SUBCONTRACTORS NEWS November 2014
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Bringing New York’s Union Subcontractors Together to Build a Stronger Construction Industry IN THIS ISSUE
2 President’s Message By Robert J. Ansbro
3 Robust Construction
Market Bodes Well For Subcontractors By Henry Kita
5 BTEA Poll Shows
Local Support For Union Construction
November 2014
Robust Construction Market Bodes Well For Subcontractors
7 Be Prepared: OSHA’s New Rule on Reporting Serious Workplace Injuries and Deaths – Effective 1/1/2015 By Henry L. Goldberg 11 New Guidance on
Revenue Recognition – Is Percentage of Completion As We Know It Gone Forever? – Part 2 By Anthony J. Campolo
15 Payment Bonds:
A Valuable Tool to Protect the Rights of Subcontractors in New York By Donna M. Mulato
21 STA and AGC
Hold Seminar on SCA Construction Inspection Division (CID) By Samantha Sweeney
23 STA Holds Last
General Membership Meeting of 2014 By Samantha Sweeney
If you would like to receive a hard copy of Subcontractors News in the mail each month, please email your full mailing address to ssweeney@stanyc.com with the subject line “Subcontractors News Hard Copy Request”
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STA Subcontractors News
PRESIDENT’S MESSAGE As the holidays approach, the STA is looking ahead to another year of growth and success for its members. Despite this busy season, our members are working hard to progress on projects and participate in events. Earlier this month, the STA hosted its final General Membership Meeting of the year. It featured a panel of representatives from Hunter Roberts Construction Group, who provided details of their upcoming projects, tips for working in their industry, and more. The presentation from Hunter Roberts was given by Mike Squilla, Purchasing Agent, Paul Wassenbergh, Project Manager, and Danielle Nichilo, Estimator. The STA’s Legal Counsel, Perry Ochacher of Gotham Government Relations, also spoke at the meeting to report on the progress of the STA Legislative Agenda and the status of bills of interest to STA members, particularly the Public Authorities Law as it relates to SCA claims. The STA would like to thank those who have attended the General Membership Meetings this year and hope that even more choose to participate next year. The meetings provide wonderful opportunities to keep up with the news of our ever-changing industry and network with other industry professionals. As you know the STA and the Associated General Contractors (AGC) have been meeting as a joint force to work with the New York City School Construction Authority (SCA) to resolve issues that arise among our members. Last month, the STA and AGC committee held a seminar presented by the SCA to address the Construction Inspection Division’s (CID) permitting processes and procedures. The objective was to review the SCA’s performance in 2013 and acknowledge matters of inspection, communication and projects. I thought the presentation by the SCA was excellent, particularly the presentation by Jason Ocharsky, Director of the CID and David Choy, Building Code Compliance, both of who encouraged us to work with the organization and to not hesitate to bring problems up the line. It was brought to our attention that some of the commitments made by the SCA, most notably change orders and close outs of projects, are not being addressed. We will address this hiccup as we know everyone is committed to correct this and move forward. The STA continues to coordinate with the SCA to help our members overcome obstacles they face and mediate problems that may emerge in the future This month’s newsletter features a piece on the highlights and trends of the rebounding construction market in New York City. Construction is expected to rise significantly, specifically in the residential sector. We look forward to seeing the results of this upward trend, specifically as it relates to our members. I look forward to seeing the continued support for our association and wish all members and their loved ones a Happy Thanksgiving! Sincerely, Robert J. Ansbro
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November 2014
Robust Construction Market Bodes Well For Subcontractors BY HENRY KITA, EXECUTIVE DIRECTOR, STA
It is becoming increasingly clear that the construction market in New York City is finally rebounding from the doldrums brought on by the recent national recession. Significant projects both small and large are springing up across the City’s five boroughs and the future looks bright for New York City’s subcontractors. According to a recent study released by the New York Building Congress, construction spending in New York City is projected to reach $32.9 billion in 2014, a 17 percent increase from the level of $28.2 billion realized in 2013. The increase in construction spending is driven in part by a marked increase in residential development which is projected to account for $10.9 billion in spending in 2014, a jump of $4.1 billion in 2013. This upturn in residential spending is staggering when compared to just $8.3 billion on residential construction in the post recession years of 2009-2011. Large-scale projects such as Manhattan West, Hudson Yards, residential towers at 53 West 53rd Street, 220 Central Park South, 225 West 57th Street and 520 Park Avenue, are among the significant projects which are but a small part of the overall boom in local construction. Local government spending on construction projects is expected to have also increased between 2013 and 2014. Government spending on mass transit, schools, roads, bridges, wastewater, etc. is expected to increase from $13.4 billion in 2013 to $14.3 billion in 2014. Capital spending by the City of New York will account for 53 percent of the overall local government spending. The second-largest local construction
