The Professional Contractor Spring 2015 by The Warren Group

THE PROFESSIONAL

SPRING 2015

A Publication of the Associated Subcontractors of Massachusetts, Inc.

Building Modular in Greater Boston After a Slow Start, Modular Construction Finds its Niche

When a project is built around collaboration, planning, and modularization, all the pieces will fall into place.

Visit Cannistraro.com to find out how our lean methods are changing the game.

THE PROFESSIONAL

A Publication of the Associated Subcontractors of Massachusetts, Inc.

16 Building Modular in Greater Boston

cover story features

04 PRESIDENTâ&#x20AC;&#x2122;S VIEW The Power of Innovation

05 FINANCE Bank Financing: How it Works

06 LEGAL Save Time and Money with Pre-Litigation Mediation 08 BUSINESS PLANNING On Your To-Do List: Tend to Your Buy-Sell Agreement 10 TECHNOLOGY Flexible Construction Security 12 14

SAFETY Fall Protection Takes the Spotlight

18 INCREASING PERSONAL PRODUCTIVITY A Dose of Discipline Can Get You Back on Track 20 TRENDS IN THE TRADES The Mechanical Trades: At the Forefront of Innovation and Opportunity 21 HUMAN RESOURCES Study Ranks Happiest Workers 22 CYBER SECURITY Cyber Fraud Hits Home with Contractors 24 INDUSTRY SPOTLIGHT Walsh Brothers, Inc. Plans for Another Century of Building in Boston

28 MEMBER NEWS

MEMBER SPOTLIGHT T.J. Conway Company Approaches 100 Successful Years The Professional Contractor

PRESIDENT’S VIEW

BY RICHARD R. FISHER

The Power of Innovation

nnovation. Massachusetts may be a hotbed of innovation these days, with an area of Boston’s Seaport neighborhood even designated as the “Innovation District” – but innovation is not a word often used to describe the construction industry. That is changing, however, as you will see as a recurring theme through this issue of The Professional Contractor. We didn’t set out to create the “innovation” issue – but as you read through the articles, you will see signs of innovation everywhere – even in an article on settling disputes. Innovation doesn’t have to mean just technological change; it’s simply doing things differently, in a way that can improve results. And in construction, there is now plenty of that. You will see it, most obviously, in our cover story. Modular construction is a hot issue these days, as increasingly it is being used as a longterm building solution – for schools, multifamily residential and even large-scale office. No longer is it just the box-like trailer, used for temporary space while a permanent structure is built. Still, there are pros and cons, which our article explores. Hand in hand with innovation in building types comes innovation in the ways we do work – as you will see in the article on changes in the mechanical trades, where BIM, off-site prefabrication and on-site use of technologies like Trimble are dramatically changing how mechanical systems are designed, built and installed.

Innovation is a constant, too, in the steady growth and success of one of Boston’s oldest builders – Walsh Brothers – who today employ all of the latest technologies on their projects, and require their subcontractors to do the same. As you read through the issue, you will see the benefits of innovation everywhere – in our article on fall prevention; another on preventing cyber fraud; and in our profile of ASM member T.J. Conway, a company that has changed dramatically over its 95 years in business. Even the articles that are not about innovation per se – such as our articles on bank financing and buy-sell agreements – are in many ways about doing things better, which is much the same thing. And yet, through it all, it is still relationships that matter the most in business and in the construction industry – people working together in a partnership of trust. You hear that from Walsh Brothers, and you hear that, too, from a national survey that shows construction workers are the happiest of any industry, and it all comes down to people, projects and work environment. In the words of one construction employee: “I am very happy at work. I really like what I do, and I get to learn something new every day to improve what I already do. I enjoy my work and working with my co-workers.” How’s that as testament to innovation and relationships as the key to success? Let that be an inspiration to all of us! s

Richard R. Fisher is founder and president of Red Wing Construction in Beverly. He can be reached through ASM at (617) 742-3412 or by email at president@associatedsubs.com.

The Professional Contractor is published by The Associated Subcontractors of Massachusetts, Inc. 31 State Street | Fourth Floor | Boston, MA 02109 tel 617-742-3412 | fax 857-453-4338 mail@associatedsubs.com | www.associatedsubs.com

ASM Officers

President: President Elect: Vice President: Vice President: Treasurer: Past President:

Richard R. Fisher, Red Wing Construction Joseph H. Bodio, Lan-Tel Communications, Inc. Steven P. Kenney, N. B. Kenney Co. Inc. James B. Miller, Salem Glass Company Russell J. Anderson, Southeastern Metal Fabricators, Inc. David G. Cannistraro, J.C. Cannistraro, LLC

Spring 2015

ASM Directors

The Warren Group Design / Production / Advertising www.thewarrengroup.com custompubs@thewarrengroup.com ©2015 The Warren Group, Inc. and Associated Subcontractors of Massachusetts, Inc All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.

FINANCE

BY MARK DREW

Bank Financing: How it Works

or some reason, many banks seem to keep the loan decision process a mystery. One bank may approve a loan while another declines the same loan. Often during this process the business owner does not receive feedback about how each decision was reached. For subcontractors, this process can be frustrating, especially because it appears that banks shy away from the subcontractor industry.

Why is it difficult for subcontractors to secure bank financing?

To answer this question, we first need to define a bank’s role and how banks make money. Banks are risk managers. This is very different from an investor or equity partner. Banks do not take ownership positions in companies they lend to, and as such, the return that banks make for lending money is limited. In theory, an investor has the potential to make an unlimited return on an investment while banks make a limited return. The bottom line is that a bank needs to get paid back to ensure the bank’s stability and protect deposit holders. Government regulating agencies are on watch to foster bank stability. As banks review loan opportunities, they take industry risk into account. Industry risk is the first obstacle with obtaining financing for subcontractors. The building and subcontractor industry is volatile and particularly vulnerable to economic conditions. As such, the industry risk is high. The industry volatility translates into cash flow volatility for the subcontractor. Cash flow volatility is the second challenge obtaining financing for subcontractors. Banks want to loan money to companies with predictable historical cash flow. Remember, unlike investors, banks receive a limited return on lending money and need to get paid back. Volatile cash flow and market cycles make it difficult for banks to predict cash flow for subcontractors. Beyond cash flow, banks want a secondary source of repayment, or collateral, for the loan. Collateral can come in many forms, including property, equipment, inventory and receivables. Property, inventory and equipment values are determined based on liquidation prices. As you can imagine, a used truck, crane or jackhammer may not fetch a high price in a liquidation scenario. That leads us to the challenge of using receivables as collateral. In order to be considered as quality collateral, receivables need to be diversified and current. When a subcontractor has only a few customers versus many customers, it increases risk to a bank.

Aside from the general challenges with receivables, bonded receivables create the greatest difficulty. In a liquidation scenario, a surety company has first right to receivables, and this means that in all likelihood there will be nothing left for the bank.

How can subcontractors position their business to be attractive for bank financing?

Position the business to demonstrate the ability to repay bank debt and withstand difficult economic and market cycles. It’s easier said than done, but by taking steps over the long term, it is possible. It not only will make a business attractive for financing, but it will make a business more stable, and eventually will command a higher price from a suitable buyer during owner exit. Here are five steps that subcontractors can incorporate into a long-term strategy: 1. Focus on margin and profitability. It’s competitive out there and sometimes the most difficult thing to do is to say no to a job, but if the job is not profitable, or is thinly priced, it may not be worth doing. 2. Diversify the client base. Many clients pose less risk than only a few big ones – not only to a bank, but to the subcontractor as well. 3. Build equity. Retain earnings in the company when times are good so there is a reserve when times aren’t so good. By keeping money in the business and not distributing it, a bank will feel more comfortable that the business can withstand a downturn and can overcome volatile cash flow. 4. Keep liabilities in check. This ties in to #3. Overextended debt and liabilities are one of the primary reasons for business failure. By controlling liabilities and debt, the business will be stronger and will be able to withstand down cycles. Also, when a down cycle occurs, it may help the business increase market share while competitors struggle. 5. Seek professional advice. Professional advisors such as CPAs and attorneys are critical in helping subcontractors position the business for bank financing and success. If these advisors are used only for transactional work such as preparing tax returns and contracts, then they are not being used to their full potential. These outside resources can provide insight that can truly help a subcontractor succeed. s Mark Drew is vice president of commercial and industrial lending at Needham Bank. He can be reached at (781) 474-5978.

