus, Ohio Walter Bazan, Jr. Bazan Painting Company St. Louis, Mo. CECO Concrete Kansas City, Mo. Rick China Primo Electric Company, Inc. Baltimore, Md. Tara Brown Unit Design, Inc. Baton Rouge, La. The Griggs Family Phoenix, Ariz.

David Hendrick Hendrick, Phillips, Schemm & Salzman Atlanta, Ga. George Igel George J. Igel & Co. Columbus, Ohio Gordon Kaufman Schneider Electric Co. St. Louis, Mo. R. David Loewendick S.G. Loweendick Sons, Inc. Columbus, Ohio E. Colette Nelson American Subcontractors Association Alexandria, Va. Denise Norberg & David Johnson Chicago, Ill. Jonathan Ostrow Ostrow Electric Company Worcester, Mass.

Salinas Reinforcing, Inc. Livermore, Calif.

Richard Stockenberg Danna, Soragham, Stockenberg & Shaw, P.C. St. Louis, Mo. Ed Windemuller Tampa, Fla. Charles Wise Washington, D.C. Fred Witters Seattle, Wash.

ASA Board of Directors (2015-16) President Letitia “Tish” Haley Barker Haley-Greer, Inc. Dallas, Texas lbarker@haleygreer.com Vice President Robert Abney F.L. Crane & Sons, Inc. Southaven, Miss. rabney@flcrane.com

9

Treasurer Jeff Banker Banker Insulation Chandler, Ariz. jbanker@bankerinsulation.com Secretary Courtney Little ACE Glass Construction Corporation Little Rock, Ark. cl@aceglass.net Immediate Past President Brian Johnson Soil Consultants, Inc. Charleston, S.C. bjohnson@soilconsultantsinc.com

Jim Blauch Blauch Brothers Harrisonburg, Va. jblauch@blauchbrothers.com

Vince Migliazzo Mark One Electric Company Kansas City, Mo. vince.migliazzo@markone.com

Anthony Brooks Platinum Drywall Maumelle, Ark. Anthony@platinumdrywall.net

Russell O’Rourke O’Rourke & Associates, L.P.A. Cleveland, Ohio rorourke@meyersroman.com

Brian Cooper AROK Inc. Phoenix, Ariz. briancooper@arokteam.com

Patricia Peterson Tindall Corporation Petersburg, Va. patriciapeterson@tindallcorp.com

Jason File Les File Drywall, Inc. Albuquerque, N.M. jasonfile@lesfiledw.com

Jeff VanderLaan Kent Companies, Inc. Grand Rapids, Mich. jeffv@kentcompanies.com

Steve Giacin IES Commercial Englewood, Colo. steve.giacin@ies-co.com Gloria Hale Hale Glass Placentia, Calif. gloria@haleglass.com Vince Irwin Irwin Products St. Louis, Mo. VMI@irwinproducts.com Shannon MacArthur Marek Brothers Systems, Inc. Houston, Texas shannonmacarthur@marekbros.com Mike McAdams Walker Engineering Irving, Texas mmcadams@walkertx.com

11

ASA by the numbers

12

31

ASA Chapters

ASA—Georgia Chapter

ASA of Colorado

ASA—Greater Kansas City

ASA of Metro Washington

ASA—Houston Chapter

ASA of Michigan

ASA—Los Angeles/

Orange County/

Inland Empire

ASA of Mississippi

ASA—Louisiana State Chapter ASA—Midwest Council ASA—North Texas Chapter ASA—Rio Grande Valley ASA—San Antonio Chapter ASA—North Florida ASA of Alabama

ASA of New Mexico ASA of Ohio ASA of Oklahoma ASA of Tennessee ASA of Texas Inc. ASA of the Carolinas ASA of the Shenandoah Valley ASA of Western Pennsylvania

ASA of Arizona

New Jersey Subcontractors Association

ASA of Baltimore

Bay Area Chapter, ASA, Inc.

ASA of California

Heart of Texas, American Subcontractors Association

ASA of Central Arkansas ASA of Central Pennsylvania

ASA Chapter Executive Directors Carol Floco ASA of Arizona www.asa-az.org

Andrea Reichman ASA of Ohio www.asaofohio.com

Kristy Kormann ASA of Baltimore www.asa-baltimore.com

Tara Barlean ASA of Oklahoma www.asaok.com

Janie Glidden ASA of California www.asacalif.com

Richard Bright ASA of Tennessee www.asaoftennessee.org

Ruth Worden ASA–Los Angeles/Orange County/Inland Empire www.asacocal.org

Jo A. Kinley ASA of Central Arkansas

Francie Dix ASA of Texas, Inc. www.asa-texas.org

Tara Brown ASA–Louisiana State Chapter

Loni Warholic ASA of Central Pennsylvania www.asacentralpa.com

Vernon Thomas ASA–Georgia Chapter Elizabeth Palmer ASA–Greater Kansas City www.kcasa.org Brianna Wright ASA–Houston Chapter www.asahouston.org

11

Susan Winkelmann ASA–Midwest Council www.asamidwest.com Stevan Brown ASA–North Florida www.asaflorida.com Beverly S. Reynal ASA–North Texas Chapter www.asa-northtexas.org Mike Harris ASA–Rio Grande Valley www.asa-rgv.com Jennifer Swinney ASA–San Antonio Chapter www.asasanantonio.org Kerrick Whisenant ASA of Alabama

Debra L. Scifo ASA of Colorado www.asacolorado.com Ike Casey ASA of Metro Washington www.asamw.org Jessica Woolpert Susan Johnson ASA of Michigan www.asamichigant.net Ashley Nichols ASA of Mississippi www.asa-mississippi.com Gia Zamora ASA of New Mexico www.asa-nm.org

Linda Burkett ASA of the Carolinas www.asacarolinas.com Elizabeth Cessna ASA of the Shenandoah Valley Angela Wentz ASA of Western Pennsylvania www.asawpa.org Richard Bright New Jersey Subcontractors Association www.njsubcontractors.org Janie Glidden Bay Area Chapter, ASA, Inc. Francie Dix Heart of Texas, American Subcontractors Association www.asaheartoftexas.org

13

ASA Staff Richard Bright Chief Operating Officer (703) 684-3450, Ext. 1335 rbright@asa-hq.com

Jessica Enochs Membership & Accounting Coordinator (703) 684-3450, Ext. 1323 jenochs@asa-hq.com

Beth Horan Director of Finance & Administration (703) 684-3450, Ext. 1333 bhoran@asa-hq.com

Past ASA National Presidents 14

1966–69 Richard L. Jackson (Deceased)

1980–81 Norma H. Mann (Deceased)

1970–73 Robert Palazzo (Deceased)

1981–82 Thomas J. McGlone (Deceased)

1973–74 Anthony Izzo (Deceased)

1982–83 Robert B. Johnson Skaneateles, N.Y.

1974–75 Ronald Bratti (Deceased)

1983–84 Arthur C. Meushaw (Deceased)

1975–76 Stan Thomas Palm Harbor, Fla.

1984–85 Eugene E. Grieve (Deceased)

1976–77 Gerald F. Collyer New York, N.Y.

1985–86 A. E. (Gene) Marchbanks (Deceased)

1977–78 Henry J. Knott (Deceased)

1986–87 Jesse M. Pickett, Jr. Dallas, Texas

1978–79 Burton Fisher (Deceased)

1987–88 John T. (Tommy) Parker (Deceased)

1979–80 Thomas J. Barfield (Deceased)

1988–89 M.R. (Mac) Sullivan, Jr. Sullivan Mechanical Contractors Shenandoah, Va. 1989–90 Thomas J. Godwin Marathon Electrical Contractors, Inc. Birmingham, Ala. 1990–91 I. Sharon Dobson Priceless Industries, Inc. Baltimore, Md. 1991–92 David G. Miller Newark, Ohio 1992–93 Ben C. Griggs (Deceased) 1993–94 Gordon C. Kaufman Ft. Myers, Fla. 1994–95 Gerald P. Graff Graff Flooring Contractors, Inc., Albuquerque, N.M.

13

Tony Kozak Director of Meetings (716) 844-8174 tonykozak@roadrunner.com

E. Colette Nelson Chief Advocacy Officer (703) 684-3450, Ext. 1310 cnelson@asa-hq.com

Marc Ramsey Director of Communications (703) 684-3450, Ext. 1321 mramsey@asa-hq.com

1995–96 Denise Norberg Lincolnwood, Ill.

2002–03 Anne Bigane Wilson Bigane Paving Company Chicago, Ill.

2009–10 Darlene East Holes Incorporated Houston, Texas

2003–04 Richard Wanner Wanner Metal Worx, Inc. Delaware, Ohio

2010–11 Timmy McLaughlin (Deceased)

1996–97 Wayne Ruth Sparks, Md. 1997–98 Daniel Biedenbender Atlas Iron & Wire Works, Inc. Milwaukee, Wisc.

1998–99 Maynard Hulm Hulm Construction Co. Parker, Colo.

1999–2000 Floyd Warkol KSW Mechanical Services, Inc. New York, N.Y. 2000–01 Richard F. Kohls Cincinnati, Ohio 2001–02 Gerry Martin Ceco Concrete Construction, L.L.C. Kansas City, Mo.

2004–05 Mat Glover Berthoud, Colo.

2011–12 Kerrick Whisenant Cornerstone Detention Products, Inc. Tanner, Ala.

2005–06 Vincent Terraferma KSW Mechanical Services, Inc. New York, N.Y. Atlanta, Ga.

2012–13 Walter Bazan Jr. Bazan Painting Company St. Louis, Mo.

2006–07 Stephen Rohrbach F.A. Rohrbach, Inc Allentown, Pa. 2007–08 David H. Bradbury 2008–09 William J. Olmo, III Strip N Seal Santa Rosa, Calif.

2013–14 Jack Austhof Sobie Company, Inc. Dutton, Mich.

2014–15 Brian Johnson Soil Consultants, Inc. Charleston, S.C.

15

John H. Hampshire Distinguished Lifetime Service Award ASA bestows its highest honor, the John H. Hampshire Distinguished Lifetime Service Award, for lifetime service to ASA and the construction industry. This prestigious award is presented to an individual who shares the vision of ASA’s early leaders and dedicates his or her lifetime working to achieve that vision. John H. Hampshire, Inc., was a Baltimore, Md.‑based subcontractor that helped found ASA. 2001

David G. Miller, Encompass Converse Electric, Inc., Grove City, Ohio

Richard B. Usher, Hill & Usher LLC, Phoenix, Ariz.

2002

Rick Wanner, Wanner Metal Worx, Delaware, Ohio

2004

Bill Miller, Building Erection Services, Olathe, Kan.

2005

Richard Kohls, The Fenton Rigging Company, Cincinnati, Ohio

2006

Maynard Hulm, Hulm Construction Co., Parker, Colo.

2007

Walter Bazan Jr., Bazan Painting Company, St. Louis, Mo.

2008

Mat Glover, Glover Masonry Inc., Arvada, Colo.

2009

Bill Olmo, Fedco Construction Inc., Santa Rosa, Calif.

2010

David Bradbury, Precision Concrete Construction Inc., Atlanta, Ga.

2012

Timmy McLaughlin (Posthumously), Austin Construction Co., Inc., Summerville, S.C.

16

President’s Award The ASA President’s Award is given by the current ASA president on a discretionary basis to an individual who has helped the president the most during his or her term.

1990 Richard B. Usher, Hill & Usher LLC, Phoenix, Ariz.

15

2001

Robert E. Lee, Jr.

2003

Dave Miller, Converse Electric, Converse, Ohio

Russell O’Rourke, O’Rourke & Associates Co., L.P.A., Cleveland, Ohio

2004

Bruce Miller, Denver Drywall Company, Englewood, Colo.

