The Professional Contractor Winter 2015 by The Warren Group

THE PROFESSIONAL

WINTER 2015

A Publication of the Associated Subcontractors of Massachusetts, Inc.

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

COVER PHOTO AND PHOTO AT RIGHT COURTESY OF LOU JONES.

A Publication of the Associated Subcontractors of Massachusetts, Inc.

16 Millennium Tower Rises with the Help of Subcontractors

cover story features

04 PRESIDENT’S VIEW The Price of Technology

05 TAX TIPS Four (Not So) Common Tax Mistakes Contractors Make

06 08

TECHNOLOGY Lean Construction from a Subcontractor’s Perspective FORECAST 2016: The Economic Year Ahead

10 PROPERTY OWNER PROFILE Cummings Properties Takes on Corporate and Social Responsibilities 12

INSURANCE Why is Employment Practices Liability Insurance Growing So Quickly?

14 MEMBER PROFILE E.M. Duggan Prepares to Celebrate 125th Anniversary 19 ASK THE LAWYER Massachusetts Sick Leave Law 20 TECHNOLOGY Being Smart About Intelligence 22 ASM’S BIENNIAL DINNER GALA ASM Celebrates at Biennial Dinner Gala 24 LEGAL Medical Marijuana: Navigating Potential Potholes 26 MEMBER NEWS 27 SAFETY Winter Safety in Any Climate

28 YEAR-END PROJECT PHOTO GALLERY The Professional Contractor

PRESIDENT’S VIEW

BY JOSEPH H. BODIO

The Price of Technology

irst and foremost, I would like to thank the ASM community and everyone who attended the Gala event at the Museum of Science (see page 22). I would also like to thank the board and the ASM members for putting their trust in me over the next few years. I look forward to working with the various committees as we move ahead in these very exciting and robust economic times. As we have seen in the past few decades, faster and better technology has driven us not only in our jobs but also in our everyday lives. When I started with “Ma Bell” 47 years ago, every work order or communiqué was either face-to-face or via telephone – in other words a “strong human element” was involved. As for contracts and agreements, most were via handshake or a one-page document. At home, evening meals were the focus of the day’s events. Sunday dinner brought the entire family together in conversation. As the wise man said, “Those were the days of simplicity and innocence.” Just 25 years ago, as I started LAN-TEL Communications, faster, sleeker phones were replacing the first generation of bag phones (which made everyone look like they were in field ops during war games as they walked and conversed). This brought on the evolution of the dreaded “mobile email” application. Now everyone could stray away from their cubicles, yet feel as if they were still there with this new accessibility. Little did we know that this would change our lives forever with major impacts on our family and friends. Vacation and vital family time would be easily interrupted with a buzz or a ding. But still there was that last grasp of human interaction via a phone call. Fast forward to today and human interaction has Joseph H. Bodio is founder, president and CEO of LAN-TEL completely fallen by the wayside. Huge strides in Communications in Norwood. He can be reached through ASM technology have allowed with a little savvy at 617-742-3412 or by email at anyone president@associatedsubs.com. to tweet, text, email, facetime, Instagram, post to

Facebook or LinkedIn anything and everything. Sadly, we have become a 24/7 society and there is no longer any need to speak with someone face-to-face or simply pick up a phone to talk. From a business standpoint, CAD drawings and contracts, as well as other vital documents, are now sent electronically with email signature capabilities. Something as simple as a change order takes longer to write up and process than it does to complete the work. The one-page contracts of the past have been replaced by 200-page electronic documents. This fever pitch technology is not without its collateral damage. Undue pressure has been thrust upon our staff and their families. We require them to be available at all times, often interrupting important family events. Our children’s faces are buried into their phones almost every waking minute. Go into any restaurant and count how many thumbs are dancing with the keyboard at each table. Studies have proven that lack of face-to-face interaction is not good for the human body. A 2010 University of Michigan study showed an increase in the onset of depression in patients with very minimal face-to-face contact with others. A study in England proved that face-to-face interaction releases a chemical beneficial to the human body and a lack of that chemical led to heart problems in those who only interacted via social media. It begs the question, “Has technology really made our lives easier, and has it benefitted society and the issues we face today?” Despite this, the ASM community has continued to buck this trend. I have always valued the faceto-face dialog in all our meetings as well as the friendships and business relationships formed as a direct result of these encounters. As president, I will continue to hold these values dear to me, and look forward to meeting with all of you in the future. s