The Professional Contractor

LEGAL

BY THOMAS I. ELKIND, ESQ.

Pre-Litigation Mediation Saves Time, Money

isputes are unavoidable in any business, and this is especially true in construction projects. If a dispute cannot be avoided, how can it be resolved quickly, inexpensively and satisfactorily? Often, early mediation is the answer. When a dispute arises, most parties initially attempt to negotiate a resolution. If both parties are motivated to resolve the dispute amicably, this can be the best way to reach an agreement. If negotiation fails, however, the intervention of a third party becomes necessary to resolve the dispute. Often, the first move made by one who feels wronged is to hire a lawyer and to commence a lawsuit (or to demand arbitration if there is an arbitration clause in their contract). Lawsuits are time-consuming, expensive and often have less than a totally satisfactory result. They should be considered the last resort for resolving a dispute, but too often, they are commenced by parties who mistakenly believe they can bludgeon the opponent into submission by aggressively taking legal action. Arbitration as an alternative to litigation has its advantages, but also has disadvantages. It is supposed to be faster and cheaper than litigation, but that is not always the case. Arbitration is essentially a private form of litigation. The parties agree on the rules, choose their arbitrator(s), conduct limited discovery and then present their case at a hearing. The arbitrator (or a panel of three arbitrators) makes a binding decision that generally cannot be appealed. A complex case can take longer to arbitrate than to litigate, since the arbitration may require several sessions that cannot be scheduled all at one time. The parties also must pay the arbitrator(s), so the process does not always end up being less expensive than litigation. In addition, since there is virtually no way to successfully appeal an arbitration award, the losing party can be stuck with a decision that may be factually or legally wrong, with no recourse. The obvious way to avoid the multiple distasteful alternatives that prolonged litigation or arbitration present is to resolve disputes early. This often does Thomas I. Elkind is a partner in the Commercial Litigation and Dispute Resolution Department at Foley & Lardner LLP in Boston. He can be reached at telkind@foley.com

Spring 2015

not occur because each side does not know yet all of the facts known by the other side, and may be under the impression that they can litigate the other side into submission, so why settle? Even if litigation is commenced, however, the time will come when the parties are required to consider settling their dispute. Usually this occurs late in the case, just before the parties are going to be forced to spend a lot of money on a trial with an uncertain outcome. If their attorneys can negotiate a settlement at that time the parties will save a lot of money in trial costs. However, in many cases the attorneys for the parties are such advocates for the positions of their clients, that they cannot compromise enough to reach an agreement, or cannot convince their clients to do so. Also, the longer cases proceed through paper discovery, motions and depositions, the harder it is for the parties to accept a compromise. Thus, negotiating a settlement late in a case is often not possible.

An Alternative Resolution For this reason, mediation has become a popular tool to settle cases that are approaching trial. Mediation is nothing more than a structured negotiation conducted by a neutral third party. Mediation is voluntary, confidential and non-binding. The mediator is chosen by the parties, and either party can terminate the mediation at any time. The mediator cannot report about the proceedings to any judge, or to anyone else. Mediation has proven to be a very successful way to settle disputes. However, many cases that are mediated close to trial still do not settle. The most common reason, again, is that by the time parties go to mediation they have already spent so much money that one or both of the parties feel that if they compromise significantly they will end up with no net benefit from the litigation. Settling at that stage of a lawsuit can result in a party being faced with accepting the lesser of two evils â&#x20AC;&#x201C; taking the best deal they can get to avoid the cost and risk of losing at trial; or going to trial to try to recoup the significant costs they have already incurred, risking losing even more. Therefore, parties who recognize the cost, delay and uncertainty of prolonged litigation, but are unable to negotiate a settlement, should consider mediation of their dispute before commencing litigation

or arbitration. Pre-litigation mediation can be conducted without attorneys in smaller disputes, or with attorneys in larger disputes. If both parties are interested in a quick, inexpensive and fair resolution of their dispute, while preserving their business or personal relationship, prelitigation mediation may be the best opportunity they have to accomplish those objectives. Successful mediation requires that both parties be motivated to reach a settlement of their dispute, even if they have very different views going into the mediation of what that settlement should look like. The mediation process, more than negotiation, enables the parties and their selected neutral to explore areas of agreement and to bridge areas of disagreement in a positive setting. Next time you find yourself in a construction, or other, dispute that you cannot settle by negotiating it yourself, consider suggesting to the other side that you try to resolve it through mediation. You may be pleasantly surprised by SullGroupTPC 1/29/09 3:49 PM Page 1 the outcome. s

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The Professional Contractor

BUSINESS PLANNING

BY PAUL BARDARO, CPA/ABV, CGMA

On Your To-Do List: Tend to Your Buy-Sell Agreement

f all the business protections that contractors and construction companies routinely have in place, the one that seems to get the least attention is the buy-sell agreement. Business advisors observe that existing buy-sell agreements often go stale more quickly than most business owners imagine, especially when it comes to determining the value of their individual stake in their own business. “But wait,” you say. “I don’t even have a buy-sell agreement!” While there is plenty of online material that explains the cost-benefits of these agreements, let’s quickly review what a buy-sell agreement is and why it’s a good idea to have one.

Reviewing the Basics In a nutshell, a buy-sell agreement (BSA) is a written agreement between the owners of a business that spells out what happens to each owner’s share of the business in the event of another owner’s death, incapacitation or some other unanticipated exit from the business. The BSA is an appropriate layer of protection for anyone who owns a business with other partners (family or not), and particularly for contractors who tend to benefit not just by their ownership stake, but by their active participation in the company’s daily operations. The best time to draw up a BSA is when all owners are healthy, on good terms and have no active contemplation of leaving the business. In this way, everyone is in the same boat and will benefit equally from having a BSA in place. As the saying goes, what is good for the goose is good for the gander. There are no hard and fast rules to drawing up a BSA, no “one size fits all” formula. And there is no need to be overly predictive about the “triggering events” that might cause the BSA to kick Paul Bardaro is a partner in the Boston-area accounting and business advisory firm Rucci, Bardaro & Falzone, PC. Through the firm’s Construction Business Services Group, he offers business valuation, financial and strategic planning advice to dynamic companies. He may be reached at (781) 321-6065 or paulb@rbfpc.com.

Spring 2015

in. You can’t possibly foresee every scenario or account for every variable. Otherwise you may never get to the desired outcome of a reasonably complete BSA that is signed by all parties. So don’t let the lack of total specificity on triggering events hold you back from putting a BSA in place.

Defining the Standard of Value Now back to your business to-do list. Like most other personal or business protection mechanisms (think estate plan, insurance coverage or disaster recovery plan), it is important to keep your BSA up to date, especially about your company’s value. Although the overall thoroughness of BSAs has improved in recent years, many continue to be silent on what is known in the business appraisal field as “standard of value.” Most current BSAs fail to adequately stipulate the standard of value to guide the person (typically a valuation expert) who will be responsible for setting the value of the business at the point of an actual triggering event. There are several standards of value, each with distinct purposes. And different standards applied to the same set of data will yield different results. The most common standards used when developing an opinion of the value of a closelyheld business are “fair market value” and “fair value.” “Fair market value” is commonly defined as the price at which property (business or equity stock) would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of relevant facts. The definition of “fair value” relies on state statutes, and so it varies from state to state. In his book, “Valuing a Business,” Dr. Shannon Pratt defines fair value as “an amount to fairly compensate a minority owner who was involuntarily deprived of adequate consideration for his or her stock.” In a fair value transaction, there is not a willing seller. This method is commonly used in dissenting or minority shareholder disputes, although it also has strong merit for use in BSAs.

Be Sure You Know the Difference Here’s why being clear about the standard of value is important. Let’s say you and your partners decide to sell the whole business, and its value is $10 million. Regardless of your relative ownership percentage, each owner will receive a proportional share of the proceeds based on the percentage he or she owned. The logical and practical concept here is fair value. Pretty straightforward. But if a minority owner were to embark to sell his or her standalone, non-controlling interest, the value of that interest would likely be discounted because the buyer is purchasing a less-than-controlling position in the company. In this case, the standard of value is fair market value. The discount recognizes the lack of prerogatives of control, creating a gap between the seller’s expectations and what the market will actually bear. This is especially nettlesome in cases where there are two owners each with 50 percent ownership interest (keep in mind that owning half the company does not give either person control) or three or more owners, none of whom have prerogatives of control. If a triggering event causes one partner to sell, it can result in a significantly discounted value. Using the fair market value standard creates a windfall for the buyer (who buys at a discount), while the seller (or his heirs) receives less than the expected payout. On the other hand, using the fair value standard instead could leave the surviving owner(s) effectively paying a premium for the departing owner’s stand-alone interest. As you

can see, without stipulating a standard of value in your BSA, things can get complicated.