2005

Douglas McNames, Baker Concrete Construction Inc., Monroe, Ohio

2006

Elaine Erickson, Viracon Inc., Owatonna, Minn.

2007

Richard B. Usher, Hill & Usher LLC, Phoenix, Ariz.

2009

Tara Brown, Unit Design Inc., Baton Rouge, La.

Maynard Hulm, Hulm Construction Co., Parker, Colo.

Bill Olmo, Fedco Construction, Santa Rosa, Calif.

Richard Usher, Hill & Usher LLC,, Phoenix, Ariz.

Floyd Warkol, KSW Mechanical Services Inc., New York, N.Y.

2010

Walter Bazan Jr., Bazan Painting Co., St. Louis, Mo.

2011

Mitch Claborn, Cornerstone Detention Products Inc., Tanner, Ala.

2012

Brian Johnson, Soil Consultants, Inc., Charleston, S.C.

Kerrick Whisenant, Cornerstone Detention Products Inc., Tanner, Ala.

2013

Brian Johnson, Soil Consultants, Inc., Charleston, S.C.

2014

Walter Bazan Jr., Bazan Painting Company, St. Louis, Mo.

17

Outstanding Service Award ASA presents its Outstanding Service Award to individuals for exemplary service to ASA.

18

2000

Gale T. Arkwright, RKTEK Enterprises, Rochester Hills, Mich.

2001

Dennis Walker, Rental Service Corporation, Denver, Colo.

2002

Richard Usher, Hill & Usher LLC,, Phoenix, Ariz.

2003

Mike Boyd, MKB Construction, Phoenix, Ariz.

2004

M. Scott Hursh, Stambaugh-Ness, P.C., Harrisburg, Pa.

Rich Forsberg, Forsberg-Engerman Company, Englewood, Colo.

2007

Carla Brandt, Cobra Stucco, Phoenix, Ariz.

Barbara Parkman, Partition Specialties, San Rafael, Calif.

Brian Chester, United Mechanical, Dallas, Texas

2009

Tom McDonnell, George McDonnell & Sons, St. Louis, Mo.

Doug McNames, Baker Concrete Construction Inc., Monroe, Ohio

2010

James “Chip” Rohrbach, F.A. Rohrbach, Inc., Allentown, Pa.

2011

Cris Gillmore, Concrete Services Corporation, Tulsa, Okla.

2012

Shannon MacArthur, MEMCO, Spring, Texas

2014

Tim Thomas, American Steel Fabrication, Pevely, Mo.

Kerrick Whisenant, Cornerstone Detention Products, Inc., Tanner, Ala.

National Construction Best Practices Award Through its National Construction Best Practices Awards, ASAÂ recognizes prime contractors that are committed to superior business practices like safety management, prompt payment, prompt processing of change requests and claims, and effective project scheduling and coordination. ASA established these awards in 2011, setting rigorous criteria, including use of a standard subcontract whose provisions reflect the best practices incorporated into the ASA-endorsed ConsensusDocs 750 subcontract agreement and highly favorable evaluations from at least three specialty trade contractors based on 20Â project management factors.

17

2011

Alberici Constructors, St. Louis, Mo.

Bigane Paving Company, Chicago, Ill.

F.A. Rohrbach, Inc., Allentown, Pa.

Ondra-Huyett Associates, Allentown, Pa.

Rives Construction, Irondale, Ala.

2012

Alberici Constructors, St. Louis, Mo.

Bigane Paving Company, Chicago, Ill.

High Construction, Lancaster, Pa.

Limestone Building Group, Tanner, Ala.

Rhodey Construction, St. Louis, Mo.

2013

Alberici Constructors, St. Louis, Mo.

Bigane Paving Company, Chicago, Ill.

2014

Alberici Constructors, Inc., St. Louis, Mo.

Limestone Building Group, Tanner, Ala.

19

Excellence in Ethics Award

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Through its Excellence in Ethics Awards, ASA honors select firms that demonstrate the highest standards of internal and external integrity. ASA established the awards program in 2008 to recognize companies that strive to promote ASA’s values every day in their businesses. Applicants are judged on criteria in three categories: corporate ethics policy and procedure, construction industry practices, and general business practices.

2008

F.A. Rohrbach, Inc, Allentown, Pa. Hess Sweitzer, Inc., New Berlin, Wisc.

Holes Incorporated, Houston, Texas Precision Concrete Construction Inc., Alpharetta, Ga. Viracon, Inc., Owatonna, Minn.

Western Engineering Contractors, Inc., Loomis, Calif.

2009

F.A. Rohrbach, Inc, Allentown, Pa. Holes Incorporated, Houston, Texas Lloyd’s Construction Services, Savage, Minn.

Western Engineering Contractors, Loomis, Calif.

Hess Sweitzer, Inc., New Berlin, Wisc.

Markham Contracting Company, Phoenix, Ariz.

Precision Concrete Construction, Inc., Alpharetta, Ga. Viracon, Inc., Owatonna, Minn.

2010

F.A. Rohrbach, Inc, Allentown, Pa. Holes Incorporated, Houston, Texas Lloyd’s Construction Services, Savage, Minn.

Precision Concrete Construction, Inc., Atlanta, Ga. Markham Contracting Company, Phoenix, Ariz.

Viracon, Inc., Owatonna, Minn.

Western Engineering Contractors, Inc., Loomis, Calif.

2011

F.A. Rohrbach, Inc, Allentown, Pa. Holes Incorporated, Houston, Texas Lloyd’s Construction Services, Savage, Minn.

Marek Brothers Systems, Inc., Houston, Texas Markham Contracting Company, Inc., Phoenix, Ariz.

South Valley Drywall, Littleton, Colo.

Western Engineering Contractors, Inc., Loomis, Calif.

2012

19

Air Masters Corporation, Fenton, Mo. Bazan Painting Company, St. Louis, Mo. F.A. Rohrbach, Inc, Allentown, Pa. Holes Incorporated, Houston, Texas M.L. Jones Acoustics, Tulsa, Okla.

Marek Brothers Systems, Inc., Houston, Texas Markham Contracting Company, Inc., Phoenix, Ariz.

South Valley Drywall, Littleton, Colo.

Western Engineering Contractors, Inc., Loomis, Calif.

2013 Air Masters Corporation, Fenton, Mo.

Bazan Painting Company, St. Louis, Mo.

F.A. Rohrbach, Inc, Allentown, Pa.

Haley-Greer, Inc., Dallas, Texas

Holes Incorporated, Houston, Texas

Marek Brothers Systems, Inc., Houston, Texas

Markham Contracting Company, Inc., Phoenix, Ariz.

Sorella Group, Inc., Overland Park, Kan.

South Valley Drywall, Littleton, Colo.

Western Engineering Contractors, Inc., Loomis, Calif.

2014 A&B Sheet Metal, Inc., Forest Park, Ga.

Air Masters Corporation, Fenton, Mo.

Banker Insulation, Chandler, Ariz.

Bazan Painting Company, St. Louis, Mo.

EyeSite Surveillance, Inc., Chandler, Ariz.

F.A. Rohrbach, Inc, Allentown, Pa.

Haley-Greer, Inc., Houston/Dallas, Texas

Holes Incorporated, Houston, Texas

Marek Brothers Systems, Inc., Houston, Texas

Markham Contracting Company, Inc., Phoenix, Ariz.

Sorella Group, Inc., Overland Park, Kan.

South Valley Drywall, Littleton, Colo.

Western Engineering Contractors, Inc., Loomis, Calif.

21

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In the struggle to define oneself, as an individual or an organization, the influence of the others around us and the events that coincide cannot be ignored. We are shaped by them and, in return, we carve our marks on them, leaving for posterity the trails of our existence.

22 24

When considering the evolution of an organization such as the American Subcontractors Association, Inc. (ASA) across 50 years, it is the ideas and actions of its members that have kept the Association flourishing despite the turbulent events taking place around it.

This commemorative book captures keys accomplishments of ASA during its 50-year history.

Some may seem commonplace, but the decisions they’ve entailed, however big or small, have woven lasting effects in the lives of ASA members and the construction industry.

Ultimately, each step leads us from where and who we were, equipping us with the experience and skills to manage, in the face of each day, the task of getting where we’re headed.

Key Accomplishments Through the Years

23

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“The main problems of subs include slow pay for work done, bid shopping to reduce fair profits, and unreasonable subcontract terms, such as holding out money. These practices add to the cost of financing and increase building costs.”

Richard L. Jackson ASA President, 1966–1969

1966 The D.C. Metropolitan Subcontractors Association and the Subcontractors Trade Association (New York City) agreed to join together to form the American Subcontractors Association, Inc. According to first ASA President Richard L. Jackson: “The main problems of subs include slow pay for work done, bid shopping to reduce fair profits, and unreasonable subcontract terms, such as holding out money. These practices add to the cost of financing and increase building costs.”

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1969 Established a liaison with the General Services Administration with initial discussions focusing on bid listing and change orders.

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Established a liaison with the American Institute of Architects, an effort that would lead to improved contract documents for every member of the construction team.

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1970 At the request of its chapter in Massachusetts, initiated legislation to reform the federal Miller Act, the law that requires prime contractors on federal construction to provide performance and payment bonds. This was ASA’s first legislative initiative and a precursor to future efforts to assure subcontractor payment rights on federal construction.

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1967 Voted to focus its efforts on organizing chapters and established guidelines for the formation of these local entities. By the next year, ASA had 25 local chapters, mostly along the Eastern Seaboard.

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1968 Established a National Advisory Council of other national associations representing specialty trade contractors. The first three members were the Association of Wall & Ceiling Industries —International, the Ceiling & Interior Systems Contractors Association, and the Flat Glass Manufacturers Association.

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Established a Legal Advisory Committee, composed of attorneys representing its local chapters.

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Provided chapter guidelines on conducting “credit interchanges,” the forerunner of one of ASA’s premier member services, the Business Practices Interchange.

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1967 After just one year, ASA had 25 chapters!

25 27

1971 Testified before the new Commission on Government Procurement, calling for prompt pay and an end to bid shopping on federal construction.

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Established a formal liaison with the Associated General Contractors of America (AGC). Initial topics of discussion included change orders and scope of work.

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Began publication of a monthly newsletter to open more regular and direct contact with its members.

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Conducted its first “conference of chapters” designed to explore the future and train its leaders.

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1972 Challenged the constitutionality of the Occupational Safety and Health Act of 1970, taking the case from the federal district court in Atlanta to the U.S. Supreme Court.

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Endorsed the American Institute of Architects’ (AIA) A401, standard subcontract, calling it a model document that treats both subcontractors and general contractors equitably.

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Opened negotiations with the General Services Administration on bid shopping, payment and change orders.

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Joined the American Arbitration Association, pledging to reduce disputes and litigation among members of the construction team.

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Hosted its first annual convention under the banner “Building Together.”

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1973 Launched Project SORE (Stamp Out Retainage Entirely), the Association’s first foray into the elimination of retainage.

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Convinced the General Services Administration to launch a pilot program to test bid listing.

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Adopted a series of policies with the Associated General of Contractors of America and the Associated Specialty Contractors. Topics included change orders, temporary job utilities, construction coordination conferences and back charges.

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1976 Established the 8-80 Club that recognizes members who recruit new members

ASA by the numbers

2,100

member companies

1974 Convinced the General Services Administration and the Federal Highway Administration to implement retainage reform.

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Sent to the American Institute of Architects a “Bill of Rights for Subcontractors.�

1976 Represented subcontractors on an advisory committee of the Commission on Uniform Laws, which was developing a model lien law.

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Represented subcontractors at the White House Conference on Inflation.

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Participated in a White House Mini-Summit on the Housing Crisis.

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1975 Persuaded the Department of Health, Education and Welfare to reduce retainage.