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: Joseph H. Bodio, LAN-TEL Communications, Inc. President-Elect: Susan M. Mailman, Coghlin Electrical Contractors, Inc. Treasurer: Russell J. Anderson, Southeastern Metal Fabricators, Inc. Vice President: Steven P. Kenney, N. B. Kenney Co., Inc. Vice President: Scott H. Packard, Chapman Waterproofing Company Past President: Richard R. Fisher, Red Wing Construction

Winter 2015

ASM Directors

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©2016 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.

TAX TIPS

BY VINCENZO BOTTA, CPA, CGMA

Four (Not So) Common Tax Mistakes Contractors Make

n the last issue of The Professional Contractor (Summer 2015), we looked at some of the tax deductions and credits that are often available to contractors, but commonly overlooked – items like expedited depreciation of new equipment, credits on fuel taxes, deductions on domestic production and the ever-important worker classification rules. Now let’s examine some of the lesser-known tricks and traps that are worth considering as part of your ongoing financial and tax planning.

for the conversion, and must be input to your tax return in the year of conversion. Now here is where proper tax planning can come into play. Losses stemming from the conversion may be taken in full in the year in which the conversion takes place. However, gains from the conversion may be spread out over a period of four years. For most taxpayers, it would be a mistake to endure the pain of a large tax bite all at once rather than to spread the tax hit of a gain over multiple years.

Cash vs. Accrual Methods

Understanding the Limitations on Vehicle Depreciation

Although both cash and accrual accounting methods are available, some contractors may be unaware of the rules that apply when a construction company chooses to be on a cash basis. For contractors organized as a corporation, the company must show average revenues of below $5 million during the prior three-year period in order to qualify for this method of accounting for tax purposes. If the company is operating as an S-corporation, the three-year average revenue ceiling increases to $10 million. Many contractors start off on a cash basis because the method is relatively straightforward. But as your company grows, it is important to have these rules on your radar as part of your normal tax planning activities. Ignoring them could result in significant penalties if it ever were to come to the attention of the Internal Revenue Service.

Converting from Accrual Basis to Cash Basis For those contractors who may have started off using the accrual method of accounting, but wish to change over to a cash basis, it is important to know that there are rules governing this type of conversion that need to be followed as well. As discussed above, first make sure that the average revenue of the three prior years is under the respective amounts for the operating entity you’ve chosen – corporation or S-corporation. Once this rule is met and the company qualifies for conversion, you will need to complete a calculation known as a “481a adjustment.” This calculation is designed to reveal a gain or a loss

It is common practice for contractors to purchase various pieces of equipment and machinery throughout the year for use on various jobs. Tax depreciation on these assets is fairly straightforward – items are depreciated over the life of the asset without too many restrictions, especially on purchases of equipment and machinery. But with vehicles to be used on job sites, the depreciation rules enforced by the IRS are a bit different. Sport utility vehicles, pickup trucks and cars come with certain limitations on the amount that can be depreciated. In fact, these limitations apply to any four-wheeled vehicle that has a gross vehicle weight rating of 6,000 pounds or less, and is manufactured primarily for use on public streets and highways. In some cases, the limitations on these vehicles can bring the depreciation deduction to less than $3,500 in the year of purchase – a nasty surprise to anyone who was expecting a much faster writeoff. continued on page 7 Vincenzo Botta is a principal in the Boston-area CPA and business advisory firm Rucci, Bardaro & Falzone, PC. Through the firm’s Construction Business Services Group, he offers tax planning advice and services to the owners and managers of contracting firms of all sizes. For a complimentary copy of “Employee vs. Independent Contractor: 7 Tips for Business Owners,” contact Botta at 781-321-6065 or vincenzob@rbfpc.com.