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spender, the Metropolitan Transportation Authority (MTA) is expected to reach $5.1 billion in construction spending in 2014. This includes a number of MTA expansion projects as well as repairs and upgrades to their facilities and infrastructure as a result of super storm Sandy. Another major governmental agency in local public construction spending is the Port Authority of New York and New Jersey. The Port Authority is expected to spend $792 million in the five boroughs in 2014 and is expected to spend at least $1.0 billion annually in each of next two years. While slightly down from last year, non-residential construction in New York City is expected to top $7.8 billion in 2014. This construction, which includes institutional development, office space, sports and entertainment venues, and hotels is expected to increase to over $10 billion in 2015. More than 80 hotels and over 15,000 rooms are expected to be built across the five boroughs over the next three years. Also noteworthy in this sector is the approximately $2 billion which is forecast to be spent by local universities and colleges in the coming years. All in all, the robust construction market will bode well for an increasing number of business opportunities for local construction subcontractors. Hopefully the trend brought on by the recession that forced many subcontractors to cut back their businesses and in far too many cases caused many to close their doors is a thing of the past, not to be revisited anytime soon.
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November 2014
BTEA Poll Shows Local Support For Union Construction
The Building Trades Employers’ Association (BTEA) recently released a poll that found that 95 percent of New Yorkers believe that it is important that wellpaying blue collar jobs remain in New York City, and 76 percent say it is important to reduce the 39 percent cost differential with non-union in order to increase more union jobs for minority and city residents. In addition, 75 percent of those surveyed said that if the cost differential was reduced to 20 percent, developers should use union contractors while 81 percent said developers should use union contractors if the cost differential could be dropped to 10 percent. The poll also showed that three out of four New Yorkers believe that creating more union construction jobs is crucial to preserving safe, wellpaying, blue collar jobs in the city. According to the results, voters see unions as defenders of workers and jobs, enforcers of standards and wages and protectors of workers’ interests. “Working with the union construction industry has many advantages – higher quality, stricter safety standards and stronger overall reliability to name a few – but it has one major disadvantage,” said Louis Coletti, President of the BTEA. “You can’t move construction jobs or projects to China. We need to double down on our efforts to reduce costs in order to protect one of the city’s most important assets – our hardworking residents. Union construction jobs provide employment to thousands of City residents, particularly minorities. This poll shows that there is support for union jobs, but the more we reduce
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costs, the greater support for union construction and that’s important to New York’s economic future.” More than 70 percent of New Yorkers surveyed believe that the better work rules, increased worker productivity and the use of less-expensive building materials are the most effective ways to cut industry costs. Voters also believe that if the union construction industry can reduce costs, building owners and developers should be encouraged to use union contractors.
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November 2014
Be Prepared: OSHA’s New Rule on Reporting Serious Workplace Injuries and Deaths – Effective 1/1/2015 BY HENRY L. GOLDBERG, MANAGING PARTNER, GOLDBERG & CONNOLLY AND STA LEGAL COUNSEL
Beginning January 1, 2015, all contractors located in states under the Federal Occupational Safety & Health Administration’s (“OSHA”) jurisdiction, such as New York, must follow OSHA’s new rule (20 CFR 1904) on reporting serious workplace injuries and deaths. Under this new rule, employers must still notify OSHA of any work-related deaths within eight hours, but now they must also notify OSHA of any work-related in-patient hospitalizations1, losses of an eye, or amputations within twenty-four hours of occurrence.