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Joined more than 20 other constructionrelated trade associations in establishing a National Construction Industry Council.

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Published, in cooperation with the Associated Specialty Contractors, guidelines to protect subcontractors and suppliers under state lien laws.

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Successfully prevailed up on the U.S. Court of Appeals to rule that subcontractors are not responsible for the OSHA violations of others.

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Published a model affirmative action plan, to help its members comply with regulations issued by the Office of Federal Contract Compliance Programs.

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Defeated common situs picketing, as a key member of the National Action Committee on Secondary Boycotts.

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Established the 8-80 Club, a program to recognize members who recruit new members.

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1977 Persuaded the Office of Federal Procurement Policy to conduct a survey on the extent of late payment to federal contractors.

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Filed an amicus brief in the Supreme Court case Regents of the University of California v. Bakke concerning reverse discrimination.

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Conducted its first legislative conference.

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1978 Faced down stiff opposition from others in the construction industry, particularly the Associated General Contractors of America, to completely eliminate bid listing in the General Services Administration.

However, GSA did reduce significantly the number of contracts on which bid listing was used.

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Initiated a member health insurance program, administered by Benefits/West.

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Conducted its first “committee week,” during which the Association’s committees reviewed, studied and recommended policy to the Board of Directors.

Joined 11 other construction associations in opposition to OSHA’s use of ex parte warrants.

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Published the UPTOP Action Kit, designed to help subcontractors get unconditional payment terms on performance.

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Established the Subcontractors Construction Operation Performance Evaluation (SCOPE), a voluntary network of subcontractors who routinely monitor the projects of eight federal agencies.

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1979 Obtained a pledge from the Office of Management and Budget to improve payment on federal construction.

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1981 Established and then chaired a Coalition for Retainage Reform comprised of a broad range of national specialty trade associations who shared ASA’s goal to eliminate or at least reduce retainage on federal construction.

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Successfully convinced the Department of Defense to launch a pilot program to reduce retainage.

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In its first legislative survey, identified government paperwork and bureaucracy as a major issue.

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Established a political action committee to support candidates for federal office who support the subcontractor agenda.

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Launched a concerted effort to elect subcontractors as delegates to the White House Conference on Small Business scheduled for the following year.

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1980 Led by its delegates to the White House Conference on Small Business, successfully lobbied for enactment of the Regulatory Flexibility Act, the Paperwork Reduction Act and the Equal Access to Justice Act.

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Introduced The Subcontractor newspaper to keep ASA members informed on issues in a timely manner.

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1982 In cooperation with a broad coalition of business associations, successfully lobbied for enactment of the Prompt Payment Act of 1982, which established standards for prompt payment on federal contracts. Unfortunately, faced with strong opposition from the Associated General Contractors of America, Congress failed to address subcontractor payment.

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Had legislation introduced in both the House and Senate to eliminate unnecessary retainage on federal construction. Testified in hearings before both the House and Senate Small Business Committees.

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Immediately launched a campaign to eliminate retainage at the state level, including the publication of a legislative work kit, Getting the States to Eliminate Unnecessary Retainage.

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Counseled both ASA of the Carolinas and ASA of Louisiana during their efforts to enact precedent-setting prompt pay laws, both of which included subcontractors for the first time.

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Introduced the Newsgram, a monthly newsletter for members.

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Introduced the Leadergram, a bi-weekly newsletter for chapter offices and executive directors.

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Conducted its first foreign study mission, including meetings to compare construction practices with specialty contractors in France, Great Britain and West Germany.

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Joined the Business Roundtable’s Construction Industry Cost Effectiveness Program to improve industry productivity through dialogue, cooperation and training.

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Published a series of new manuals to help subcontractors run their businesses more effectively, including Bonding for Subcontractors and Summary of State Payment Laws.

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1983 Successfully convinced the Office of Federal Procurement Policy to publish a final rule eliminating routine retainage on federal construction. OFPP Policy Letter 83-1 and its implementing regulation completed ASA’s long battle to eliminate unnecessary retainage at the federal level.

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At the request of the Reagan Administration, launched the Subcontractors Employment Project, designed to reduce construction unemployment.

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Conducted an international study mission during which ASA members met with peers in Japan, Hong Kong and China to exchange information and tips on thriving in a global economy.

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1985 ASA assisted member chapters to enact new prompt payment laws.

ASA by the numbers

4,100

individuals receiving member benefits

1984 Condemned a new subcontract form unilaterally developed by the Associated General Contractors of America.

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Developed and published a commentary on and an addendum for subcontractors to use with the AGC document.

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Testified before Congress on the Navy’s refusal to apply the Prompt Payment Act to military construction.

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31

Lobbied intensively, albeit unsuccessfully, against the General Services Administration’s final elimination of the remnants of its bid listing requirements.

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Published two new educational manuals designed especially for subcontractors, Insurance for Subcontractors and Cost Effective Employee Relations for Subcontractors.

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Moved its headquarters to Alexandria, Va., when a group of ASA members formed a limited partnership to purchase a new building designed for ASA’s use. The goal was for the partners to eventually donate their shares of the partnership to ASA, making ASA the owner of its headquarters building.

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1985 Published, in conjunction with the Associated General Contractors of America and the Associated Specialty Contractors, a model payment schedule for all tiers in the construction process.

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Successfully had enacted broad statutory language in which the federal government for the first time recognized the importance of subcontractor payment. Although the new law had no enforcement mechanism, it formed the basis for later ASA payment successes.

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Organized and hosted a construction-wide roundtable to examine how the industry could meet the challenges of a growing list of toxic substances to which its workers are exposed.

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Had introduced federal level prompt pay reform legislation that included language addressing the needs of construction subcontractors and suppliers.

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Assisted chapters in the District of Columbia, Georgia, Mississippi and Texas successfully enact new prompt pay laws.

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Expanded its library of subcontractor educational materials, adding Safety Program Assistance for Subcontractors, Equal Opportunity and Affirmative Action Plan, and Winning the Battle of Subcontract Forms.

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1986 Assisted 16 members get elected as delegates to the White House Conference on Small Business, where they successfully included prompt payment for subcontractors in the conference’s final recommendations to the President and Congress.

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Testified repeatedly in support of federal legislation to extend the government’s payment protections to construction subcontractors.

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In conjunction with 17 other construction trade associations, filed suit in the U.S. Court of Appeals against OSHA in an attempt to prevent implementation of the agency’s Hazard Communication Standard.

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Established the Foundation of the American Subcontractors Association (FASA) with the goal of creating a library of educational products geared especially for construction subcontractors.

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Published two new manuals, Fundamentals of Fair Subcontracts and Subcontractor Bidding and the Law.

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Adopted its Professional Standards of Practice for Construction Subcontractors.

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Joined the Associated General Contractors of America and the Associated Specialty Contractors in publishing the Construction Industry Survival Kit.

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Joined the American Tort Reform Association in its efforts to reform the tort liability system.

Added two new training programs to professionalize its chapters — a Membership Chairmen Training Institute and a Chapter Officers’ Symposium.

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1988 Successfully led a broad coalition of business associations in support of the Prompt Payment Act Amendments of 1988, overwhelming efforts by the Associated General Contractors of America and the Associated Specialty Contractors to weaken its subcontractor payment protections. President Reagan signed the bill into law on Oct. 17.

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Published Lien and Bond Claims in the 50 States, Model Personnel Handbook for Subcontractors and Understanding the AIA A312 Payment Bond.

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1987 Sparred repeatedly with the Associated General Contractors of America before Congress and in the trade press over proposed legislation to extend federal prompt payment protections to construction subcontractors.

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Issued a joint policy statement with the Associated Specialty Contractors in support of direct disbursement.

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Established a partnership with the Associated Builders and Contractors and the National Association of Home Builders to fight OSHA’s proposed Hazard Communication Standard, eventually taking the battle all the way to the U.S. Supreme Court.

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Had an ASA member appointed to OSHA’s Advisory Committee on Construction Safety & Health.

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Endorsed the latest model documents of the American Institute of Architects, including general conditions (A201) and the standard subcontract (A401), once again declaring them the most equitable model documents in the industry and urging subcontractors to condition their bids on the use of the documents.

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Conducted its first Legislative Institute, designed to train chapter leaders how to lobby more effectively at the state and local levels.

Established a Task Force on Minorities and Women to examine and make recommendations on how ASA could aid the development of and encourage membership in ASA by minority- and womenowned subcontracting firms.

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1989

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Joined with the National Association of Surety Bond Producers in educating subcontractors how to improve their chances of obtaining bonding in a tight surety market.

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Published a new legislative work kit to help its chapters enact subcontractor prompt pay laws at the state level.

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Convinced Congress to approve a pilot program to test direct disbursement to subcontractors on selected military construction projects.

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Joined with nine other associations to convince the National Association of Attorneys’ General to withdraw onerous model public construction documents.

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Published, in conjunction with the Associated General Contractors of America and the Associated Specialty Contractors, Guidelines for a Successful Construction Project.

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Launched what would become a sevenyear effort to reauthorize and strengthen the Paperwork Reduction Act, in response to the Supreme Court’s ruling allowing implementation of OSHA’s Hazard Communication Standard.

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Published, in cooperation with the Associated Builders and Contractors and the National Association of Home Builders, an OSHA-approved manual Hazard Communication Standard: A Guide for the Construction Industry.

1990 Proposed and lobbied intensively for government regulation of individual sureties, the use of which was threatening the payment rights of subcontractors on public work around the nation.

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Once individual surety regulations were finalized, successfully led the fight against a legislative alternative that would have permitted federally-approved associations of individual sureties.

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Developed and published a new model retainage bill, which required that progress payments be made in full without retainage.

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Published two new manuals, Improving Cash Flow: A Guide for Subcontractors and Understanding Employee Relations.

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Assisted numerous chapters with their own legislative efforts to enact prompt pay for subcontractors.

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Published A Drug-Free Workplace: A Subcontractor’s Guide to Stopping Substance Abuse.

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Founded, in conjunction with the Associated Builders and Contractors, the Associated General Contractors of America and the Associated Specialty Contractors, the Construction Workforce Foundation in order to respond to future work force shortages.

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1991 ASA launched a nationwide campaign to end pay-if-paid clauses.

ASA by the numbers

98

subcontractors value % ofASA’s legislative and regulatory government initiatives.

1991 Responded to members’ growing concern with pay-if-paid clauses by launching a nationwide campaign to end their use. The campaign included educational tools and a new legislative work kit.

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Worked with ASA of the Carolinas to help North Carolina become the first state to enact legislation to outlaw pay-if-paid clauses.

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Worked with 10 different Congressional committees investigating or seeking solutions to the problems with access to surety bonding. Successfully defended the Miller Act against attempts to erode its subcontractor payment protections as a prospective solution to surety bond access.

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Successfully changed federal regulations to assure that subcontractor payment is protected when prime contractors provide letters of credit in lieu of surety bonds.

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Assisted several ASA chapters with their own prompt pay legislative efforts, including the chapters in Ohio, which enacted a precedent-setting lien and prompt pay laws.

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Lobbied extensively against proposed amendments to the Occupational Safety and Health Act, which would have dramatically increased the cost of compliance.

Eventually defeated a House-passed bill that would have required all construction projects to be registered with OSHA.

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Worked with a wide coalition of construction associations to obtain enactment of the Intermodal Surface Transportation Efficiency Act, which provided $151 billion in surface transportation funding over six years.

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1992 Continued efforts to eliminate pay-if-paid clauses, including helping ASA of Greater Milwaukee enact legislation to make Wisconsin the second state to completely ban such clauses. Assisted the ASA-Chicago Chapter to enact a new law that protects subcontractor lien rights in the face of a pay-if-paid clause.

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Testified before Congress on surety bond reform, OSHA reform, striker replacement legislation, and independent contractor reform.