Final Questions to Ponder Is it possible to find a midpoint between fair value and fair market value? The answer is yes, and such a formula can – and should – be spelled out in the language of the BSA. Who can you turn to for help in drafting or updating a BSA? Since it is primarily a legal document, an attorney well acquainted with the ins and outs of BSAs is an excellent starting point. But the ultimate litmus test for whether the agreement adequately protects your stake in the company will be to share an early draft with a certified valuation expert, and asking one simple question: if a triggering event were to occur, would you know what to do? s

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The Professional Contractor

TECHNOLOGY

BY BRIAN SULLIVAN

Flexible Construction Security

Background In the fast-paced, deadline-driven world of construction sites, security has become imperative. Multiple trades are often onsite simultaneously, each with their own vehicles, tools, labor force and goals. Factor in the continuous delivery of materials and the potential for visitors, and you have all the ingredients for a successful project â&#x20AC;&#x201C; but also for the possibility of accidents, mistakes, theft and litigation.

Challenges Construction site managers need to be able to proactively secure their sites from theft and vandalism at night, while also creating a video Brian Sullivan is president of Net Technologies, a Massachusetts-based full-service systems integrator specializing in surveillance, security and life safety systems for the commercial, government and transportation industries. He can be reached at bsullivan@ntisys.com or 800-905-3049.

Spring 2015

record of daytime activity to reference when any jobsite issues arise. In addition, police departments require timely and actionable alarm system information in order to dispatch officers to catch thieves, vandals and trespassers while they are still onsite. Itâ&#x20AC;&#x2122;s also important that managers be able to provide a video record of normal jobsite activity. Traditional video surveillance systems require power, which in many instances is not feasible when utilities are yet unavailable. Many systems also require cabling, which calls for trenching or aerial installation. This process is costly and time-consuming, and doesnâ&#x20AC;&#x2122;t allow contractors the flexibility to easily change camera coverage as the site evolves.

Solution Construction managers benefit from systems that provide the flexibility to capture video and protect different aspects of their site as it evolves. This is achieved by implementing a wire-

Location

Traditional Alarm Response

Videofied Response

Difference (Minutes Faster)

Boston, MA

21 minutes

7:38 minutes

12:22 minutes

Watertown, MA

23 minutes

4 minutes

19 minutes

less, video-based alarm system and wireless solar-powered cameras. The result is a only comprehensive system in which each device’s strong points are perfectly complemented. Let’s take a closer look at each system. Videofied is a cellular-based alarm solution that sends short video clips every time the built-in motion sensor trips from activity. Each video clip is then sent to a central monitoring station, where it is evaluated and passed on to local law enforcement. This enables them to give that alarm a higher priority and dramatically increase response times, thus apprehending criminals in the act and better safeguarding your assets. The video verification of the alarm is important in eliminating false alarms. When the police are asked to respond, they know there is a situa-

tion in progress. Videofied’s sensor can easily be moved around the construction site to focus on high-value areas or packed up quickly to be reused at another jobsite. MicroPower is a wireless, solarpowered video surveillance solution that enables contractors to cover the perimeter of a construction site or focus specifically on troubled hot spots that need extra coverage. The system then wirelessly sends video to a traditional video management system (VMS) that stores the video and triggers notifications, including emails and text messages, notifying the user of pre-defined actions, such as a pallet of material being moved. As a fully self-contained surveillance camera, wireless hub and power source, the MicroPower system enables installation and maintenance

that costs dramatically less than that of traditional surveillance solutions. By combining the power of both Videofied and MicroPower, contractors can feel confident that their assets are proactively being watched both day and night. In addition, the technology not only improves site security but can also be reused time and again at different construction sites for only a fraction of the typical cost. Videofied and MicroPower are just two of a wide range of technologies available today, both wired and wireless, that can provide reliable security and peace of mind. As with every important business decision, it is best to consult with an expert to choose the system that is best suited to your unique application and site requirements. s

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The Professional Contractor

SAFETY

BY SCOTT SZYCHER

Fall Protection Takes the Spotlight

A guard rail system in place on a Greenwood Industries jobsite.

ASM’s Safety Committee Chair Mike Boyle, of Boyle Construction Safety Services LLC, and Harry Carlson, Environmental Health and Safety Manager, Greenwood Industries.

SM recently held a Safety Roundtable on Fall Prevention, with a presentation by Harry Carlson, environmental health and safety manager of Greenwood Industries. Following is a summary of key points and guidance from the discussion. The hazards of working on roofs came into regional consciousness this past winter, as homeowners and contractors cleared roofs of historic snowfalls and accidents made the headlines. Yet falls have historically been the deadliest and most costly hazard for the construction industry. The leading cause of construction fatalities is workers falling to a lower level. Fortunately, through experience, clear standards and protocols, and numerous options, contractors now have cost effective ways of protecting workers while complying with OSHA regulations, which stipulate that fall protection must be provided at elevations of 4 feet in general industry workplaces, and 6 feet in the construction industry. “Safety systems should be flexible, feasible, simple and economical, while providing safety,” said Harry Carlson, safety manager for Greenwood Industries, one of Boston’s top roofing contractors, which has worked on such high-profile projects as the TD Garden, the Massachusetts State House and Logan Airport. “It’s critically important to provide a safe working environment while still fostering productivity.” There is an array of personal protective equipScott Szycher is ASM’s membership, marketing and communications director.

Spring 2015

ment, including anchorages, connectors, body belts and harnesses – known as personal fall arrest systems (PFAS) – which limit the distance a worker can fall after he/she has fallen over the edge or side of a building. But as the moniker indicates, fall arrest systems help after a worker suffers a fall, a situation that Carlson wants to avoid at all costs. He and his colleagues at Greenwood Industries are much more focused on fall prevention. “It only takes two seconds to free-fall 64 feet, and the force of a 200-pound person falling generates a staggering, and frequently lethal, amount of force,” Carlson explained. One inherent problem with fall arrest systems is that harnesses and ropes require anchor points capable of supporting 5,000 pounds per employee, and such anchor points aren’t always available on roofs. The National Institute for Occupational Safety and Health (NIOSH) has stated that while personal protective systems carry low initial costs, they can be very costly to sustain over the long term. Moreover, bulky harnesses can limit a worker’s mobility, and ultimately his productivity. “We get paid by the amount of roofing we do, so things that hamper worker productivity cost us money, and ultimately make us less competitive,” Carlson noted. That’s why Greenwood Industries prefers to use various forms of “engineered controls” on its projects, such as guardrail systems which are barriers erected to prevent workers from falling to lower levels. Greenwood Industries is such a strong proponent of guardrail systems that senior Greenwood management must personally approve all exceptions. “Any fall protection

other than guard rails requires my approval and a report justifying why rails cannot be used,” said David Klein, Greenwood’s president. These systems require an upfront investment, but Greenwood Industries has clearly determined that they pay for themselves due to the increased on-the-job worker productivity and reduced safety setup time. “We can install a guardrail system with two men tied off (secured to harnesses, ropes and anchor points), then let our entire crew work without bulky physical restraints,” said Carlson. “That’s much more effective than having each member of our crew wearing harnesses and ropes that restrict mobility, require significant training and constant inspections.” While investments in guardrail systems are an easy decision for companies like Greenwood that make their living working in high places, adoption of these engineered controls is far slower for companies with smaller budgets, and for companies that only occasionally have workers at risk for falls. But rental options help reduce the sting for many such companies. “We rent and install perimeter guard railing along with many other fall protection systems to contractors of all trades,” said Robert Grigas, a member of ASM’s Safety Committee, and president of Triple G Scaffold Services Corp., which sells and rents a variety of scaffolding and shoring products, and supplies crane services, winter enclosure systems and debris netting to its customers.