Labor Statistics (“BLS”), or a state agency operating under the authority of OSHA or BLS, employers in the partially exempt industries do not have to keep records of its employees’ illnesses and injuries. The exemption also extends to companies with ten employees or less. While these “partially exempt” companies are not obligated to maintain records on illness and injuries in the workplace they are still obligated to follow the requirements of the new serious workplace injuries and death notice reporting rules discussed above.
The old OSHA rule required employers to notify OSHA of work-related deaths within eight hours, but only required notification within twenty-four hours of any in-patient hospitalizations of three or more employees. Prior to the new OSHA rule, notification was not necessary for single in-patient employee hospitalizations, losses of an eye, or amputations.
As set forth by OSHA, the penalties for violating the reporting rules on serious workplace injuries and deaths are as follows: • Where no records are maintained and there have been injuries or illnesses which meet the requirements for recordability, as determined by other records or by employee interviews, a citation for failure to maintain records shall normally be issued. • Where no records are maintained and there have been no injuries or illnesses, as determined by employee interviews, a citation shall not be issued. • When the required records are maintained but no entry is made for a specific injury or illness which meets the requirements for recordability, a citation for failure to record the event shall normally be issued. • When the required records are maintained but have not been completed with the detail required by the regulation, or the records contain minor inaccuracies, the records shall be reviewed to determine if there are deficiencies that materially impair the understandability of the nature of hazards, injuries and illnesses in the workplace. If
According to OSHA, this new rule was promulgated to enable it to more effectively focus its efforts on preventing severe workplace injuries and deaths by collecting pertinent information on what occurs in the field. This new data will enable OSHA to identify employers and industries where employees are at the greatest risk of harm and target its compliance assistance and enforcement resources accordingly. Some industries are partially exempt from maintaining illness and injury records based on the low death and injury rate in that industry. OSHA recently updated the list of industries that are partially exempt from maintaining illness and injury records as part of this new rule on death and serious injury reporting.2 Unless requested to do so in writing by OSHA, the Bureau of
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the records are defective to this degree, a citation for failure to record shall normally be issued. In all other cases, the employer shall be provided information on maintaining the records for the employer’s analysis of workplace injury trends and on the means to maintain the records accurately. The employer’s promised actions to correct the deficiencies shall be recorded and no citation shall be issued. Where citations are issued, penalties shall be proposed only in the following cases: 1. Where OSHA can document that the employer was previously informed of the requirements to keep records; or, 2. Where the employer’s deliberate decision to deviate from the recordkeeping requirements, or the employer’s plain indifference to the requirements, can be documented.
Citations for either serious or non-serious violations impose a maximum penalty per individual violation of $7,000. Furthermore, for the more serious offense of a deliberate or willful violation a minimum penalty of $5,000 per violation is imposed up to a maximum of $70,000 per violation. For more information on individual violations and penalties, please refer to OSHA’s Field Operation Manual Chapters 4 and 6.3 G & C Commentary Failure to comply with OSHA’s new rule (20 CFR 1904) is not an option and penalties can be severe. It is important to note that this new rule does not come into effect until January 1, 2015. Therefore, your firm has time to create proper record keeping procedures to ensure compliance with the new OSHA rule. Even if your company has a procedure in place for maintaining illness and injury records and reporting such adverse events to OSHA, the procedure must be updated to ensure that single employee in-patient hospitalizations, amputations, and eye losses are now promptly reported to OSHA within twenty-four hours of the event in order to comply with the new OSHA rule.