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Initiated an effort to prohibit general contractors from shifting their OSHA fines to subcontractors through hold harmless clauses. The effort eventually was to include legislative, regulatory and judicial solutions.

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Worked with the Department of Defense to develop new regulations strengthening subcontractor payment protections by allowing a subcontractor to obtain information concerning the general contractor’s payment bond directly from the contracting officer.

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ASA by the numbers

96

subcontractors value ASA’s advocacy % ofinitiatives in the courts through the

ASA Subcontractors Legal Defense Fund.

Intervened in a court case that undermined the federal Miller Act by holding that a subcontractor’s notice under the law is “given” only when it is actually received by the general contractor. The subcontractor had complied with both the letter and spirit of the Miller Act’s notice provisions but fallen victim to the inefficiencies of the U.S. Postal Service, which had failed to deliver the notice in a timely manner.

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Initiated legislation that would require a U.S. Treasury-listed surety company to give reasons to a contractor who it rejects for a surety bond.

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Helped ASA chapters in Florida secure enactment of a new prompt payment law, including making personal contact with Governor Lawton Chiles, an original sponsor of ASA’s subcontractor prompt payment bill when he was in the U.S. Senate.

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Reissued a legislative work kit, Encouraging States to Require Bid Listing, to help subcontractors improve bidding practices at the state level.

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Helped subcontractors comply with the new Americans with Disabilities Act and new federal rules requiring commercial drivers’ licenses.

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Unveiled a “Construction Economic Recovery Campaign” to help subcontractors talk to their elected leaders, bankers and the news media about ways to promote job creation and expansion.

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1993 Testified and provided detailed written comments on a new acquisition reform plan issued by a Department of Defense Advisory Group, in which DoD once again tried to undermine prompt payment requirements for prime contractors and subcontractors.

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Testified and lobbied before Congress over the DoD’s failure to implement earlier statutes assuring prompt payment, as documented by the General Accounting Office.

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Continued working with Congress to seek solutions to surety bond access problems that would not erode subcontractor payment rights. Initiated new legislation to strengthen subcontractor payment rights under the 1935 Miller Act.

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In conjunction with the Associated General Contractors of America and the Associated Specialty Contractors, developed and endorsed a new Guideline on Partnering.

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Continued its fight against onerous OSHA reform, testifying repeatedly before Congressional committees and helping to form a new construction coalition on safety and health issues.

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Developed and launched “Safer Work— Not Paperwork,” a grass-roots campaign to fight onerous OSHA reform.

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Called for federal, state and local governments to take care when “privatizing” formerly government functions to assure that they do not eliminate or undermine payment protections for contractors and subcontractors.

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Helped subcontractors comply with the new Family and Medical Leave Act.

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Introduced its first self-study course, titled Master Subcontracts, a comprehensive, understandable and convenient program to teach subcontracting professionals important information on negotiating subcontracts.

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Worked with a general business coalition to enact legislation to protect businesses from undercharge claims from bankrupt trucking companies.

Continued to work with local chapters on legislation to eliminate pay-if-paid clauses, with primary efforts focused in California and Rhode Island. Helped North Carolina enact a new law prohibiting clauses that allow contracts to be interpreted or enforced under another state’s law, thus protecting North Carolina’s already enacted law banning pay-if-paid clauses.

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Joined the National Association of Credit Management in successfully adding amendments to a bankruptcy reform measure that improved protections for construction subcontractors and suppliers in the event of a customer’s bankruptcy.

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1994 Endorsed a new model subcontract, adopted after three years of negotiations with the Associated General Contractors of America and the Associated Specialty Contractors.

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Filed an amicus brief before the U.S. Court of Appeals arguing that subcontractors for whose work a general contractor has collected payment should have precedent of payment over the Internal Revenue Service in the event of the GC’s bankruptcy.

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Signed a “Letter of Agreement” with Montgomery County (Md.) Public Schools in which both parties agreed to jointly educate the construction industry about the importance of full and prompt payment for work properly performed, using the County’s practices and procedures as a model.

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Launched a regional educational program designed to educate subcontractors and general contractors about the new AGC/ ASA/ASC model subcontract.

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Organized and hosted a two-day meeting of specialty trade associations to discuss how the organizations could better work together to assure full and prompt payment for work properly performed.

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Successfully argued before the New York Court of Appeals that pay-if-paid clauses should be against public policy. In the precedent-setting West-Electric case, the court ruled, in response to an ASA-filed amicus brief, that the pay-if-paid clause violated New York’s lien law. This was ASA’s first attempt to eliminate pay-if-paid clauses through the judicial system.

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Pushed the Clinton Administration to update prompt payment regulations, assuring improved payment for subcontractors on federal construction.

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Assisted a subcontractor in Tennessee to enforce the federal Prompt Payment Act by filing a qui tam lawsuit under the 1986 False Claims Act.

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Organized a Small Business Working Group on Procurement Reform to oppose so-called “procurement streamlining” legislation that would have eliminated prime contractor payment disclosure, reduced Miller Act payment rights, and otherwise eroded subcontractor payment rights on federal construction.

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Facilitated the reorganization of ASACalifornia, including the development of a strategic plan on advocacy, which established retainage reform as a priority. ASAC also established a legal defense fund as a result of its new plan.

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Continued to help chapters with their legislative efforts, focusing on prompt pay in Arizona, pay-if-paid in Maryland, sweeping procurement reform in Mississippi, lien law reform in New Jersey, and prompt pay in Pennsylvania.

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Worked with a business-wide coalition to support a Senate filibuster against striker replacement legislation, which ultimately led to the defeat of the bill.

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Released a new video designed to help subcontractors prepare for OSHA inspections. Ready for Inspection: What to Do During an OSHA Inspection soon became an ASA “best seller.” Also released new educational materials on total quality management and contract changes and claims.

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ASA by the numbers

91

% of subcontractors value ASA membership.

1995 Testified before Congress on contractor and subcontractor payment, surety bonding, OSHA reform, and paperwork reduction.

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Defeated a Department of Defense proposal to allow federal agencies to waive the Prompt Payment Act, the Miller Act and other laws protecting subcontractor payment.

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Successfully had enacted a law that requires federal contracting officers to provide subcontractors with information on whether a prime contractor has submitted a request for payment and whether payment has been made for that subcontractor’s work.

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Pushed for implementation of a new federal regulation that assures subcontractor payment on smaller construction projects through the use of tools such as direct disbursement, escrow accounts and demand payment bonds.

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Continued to support “sane” OSHA legislative reform, while opposing gross expansion of safety regulations impacting construction, including an ergonomics rule.

Assisted ASA chapters in eight other states with their own efforts to eliminate pay-if-paid clauses through the legislative process. Assisted chapters in Alabama and Delaware with the development and enactment of new prompt pay laws.

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Joined its chapter in New York City, the Subcontractors Trade Association, in filing an amicus brief on a lien priority case.

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Established a “subcontractors caucus” at the White House Conference on Small Business, providing technical advice to ASA members and other construction subcontractors among the more than 1,500 delegates.

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Negotiated and signed a Memorandum of Understanding with the National Association of Minority Contractors that focused on sharing educational products and services.

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Won a $38,200 grant from the Business Roundtable for the development of new safety training materials for construction subcontractors.

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Assisted chapters in California with the development and promotion of precedentsetting retainage reform legislation, including accompanying the ASAC lobbyist and members on visits to legislators to testify on retainage practices at the federal level and in other states.

Published more than a dozen new manuals and other educational materials designed to help subcontractors improve their business practices.

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Conducted a series of four focus groups of subcontractors in Chicago to assess different needs and priorities of different segments of the industry.

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1996 Continued efforts to eliminate pay-if-paid clauses through the courts by successfully arguing before the Tennessee Supreme Court that pay-when-paid language establishes a time for payment rather than a condition precedent for payment. Also filed an amicus brief in Connecticut, arguing that pay-if-paid clauses inequitably shift the risk of owner payment default to subcontractor from the prime contractor.

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Testified before Congress on issues as diverse as OSHA reform, estate taxes and acquisition reform.

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Met repeatedly with OSHA officials to represent members’ concerns about proposed new regulations on ergonomics, fall protection and written safety and health plans.

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42

As part of its owner awareness campaign, arranged for Montgomery County (Md.) Public Schools Fiscal Officer of Construction Services Bob Weston to meet with owners in Minnesota, Missouri and New York to discuss the value of owners working closely and fairly with subcontractors.

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Entered into partnership with ENR magazine, including a special supplement featuring ASA, its programs, activities and achievements.

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Continued to assist ASA chapters with their legislative efforts concerning payment, helping chapters in Missouri, New Mexico, New York and Oregon enact new or strengthened prompt payment laws.

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Strongly objected to the Associated General Contractors of America when it announced that it intended to develop a model subcontract with a “pay-if-paid” clause. While ASA’s efforts may have delayed AGC’s action, that Association eventually would publish a new subcontract that inequitably shifts payment and other risks to subcontractors.

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Updated the Guidelines on a Successful Construction Project with the Associated General Contractors of America and the Associated Specialty Contractors.

This included a new “Guideline on the Purchase of Materials or Equipment by Owners.”

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Coordinated with the National Association of Home Builders to modify OSHA’s fall protection standard applicability to home construction.

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Introduced eight new educational products designed for subcontractors, including a manual on project documentation, a new safety kit on coping with ergonomics in the workplace, a “Subcontractor Checklist” to help subcontractors take a step-by-step approach to reviewing subcontractors.

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Partnered in the development of educational products with other specialty trade groups, including the Air Conditioning Contractors Association, the Independent Electrical Contractors and the National Fire Sprinkler Association. Negotiated educational partnering agreements with other groups, including the Architectural Woodwork Institute, the American Traffic Safety Services Association and the National Erectors Association.

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41

Provided speakers to more than a dozen other national associations, including the Independent Electrical Contractors, the National Association of Minority Contractors and the National Association of Surety Bond Producers.

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Argued successfully that pay-if-paid clauses should be made against public policy before the California Supreme Court. This was the first victory for ASA’s newly-established SLDF.

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Assisted ASA of Minnesota with the drafting and subsequent enactment of its “Contractor Bill of Rights,” as a model for other ASA chapters.

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Joined more than 30 other construction associations in endorsing the Dispute Avoidance and Resolution Task Force’s (DART’s) Declaration of Principles, which emphasized greater cooperation among construction parties to minimize disputes and adversarial relationships.

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Won two national awards. ASA was awarded the Outstanding Chapter Relations Pyramid Award by the American Society of Association Executives for “Taking Stock: An Investment in Chapter Management.” ASA’s monthly newspaper, The Subcontractor, also received special recognition from Association Trends magazine.

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1997

Helped subcontractors in Connecticut win passage of a “no pay, no certificate of occupancy” provision. Although subsequently vetoed by the governor, this marked the first time that a legislative body had approved the “no pay/no CO concept.

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Organized and hosted the first annual Construction Industry Legislative Conference, bringing together seven national specialty trade associations in a single event designed to build coalitions at the state level and carry the subcontractor message to Capitol Hill.

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Continued efforts to assist local chapters with their legislative activities focusing on pay-if-paid in Georgia, indemnification and prompt payment in Texas, pay-if-paid and venue in Utah, and surety bond protections in Wisconsin.

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Drafted and had introduced legislation to modernize and streamline the 1935 Miller Act to help assure that the antiquated law would protect subcontractor payments into the next century.

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Founded the Coalition to Modernize the Miller Act, which was immediately joined by 10 other specialty trade associations, to promote the new legislation.

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Established the Subcontractors Legal Defense Fund to help finance ASA’s efforts to promote the subcontractor agenda in the courts.

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Conducted its first joint convention, partnering with the Association of the Wall & Ceiling Industries – International to sponsor the event in Reno, Nev.