Planning Ahead Of course, construction companies still need to be prepared for life-threatening emergencies, fallrelated or otherwise. Many general contractors and, increasingly, building owners are requiring emergency plans be in place before project work begins. “While some construction companies rely on the local fire department in case of an emergency, that’s usually not a good plan,” said

Blake Underhill, president of Cantonbased Industrial Safety and Rescue, which provides a variety of technical rescue, first aid, safety monitoring and training to a variety of construction and industrial clients. “Outside of the metropolitan areas, many small towns use volunteer fire departments, and while they do great work on fires, they might not be trained or equipped to perform emergency rescues on construction sites, where time is a major factor.” “OSHA requires a suspended worker be rescued ‘in time to prevent serious injury to the worker,’ and emergency medical services be provided within 3-4 minutes,” Underhill noted. “The national average for 911 calls is 10 minutes just to pull on to the site. It eats up precious minutes to assess and commence a rescue, assuming they have the right equipment with them. Often, they will need to

call in a technical rescue team, which adds even more time.” As building owners have become more cognizant and sensitive to the risks associated with fall protection, some are going so far to require an emergency rescue team to be on site during construction. “Falls and injuries cost millions of dollars to construction firms, so it’s a good dynamic when owners require contractors to step up,” Underhill continued. “It costs a lot less to have firms like ours on site than to ask employees who lack critical medical and technical training to perform rescues or first aid.” “Hopefully, the injuries and fatalities that occurred this past winter in New England serve as a wake-up call to companies that rescue plans are not just a check off box on their paperwork,” Underhill concluded. “These are people’s lives we’re talking about.” s

WE KNOW THERE’S MORE ON YOUR MIND THAN THE SAFETY OF A BUILDING ALONE. As a contractor, you know there is risk around every corner. You need an insurance company that understands that. Not just from an insurer’s perspective, but from yours. Acadia Insurance. We’re closer to your business. And to you. With specialists in Massachusetts ready to serve you 24/7. Visit acadiainsurance.com or contact your local independent agent for more information about the ASM Safety Group and Dividend potential. Closer coverage. 290 Donald J. Lynch Blvd Marlborough, MA 01752, 1-888-665-1170 Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to applicable underwriting guidelines and the actual terms and conditions of the policies as issued.

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3/19/15 9:18 AM The Professional Contractor 13

MEMBER SPOTLIGHT

BY SCOTT SZYCHER

T.J. Conway Company Approaches 100 Successful Years

Dino D’Angelo, Lead Design Engineer

Thomas J. Conway Jr., President

here are a lot of benefits to being in business for 95 years, as Springfield-based mechanical contractor T.J. Conway Company (Conway Co.) can attest. Suffering through the Great Depression of the 1920s wasn’t one of them. “My grandfather, Tom Conway, emigrated from Ireland to Worcester and then to Springfield, traveling around New England to find work,” said Tom Conway Jr., president of T.J. Conway Co. A skilled plumber, the elder Conway got his first big break when he was part of a team that helped build Hope High School in Providence. He also made a name for himself doing residential work, then got more involved in public projects. By the 1960s and ’70s, Conway Co.’s primary customer was the Archdiocese of Springfield, which was undergoing a significant expansion. Tom Jr. joined the family company 1993, but took a circuitous route there. “I started with an apprenticeship, then union training and field work, all of which provided me with a great foundation,” said Conway, who has also made apprenScott Szycher is ASM’s membership, marketing and communications director.

Spring 2015

ticeships and union training a company standard for his team. He started his career with B-G Mechanical Services Inc. and Harry Grodsky & Co., rather than immediately working for Conway Co. “I wanted to see how other firms operated, and if there were any ideas I could bring with me, in addition to my trade skills.“ Conway Co. has made quite a name for itself in Western Massachusetts, having done major construction work on the Baystate Medical Center in Springfield, the Westover Marine Facility, and for UMass Amherst, including complete mechanical work on the university’s new Studio Arts building. They have also had a long-standing relationship with Mercy Hospital in Springfield, having finished work on the Ambulatory Surgical Center 18 months ago. Conway Jr. also serves on Mercy Hospital’s Capital Funds Committee.

Decades of Success Conway Jr. credits several factors for the company’s decades of success. “We’ve got a skilled staff and a very low turnover rate, so we’ve some guys working for us for over 40 years,” said Conway. “That really helps them work as a team, and know who’s got particular expertise in a variety of situations.”

He is also quick to point to the company’s increasing design/build capabilities as a way to provide extra value in a very competitive marketplace. “There are fewer competitors when you can bring design/build skills to the table, and we’re good at it,” he said. During its work for the Northampton VA hospital’s critical care unit, Conway Co. changed the entire design. “We’ll let our customers know why a certain design won’t work, and what it will cost to fix it. They appreciate our being honest with them, and our commitment to the project’s success,” Conway said. And once the mechanical systems are place, the company’s role doesn’t end, as they’re providing on-going mechanical services, including preventive maintenance, to customers who don’t have in-house people for those efforts. Despite a robust workload, Conway Co. finds time to contribute to the communities they work in, including the

pro bono work they did on behalf of a pedestrian who was struck and seriously injured by a motorcycle, and required an addition to his house in order to continue living there. Certainly, Conway Jr. has seen changes in the industry during his career. They have walked away from project opportunities where the schedule was unrealistic. And expectations and standards have risen on the customer end. “People expect a lot more for their money, and with margins being squeezed, you need to be good and fast at what you do. You need to outwork and outsmart the competition, but also be selective about your work.” They also won’t cut corners on safety to meet a schedule, as evidenced by the company’s multiple safety awards. They have also been members of ASM since 1973, finding copious value in the association’s legal and legislative support. “We know they’re experts

on modern construction laws, and we certainly take advantage of their legal support when we have questions,” he said. Looking to the future, while Conway Co. already has an abundance of private college work lined up, they are looking forward to the development and economic opportunities coming to Springfield via the casino project. But Conway Jr. sees a potential challenge beyond the bright lights the casino promises to bring. “It’s going to be a challenge finding skilled labor in Western Massachusetts,” he said. “We’ve certainly seen skilled tradesmen migrate east towards Boston as that’s where a lot of the action has been over the past few years.” Expressing what’s in the minds of many, “I just hope the spotlight on Springfield that the casino development will bring, also convinces people to come back here,” he said in conclusion. s

The Professional Contractor

The David H. Koch Childcare Center at the Massachusetts Institute of Technology.

Building Modular in Greater Boston After a Slow Start, Modular Construction Finds its Niche

By Jay Fitzgerald In the early 1900s, Sears, Roebuck & Co. launched a now-famous “house by mail” advertising campaign, promising a new era of homes that would be built off-site and delivered to its American catalog customers – some assembly required. A century later, that modular-building dream still hasn’t come to fruition in the way Sears once hoped. Modular construction only makes up a small fraction of the overall commercial and residential construction market in the U.S. and across the globe. But that’s slowly changing, as more and more contractors and subcontractors increasingly eye modular construction as a viable alternative to traditional methods of constructing all types of buildings. Modular is no longer viewed as just temporary boxes for school districts in emergency need of new classrooms or for workforce housing in boom areas, such as for the thousands of workers 16

Spring 2015

now flooding to the oil shale fields of North Dakota. Instead, modular construction – or the off-site construction of entire sections of buildings that are later transported to a site via truck – is now spreading into the office and retail sectors, as well as into multifamily housing. These are permanent modular structures, sometimes even multiple stories high. “Everyone is talking about it these days,” said John Cannistraro, president of J.C. Cannistraro LLC in Watertown. Cannistraro’s mechanical contracting company has worked on a number of modular projects recently, including a new childcare center, laboratory and mechanical building at the Massachusetts Institute of Technology. The movement toward modular, as well as partially prefabricated buildings, isn’t entirely about costs. Modular construction costs roughly the same as traditional “stick-built”

facilities, industry officials say. Any savings achieved by making buildings within off-site modular factories are usually offset by the cost of transporting modular sections to building sites via trucks. Instead, the benefits of modular are largely twofold: The speed, accuracy and efficiency at which modular components can be built and completed, and the fact that modular construction projects can still proceed at nearly full speed in the winter, as opposed to traditional construction projects that often grind to a halt in the snowy months. “It avoids surprises and it’s safer and reduces waste,” said Cannistraro of modular. Even some unions have embraced the movement toward modular, after years of some opposition to modular construction, based largely on the fear that modular would put many trade employees out of work.