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Henry L. Goldberg may be reached at (516) 764-2800 or via email at hlgoldberg@goldbergconnolly.com Jeffrey I. Scott, an associate with Goldberg & Connolly, assisted in the preparation of this article. ©Goldberg & Connolly 2014 This article has been prepared for informational purposes only. It is not a substitute for legal advice addressed to particular circumstances. You should not take or refrain from taking any legal action based upon the information contained herein without first seeking professional, individualized counsel based upon your own circumstances. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience. 1 OSHA defines in-patient hospitalization as “a formal admission to the in-patient service of a hospital or clinic for care or treatment”. 2 The list of partially exempt industries can be found at https://www.osha.gov/recordkeeping/ppt1/RK1exempttable. html 3 The FOM can be found at: https://www.osha.gov/OshDoc/ Directive_pdf/CPL_02-00-150.pdf
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November 2014
New Guidance on Revenue Recognition – Is Percentage of Completion As We Know It Gone Forever? – Part 2 BY ANTHONY J. CAMPOLO, CPA, PARTNER, COHNREZNICK CONSTRUCTION INDUSTRY PRACTICE
The wait is over. On May 28, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued the long-anticipated converged guidance on recognizing revenue in contracts with customers in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers – Topic 606 (ASU 2014-09). The new guidance affects all entities that enter into contracts with customers to transfer goods or services, including construction companies, leading many to ask, “is percentage of completion -as we know it - gone forever?” CohnReznick addresses the new guidance and the ways in which it can impact construction companies in the forthcoming discussion. Please note: In an effort to make this article as comprehensive as possible, it was decided to split it into three separate sections. In the first issue we reviewed methods to identify the contract with the customer as well as how to identify separate performance obligations (promises) in the contract. In this issue we will discuss how to determine the transaction price. Step 3: Determine the transaction price. The transaction price can include both a fixed price and any variable consideration. Variable consideration should include award income, incentives, liquidated damages (reduction to contract price), and claim income, as well as approved and unapproved change orders income. There is a two-step process to determine the total variable
consideration to recognize in the transaction price. The first step estimates variable consideration using one of two methods. The first method is an “expected value approach,” which is a probabilityweighted calculation assigning probabilities and values to multiple outcomes. The second is a “most likely amount” approach, where there are only two outcomes – either a contractor will get the entire amount (e.g., meets a deadline) or will get nothing (e.g., misses a deadline). The second step is to determine when a contractor can recognize the variable consideration. Variable consideration can be recognized when it is “probable that a significant reversal will not occur.” In order to make this determination a contractor must examine factors such as past experience with the customer (e.g., how have prior negotiations been resolved with the same customer in the past). The biggest change for construction companies is how and when they can recognize variable consideration relating to claim income and unapproved change orders. Under the new standard, the construction company could potentially include estimated gross profits in the transaction price provided two criteria are met: (a) the contractor expects the price change will be approved and (b) there is no expectation that the estimated transaction price being used will have a significant reversal in the near future. This is a significant change. Under the current standard, contractors could only recognize revenue to the continued on page 13
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continued from page 11 extent of costs incurred (i.e., gross profit is not recognized) provided that parties agreed to the scope of work and it was just the price that was not approved. Contractors will need to place more focus and increased diligence to the rationale of how variable consideration will be recognized in the respective transaction price. Consider the following example addressing unpriced change orders: a general contractor enters into a construction contract to build a sports stadium, which is considered to be a single performance obligation (building the stadium). The contractor has a history of executing unpriced change orders. It is not uncommon for the contractor to begin work related to change orders after the contractor and customer agree to the scope of the change, but prior to the price being agreed to. Based on the background information, when could the contractor include the unpriced change orders in contract revenue? In this example, the contractor determines that the change order is not a separate contract because the remaining goods or services, including the change order, are not distinct and are part of a single performance obligation that has already been partially satisfied. Also, since the contractor has a history of executing unpriced change orders, the contractor might conclude that it expects the price of the change order to be approved. As such, once the scope of the change order is approved, the unpriced change order would be accounted for as variable consideration and the contractor should update the transaction price to include the change order and record a cumulative catch-up adjustment based on the measurement of progress towards completion of the contract. The time value of money also needs to be considered in determining transaction price. If there is a one year or greater time difference between the time, the goods or services were provided and the time payment is received, the time value of money would need to be calculated and included in the
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transaction price. In most construction contracts, this would not apply as requisitions, are generally issued on a monthly basis and payments are received in less than one year. The question of retainage remains. Since retainage is often paid more than one year after the project’s completion, does the time value of money apply to retainage receivable? The answer is that retainage receivable will not need to be discounted as the concept of retainage is intended to protect the customer and not to finance the project. The last factor to be considered is collectability. There is really nothing new here. The company would need to determine an allowance for bad debts and adjust accordingly, similar to the current practice. This amount would be presented separately in selling, general, and administrative expenses. In the final section of this article, we will cover techniques to allocate the transaction price to the performance obligations in the contract as well as methods used to recognize revenue when (or as) the reporting organization satisfies a performance obligation. Please feel free to reach out to Anthony J. Campolo, CPA at CohnReznick, LLP. He can be reached at Anthony.campolo@cohnreznick.com or 914-922-2126 or visit www.cohnreznick.com for more information on revenue recognition.