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Testified before Congress on a myriad of issues, including “real” OSHA reform, estate tax reform, independent contractor reform, payment protections, and procurement reform.

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Worked in cooperation with the Small Business Legislative Council to convince the Internal Revenue Service to issue new guidance on enforcement of existing rules governing independent contractors.

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Endorsed the latest model documents of the American Institute of Architects, including general conditions (A201) and the standard subcontract (A401), once again declaring them the most equitable model documents in the industry and urging subcontractors to condition their bids on the use of the documents.

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Developed and endorsed, in conjunction with the Associated General Contractors of America and the Associated Specialty Contractors, two new guidelines on project inspections and environmental responsibility.

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Unveiled Safety CompliancePlus software, including new training and recordkeeping modules.

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Co-sponsored a teleconference to help inform students in secondary schools about opportunities in the construction industry. More than 250,000 students nationwide watched the broadcast of “Careers in Construction … Join America’s Build Team.”

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Launched chapter grant program to help local and state groups fund programs to help with their own growth and member services.

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1998 Denounced the Associated General Contractors of America for the withdrawal of its endorsement of the subcontract jointly developed with ASA and the Associated Specialty Contractors (1994) and its announcement that it intended to unilaterally develop a new subcontract that included a pay-if-paid clause.

Administration and other specialty trade groups. Strong testimony and lobbying by AGC and the surety industry stalled the legislation at the close of the Congress.

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Sparred repeatedly with AGC over each new draft of its unilaterally developed model subcontracts, which inequitably shift risk from general contractors to subcontractors. Although each new AGC draft eliminated some “anti-subcontractor” language, the final documents were still much less fair than other industry models, particularly the AIA A401.

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Developed and distributed at no cost, an addendum to the new AGC “interim” model subcontracts to help subcontractors deal with their most onerous provisions.

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Continued to promote Miller Act reform obtaining the support of the Office of Advocacy in the Small Business

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Argued before the Supreme Court that an owner should be required to pay a subcontractor for work performed, even though the general contractor was terminated for cause.

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Presented proposals to the Office of Management and Budget to protect subcontractor payment rights as the federal government converts to new and future technologies.

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Continued to promote “owner awareness” of subcontractors through ads and articles in ENR magazine, a presentation to the Business Roundtable, liaison with the Associated Owners and Developers, and encouraging its chapters to develop their programs.

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Continued efforts to assist chapters with their own legislative activities, focusing on retainage reform and pay-if-paid in California, pay-if-paid and no pay/no CO in Connecticut, lien law reform in Florida, pay-if-paid in Idaho, retainage reform in Maine, and pay-if-paid in Ohio.

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Led efforts to defeat a legislative initiative by the Associated General Contractors of America that would have changed OSHA’s multi-employer jobsite policy and allowed general contractors to shift job safety responsibility and fines to their subcontractors.

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1997 ASA testified before Congress on a myriad of issues, including “real” OSHA reform.

Joined with the general business community to support the SAFE Act, legislation to reform OSHA to promote safety education and reduce the focus on penalties.

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ASA by the numbers

88

subcontractors value ASA’s % ofefforts to improve industry model contract documents.

Once again joined with the National Association of Credit Management to develop, introduce and promote bankruptcy reform legislation to better protect construction subcontractors and suppliers.

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Worked with a coalition of construction industry associations to enact TEA-21, under which the federal government would invest at least $162 billion for highways and $36.3 billion for mass transit in a five-year period.

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Strengthened its chapter grant program by focus funding on innovative programs that can serve as models for other chapters.

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Initiated the Chapter Merit Award Program to help chapters evaluate their own programs and services and provide targeted assistance to “endangered” chapters.

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1999 Brought Miller Act reform grassroots effort to closure with final passage and enactment of the Construction Industry Payment Protection Act of 1999.

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Chaired industry negotiations on Miller Act Reform that led to a landmark Memorandum of Understanding signed by all segments of the construction and surety industries.

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Drafted and had introduced new Miller Act reform legislation, supported by the breadth of the construction and surety industries; visited more than 60 members of Congress on the two House committees with jurisdiction; conducted a targeted grass-roots campaign to secure House enactment.

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Successfully argued against pay-if-paid clauses before the Colorado Supreme Court, which subsequently placed strong limits on the use of pay-if-paid clauses in the state.

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Through the Subcontractors Legal Defense Fund, won a second landmark victory before the New York Supreme Court, which upheld its decision that contingent payment schemes are against public policy. The decision built on ASA’s original victory in 1995 in West-Fair. A general contractor and surety hoped to find a loophole by using a nonpayment scheme that would have had the same practical effect as pay-if-paid.

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ASA by the numbers

83

% ofvaluesubcontractors ASA’s model

contract documents.

Expanded efforts to assist chapters with their legislative activities, focusing on payment rights in Arizona, lien law reform in California, venue in Florida, prompt pay in Hawaii, pay-if-paid and retainage reform in Montana, trust funds in Pennsylvania, retainage reform in Utah, pay-if-paid in Virginia, indemnification in Wisconsin.

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Worked with OSHA to develop a new multi-employer workplace policy that would preclude general contractors from shifting safety responsibility and fines to subcontractors.

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Conducted a nationwide survey on the practice of retainage and found that subcontractors suffer huge financial burdens because of it. Results were used to focus industry attention on the problems of using retainage as security.

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Set in motion an inclusive process for determining ASA’s long-term goals, resulting in the Long-Range Strategic Plan: 2000-2002.

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Developed and distributed, at no cost to recipients, a new “generic” subcontract addendum for subcontractors to use with general contractors’ proprietary subcontracts.

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Provided extensive input to the Associated General Contractors of America on their proposed design-build documents. Nonetheless, the final documents inappropriately shift risk from the general contractor to subcontractors.

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Working with the Associated General Contractors of America and the Associated Specialty Contractors, developed and endorsed guidelines on dispute resolution and design responsibility in contracts.

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Introduced a new bi-weekly fax/email newsletter, ASAtoday, to help keep members better informed.

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Conducted four regional summits designed to bring chapter and industry leadership training “closer to home.”

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Partnered with the National Association of Home Builders to educate small commercial builders on improved contract, human resource and safety practices.

Approved a new “Contracting Bill of Rights,” which sets forth the rights every member of the construction team should expect.

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Developed and distributed, at no cost to recipients, an addendum to the new AGC subcontracts to help subcontractors deal with their most onerous provisions.

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Published, with funding from the Business Roundtable, a new safety manual that includes 14 case studies on the safety practices of award-winning contractors and subcontractors.

2000 Reviewed and commented on proposed regulations implementing Miller Act reform.

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Was the primary advocate of bid listing legislation introduced in the U.S. House of Representatives. ASA initiated a grassroots letter-writing campaign targeting key House members needed for committee consideration.

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Testified in favor of bid listing legislation before the Subcommittee on Government Management, Information and Technology.

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Opposed a lawsuit threatened by the Associated General Contractors of America against the U.S. Department of Transportation for promulgating rules allowing “quick release” of retainage to subcontractors on projects receiving USDOT funds when subcontractors have completed their portions of the work.

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Launched a redesigned Web site, including a members-only section and secure e-commerce capabilities.

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Launched the Subcontractors’ Transfer of Risk Action Plan (STRAP) to address contractual and insurance risk transfer problems.

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Joined with other trade associations to oppose OSHA’s proposed ergonomics rule for general industry, and expressed deep concern about future extension of a similar rule to the construction industry.

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Launched a public relations campaign “Retainage: Dollars and $ense that Don’t Add Up” to expose the effects of the antiquated practice. Developed a media kit with fact sheets and checklists for subcontractors to use to evaluate whether they might be at risk of nonpayment.

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Partnered with e-commerce companies to educate ASA members about the evolving online marketplace for construction services and changing project management techniques.

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Conducted scientifically valid Needs Assessments of members and chapters.

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Partnered with Onvia.com on a joint Onvia/ASA Web site for small businesses.

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Joined with the Associated General Contractors of America and the Associated Specialty Contractors to develop and submit initial comments to the American Institute of Architects on proposed revisions to the AIA 201 General Conditions form to be published in 2002.

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Was named “Association of the Year” for 2000 by the AIC Constructor Certification Commission for promoting Constructor Certification, a process that sets high professional standards for practicing constructors.

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Published an addendum to two of the Associated General Contractors of America’s design-build subcontracts, AGC 450 and 455, and distributed the addendum to members at no cost. The addendum was also made available on the Internet.

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Assisted chapters with government relations activities. There were successes in Arizona with a revolutionary prompt pay law, in Florida with anti-indemnity, in Maryland with retainage reform, and in South Carolina with voiding “pay-if-paid.”

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Supported estate tax reform legislation in Congress through the Small Business Legislative Council.

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Increased the frequency of ASAtoday to weekly.

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Implemented streamlined dues reporting procedures for ASA chapters, including distribution of a handbook to executive directors explaining required procedures.

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Published the Addendum to the AGC Form 603 Standard Short Form Agreement Between Contractor and Subcontractor. ASA also published a comparison guide of the AIA A201 and AGC General Conditions.

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Provided resources from its STRAP campaign on the ASA Web site.

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2001 ASA Hampshire Award winner Richard Usher of Phoenix, Ariz., and ASA Construction Law and Contracts Counsel Brian Cubbage, now with Ceco Construction Group, Kansasa City, Mo., presented ASA’s risk transfer workshop in more than 20 locations around the country to ASA chapters and other industry groups.

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Met with representatives of construction industry groups that offer certification programs to discuss certification trends, and outlined a plan to create a “clearinghouse” of information about construction-related certifications.

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Formed a strategic partnership with the Commercial Affiliation Marketing unit of CNA to address contractual transfer of risk issues.

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ASA by the numbers

79

subcontractors value % ofASA’s in-person professional development.

Launched a campaign challenging leaders in the construction industry and public policy makers to renounce business practices and public policies that shift virtually all insurable risks down to subcontractors. ASA asked legislators and groups developing model construction contracts to review and appropriately revise legal and contract language.

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Launched SubLocate.com, an online searchable database of members.

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Leadership Forum, scheduled for Sept.

13-16, was canceled because of Sept. 11 terrorist attacks.

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2002 Filed a brief to support an appeal by a concrete contractor that would force Nevada state courts to recognize exceptions to the enforcement of “no damage for delay” clauses in construction contracts.

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Secured victory for subcontractors in a case before the Florida 2nd District Court of Appeals. The court decided that a Florida subcontractor should not have to pay the defense costs of a general contractor that pursued an invalid indemnity claim.

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Filed papers with the U.S. Court of Appeals for the 9th Circuit asking the court to expand the remedies available to unpaid subcontractors under the Miller Act.

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Subcontractors Legal Defense Fund (SLDF) won a case in New York ensuring the ability of subcontractors to make claims for delay damages.

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Filed an amicus curiae brief in a case that threatened Tennessee’s construction subcontractors’ rights involving change order disputes.

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Signed a partnering agreement with the Associated General Contractors of America to “work jointly on industry guidelines, documents, and procedures that advance efficient project delivery and promote equitable risk allocation.”

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Intervened in a lawsuit before the Alabama Supreme Court over the limits of coverage that construction subcontractors must provide to a general contractor under a “hold harmless” or “indemnification” clause.

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Signed a partnering agreement with the Construction Management Association of America Inc., laying the foundation for construction managers and specialty trade contractors to communicate with each other on issues of importance. The agreement also recognized the need to support CMAA’s Construction Manager Certification program and provide construction professionals with continuing education opportunities.