“We want to be, and will be, part of the mix,” said Matt Lash, business development director of IBEW Local 103 in Dorchester, which has about 7,500 members in the Boston area. Licensed trade unions including electricians and plumbers have largely accepted modular as part of the construction future, though some nonlicensed trade unions may still have doubts, Lash said. Lash proudly noted that his union has been involved in on-site work at projects such as the multifamily, multilevel Residences at Malden Station and The Flats At 22 in Chelsea. IBEW Local 103 has also been involved in a number of modular school and education projects. Cliff Cord, president of Triumph Modular Inc. in Littleton, said modular has definitely gone mainstream, in the sense that modular facilities are no longer viewed by most everyone as merely temporary structures designed to be later torn down. The movement toward more permanent modular

structures began about a decade ago, he said. He notes his company recently did a two-story, modular addition at Cambridge Hospital in Cambridge. The New England modular market tends to be most popular within the education, health care and social services sectors, he said. Modular construction of office buildings hasn’t really caught on yet in New England, though modular office projects are more common in other parts of the country, Cord said. In general, Europe and Japan are considered far ahead of the United States in terms of modular construction trends. Indeed, European designs for multi-story modular buildings are only now starting to seep into the U.S. market, industry officials say.

Not Enough Sources One of the main challenges facing modular construction in New England is the limited number of modular factories, or “modular fabricators,” in

“One of the benefits is that you can do it year-round. It’s easier to do in the winter. There’s a nice warm place inside to work.” — Brian Hamilton, project executive, Consigli Construction

The Residences at Malden Station.

the region. There are only a handful of factories capable of making modular buildings in the six-state region, such as Maine’s KBS Builders Inc. KBS has built modular sections for a number of construction projects in the Boston area over recent years, including the 84-unit Residence at Malden Station. According to industry officials, a number of New England modular factories closed after the housing market bust last decade, largely because they focused too heavily on the single-family modular home market. As a result, many modular builders have to have their modular units constructed as far away as Pennsylvania and Indiana, then have the units trucked to the Boston area for unloading and assembly at sites. Once on location, huge cranes lift the modular sections into place at pre-cleared sites. A swarm of workers then descend on the modular units to finish up with plumbing, electrical and other work that needs to be done. Industry officials say modular construction won’t really take off in the Boston area until a modular factory is open and operating in this area, thus reducing transportation costs. Cannistraro and other industry officials say it’s only a matter of time before a modular factory is built in Greater Boston. Meanwhile, modular contractors and subcontractors are making do with what is currently available – and prospering. Commodore Builders of Newton is now constructing a $23-million, three-building campus for the Match Charter School in Hyde Park; two of the buildings are modular. The Match Charter development, which is expected to be finished by this summer, is just one of many school projects around the state using modular construction for classrooms. James Apodaca, Commodore’s senior project manager, said modular construction is still labor intensive and requires close coordination between contractors and subcontractors. Sites still have to be cleared, concrete foundations poured, wiring and plumbing continued on page 19 The Professional Contractor

INCREASING PERSONAL PRODUCTIVITY

BY GREG ENOS

A Dose of Discipline Can Get You Back on Track

ersonal productivity can be increased with an attitude adjustment and a dose of discipline. There is no need to make a day 26 hours long or invent a time machine. There are plenty of technology tools, training programs and trendy concepts available. They include “supplements” that may increase your brain function and smart phone apps that can make your life easier. Here are some proven, practical ways to increase your personal productivity every day. They do require simple doses of discipline. Write down your top three priorities before you start your day. Focus on individual priorities that can be accomplished in two hours or less. Tasks that are going to take more than two hours to do should be broken down into smaller segments. Some days you may only accomplish your top priority. This is perfectly acceptable because you are completing objectives that are important to your success. Commit yourself to being an effective listener Greg Enos is a speaker, author and trainer on personal productivity, listening and leadership, and consults with organizations to improve individual and team productivity. He can be reached at (401) 333-9050 or gregenos@gregenos.com.

Spring 2015

in all situations. Tremendous amounts of energy are wasted every day because we really do not listen well. Successful listeners make a commitment to pay attention, concentrate by giving their undivided attention to the individual they are communicating with, and collect the essential information being discussed. Taking notes, recording the conversation, or memorizing important information is critical. Asking good questions helps confirm that you are getting the facts correct. Sometimes multiple questions are necessary to ensure you understand what is being communicated. Accomplish your work in 90-120 minute segments. Take regular breaks to minimize stress. Invest in your health by getting exercise, eating lunch away from your work area and clearing your mind of one project before starting a new one. Increase your energy level by getting a good night’s rest. Sleep is important to recharging our bodies. Experts recommend a reduction in food and liquid in-take at least two hours before bed time. Elimination of highly stimulating activity just before bed is also encouraged. Constantly seek out ways to improve your work process. Continuous process improvement of regular, repeated tasks can save time, money and energy. Simple math shows that a 12-minute time savings on a daily basis can yield more than a week (40 hours) of additional productivity over a year. Documenting the process improvement and sharing it with appropriate staff is important. It can lead to employees bringing ideas forward for consideration. Touch a piece of paper only once. This includes letters, messages and memos. You should resolve it with an immediate reply, file it or throw it away. Expeditious resolution of communications also applies to email, voicemail and text messages. When filing items, it is important to have a consistent labeling system across all electronic and printed platforms. Forget about multitasking! The human brain is wired to handle one thing well at a time. Do not fool yourself or others about your capacity to accomplish two or more higher brain tasks at one time. People who believe they are multitask-

ing are actually switching between two or more tasks. While they appear to be very active, only their short-term productivity appears to be affected. Eventually they will burn out. Defeat distractions. Turn off device alarms. They frequently take your attention away from a significant task and divert it to a message that does not contribute to your productivity. Current studies show that distractions and interruptions take us away from our planned work for more than 20 minutes. We can then be further distracted, compounding our productivity loss. Commit yourself to being a lifelong learner. Seeking opportunities to learn stimulates brain activity, promotes a healthy life style and reinforces a positive attitude. Pulverize procrastination! It is one of the biggest productivity challenges working professionals encounter on a regular basis. A fear concerning the size of a task frequently delays our actions to overcome procrastination. Lack of experience with the subject can also be a barrier. The keys to conquer procrastination are: •• Identify a task that can be dealt with in two hours or less. •• Establish a quantifiable objective. •• Tell somebody what you are planning to do and get started. •• Complete the task to the objective standard. •• Reward yourself for the task completion. You can absolutely deal with procrastination by tackling a task that is not too big and applying the keys above. Start with a small task and build success. The concepts discussed in this article are a starting point for increasing your productivity. Pick one and apply it to your life for a 21-day period. (Pick only one, otherwise you can overwhelm yourself.) Once you have had success with one new technique, try a second one. Be realistic about increasing your productivity. A positive attitude and a willingness to expend some enthusiastic energy will change your life. s

Building Modular in Greater Boston continued from page 17

installed and a host of other on-site duties performed. “There’s still a lot of work to be done to put them together,” said Apodaca of modular units. “They don’t come completely finished.” Eventually, he said he sees modular spreading more deeply into the officeconstruction sector, particularly in the construction of two- to three-story suburban office buildings. Jai Singh Khalsa, president of Khalsa Design, a Somerville architecture firm, said he’s been doing modular residential construction since the late 1980s. He’s currently involved in a project to build 150 apartment units at the old Lincoln Park in Dartmouth. Indeed, he’s currently constructing his own modular home in Cambridge. “Modular is a great delivery system,” he said. “It’s very efficient.” For architects, they can send their designs to “modular fabricators,” or

factories, and can be reasonably sure the final products will come back accurate. Typically, all modular building designs are inspected by third-party reviewers and by state building regulators, all to ensure quality, safety and that fabricated units are built to code, he said. Brian Hamilton, a project executive at Consigli Construction, a Milford construction management company, said his firm is not very involved in modular in the region. Still, he sees modular as an up-and-coming force within the contracting and subcontracting sectors. “As more and more people see it, the more it will be accepted,” he said. “It will take time. It will be modest growth. But the benefits are apparent. One of the benefits is that you can do it year-round. It’s easier to do in the winter. There’s a nice warm place inside to work.” s