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November 2014
Payment Bonds: A Valuable Tool to Protect the Rights of Subcontractors in New York BY DONNA M. MULATO, FARRELL FRITZ, P.C.
A payment bond secures the obligation of the general contractor to pay all parties for their work on a construction project. The purpose of a payment bond is to protect the Owner against the claims (liens) of unpaid parties1 and to facilitate payment for labor and materials furnished to the project. Beneficiaries of a payment bond often include subcontractors, suppliers, and material men. If the general contractor defaults, the beneficiaries often have the right to sue the surety directly on the bond. In New York, all public improvements (with the exception of Industrial Development Agency projects)2 undertaken by the State, municipal corporations, public benefit corporations and commissions appointed by law require payments bonds (also known as “§137 bonds”). Section 137 bonds3 are designed to supplement the Lien Law by extending additional protection to parties that improve public property by ensuring payment of money due on public improvements.4 Other public entities and improvements such as town highway improvements,5 sewer systems,6 and canals,7 also require payment bonds pursuant to statute. Contract bid specifications generally provide details as to whether or what type of payment bond is required for the job.8 Prior to bidding, a subcontractor should review the bid specifications, as well as the applicable statute, ordinance, or law, if any, that requires a payment bond. A subcontractor should ask the general contractor to provide a copy of any and all bonds it has provided to the Owner for the particular job being quoted.9 In addition, copies of all bonds furnished by the general contractor in connection with publicly funded projects are required to be made available for public inspection in the office of the head of the Department or Bureau in charge of the public improvement.10
On public projects, compliance with the specific written notice provisions of the payment bond or statute, such as those relating to the timeliness of a claim is necessary, so that a claim will not be denied outright without consideration of its merit.11 However, if the bond claimant is in privity with the general contractor on the bond there is often no need for a written notice to the bonding company.12 State Finance Law §137 provides that a claimant who contracts directly with the general contractor and has not been paid in full within 90 days of the day on which the claimant last performed labor or supplied materials may sue the surety without prior notice of its claim.13 If the claimant (such as a second tier subcontractor, for example), contracted with a subcontractor and not the general contractor, the claimant must give notice of its claim to the general contractor within 120 days of the day on which the claimant last performed labor or supplied materials.14 In this case, the notice must be served personally on the general contractor or by registered mail, at any place where he maintains an office or conducts business or at his residence.15 If the general contractor directly receives a notice, the manner of service is immaterial.16 The time limitation to commence a lawsuit is one year from the date on which the public improvement has been completed and accepted by the public owner.17 In New York State, when a claim is made on a payment bond, interest is calculated from the date of the demand. The payment bond claim should include the name of the project, the contractual relationships (i.e., owner, general contractor and subcontractor, etc.), and with “substantial accuracy” the amount owed. Much care should be taken to properly address the demand, and to be timely in its submission, so it is wise to get a copy of the bond, that will contain the precise name of the surety, the bond number and any claim submission procedures.18 continued on page 9
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CONSTRUCTION LAW SOLUTIONS Contract Claims & Disputes | Bid Protests Labor Law/Prevailing Wage | M/W/DBE Mechanics Lien/Payment Bond Claims Insurance Coverage CONTACT: HENRY L. GOLDBERG MANAGING PARTNER hlgoldberg@goldbergconnolly.com www.goldbergconnolly.com | 516.764.2800
LEGAL COUNSEL TO THE STA
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continued from page 7 The class of items covered under most payment bonds generally is the same as the class allowed by the Mechanic’s Lien Law.19 Payment Bonds are for the cost of labor and materials. They do not cover a beneficiary’s lost profits20 or damages a beneficiary suffers due to a principle’s negligence.21 In addition, Section 137 will award attorney’s fees to a defending party if the demand, or claim was “without substantial basis in fact or law.”22 On the flip side, Section 137 will also award attorney’s fees to the claimant if the surety presents a defense that is “without substantial basis in fact or law”. First or second tier subcontractors, material men and vendors need to be certain that they are not vulnerable to a defense by the general contractor, and/or his surety. Sureties are restricted from paying out against claims for a payment bonds if a legitimate dispute exists. A payment bond claim provides a direct connection to the prime contract with the Owner and offers a greater possibility of success than filing a lien if it can be proven that work was performed or deliveries of materials occurred and that there is no contributory failure of performance that instigated the refusal or failure to pay by the general contractor. Many defenses exist to inhibit automatic payment of a bond claim. Such defenses might include defective work, exclusive delays caused by the subcontractor which “but for” said delays, the entire project would have been on schedule, substandard materials, and so forth. Under this scenario, the surety is under no obligation to immediately write a check, unless and until the dispute is adjudicated by a court or an Arbitration proceeding. While payment bonds can prove to be an effective tool to ensure timely payment for work performed and a means to obtain payments that have been withheld, there are two important points to be understood. First, before a subcontractor bids a project, he should obtain a copy of the payment bond if one exists, and understand the terms and conditions under which it is enforced. Second, subcontractors must be certain that the fault is clearly not theirs, before they implement a demand/claim.