The Professional Contractor

TECHNOLOGY

BY SCOTT SZYCHER

Lean Construction from a Subcontractor’s Perspective

Use of prefabricated ductwork (below) is one way WAC operates “Lean” and saves on the time required for installation (above).

wo months ago, the Lean Construction Institute’s 2015 Congress event, featuring a variety of speakers and workshops on Lean Construction topics, made its first visit to Boston. The timing was fortuitous, as the Lean philosophy is slowly but surely gaining acceptance in our area among owners, general contractors and subcontractors. But for some, Lean has remained a bit of a mystery, with promises of reduced waste, heightened productivity and improved communication serving as prizes just outside of easy reach. One local champion of Lean methodology is James Morgan, president of Worcester Air Conditioning, a leading sheet metal fabricator and installer for commercial and industrial construction projects across New England. Before Morgan came to Worcester Air Conditioning in 2009, he had run manufacturing companies, where he got a chance to witness the benefits of Lean firsthand. As a result, he views Lean with a broader lens than just what he sees on a construction project. Scott Szycher is the membership, marketing and communications director for ASM.

Winter 2015

“Lean is a new way of accomplishing work, both in our fab shop and at the job site,” Morgan said. “When implemented with wholehearted commitment, productivity rises, worksites become safer and work becomes more enjoyable.” Specifically, project sites become more enjoyable for subcontractors because, traditionally, subcontractors have very little control over the environment; they’re often forced to waste time waiting for other trades to finish their work (for example, ceiling workers requiring the completion of overhead HVAC work before they can start), or their work is scheduled simultaneously with other trades, resulting in workers literally being on top of each other – sometimes known “stacking trades.” To combat these types of preventable situations which lead to wasted time and frustration, Lean emphasizes “pull” planning rather than “push” planning. Under the more traditional push planning method, work schedules are planned from a central authority, regardless of whether those plans are feasible in the real world. In contrast, pull planning advances workflow only when that task is ready to commence, as agreed by trade contractors on the job. “It allows subs to get out in front of our schedules, and gives me an idea of when the site will be ready for my crew,” explained Worcester Air foreman Jim Nason. “Lean gives subs an idea of when they can commence their work, and avoid the costs and waste of sending equipment and labor to a project site that’s not ready.” Having worked for Worcester Air for nine years, Nason recalls the company’s initial exposure to Lean. “In 2009, Jim Morgan had someone come in and speak to us about Lean. I can’t say that there was complete acceptance right off the bat. But once we started with simple things – like having our equipment on wheels so that it could easily be transported – the light started to go on.” Nason and his colleagues have come to appreciate the difference on Lean projects. “The whole planning process is different; subs like us can contribute to the installation plans, so we can now work backwards from critical milestones, and avoid these costly scheduling nightmares of sending out equipment and labor to a site that’s not ready.” He’s also seen benefits from a safety perspective.

Lean projects “are safer, because there’s less stacking of trades, and if the project includes some higher-risk work, we’ll be fully prepared for it.” Morgan noted that Lean concepts aren’t just for a job site; he insists many of its basic principles can be implemented internally. “The old school is that ideas are generated by management and pushed down to employees,” he said. “Now, ideas flow up from engaged workers, regardless of whether they’re in accounting or sheet metal.” He was quick to mention that Worcester Air has seen improvements in administrative and accounting functions due to the internal implementation of Lean in his own company. While Lean is still not an industry standard in the Northeast – Morgan estimated that about 25 percent of his jobs utilize Lean concepts in one way or another – he said it is gaining acceptance more rapidly. “Part of it is cultural; you have to be committed to Lean throughout the project,” he said. “But we’re finding that once owners see the potential for increased productivity and reduced costs, the pace of adoption will pick up. And that’s the real long-term home run, when everyone starts getting the benefits of better collaboration.” Other contractors have mentioned that since the cost of labor is high in our region, ferreting out inefficiency significantly helps subcontractors, and embracing Lean is one way to accomplish that. For companies looking to get started with Lean, Nason favors keeping it simple. “Attend a pull planning meeting, see what the benefits are, and then follow the rules and finish that way,” he said. “You’ll probably be pleasantly surprised with the results. I know I was!” Even if a subcontractor isn’t on a Lean project, Morgan stressed that subs needn’t wait for owners or general contractors to implement Lean. “Subcontractors can adopt Lean internally first, with their own crew,” he said. “Lean isn’t just for the construction site. A big part of it is cultural. Once you commit to having information flow upwards, it helps streamline workflows across several departments.” s

Four (Not So) Common Tax Mistakes Contractors Make continued from 5

And it would be an even bigger mistake to think that these types of vehicles would qualify for the Section 179 provision (discussed in my previous article), which allows for an immediate tax depreciation deduction of the entire cost of equipment and machinery in the year it is placed into service. Also worth noting is that this type of vehicle in some instances could take longer than the normal five to seven years to depreciate fully. This could cause problems when trying to embark on year-end tax planning that covers multiple years.