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Added to its list of professional certifications and certificates that it endorses: the Concrete Flatwork Technician and the Concrete Flatwork Finisher certification programs of the American Concrete Institute; the Certified EIFS Mechanic certification program, the Certified EIFS Inspector certification program, and the Certified EIFS Professional certification program of the Association of the Wall and Ceiling Industries – International; the Contractor College certification program of the International Masonry Institute; the Certified Professional Services Marketer certification program of the Society for Marketing Professional Services; the Quality Certification program of the Architectural Woodwork Institute; the Architectural Hardware Consultant and Certified Door Consultant program of the Door and Hardware Institute; and the Masonry Certification program of the Rocky Mountain Masonry Institute.

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Partnered with the Society for Marketing Professional Services and the Foundation of SMPS to raise the level of professionalism and ethics throughout the construction industry.

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Endorsed the National Commission for the Certification of Crane Operators’ crane operator certification program.

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Filed an amicus curiae brief in a Tennessee Court of Appeals case on behalf of a construction subcontractor that was not paid for extra work.

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FASA published Fundamentals of Fair Subcontracts and Mastering Subcontracts: A Reference Guide on CD-ROM.

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Signed a partnering agreement with the American Institute of Constructors and the AIC Education Foundation to improve professionalism in construction in various ways, including to encourage public and private corporate policies recognizing the Certified Professional Constructor and Associate Constructor designations.

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2002 Launched The Contractors’ Knowledge Network.

Succeeded in persuading the Delaware Supreme Court that “additional insured” requirements “may, under certain circumstances, be unenforceable.” ASA had filed an amicus curiae brief in the case, with the support of the SLDF.

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Hosted a news conference in conjunction with CONEXPO-CON/AGG 2002, to discuss the opening of the Contractors’ Knowledge Network.

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ENR endorsed Owners and Contractors Protective Liability insurance, a key part of ASA’s STRAP program.

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Established the Online National Business Practices Interchange.

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FASA launched the Contractors’ Knowledge Network, consisting of four interconnected services for contractors: the Contractors’ Knowledge Depot, The Contractor’s Compass, The Contractor’s Knowledge Quest, and the Contractors’ Knowledge Bank.

Collaborated with the Associated General Contractors of America and McGraw-Hill Construction to develop a Subcontractor Community offering comprehensive product and service information to specialty trade contractors.

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Won an indemnity case before the Alabama Supreme Court.

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Filed a brief in a case before the Texas Supreme Court arguing that construction subcontractors should be able to pursue claims for damages that are caused by construction owners.

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Formally endorsed the CM Certification Program of the Construction Management Association of America.

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2003 Endorsed the National Institute for Certification in Engineering Technologies’ Fire Protection Certification Program.

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Filed a motion, along with the Rhode Island Subcontractors Association, to challenge a Rhode Island trial court’s ruling that mechanics’ liens are unconstitutional under the Rhode Island and U.S. Constitutions on “due process” grounds.

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Launched the Contractors’ Knowledge Bank, FASA’s Web-based, searchable document retrieval system that gives users access to a diverse selection of documents to help them manage contract negotiation, accounting, insurance, and more.

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Strengthened its alliance with McGrawHill Construction and its Sweets Marketplace through online co-branding and links between each organization’s Web site, enabling ASA members to more easily find, select, compare and purchase products.

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President Anne Bigane Wilson, CPC, PE, was awarded the Walter A. Nashert Sr. Award by the American Institute of Constructors at the AIC convention in Tampa, fFla.

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Filed an amicus curiae brief in a case before the Wisconsin Supreme Court, challenging an appeals court’s decision that would unreasonably limit insurance coverage provided to contractors through common commercial general liability policies.

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Launched its national Payment Advocacy Year (PAY!) campaign, a multi-pronged advocacy and education effort to enact better payment-related laws and educate contractors and other members of the construction team about prevention of late payment and nonpayment.

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ASA by the numbers

73

subcontractors value % ofASA’s remote professional developments.

2004 Launched a redesigned Web site with new features and a new “look” at www.asaonline.com. The site includes a password system allowing individuals at member firms to set up passwords and gain access to “members-only” documents and resources.

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FASA published “Retainage Practice in the Construction Industry,” a study conducted by Dennis Bausman, Ph.D., of Clemson University. The study contains many important findings useful to subcontractors that argue against retainage.

ENR published an editorial spurred by the FASA report, titled “Retainage Has Many Costs That Outweigh Benefits.”

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Filed an amicus curiae brief in a case before the Oregon Supreme Court to uphold anti-indemnity restrictions.

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Launched digital version of “Guidelines for a Successful Construction Project,” jointly developed with the Associated General Contractors of America and the Associated Specialty Contractors.

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Argued to reverse an Ohio court decision that subcontractors could be held liable for contract-type damages, such as lost profits, by an owner, despite the absence of privity of contract.

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Scored a decisive legal victory when the Texas Supreme Court ruled that the state recognizes subcontractors’ pass-through claims. The ruling means the Texas subcontractors are protected against the legal argument that pass-through claims are not enforceable because the general contractor lacks proper standing to bring claims for damages suffered by subcontractors.

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Filed an amicus curiae brief, along with the Rhode Island Subcontractors Association, urging the Rhode Island Supreme Court to uphold mechanic’s lien laws.

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Launched the “Stand Up! For Subcontractors” educational campaign to help subcontractors help themselves in contract negotiations. The cornerstone of the campaign is a series of white papers, articles and other resources on selected contract-related topics.

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Succeeded in convincing the Nevada Supreme Court that state law includes exceptions to the enforcement of “nodamage-for-delay” contract clauses. The court’s written decision cited materials that ASA provided with its amicus curiae brief.

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Released inaugural edition of “The ASA Report: The Policy Environment in the States,” a report card of states’ progress (or lack thereof) on enacting policies that improve the business environment for subcontractors.

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Secured victory on behalf of subcontractors in Wisconsin Supreme Court case when the court held that standard commercial general liability policies cover accidents caused by defective construction.

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ASA by the numbers

70

% of subcontractors regularly read

ASA’s weekly bulletin, ASAToday.

2005 Convinced the Ohio Supreme Court to overturn an appeals court ruling that would have allowed an owner to directly sue a subcontractor, with whom the owner had no privity of contract, for delay damages.

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Released a revised edition of the ASA Addendum to Subcontract and published a new short form of the addendum, the ASA Short Form Subcontract Addendum.

Both documents were designed to help subcontractors negotiate or re-negotiate terms and conditions of a contract.

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Published its ASA Subcontractor Bid Proposal as a new tool for subcontractors to use to condition their bids during contract negotiations.

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Launched its distance learning programs with two series offering subcontractors contract education by conference call and Internet: The ASA Critical Skills Series on Contract Negotiation, featuring 24 one‑hour teleconferences; and The ASA Building for Profit Internet Learning Series: “Contract Dos, Don’t’s and Maybes,” featuring six two-hour Web-based seminars, or “webinars.”

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Asked the Wisconsin Supreme Court to review an appeals court decision forcing a subcontractor to indemnify a project owner for personal injuries to a third party caused by the owner’s allegedly faulty freight elevator.

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Secured victory for subcontractors when the Maryland Court of Appeals ruled that a payment surety’s failure to respond to a subcontractor’s claim in the manner prescribed in a bond form prevented the surety from disputing the claim, and required the claim to be paid in full. ASA had filed a “friends of the court” brief, along with ASA of Baltimore and the D.C. Metropolitan Subcontractors Association, in the case.

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Successfully defended mechanic’s lien rights from a constitutional challenge in a case before the Rhode Island Supreme Court. ASA had filed an amicus curiae brief in the case, along with the Rhode

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FASA released the first phase of a study, in conjunction with the Associated General Contractors Education and Research Foundation, that suggests online reverse auctions do not deliver promised savings in markets in which they are being used.

“Online Reverse Bid Auctions for Construction Contractors and Subcontractors” was authored by James H. Gill Jr., J.D., AIC, and Yilmaz H. Karasulu, Ph.D., COSS.

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Hailed the Oregon Supreme Court’s decision to preserve the state’s legal restrictions on risk transfer. ASA had filed an amicus curiae brief in the case, through its Subcontractors Legal Defense Fund.

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Filed an amicus curiae brief, along with ASA of Texas, Inc., urging the U.S. Court of Appeals for the 5th Circuit to overturn a district court ruling that denied a home builder coverage under a commercial general liability policy. Island Subcontractors Association, thanks to funding from ASA’s Subcontractors Legal Defense Fund.

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2006 Published a “Model Code of Ethics for a Construction Subcontractor” to help subcontractors that want to uphold the letter and the spirit of the Sarbanes-Oxley Act. The model code contains language that subcontractors can adapt to address ethical concerns: competition, qualifications, standards of practice, conflicts of interest, public safety, service providers and suppliers, employees, public information, compliance with laws, image of the construction industry, and internal procedures.

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2007 55

Launched the inaugural Champions Academy to provide chapter leaders with strategies for strengthening their chapters and an opportunity to meet with federal legislators on Capitol Hill to discuss key subcontractor issues.

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With ASA of Colorado, defended the payment recovery option provided by the state’s Trust Fund Statute when the Colorado Supreme Court concluded that the Trust Fund Statute “protects subcontractors, laborers, and material suppliers who add value to property but are unable to recover monies owed to them through the lien claim process.”

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With the Associated General Contractors of America and the Associated Specialty Contractors, expanded the Guidelines for a Successful Construction Project.

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Filed a brief acknowledged by the Pennsylvania Superior Court in reaching a decision that corrected a mistaken reading of the state’s prompt payment law.

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Prevailed in an Ohio appeal, preserving mechanic’s lien rights for most kinds of equipment installations.

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Provided input to the American Institute of Architects on its A201-2007 and A4012007 forms.

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Signed a Memorandum of Understanding with the Associated General Contractors of America outlining the associations’ participation in the Construction Industry Contracts Council, an entity that works to develop, publish and disseminate consensus model contract documents and related forms.

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2008 Revised the ASA Addendum to Subcontract, ASA Short Form Subcontract Addendum, and ASA Subcontractor Bid Proposal, acknowledging the ConsensusDocs documents as the new gold standard for contract language and removing the subcontractor’s obligation to participate in controlled, or “wrap-up,” insurance programs.

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Launched two new contract tools, Contract Offer Terms for Projects Using Wrap-up Insurance and Addendum to Subcontract – Project-Specific Insurance, to manage the risks of projects that use wrap-up insurance policies.

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Launched a new, state legislative tracking service.

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With FASA, unveiled a donor recognition program, the Circle Club.

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2009 Sought and obtained targeted tax relief in the stimulus package, including: a oneyear delay of the 3 percent tax withholding requirement on public contracts; an extension of small business expensing limits; and a one-year patch of the Alternative Minimum Tax.

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Voiced concerns about a shortage in the Highway Trust Fund, and President Bush signed a law restoring $8 billion to the fund.

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Successfully argued before a federal court that Texas’ Trust Fund Law protects payments to a supplier against the claims of a bankruptcy trustee.

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ASA 50th Anniversary Ad (PRINT).pdf

With the Associated General Contractors of America and the Associated Specialty Contractors, produced guidelines on terminations and suspensions; project warranties; building information modeling; price adjustment clauses; and surety bonding.

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Outlined an economic survival plan for member companies in an ASAtoday Special Report to all members.

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With its allies, contacted legislators and ran ads in Capitol Hill publications touting the economic benefits of construction during the debate on the federal economic stimulus package. The final package contained more than $130 billion for construction projects of all types.

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Provided timely education through inperson workshops like “Surviving Tough Economic Times” and “What To Do When — or Before — a Project Stops,” through The Contractor’s Compass and ASAtoday articles like “Credit and Collections Tips in a Tight Economy,” and through podcasts including “10 Survival Tips for Subcontractors in Lean Times.”

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2010 Worked with U.S. senators to include in a law that took effect in September 2011 requirements that (1) federal agencies make public federal prime contractors’ “history of unjustified, untimely payments to subcontractors” and (2) federal prime construction contractors explain to their federal contracting officers the reasons for which they did not “acquire articles, equipment, supplies, services or materials or obtain the performance of construction work” from those small businesses whose bids or proposals they used “in preparing their bid or proposal.”