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Donna M. Mulato is a Law Clerk in Farrell Fritz’s commercial litigation department. Ms. Mulato interned at the firm during the spring of 2014. Prior to joining Farrell Fritz, she was a partner at The Mazza Consulting Group, which provides engineering counsel to the construction industry. While attending law school, Ms. Mulato held several internship and externship positions. Ms. Mulato earned her Juris Doctor degree from St. John’s University School of Law; her Bachelor of Business Administration, summa cum laude, from Hofstra University; and her Associate of Science, summa cum laude, from Nassau Community College. Novak & Co., Inc. v. Travelers Indem. Co., 56 A.D.2d 4187, 392 N.Y.S.2d 901 (2d Dep’t 1977). 2 Davidson Pipe Supply Co., Inc. v. Wyoming County Indus. Development Agency, 85 N.Y.2d 281. 6224 N.Y.S.2d 92, 648 N.E.2d 468 (1995); however, Section 5 of the Lien Law provides that if no public funds are used for a public improvement with an estimated cost in excess of $250,000, the private entity for whom the improvement is being made must post a bond or other undertaking guaranteeing payment to the contractor, subcontractors, and others furnishing labor or materials to the contractors or subcontractors. N.Y. Lien Law §5 (effective November 17, 2004). 3 N.Y. State Fin. Law §137. 4 Chittenden Lumber Co. v. Silberblatt & Lasker, 288 N.Y. 396, 43 N.E.2d 459 (1942). 5 N.Y. High. Law §193. 6 N.Y. Village Law § 17-1718(5). 7 N.Y. Canal Law §30(6). 8 Id. 9 Postner & Rubin, New York Const. Law Manual § 8:33, at 398 (2d ed rev, 2008). 10 N.Y. State Fin. Law §137(2). 11 Ferrante Equipment Co.v. Charles Simkin & Sons, Inc., 30 A.D.2d 525, 290 N.Y.S.2d 246 (1st Dep’t 1968). 12 Id. 13 N.Y. State Fin. Law §137. 14 N.Y. State Fin. Law §137(3). Federal courts construe similar language in the Miller Act, 40 U.S.C.A. §§3131 et seq., to mean that the period begins to run on the last day work was done as part of the original contract; correction of defects or repairs following inspection of work will not extend the notice period. U.S. for Use of Magna Masonry, Inc. v. R.T. Woodfield, Inc., 709 F.2d 249, 31 Cont. Cas. Fed. (CCH) P 71242 (4th Cir. 1983). 15 Id. 16 Id. 17 N.Y. State Fin. Law §137(4)(a). 18 Ulster Elec. Supply Co. v. Maryland Cas. Co., 30 N.Y.2d 712, 332 N.Y.S.2d 648, 283 N.E.2d 622 (1972); N.Y. State Fin. Law §137. 19 Hub Oil Co. v. Jodomar, Inc., 176 Misc. 320, supra. 20 Concrete Const. Corp. v. Commercial Union Ins. Co. of New York, 68 A.D.2d 866, 414 N.Y.S.2d 703 (1st Dep’t 1979) (the claimant can recover from the surety increased costs incurred due to the delay; it cannot recover its lost profits); QDR Consultants & Development Corp. v. Colonia Ins. Co., 251 A.D.2d 641, 675 N.Y.S.2d 117 (2d Dep’t 1998). 21 Gerosa Crane Service, Inc. v. International Products, Limited, 70 Misc. 2d 176, 332 N.Y.S.2d 536 (N.Y. City Civ. Ct. 1972). 22 N.Y. State Fin. Law §137(4) (c). 1
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Great things get built when we put our heads together. Gary Y. Wirth
William P. Laino
Lee J. Mendelson
Our firm knows the business needs of subcontractors. Our Construction Law Practice applies a unique, cost-effective and innovative approach to problem solving. Our experience in representing not only subcontractors, but also owners, contractors, construction managers and sureties, enables us to better serve you. Because we lack traditional separation by departments, you tap into the combined mind power of our entire firm: more than 55 experienced attorneys with diverse skills and insight, all coming together to deliver big picture solutions for your business.