Properly Tracking Your Work In Process This not-so-common mistake is less about taxes and more about financial reporting. But it is certainly a mistake worth discussing, especially for companies that – for reasons such as securing bonding or a loan – need to ensure that all job costs are being accounted for properly. Simply stated, the work in process schedule shows all the ongoing jobs and their costs at a specific point in time. The internal statements of some companies are set up to capture the direct costs of materials, direct labor and subcontractors. But some companies fail to include expenses such as insurance, payroll taxes, equipment rental costs and other “indirect” costs of their jobs. If all your costs – both direct and indirect – are not included in cost of goods sold, then the company’s balance sheet will be incorrect, and inevitably lead to an inaccurate profit/loss statement. These two financial documents (along with your cash flow statement) are what lenders and bonding services rely on to determine the financial health of your company. And so, if you are not correctly tracking your job costs now, it could very well cost you in far more significant ways at some point down the road. s

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The Professional Contractor

FORECAST

BY JOSEPH BRUSUELAS

2016: The Economic Year Ahead has also been a disappointing year. This was due largely to the sharp pullback in investment in mining, utilities and energy associated with the decline in commodity and oil prices. However, we believe 2016 should see a modest bounce in private fixed investment.

Risk Factors

.S. growth in 2016 will likely remain well above the long-term trend of 1.5 percent. We anticipate the economy will grow near 2.6 percent next year with the household sector and residential investment being the two primary drivers. The recent Washington D.C. policymaker agreement, which resulted in a lifting of the debt ceiling, should add 0.2 percent to overall economic activity in 2016. Our forecast is based on an estimation that household spending should grow by 3 percent this year, which will be fueled by job growth and wage gains. Meanwhile, we expect residential housing starts to accelerate to 1.375 million at an annualized pace, which would be a cyclical high. Private fixed investment has lagged the overall expansion since the Great Recession, and 2015 8

Winter 2015

The manufacturing and tradeable sectors may continue to act as major drags on growth. Although U.S. dollarâ&#x20AC;&#x2122;s rise will slow in 2016, firms that have large exposure to the global economy, or obtain more than half their revenues from the external sector, will face a very challenging year. Further erosion in competiveness cannot be discounted. Global growth should slow to or below 2.9 percent next year, which should result in an expanding trade deficit for the U.S. economy. Canada, Mexico and China (the three major U.S. trading partners) are all facing difficult periods of transition in their domestic growth models â&#x20AC;&#x201C; oil in the case of the North American countries, and the move to domestic consumption in the case of China. This will likely continue to restrain growth and demand for U.S. goods. The consensus forecast is that the Canadian economy will expand by 1.9 percent, the Mexican economy by 2.8 percent and China near 6.9 percent, with risk to the downside for all three countries. The three alternatives to our base case of 2.6 percent U.S. growth (which we give a 65 percent probability) is that a) the economy will slow toward the long-term trend of 1.5 percent (a 20 percent probability), b) the economy outperforms and grows above 3 percent (a 10 percent probability) or c) geopolitical tensions and security concerns result in a global recession, which includes the U.S. (a 5 percent probability).

Long-Term Growth Trend Our new estimate of the long-term growth trend in the U.S. is based on the slowing in productivity to about 1 percent and the secular slowdown in labor market growth to 0.5 percent per year. Under such conditions, growth above 2 percent implies a further narrowing of overall economic slack, tightening labor markets and

rising wages, all of which provide a modest upside risk to inflation in 2016 and throughout the remainder of the business cycle. While our estimate is below the Federal Reserve’s long-term growth forecast of 2 percent, we believe that our estimate reflects both the longer-term dynamics in productivity and increasing demographic headwinds that will be the major part of the growth narrative during the next decade.