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TRENDS IN THE TRADES

BY HUGH KELLEHER

The Mechanical Trades: At the Forefront of Innovation and Opportunity

couple of major trends are taking place in the mechanical trades in Boston, and they are important to understand. The first involves innovation. Thirty years ago, on a large-scale commercial plumbing job, you would hear the plumbers say: “Plumbing is plumbing.” There was a sense that the trade would continue to be what it had been, more or less, since the days of the Romans when the Latin word for lead – plumbum – gave the trade its name. In the many hundreds of years since the Romans, the trade had indeed introduced a few innovations. By the 20th century, we were no longer using lead pipes to transport water. Cast iron drainage piping became common, and by the late years of the century various forms of plastic, including PVC and PEX, had been introduced. Yet the trade remained essentially the same. Plumbers went out to jobs, cut holes in studs, and soldered, clamped or glued systems together. It was the digital revolution that caused things to change in a dramatic way. You see the innovations particularly on commercial jobs, where buildings are now being fully designed back at the shop, where pipe is then cut and fabricated. Whole batteries of fixtures are now being put together under controlled conditions before being lifted by cranes and popped in place. Perhaps even more striking are job site innovations like the Trimble system, which allows the folks back at the office to determine the precise location of hangers and cores. Data is sent wirelessly out to the job, downloaded into the Trimble, and locations for those hangers and holes are identified and marked in a matter of minutes. It’s a very far cry from the days when we used plumb bobs and chalk lines on the floor to fix our locations. If you had a told a plumber three decades ago that this would be the way apprentices and Hugh Kelleher is the executive director of the PlumbingHeating-Cooling Contractors Association of Greater Boston.

Spring 2015

journeymen in the 21st century would be doing layout, they would have looked at you with a very puzzled expression. The second major trend in the mechanical trades – and to a large extent, the building trades in general – is the growing shortage of skilled workers. Decades of an educational system that placed an emphasis on going to college had given the trades a bad rap. Few students leaving high school had been told that among their options is joining an apprentice program – such as those offered by the building trade unions – where if you worked hard, after five years you could be earning a six-figure income. Instead of being tens of thousands of dollars in debt from obtaining a college degree, a skilled craftsperson today has opportunities that often exceed those with bachelor’s degrees. This is not to say that college is not useful. Indeed, we are finding that more and more of those who are joining the trades arrive with some advanced education. For instance, in recent years, during the Plumbers Local #12 application process there has been at least one law school graduate. Even at the high school level, we are seeing a renewed appreciation for the importance of our vocational schools. What is becoming apparent is that the coming retirement of Baby Boomers is opening up a whole set of employment opportunities for those willing to take on the challenges of learning a mechanical trade in the 21st century. Increasingly, there are shortages in various parts of the country of skilled plumbers and electricians. In the years to come, the mechanical trades will take on a whole new look. And we’ll be looking for smart, hard-working young people who are ready to take on the challenges and opportunities that the building trades can offer. There is a Willie Nelson song that includes the line, “mamas, don’t let your babies grow up to be cowboys.” For years, the American educational system sang a similar tune: “Mamas, don’t let your babies grow up to be plumbers (or electricians, or carpenters, etc.).” That tune is changing. s

HUMAN RESOURCES

BY ERNIE SMITH

Study Ranks Happiest Workers

ew research from human resources startup TINYpulse finds that, no matter the industry, employees who have ample resources and coworkers they like are the happiest. Construction workers do more heavy labor than office drones do – and they’re OK with that. In fact, according to a new survey released by the human resources firm TINYpulse, employees in the construction and facilities services field are the happiest and rank ahead of those who work with consumer products and technology – two lines of work that get a lot more attention. TINYpulse based its findings on the thousands of one-question surveys that it serves up weekly to companies, small and large, including General Electric, Amazon and Ticketmaster. So what makes construction firms such great places to work? According to the survey, the top three reasons are people, projects, and work environment. About a third of construction and facilities services employees (34 percent) said they are happy with the people they work with, while 19 percent said they are excited about the projects they work on, and 10 percent boasted of a great work environment. One employee summed it up best in comments to TINYpulse: “I am very happy at work. I really like what I do, and I get to learn something new every day to improve what I do already. I enjoy my work and working with my coworkers.”

opportunities for growth. A company’s unwillingness to modernize also likely contributes to employee dissatisfaction, Dan Davis, editor-in-chief at the Fabricators and Manufacturers Association, told TINYpulse. “Some facilities have not made these investments, so their employees may not see the benefit,” Davis said. “Also, if a company is not taking the time to have safety meetings or invest in safety guards to protect employees, will employees think that they have an employer that is looking after them? Probably not.” Any industry, though, has room to fix lingering human resources problems, TINYpulse CEO David Niu told Entrepreneur magazine. “These findings are remarkable because they show me that any leader

– no matter the industry that they’re in – has the power to make workplace changes to materially impact job satisfaction,” Niu said. Curious about the full report? You can download it at: www.tinyhr. com/2015-tinypulse-best-industryranking-report. Reprinted with permission from Associations Now. Copyright, ASAE: The Center for Association Leadership (February 2015), Washington, D.C. s Ernie Smith is the social media journalist for Associations Now, published by the American Society of Association Executives.

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What Frustrates Employees

The study’s greatest lessons may come from the bottom rankings. Manufacturing ranked lowest out of 12 fields in the study. Also bringing up the rear: the government and nonprofit sector, which sits in 11th place. So why do those in the manufacturing trade struggle? It comes down to leadership. The study noted that employees were most likely to be brought down by unsupportive managers, limited tools and resources, and fewer

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1/25/12 10:24 AM The Professional Contractor 21

CYBER SECURITY

BY SCOTT SZYCHER

Cyber Fraud Hits Home with Contractors

From left, David Nussbaum, Barbara Minkwitz and Lynne McDonald, Eastern Bank; Michelle Lord, Eastern Insurance; Attendees listen intently at ASM’s Fraud & Cyber Theft program. and Justin Amico, Feeley & Driscoll P.C.

SM recently conducted a panel discussion, “Preventing Fraud & Cyber Theft,” featuring speakers from Eastern Bank, Eastern Insurance and Feeley & Driscoll, P.C. This article summarizes some of the key points from the discussion. It started, as many instances of fraud do, innocently enough. A contractor received an email from an overseas vendor, asking that payment for supplies be wired to a new bank account the supplier was using. The email, coming from his supplier’s email address, seemed to be legitimate. It was only after the money was wired to the new bank account did the contractor learn that he’d been swindled: a cyber criminal had “stolen” the email address, and the wired money was gone. Though major corporations like Target, Anthem and TJX may be obvious targets for cyber fraud, smaller businesses like contractors are just as vulnerable, yet for many, it flies under the radar. “Fraud used to be conducted face-to-face, such as criminals trying to cash stolen checks at banks,” explained Barbara Minkwitz, vice president and regional fraud investigator at Eastern Bank. “Now, it’s faceless – all done online.” Certainly, there is still plenty of fraud involving checks, including forged and counterfeit checks. “It’s easy to replicate checks, and some criminals have practically perfected it,” said Minkwitz. But the fastest growing form of fraud involves Automated Clearing House (ACH) transactions. The ACH network acts as the central clearing facility for electronic fund transfer, and is a critical link in the global banking system. Unfortunately, ACH fraud is very easy to execute with just an account number, and a bank routing number. “This type of fraud can occur over the phone or through Scott Szycher is ASM’s membership, marketing and communications director.

Spring 2015

web transactions,” said Minkwitz. “It’s one reason why Eastern Bank doesn’t wire money based on email requests. It’s too easy for ‘mules’ to open accounts that receive stolen funds.” While ACH fraud threatens businesses across the board, contractors have their own risks. Surprisingly, many of the biggest risks to contractors stem from lack of controls in their own internal processes. “Many contractors don’t implement even basic financial controls for fear of insulting longtime employees who have handled payments and routine bookkeeping for years,” said Justin Amico, partner at Feeley & Driscoll, P.C. “Construction company owners need to depersonalize the situation, and focus on process and controls. Too often, even trustworthy employees can be tempted to do the wrong thing under certain circumstances, if they are in a position to do so.” Amico recommends segregating duties, including custody of checks, check writing and signing authorization, and bank reconciliation. He’s also a strong proponent of company owners intimately knowing their numbers, such as job costing and monthly project accountability. “It’s important for the person at the top to notice discrepancies and ask ‘On this project, why did our materials or labor go over budget?’” Amico stressed. He’s also a staunch proponent of company owners personally monitoring their bank accounts, at least on a monthly basis when the statements come in, but preferably more frequently, online, because it’s important to act quickly if something doesn’t look right. “Opening your bank statements and recognizing your payees and signatures on the checks are the strongest controls you can have,” he said.