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November 2014 ADVERTISEMENT
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Building And Business Together When it comes to creating new contacts and connections, we create the perfect fit. From enhancing market relationships and creating alternative risk financing to forming joint ventures and acquisition opportunities, our team of experts can put it all together for you.
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Beyond Protection. Partnership.
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November 2014
STA and AGC Hold Seminar on SCA Construction Inspection Division (CID) BY SAMANTHA SWEENEY, SUBCONTRACTORS TRADE ASSOCIATION On Friday, October 24, the Subcontractors Trade Association (STA) in partnership with the Associated General Contractors (AGC) held a morning seminar on the New York City School Construction Authority’s (SCA) Construction Inspection Division (CID) permitting processes and procedures. The meeting was attended by over 40 subcontractor and general contractor professionals and was held at the Downtown Association in Manhattan.
The presentation outlined operational enhancements including training, communication and technology. Highlighted in communication was the Acceptance of Deficiency (AOD) system, a web-based application which allows construction management and A&E staff to review and resolve QA/QC observations during inspections on an expeditious basis. A detailed description of the AOD system can be found on the SCA website at www.nycsca.org.
SCA President Lorraine Grillo opened the morning by introducing the key speakers, Jason Ocharsky, Director of CID, and David Choy, Director of Building Code Compliance (BCC), and reviewing the SCA’s performance in 2013 which included reviewing 1,378 DOB filings, issuing 1,408 permits, performing over19,200 inspections and 855 projects at 838 different schools.
The STA would like to thank all those who participated in this seminar and for their continued support of the association.
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Kaufman Dolowich & Voluck Is A Full-Service Litigation Firm That Understands Your Business Needs Andrew Richards
Matthew Minero
Jeffery A. Meyer
Partner Chair of KDV’s Construction Practice
Partner
Partner
In today’s business climate, companies face risks on a variety of fronts when a dispute arises. Our attorneys are proactive, pragmatic and result-oriented. We always act in the best interests of our clients and strive to achieve favorable results whether by litigation or through settlement whenever alternate resolution is possible. Construction Law
Jason Lange
Muhammad Ikhlas
Associate
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▪ Contract Drafting and Negotiation ▪ Construction Defect Litigation ▪ Claims, Litigation, Arbitration and Mediation - Breach of Contract - Extra Work - Wrongful Termination - Performance and Payment Bond - Non-Payment - Defective Work - Mechanic’s Lien - Delay Claims
Labor & Employment Law on Behalf of Management ▪ Wage and Hour Litigation and Compliance ▪ Collective Bargaining and Negotiations ▪ Human Resources Counseling and Training ▪ Employment Agreements ▪ Risk Management ▪ Union Arbitrations and Grievances ▪ Whistleblower and Retaliation Claims
Commercial Litigation ▪ Real Estate Claims and Disputes ▪ Fidelity and Surety
135 Crossways Park Drive, Suite 201, Woodbury, New York 11797 | Tel: 516.681.1100 | Fax: 516.681.1101 | www.kdvlaw.com
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November 2014
STA Holds Last General Membership Meeting of 2014 BY SAMANTHA SWEENEY, SUBCONTRACTORS TRADE ASSOCIATION