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Secured enactment of a new law that requires federal prime contractors to explain to their federal contracting officers the reasons for which they did not “obtain the performance of construction work” from those small businesses whose bids or proposals they used “in preparing their bid on proposal.”

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With its allies in Washington, D.C., saved subcontractors and their employees from new regulatory burdens by convincing the Obama administration to rescind the controversial “no-match” rule, which would have added multiple steps beyond completing I-9 forms to the process of verifying employment eligibility.

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Won a landmark legal case in Maryland that will help keep prime contractors from “shopping” Maryland subcontractors’ contracts. The court agreed with ASA, the D.C. Metropolitan Subcontractors Association, and ASA of Baltimore that subcontracts should not be made “illusory and meaningless” by allowing general contractors to terminate them for convenience when they find better deals.

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Won an important victory when the California Supreme Court chose not to review a court of appeals opinion that supports a contractor’s position that it should be able to rely on owner-provided information when serving statutorily required preliminary lien notices.

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With ASA of Ohio, successfully argued, through multiple appeals, that general contractors can’t create arbitrary hurdles to deny payment of time-and-materials invoices. An Ohio appeals court affirmed that a lien filed by a subcontractor for unpaid T&M invoices is “enforceable as a matter of law on the undisputed facts.”

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With ASA of Colorado, won a victory before a Colorado Appeals Court that rejected a design-build contractor’s claim that a contractual indemnity clause allowed the shifting of settlement costs for damage caused by its own design errors to subcontractors. The court unanimously dismissed the design-builder’s indemnity claim.

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Scored a victory before the Texas Supreme Court when it convinced the court that statutory payment bond and trust fund rights are not mutually exclusive. The high court stated, “Interpreting the McGregor Act to provide an exclusive remedy for unpaid claims would contravene, rather than further, the purpose of both the McGregor Act and the Trust Fund Act.”

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Celebrated Kansas’ landmark Controlled Insurance Programs Act (H.B. 2214), spearheaded by ASA–Greater Kansas City, making Kansas the first state to comprehensively regulate the terms and conditions of CIPs, also know as wrap-up insurance.

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2011 Released revised editions of the ASA Addendum to Subcontract and the ASA Short-Form Subcontract Addendum to help subcontractors get equitable terms like those in the ASA-endorsed ConsensusDocs documents.

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Spearheaded the Construction Quality Assurance Act, H.R. 1778, to combat the practice of bid shopping by instituting bid listing requirements.

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Urged Congress to make federal Miller Act bond requirements applicable to public-private partnerships, including projects financed by the proposed National Infrastructure Bank.

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Called on the Treasury Department to provide public notice when a federal agency has notified a surety company that the agency may reject surety bonds underwritten by the company.

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Led a successful campaign to enact federal legislation saving subcontractors thousands of dollars in overhead costs each year when President Obama signed legislation repealing a law that would have required businesses to issue an IRS Form 1099 to each vendor to which they make $600 or more in payments during a calendar year.

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Updated the ASA Subcontractor Bid Proposal for subcontractors to use to condition their bids on use of the ConsensusDocs 750 Agreement Between Constructor and Subcontractor during contract negotiations.

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Launched the ASA National Construction Best Practices Awards, recognizing contractors that implement industry best practices, including superior contract language and positive relationships with subcontractors.

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Won a landmark case in California when a state appeals court’s ruled that custom pre-fabricators are subcontractors entitled to payment protections under California law.

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Won a key victory in North Carolina when an appeals court agreed with ASA that lenders’ liens should not take priority over subcontractor liens.

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Urged federal procurement rulemakers to require bid listing on federal projects in rules intended to increase transparency in federal contracting.

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2011 Renewed our call for comprehensive immigration reform to “fix our broken immigration system.”

Successfully lobbied for key tax provisions, including extending and expanding the Section 179 expensing threshold, extending bonus depreciation, allowing a five-year carry-back of general business credits, and other construction-related provisions in the White House-Republican tax compromise (H.R. 4853).

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Lobbied to establish an exemption of $5 million and a top tax rate of 35 percent for the estate tax. Congress adopted this provision for two years.

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Submitted comments to the U.S. General Services Administration, voicing support for a proposal to give subcontractors and other members of the public access to the federal government’s database concerning records of misconduct and legal/administrative actions taken against contractors that have worked for it.

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Urged the chairmen of the House and Senate tax-writing committees not to adopt a proposal to require S Corporation shareholders to withhold payroll taxes from their service-based income.

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Renewed its call for comprehensive immigration reform to “fix our broken immigration system.”

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Told the Environmental Protection Agency that renovation firms working on public and commercial projects already employ lead-safe best practices in response to EPA’s plan to expand regulation of leadbased paint hazards in public and commercial buildings.

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Voiced its support for a General Services Administration proposal to make the claims process more consistent and uniform, thus increasing the likelihood that contractors working on federal projects will receive final payment in a timely manner.

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Educated legislators about the damaging effect on construction subcontractors of many of the provisions of the Patient Protection and Affordable Care Act.

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Published a new resource to help subcontractors track, understand and comment on federal regulatory proposals.

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With ASA of California, won a landmark legal case in California when the state’s Supreme Court ruled that a public entity may be required to provide extra compensation if it knew, but failed to disclose, material facts that would affect the contractor’s bid or performance.

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With ASA of Baltimore and the D.C. Metropolitan Subcontractors Association, filed briefs and successfully argued that construction subcontractors working on public projects in Maryland cannot be denied payment for their work on grounds that government entities have “sovereign immunity.”

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Held leadership positions in the ConsensusDocs coalition, providing input to the new and updated ConsensusDocs documents and helping to expand the coalition’s membership. The 2011 releases included the first major revisions to the ConsensusDocs standard 750 subcontract agreement and 751 short-form subcontract agreement, as well as revisions to the design-bid-build, design-build, and CM-at-risk contract documents, and to the ConsensusDocs qualification documents for subcontractors and constructors.

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Developed new stickers that members can affix to signed documents to reserve their rights, including change orders, lien or bond waivers, payment applications, and schedule approvals.

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2012 Hosted a national GC Expo to provide subcontractors additional networking opportunities with major general contractors, construction managers and design-builders.

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With ASA of Ohio, asked a state appeals court to reverse a trial court’s decision that, if allowed to stand, would allow general contractors to effectively waive their subcontractors’ lien rights without the subcontractors’ agreement.

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Celebrated a decision by the Supreme Court of Georgia vacating an appeals court’s decision that, if left standing, would have permitted injured employees to sidestep the workers’ compensation system and sue construction firms and project owners for damages.

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Initiated a provision included in the federal surface transportation law requiring USDOT to develop “standard publicprivate partnership transaction model contracts,” and urged DOT to include payment assurances for subcontractors in such contracts.

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Celebrated a win in Missouri when the Missouri Supreme Court overturned an appeals’ court’s decision that threatened to dramatically diminish the value of subcontractors’ lien claims.

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Helped lead efforts to protect subcontractor payment on federal projects by supporting federal legislation curbing the use of individual surety bonds.

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Urged the Treasury Department to protect construction contractors from unknowingly submitting non-responsive bids on federal construction by providing public notice when a federal agency has notified a surety company that the agency may reject surety bonds underwritten by the company.

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Supported a Small Business Administration proposal designed to improve access to surety bonding for small construction contractors.

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Challenged an insurer’s denial of insurance coverage in a case before the Connecticut Supreme Court, arguing that insurance companies must deliver what they promise in their commercial general liability policies.

Asked the Supreme Court of Minnesota to uphold the state’s anti-indemnity law, enacted to help protect construction firms from being forced to pay for damage caused by others on construction projects.

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With ASA of Texas, celebrated a victory when a U.S. appeals court withdrew a decision expanding contractors’ risk of insurance coverage denial.

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Celebrated an Ohio appeals court ruling that a “pay-if-paid” clause using the words “condition precedent” is unenforceable and should be interpreted as a “pay-whenpaid” provision, reversing a trial court decision.

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2012 Hosted a national GC Expo to provide subcontractors networking opportunities in the field of construction.

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need to negotiate particular subcontract clauses, including ASA-recommended language, samples of what subcontractors may see in their clients’ proprietary subcontracts, an explanation of the impact of poor language on subcontractors, negotiating tips, and sources for more information.

Inked a five-year agreement with Textura to educate subcontractors and other construction firms about electronic payment management, prequalification and other core business functions that these firms use Textura products and services to manage.

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2013 Updated the ASA Subcontractor Bid Proposal for subcontractors to use to condition their bids on use of the ConsensusDocs 750 Agreement Between Constructor and Subcontractor during contract negotiations.

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Launched a series of Subcontractor’s Negotiating Tip Sheets designed to provide subcontractors with information they

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With the National Association of Surety Bond Producers, published “Public-Private Partnership Laws in the States, Including Surety Bond Requirements,” a guide to help subcontractors determine whether they have payment protections before they bid on a P3 project.

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Unveiled model state legislation to address growing payment assurance problem on public-private partnership projects.

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Provided extensive comments on the long-awaited Occupational Safety and Health Administration’s proposed rule on crystalline silica, saying it was “confusing and burdensome without meeting the shared goal of improved worker safety and health.”

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Called on Congress to enact legislation to prohibit the use of reverse auctions to procure construction for the federal government.

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Celebrated a victory when the U.S. Supreme Court preserved the 24 state laws limiting the validity of forum-selection clauses in construction contracts.

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2014 Celebrated a precedent-setting decision by the Texas Supreme Court, when it ruled that a no-damages-for-delay clause does not shield an owner from liability for deliberately and wrongfully interfering with a contractor’s work. ASA and ASA of Texas had filed an amicus brief in the case, Zachry Construction Corporation v. Port of Houston Authority of Harris County, Texas, saying, “There is no justification to leave [small businesses] at the mercy of the owner’s willful, arbitrary, capricious, and fraudulent conduct that is also active interference.” Attorney Richard Gary Thomas of the Dallas law firm Thomas, Feldman & Wilshusen, LLP, who prepared the ASA brief, said, “This is a great victory for the subcontractor-supplier industry.”

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Celebrated when a U.S. appeals court withdrew its prior opinion, reversed a trial court, and granted a rehearing in a Texas CGL case, saying the contractual liability exclusion does not exclude coverage for property damage arising out of breach of a contractor’s duty to repair. ASA and others in the construction industry had argued that the appeals court opinion had called into question whether subcontractors could depend on their commercial general liability insurance policies for coverage — coverage previously upheld by other courts.

with OSHA’s proposed standard would cost the construction industry nearly $3.9 billion per year, nearly eight times larger than OSHA’s estimate.” ASA requested that OSHA withdraw the proposed rule and offered to engage in a dialogue with OSHA regarding what would be an appropriate approach to dealing with the hazards of silica on construction worksites.

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Urged the Federal Acquisition Regulatory Council to amend the report submitted by individual sureties to “increase the likelihood that the assets pledged by an individual surety are real, sufficient in amount, and readily available should any payment claim arise.”

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Submitted final comments separately and as part of the Construction Industry Safety Coalition, of which ASA is a founding member, reemphasizing the coalition’s prehearing written comments and testimony on the Occupational Safety and Health Administration’s proposed rule on crystalline silica, stating that “compliance

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2014 Launched the “Improving Cash Flow” column providing tips for improving cash flow to both veterans and newcomers in the construction industry.

Published a revised version of “Lien & Bond Claims in the 50 States,” providing subcontractors with the most current information for filing claims no matter where in the United States they do business.

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Revised “Contingent Payment Clauses in the 50 States,” a guide for subcontractors and suppliers to help them understand their risk.