More Levels of Protection And there are a few other easy tips to prevent fraud that don’t require any particular training. “Review your payroll account carefully, as most fraud occurs within

this account because it’s not the operating account,” said Amico. “It’s important to control who can open payroll reports, add employees or change rates,” he said. “And if you use a stamp to sign company checks, get rid of it now! Have the owner sign the checks and still open the bank statement. If you need to have your staff make purchases, do it with a company credit card, and put a limit on those expenditures, or set up accounts with authorized suppliers.” Many banks now offer a service called ACH Positive Pay, which functions as fraud protection against ACH fraud by allowing ACH debits only by designated companies, within specific dollar limits, for authorized transaction types. Positive Pay is also available against check fraud: your bank will compare a file of your checks issued against every check presented for payment, and pay only the checks that match. “It’s a way of providing advance notice of potential fraudulent check activity,” said Lynne McDonald, vice president of treasury services for Eastern Bank. “Alert notification can also help deter fraud by notifying customers of important banking activity through online alerts, such as

balance thresholds, outbound wires and more.” McDonald also recommends placing internal controls on online banking, such as having two or more levels of user IDs and passwords; having separate passwords and IDs for different employees; and having a designated company administrator assign internal levels of usage by account, dollar level and activity. But with criminals working diligently to stay one step ahead of their targets, contractors still need fraud insurance protection that reduces their liability. “Your existing package policies may not cover modern types of electronic fraud,” cautioned Michelle Lord, vice president of Eastern Insurance. If you don’t have the right coverage, whether it’s crime insurance, forgery or funds transfer fraud coverage, you could find yourself exposed.” Massachusetts now has regulations in place requiring every business to have a written information security program (WISP) to ensure the security and confidentiality of personal information, and protect against threats, hazards and unauthorized use of that information. Without a

You put building first.

good WISP, companies may find themselves on the receiving end of steep fines, to the tune of $5,000 per piece of data stolen. “Companies need to have WISP in place,” said Lord. “It’s no longer an option in Massachusetts; it’s a requirement. And these are new requirements, so your existing general liability policy may not cover losses or breaches that fall under WISP.” And insurance agencies are beginning to take a proactive role with their clients. “Over the past four months, we’ve been doing outreach to our clients to find out what they’re doing to prevent cyber fraud, and discussing specialized cyber/data liability insurance as part of their risk management program,” said Darlene Beshaw, senior vice president at Marsh & McLennan Agency LLC. Considering how hard contractors work to build their businesses, overlooking the importance of insurance is a critical mistake. “It’s crazy for contractors not to have the correct insurance policy when it comes to fraud,” Amico concluded. “It takes the edge off in case anything does happen, and provides some much-needed peace of mind.” s

Whether you’re a plumber, an electrician or a general or specialty contractor, you need a risk plan developed by an agent who puts your needs first. As one of the largest independent insurance agencies in New England, we can design a competitive and comprehensive insurance plan just for you. And when you feel secure, we do too. For an in-depth review of your program, call Eastern Insurance Group at 508-620-3412.

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INDUSTRY SPOTLIGHT

Walsh Brothers, Inc. Plans for Another Century of Building in Boston

SM recently interviewed Richard C. Walsh, vice president and director of Walsh Brothers, Inc., a fourth-generation company that has been building in the Boston area for over 100 years. His thoughtful responses not only provide insight into Walsh Brothers and how the company has changed with the times, but also into the construction industry and where it is headed in the coming years.

Richard C. Walsh

Spring 2015

Walsh Brothers has been a fixture in Boston for more than a century. What would you like to share about the early history of the company? My great grandfather and great grand uncle, James and Thomas Walsh, started Walsh Brothers in 1901 in Cambridge. These were very humble beginnings, as this was the era of “No Irish Need Apply,” and to make a go of a business in Boston they had to focus their efforts on building churches for the local dioceses and public facilities for the local municipalities around Boston. Over the next 100 years, the subsequent generations of

Walsh family owners expanded into institutional markets including hospitals, colleges and historic preservation projects. Our quality workmanship and honest approach to exceptional client service launched the company to local prominence and became the founding principles that still guide us today. How has the company changed over time – in terms of the type of work and market focus? Walsh Brothers’ primary niche markets remain medical, educational, life science, institutional and corporate, with widely varying project types in the $1 million to $200 million range. I think the greatest change for any long-term contractor, including Walsh Brothers, has been the evolution from general contractors that self-performed the majority of trade work on a project, to construction managers that now subcontract most, if not all, trade work. There was a time when we excavated the site for a new building, poured the concrete, set the masonry units and performed the rough and finish carpentry, all with our in-house personnel. Today, with many highly skilled and trained specialty subcontracting firms (like the

ones that comprise the ASM membership), it is no longer necessary to self-perform trade work to ensure the highest level of quality workmanship. What sets Walsh Brothers apart from the competition? What do you do differently from other firms? As a fourth-generation owner and steward of the firm, I have lived this business since I took my first steps. Visiting active jobsites as part of family weekends was the norm growing up. In the 50 years that I’ve been around the business, I can honestly say that as much as we have made significant advances in the computerized technology used to plan and execute the construction of a building, one thing has not changed much, and that is the importance of personal relationships and trust between us and our clients. As we celebrated our centennial in 2001, we developed the marketing phrase “Promises kept from one generation to the next,” which was and still is the essence of Walsh Brothers. It is in our DNA to strive for the best for our clients on every project we undertake, large or small. Our people are what set us apart from the competition; we are a family and we work together to ensure that collectively we deliver on every promise made. Where do you see the local construction market heading in the next few years? The Boston market will continue to remain strong, although I don’t believe we will see the number of residential towers going up as we have seen in the past 4 to 5 years. In the health care market, we will continue to see major hospitals expanding into suburban areas with day-surgery centers and other “routine” care centers, while the main urban campuses will re-program and re-purpose spaces for the more urgent care needs. The local colleges and universities will continue to build residence halls to get as many students on campus and out of the local rental markets, and will continue to build amenities-rich facilities to attract and retain high-caliber students. Institutions with historic facilities that have deferred significant maintenance and expansion to get through the recent recession can delay no more and will begin to implement their long-planned improvements. What do you see as the major challenges for the industry right now – e.g., what’s your take on the skilled labor shortage? As at-risk construction managers, we have become more and more reliant on the talents and skills that our subcontractor partners bring to the table. As such, when the high quality subcontracting firms get busy and near their capacity, it is incumbent on us to ensure that we are reaching out to as many potential subcontracting firms as is practical. We need to make sure that the firms we contract with will have enough skilled individuals to man a project per the schedule, and even extra capacity should a project need to be accelerated. We also need to know they have good working relationships with the equipment and material suppliers that will be servicing our projects. Our word to our clients is our bond, and we expect no less from the firms that we con

sider subcontracting with. Working with subcontractors who adhere to our philosophy of “promises made and promises kept…” will enable Walsh Brothers to face the industry’s challenges head-on. How would you assess the impact of technology on the industry? How is it changing the way you do things at Walsh Brothers? In addition to BIM being a major game-changer for our industry, so too is the advent of electronic information sharing. I can still remember when we installed our first fax machine and marveled at how the documents – which previously came by mail – were now instantly appearing before our eyes. Fax technology heightened the need for immediacy in sending and receiving information, which has only increased with the advent of electronic file transfer services. Now, we host virtual document sharing sites through the use of ShareFile and Bluebeam to create a very organized method of filing project information that is accessible to the entire project team and accessible to our subcontractors through established access levels. We continued on page 26 The Professional Contractor

Industry Spotlight continued from page 25

are able to control who has readonly access or the ability to post new documents. These project-specific sites can accommodate large files that cannot be transmitted by email efficiently. The organization, file structure, access and notification features of the ShareFile site can be customized to suit any of your project specific needs. In our attempt to minimize our carbon footprint and be more sustainable, we always strive to be paperless and are now utilizing virtual planroom technology on job sites to minimize and eventually eliminate the use of paper construction drawings and specifications. Our superintendents use an iPad to access the “plan table” as they walk through the building so they always have access to the full set of current construction documents without carrying paper plans. As technologies that enhance the flow of project information continue to develop and improve, we are constantly assessing the potential benefits to our projects and ultimately to our clients. Walsh Brothers has made a commitment to building information modeling (BIM). How has BIM changed the industry, and how are you using it on your projects? BIM has revolutionized how we build, but mostly in how we prebuild. What I mean is, we have always done the conventional pen on paper 26

Spring 2015

composite coordination drawings with the structural, mechanical, HVAC, plumbing, fire protection and electrical contractors drawing in where their respective equipment, duct work, piping, etc., will be placed in the field. Now with three-dimensional computer programs enabling us to electronically coordinate an entire a building at one time, the speed with which each subcontractor can fabricate or pre-fabricate their work product has been exponentially increased. There are fewer field clashes, and the time saved is money saved for the client’s benefit. In the case of using BIM to pre-coordinate these elements of the building, faster is cheaper and better! What about 3-D printing? Do you see a practical application for commercial construction? This technology seems to still be in its infancy, but I do envision a time in the not too distant future when certain building components (decorative precast concrete panels, for example), will be designed and fabricated through the use of a super-sized 3-D printer. As with all emerging technologies, the final product will need to have a greater value than the conventional product it strives to replace, but with continuous improvement and development of this technology, I have no doubt we will begin to see it become more practical.