The Subcontractors Trade Association (STA) held its last General Membership Meeting of the current year on Wednesday, November 12 at the Center for Automotive Education and Training in Queens. Over 50 subcontractors and construction industry professionals attended the event. The meeting was opened by STA Legislative Counsel Perry Ochacher of Gotham Government Relations who reported on the recent election in New York State as well as the status of legislation of interest to the STA. Among such legislation is the Public Authorities Law Reform Bill dealing with the SCA claims process as well as Scaffold Law Reform. General Contractor Hunter Roberts Construction Group gave the primary presentation of the evening. The panel consisted of Mike Squilla, Purchasing Agent, Paul Wassenbergh, Project Manager, and Danielle Nichilo, Estimator. The presenters provided information and tips for working with their company,
and details of their upcoming projects which include the pyramid-shaped residential tower at West 57th Street as well as a commercial development at South Street Seaport (Pier 17). The STA and the Board of Directors would like to largely thank all attendees, participants and presenters who contributed to the General Membership Meetings in 2014. Your support is the cornerstone to the STA’s continuous representation of over 350 subcontractors and suppliers in the New York metropolitan area. Please look out for the 2015 Calendar of Meetings and Events that will be distributed in the next few months. The STA looks forward to many more well-attended and educational seminars in 2015. Do not hesitate to contact the STA office at 212-3986220 or via email to ssweeney@stanyc.com for more information on meeting sponsorship opportunities or forthcoming events.
STA President Robert J. Ansbro, left, stands with Hunter Roberts representatives Mike Squilla, Purchasing Agent, Danielle Nichilo, Estimator, Paul Wassenbergh, Project Manager, and STA Executive Director Hank Kita at the November 12 General Membership Meeting.
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Subcontractors Trade Association 1430 Broadway Suite 1600 New York, NY 10018 T: 212.398.6220 F: 212.398.6224 e-mail: info@stanyc.com website: www.stanyc.com
Hank Kita Executive Director Subcontractors Trade Association Henry Goldberg Legal Counsel Goldberg & Connolly Active Past Presidents Greg S. Fricke, Jr. Leonard Powers, Inc.
Officers Robert J. Ansbro President The New York Roofing Company Robert Weiss 1st Vice President A.J. McNulty & Co. Inc.
John A. Finamore Treasurer Jordan Panel Systems Joseph Leo Secretary Atlantic Contracting & Specialties, LLC
Board of Directors Joseph Azara Jr. C.D.E. Air Conditioning Christine Boccia JD Traditional Industries Dan J. DeVita Penava Mechanical Corp.
Jerry Liss A. Liss & Co. Inc.
John Dierks Dierks Heating Company, Inc
Alan Nathanson (Honorary) Forsythe Plumbing & Heating Corp.
Andrew Drazic ATJ Electrical
Lawrence Roman WDF, Inc.
Peter Cafiero 2nd Vice President Island Painting
Scott Rives Woodworks Construction Co, Inc.
Gloria Kemper Recon Construction Corp. Randy Rifelli United Iron, Inc. Guy VandeVaarst Firecom Inc. John Villafane Eldor Electric Upcoming Events Board of Directors Meeting Tuesday, December 9 5:30PM
Brent Fleisher Environet Systems
Arthur Rubinstein Skyline Steel Corp.
James Flynn Independent Temperature Control
Robert Samela A.C. Associates
Patrick Gallagher BP Mechanical Corp.
Gary Segal (Honorary) Five Star Electric Corp.
Stephen Gianotti Arcadia Electrical Co., Inc.
Lawrence Weiss A.J. McNulty & Co., Inc.
Craig Gilston Gilston Electrical Contracting
O U R M I S S I O N S TAT E M E N T trengthen New York’s construction industry each member firms to increase business opportunities dvocate to preserve subcontractors’ rights
Sandra Milad Gibson Milad Contracting Corporation
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For more than 30 years, Grassi & Co.’s Construction Practice has been assisting contractors, engineers, suppliers and distributors minimize their tax liability, uncover potential savings, and build a successful future. Manhattan 212-661-6166
Long Island
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