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Published a revised version of “Prompt Payment in the 50 States,” a state-by-state chart breaking down such details as the time frame for payment between owners and prime contractors; primes and subcontractors; and subcontractors to lower-tier subcontractors.

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Updated the popular “Public-Private Partnership Laws in the States, Including Surety Bond Requirements,” a guide published

by ASA and the National Association of Surety Bond Producers to help subcontractors determine whether they have payment protections before they bid on a P3 project.

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Launched a comprehensive campaign to educate construction subcontractors and suppliers of the risks of working on publicprivate partnership projects, which may lack both payment bond and mechanic’s lien remedies, and continued to call for the federal, state and local governments to take steps to assure payment of construction subcontractors and suppliers on projects financed through public-private partnerships.

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Renamed ASA’s annual convention as SUBExcel, combining “subcontractors” and “excellence” to better reflect the focus of education workshops and sessions.

Formerly known as the ASA Business Forum & Convention, the new SUBExcel 2014 took place in March 2014 in New Orleans, La.

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Launched the “Improving Cash Flow” column providing tips for improving cash flow to both veterans and newcomers in the construction industry.

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Launched the “A Shared Responsibility” column laying out the shared responsibilities of all members of the construction team, owners, design professionals, general contractors and construction managers, subcontractors, and sureties.

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Supported the U.S. Small Business Administration’s proposed rule to simplify guidelines for determining affiliation for eligibility based on size for its Surety Bond Guarantee Program and four loan programs.

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Celebrated a “big win” for subcontractors in an Alabama CGL insurance case when an appeals court reversed an earlier court ruling that threatened the coverage for which subcontractors pay substantial premiums. The U.S. appeals court in the case of Pennsylvania National Mutual Casualty Insurance Company v. St. Catherine of Siena Parish affirmed that unexpected and unintended property damage is an “occurrence.” ASA filed an amicus brief in the case in July 2014.

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Filed an amicus brief in July 2015 in a major insurance coverage court case in Texas that has widespread implications for contractors and subcontractors as to coverage for defective construction and installation of particular parts, products, and equipment into construction projects.

ASA, ASA of Texas, and other industry organizations filed the brief in the case of U.S. Metals, Inc. v. Liberty Mutual Group, saying, “The proposition that an insurer should not be obligated to pay claims that are outside the coverage of the policy it issued is not astounding. However, there is a tendency on the part of some insurers to deny claims that are more than arguably within the coverage of the policy.

This is particularly true as to claims under commercial general liability (“CGL”) policies involving alleged defective products supplied by insured manufacturers and alleged defective workmanship performed by insured contractors. Despite the efforts of insureds to control the quality of their products or work, defects may occur, and insureds purchase CGL insurance policies to cover unintended property damage arising out of those circumstances.”

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2015 Fought for and won legislation that will ensure that subcontractors and suppliers on federal construction projects will have assurances that adequate and reliable security is in place to assure that they will be paid. In November, President Obama signed into law two key surety bond provisions as part of the National Defense Authorization Act of 2016. One provision requires individual sureties to pledge known and reliable assets to back their bonds, and to relinquish control of those pledged assets to the federal government.

The second provision increases the bond guarantee from 70 percent to 90 percent to sureties in the bond guarantee program sponsored by the U.S. Small Business Administration. Subcontractors and suppliers can be certain that there will either be a corporate surety bond from a company approved by the U.S. Treasury or assets from an individual surety with readily identifiable value pledged and relinquished to the federal government while the construction project is ongoing.

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be assured that the bidding and contract award process is clear and efficient, or the most qualified contractors will avoid federal projects,” ASA told the Committee on Small Business of the U.S. House of Representatives. Specifically, ASA called on Congress to (1) stop government bid shopping by prohibiting the use of online reverse auctions on federal construction projects, (2) stop post-award bid shopping at the subcontract level by requiring subcontractor bid listing on federal construction projects, and (3) reduce the cost of competing for federal design-build projects by requiring a two-step process on projects over $750,000.

In an amicus brief, argued in the California court case Joel Hernandezcueva vs. E.F. Brady Company, Inc. that a subcontractor cannot be strictly liable for installing material that complied with specifications.

“To impose a burden of strict liability on a subcontractor for installing material that complied with specifications because years later it is identified to have a dangerous component would impose liability on a party who did not specify or approve the material installed,” wrote ASA, the Association of the Wall and Ceiling Industry, and the Roofing Contractors Association of California.

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Called for “targeted Congressional intervention” to improve the federal contracting process, saying specialty trade contractorst continue to face obstacles to participation on federal construction projects. “Contractors at all tiers need to

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Urged Congress to pass legislation that would improve how federal agencies develop and publish regulations. ASA has long supported legislation that would

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Producers, and The Surety & Fidelity Association of America, “Public-Private Partnership Laws in the States, including Surety Bond Requirements” (2015 Edition), that will help subcontractors determine whether they have payment protections before they bid on a P3 project.

make the regulatory process more transparent, agencies more accountable, and regulations most cost-effective.

Petitioned with other construction industry associations the Office of Federal Procurement Policy to modify the Federal Acquisition Regulation to “make explicit” that before ordering a change to a construction contract the contracting officer must assure that funds are available to pay for additional work being ordered. “Our members are facing increasing numbers of instances in which a Contracting Officer will direct a change in the scope of work on a construction project, lacking funds available to pay for the increased costs being imposed upon the contractor,” the associations wrote.

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Led a coalition of key construction industry organizations urging the administrator of the Office of Federal Procurement Policy to require that assets pledged by an individual surety are real and readily available by modifying part of the Federal Acquisition Regulation requirements. The coalition warned that “a determined and unscrupulous individual surety can too readily pledge assets that provide only illusory or insufficient protection.”

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Joined The Surety & Fidelity Association of America and the National Association of Surety Bond Producers in calling on the Federal Highway Administration to include in its contract guide for public-private partnerships a requirement that contractors provide surety bonds on the construction components.

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Reviewed state laws authorizing construction projects to be financed by publicprivate partnerships and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds, and updated a comprehensive guide published by ASA, the National Association of Surety Bond

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Submitted comments calling on the Federal Acquisition Regulatory Council to strengthen and expand its proposed rule on subcontracting to better protect subcontractor bidding and payment on federal construction. The proposed amendment to the Federal Acquisition Regulation would implement ASA-initiated provisions in the Small Business Jobs Act of 2010. The proposed rule would require an offeror to provide assurances that it will make “a good faith effort” to acquire construction work from “the small business concerns that the offeror used in preparing its bid or proposal, in the same or greater scope, amount, and quality used in preparing and submitting the bid or proposal.”

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Advocated for a reform package that put the U.S. Army Corps of Engineers in charge of any construction project by the U.S. Department of Veterans Affairs estimated to cost $100 million or more. ASA repeatedly asked Congress to take action after severe construction management problems, including changing designs and delays in decisionmaking, arose on several major VA projects.

Congress passed S. 2082 and the legislation became law in September 2015.

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Urged the Occupational Safety and Health Administration to follow the clear language of its authorizing statute with respect to employer recordkeeping in response to OSHA’s request for comments on a proposed rule on the “Clarification of Employer’s Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illness.”

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Collaborated with 24 other construction industry associations and entered dialogue with the Occupational Safety and Health Administration on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits.

expense of travel and litigation in a distant location, as well as may not be able to access witnesses or provide other evidence to support their position in a claim.

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Published “Anti-Forum Selection Clauses in the 50 States,” a comprehensive manual to help subcontractors understand how forum-selection clauses are treated in the 50 states and the District of Columbia.

Many states view forum-selection clauses as against public policy and make them “void and unenforceable.” Such clauses may create an undue hardship for subcontractors on a project, as they may have to comply with laws and regulations with which they are not familiar and be held accountable for failure to comply.

Subcontractors also may have to bear the

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Launched a “tongue-in-cheek” awards program, called Subcontractors are Prey (SAP), calling attention to predatory contract language in the construction industry.

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Published a Frequently Asked Questions on the subject of contingent payment clauses to help subcontractors deal with such clauses that shift the risk of nonpayment by the owner from the prime contractor to the subcontractor.

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Published a weekly column, “Contract Changes & Claims,” providing tips for managing changes and changed conditions and on how to realize full adjustment to the contract price or contract time.

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www.asa-az.org • (602)274-8979

Established 1980

Specializing in the Fabrication & Installation of Rectangular HVAC Systems Thomas Sessa– CEO

Scott Wahl-President www.sessasheetmetal.com 410-327-7000

Dear ASA Members & Friends As ASA begins its 51st year, our No. 1 priority is membership growth and chapter development. With that in mind, we are committing focused resources into several new initiatives that will fuel our growth.

Membership growth is one of the most important challenges that any trade association faces. In order for ASA to consistently serve as the leading voice for construction subcontractors, the organization must continually identify and recruit new members for fresh ideas, new energy and meaningful engagement.

Yet, growing membership is inevitably a difficult task for all associations, not just ASA. 71

Trade associations face declining membership numbers for numerous reasons, such as economic downturns, competition for trade members, aging membership, and different preferences of Baby Boomers and Generation X-ers.

Increasing the number of members improves ASA’s knowledge base and increases dues revenue, which funds ASA programs and activities at both the chapter and national levels.

That’s why ASA began a comprehensive membership drive called “Build It Bigger” in 2015. This campaign program is spearheaded

by ASA chapters and supported by national resources and collaboration with the goal of establishing net growth at every ASA chapter in 2016.

Sincerely, Richard Bright, ASA Chief Operating Officer

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TM

About the Foundation of ASA and The Contractors’ Knowledge Network

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The Foundation of the American Subcontractors Association (FASA) was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness of issues in the construction industry from the perspective of subcontractors and specialty trade contractors. 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. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues influencing subcontractors and specialty trade contractors in the construction industry.

Contractors’ Knowledge Quest­ FASA’s Contractors’ Knowledge Quest is dedicated to expanding the body of knowledge on subcontractor issues. Under the hallmark of the Quest, FASA funds and commissions research on the key business issues of construction subcontractors and specialty trade contractors.

The research goals are two-fold: (1) to identify trends that could impact construction subcontractors and specialty trade contractors in order to help them prepare for these changes; and (2) to identify best practices for subcontractors and specialty trade contractors. FASA’s “wish list” for research includes additional insured requirements, wrap-up insurance, subcontractor default insurance, pay-if-paid clauses, best practices of negotiating strategies for subcontractors, best practices on collection techniques for subcontractors, and the impact on the bottom line of safety best practices.

Contractors’ Knowledge Bank The Contractors’ Knowledge Bank is a powerful tool for anyone in the business of construction. The Bank is a digital information repository comprised of the knowledge ASA has gathered during its 50 years of existence. It includes educational materials, special reports, white

papers, manuals, etc., on topics as wide-ranging as subcontract terms and marketing. Its goal is to provide subcontractors and specialty contractors with 24/7 access to the type of information they need to operate successful businesses.

Contractors’ Knowledge Depot The Contractors’ Knowledge Depot is an online “bookstore” of educational products designed for construction subcontractors and specialty trade contractors. Educational products address key topics, such as subcontracts, business management, and construction claims. Many of the products were developed by FASA just for subcontractors. These include, for example, Fundamentals of Fair Subcontracts, Mastering Subcontracts: A Reference Guide, Lien & Bond Claims in the 50 States, and The Specialty Contractor’s Guide to Marketing Success.

The Contractor’s Compass The Contractor’s Compass is a monthly educational journal focusing on the business management education needs of construction subcontractors and specialty contractors. The journal is designed to equip readers with the ideas, tools and tactics they need to thrive.

American Subcontractors Association 1004 Duke St. | Alexandria, Va. 22314 (703) 684-3450 | Communications@asa-hq.com | www.asaonline.com