Have you been involved in Integrated Project Delivery (IPD) on any of your projects? Do you see the use of IPD increasing? The AIA defines IPD as “a project delivery method that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to reduce waste and optimize efficiency through all phases of design, fabrication and construction.” That is exactly what Walsh Brothers has been practicing for over 100 years, long before this terminology was developed. There are elements within IPD projects which are gaining popularity and credibility, namely lean construction practices. In our on-going efforts as an industry to minimize wasteful field practices, and streamline construction, we have adapted the auto industry’s practice of lean manufacturing, which advocates the pursuit of continuous improvement in all aspects of a project. We are currently involved with three major projects that have formalized the lean construction methodology, and we are seeing immediate and measurable savings in field installation efficiencies. But I still believe that even as new project delivery methods and practices continue to evolve in the future, the success of any project will continue to revolve around the trust and chemistry of the entire project team’s members. Building a project team based on mutual trust and respect will always

be more important than the chosen project delivery methodology. Are there particular projects you’d like to highlight that you have recently completed? We have been fortunate to have been chosen as the construction manager to construct numerous significant projects recently, but a few notable undertakings include UMass Boston’s Integrated Sciences Complex, Brigham and Women’s Green Garage, Boston Children’s Hospital’s Mandell Building Addition, Westfield State University’s New Residence Hall, Boston College’s Stokes Hall and the new Spaulding Rehabilitation Hospital in Charlestown. Would you like to mention any works in progress of particular interest? To name a few, we are currently acting as the construction manager on projects for Massachusetts General Hospital, Brigham and Women’s Hospital, Emmanuel College, Mt. Auburn Hospital, the Boston Symphony Orchestra, Procter & Gamble/Gillette

and the Harvard Business School. What advice would you give to subcontractors who would like to do business with Walsh Brothers? As mentioned previously, we expect of our subcontractors the same type of open and honest commitment to our client’s project goals that we embrace. We are looking for long-term, mutually beneficial business relationships with our clients; therefore, we would expect that subcontractors who wish to work with Walsh Brothers seek the same of us. Of course they need to be corporately qualified to take on the scope of trade work that the projects demand, but more importantly, the personnel that they propose to man our projects must be skilled with relevant experience, and have strong references. What would you like subcontractors to know about your prequalification process – or other company protocols? For any firm that wishes to prequalify for Walsh Brothers’ projects, please

reach out to Director of Preconstruction Services Nelson Dupuis at 617878-4800 or ndupuis@walshbrothers. com to receive a prequalification statement, in which the company protocols are spelled out. Is there anything you would like our readers to know that hasn’t been mentioned above? There has been a recent surge in requests from clients, especially on larger and more complex projects with compressed preconstruction phases, for construction managers to provide design-assist capable subcontractors. The construction manager is responsible for managing a competitive process to get these firms on board early to assist the architect/engineer team with the detailing of certain disciplines of trade work. As BIM has become an industry standard for this type of accelerated systems design, firms that possess these skills along with prior design assist experience will be greatly sought after as project schedules continue to be shortened. s

Outstanding Performance Terminal B, Logan Airport Boston, MA Photo Credit: Richard Mendelkorn Photography

At Wayne J. Griffin Electric, Inc. we work tirelessly to maintain the highest standards of on the job performance. From preconstruction planning, through project execution and final closeout, we go to great lengths to provide quality workmanship for the best value. We know our clients would never settle for anything less. And neither will we. Corporate Headquarters 116 Hopping Brook Road Holliston, MA 01746 (508) 429-8830 Regional Offices: Charlotte, NC Durham, NC Duluth, GA Pelham, AL www.waynejgriffinelectric.com

www.waynejgriffinelectric.com

MA Lic A8999

The Professional Contractor

MEMBER NEWS

J.M. Electrical Performs Work on Harvard Medical School

Aware of the great work that Harvard Medical School does, J.M. Electrical Company (Lynnfield) was delighted to do some electrical work recently for the organization.

The Winter of Our Discontent

Some contractors, like The Drake Company (Holliston), stayed busy this past winter with various snow removal efforts, while others like Lanco Scaffolding, Inc. (Somerville) had to do their work in and around the snow! 28

Spring 2015

J&M Brown Helps Renovate Boston’s Old South Church

J&M Brown Company (Boston) renovated the Old South Church’s multiphase electrical systems, including construction of a new electrical room and electrical distribution system. Of particular importance to the church’s visitors was the restoration of 18 historic chandeliers dating back to the turn of the century. The venerable electrical subcontractor undertook extensive preconstruction planning with the general contractor and the electrical engineering firm to ensure minimal disruption to the church’s structural integrity and interior finishes.

LAN-TEL Teams with My Brother’s Keeper

My Brother’s Keeper is a well-known Christian ministry which serves people of all faiths by providing groceries, furniture and other daily necessities. That’s why LAN-TEL Communications (Norwood) partnered with them to help families in need in southeastern Massachusetts. LAN-TEL employees volunteer monthly, assisting with the packaging and delivery of donated items.

LAN-TEL Keeps Patriots Revelers Safe

LAN-TEL Communications’ expertise in security systems was on display during the Patriots Super Bowl Parade, as they provided Boston with an array of video surveillance cameras throughout the parade route to monitor and manage the event. The cameras provided the Boston Police and Fire departments, as well as Boston EMS, with views needed to provide safety and security.

Maria Fallon Electrical Services Retrofits 160 Federal St. in Boston

Maria Fallon Electrical Services (Westwood) is nearing the completion of an energy-efficient lighting project at Boston’s historic 160 Federal St. building. The project work includes renovation of exterior and interior lighting, including over 500 fixtures, 205 of which are exterior LED floodlights that illuminate the building’s historic façade. The MBE/WBE company is also equipping bathrooms with occupancy sensors. The Professional Contractor

MEMBER NEWS

Mark Richey Woodworking Lands Contract with Apple Inc.

Known for their high-end wood interior work, Mark Richey Woodworking Inc. (Newburyport) is working on what’s known as “Apple Campus 2” in Cupertino, California. Richey will expand its workforce and facility as it ramps up for this project, which will be its largest yet.

NB Kenney Acquires Boston Mechanical Services

Already regarded as one of the region’s largest mechanical contractors, N.B. Kenney Co. (Devens) kicks off its 45th year with a bang by acquiring Stoughton-based Boston Mechanical Systems, a provider of a full range of maintenance and operation services for mechanical systems. Boston Mechanical Systems will retain its name and become a division of N.B. Kenney, with former Boston Mechanical Services principal Aidan Maguire assuming the role of N.B. Kenney’s vice president of service. Pictured, left to right: N.B. Kenney Executive Vice President Robert Nims; Boston Mechanical Vice President Aidan Maguire; and N.B. Kenney President Steven Kenney. 30

Spring 2015

Sanford Contracting Finishes Work on ‘Zinc’ Apartments

Billerica-based Sanford Contracting, which specializes in the design, engineering, fabrication and installation of building envelope assemblies, recently finished work on a project at 22 Water St. in Cambridge that many Boston commuters know as the “Zinc” apartment complex. Their work consisted of 130,000 square feet of unitized cement board panels, shopinstalled windows, studs, sheathing, mineral wool insulations, balconies with thermal breaks, and more.

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