This indicates firms are facing challenges finding skilled and semi-skilled workers. It also implies wages and salaries will likely accelerate above 3 percent in the near term. We expect a decline in the unemployment rate to 4.7 percent by the end of 2016 with risk of a lower unemployment rate as the economy moves past full employment. This poses a risk of escalating wage demands next year.

Central Bank Policy

Inflation Outlook

The Federal Reserve increased the federal funds rate by about 25 basis points in December and is expected to approve additional rate hikes in 2016, consistent with the Fed’s central tendency forecast that implies 100 basis points of rate increases on the year. We expect two increases prior to the U.S. presidential election and then another at the end of the year. The Fed’s own central tendency forecast implies that the policy rate will hit 3.5 percent by the end of 2018, which we believe may be overly optimistic.

In 2016 the major inflation narrative will likely be modest increases in global oil and commodity prices along with rising costs for services and rents. This suggests upside risk to our forecast of a 2.3 percent increase in the consumer price index and a 1.9 percent rise in the core personal consumption expenditures index, which is the Federal Reserve’s preferred inflation metric when formulating policy. If economic growth arrives near our forecast of 2.6 percent, which is well above the 1.5 percent long-term trend, this implies narrowing slack in the economy and rising wages demands, thus creating the conditions for a higher overall level of prices. s

Labor Market Outlook The U.S. economy will continue to generate about 175,000 to 200,000 jobs per month, reflecting moderation in overall hiring after the release of pent-up demand during the past few years. The composition of hiring should remain slightly tilted toward higher-paying jobs. Meanwhile, the labor market is tightening, with only about 1.43 unemployed persons available for each job opening.

Joseph Brusuelas is the chief economist of RSM, a leading provider of audit, tax and consulting services. With over 20 years of experience in finance and economics, he specializes in analyzing the U.S. monetary policy, labor markets, fiscal policy, economic indicators and the condition of the U.S. consumer.

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The Professional Contractor

PROPERTY OWNER PROFILE

BY SCOTT SZYCHER

Cummings Properties Takes on Corporate and Social Responsibilities

nown for offering high-quality commercial office space in conveniently located suburbs in Eastern Massachusetts, Cummings Properties is staying true to its core mission while fully capitalizing on the region’s economic rebound. Many factors are working in harmony to facilitate this growth. “We’re experiencing a higher volume of showings, and we’re signing more leases than five years ago, with numerous clients coming from the life sciences, high tech, clean tech and medical industries,” said Executive Vice President Eric Anderson. Although many of those industries are often associated with office and lab space in Kendall Square or Boston’s Innovation District, Anderson is quick to note that companies in all industries often base their leasing decisions on practical factors, such as price and convenience. “Companies that are price-sensitive appreciate that our rates are often half of what they’ll typically find in Boston or Cambridge,” Anderson noted. “Plus, we offer free parking.” During its 45-year history, Cummings has grown from one building in Woburn to 10 million square feet of prime space in 10 communities north and west of Boston. Among its most prominent properties are Cummings Park and TradeCenter 128 in Woburn, and the 2-million-square-foot Cummings Center in Beverly. Scott Szycher is the membership, marketing and communications director for ASM.

Winter 2015

Cummings is keeping busy these days with its usual stream of client buildouts as well as two new Beverly projects: the development of its scenic 54acre Dunham Road campus and the construction of luxury residential condominiums at Cummings Center. Seeing great potential for the Dunham Road site, which came with one 105,000-square-foot building, Cummings added a 475-car central parking structure as well as two complete foundations that can each accommodate 145,000-square-feet buildings for office, lab, or research uses. Anderson anticipates that steel erection will commence in spring 2016 at this burgeoning campus, which sits on one of the few remaining highly visible properties directly fronting Route 128. Eight parcels on the property are available on a long-term ground lease basis, a first for Cummings. These pad sites are fully cleared and approved for building. The waterside condominium project in Beverly will result in 73 upscale one- and two-bedroom units. It is anticipated that many of the buyers will be local professionals and empty-nesters. “Steel is already rising, and we intend to build throughout the winter,” Anderson said, adding that some specialty work will be designated for subcontractors. Although Cummings maintains its own directly employed team of trade professionals, the company depends on independent subcontractors for

construction and renovation projects. When there’s trade work to be done, Cummings doesn’t hesitate to call on local subcontractors to supplement its team. “It usually works seamlessly,” Anderson said. “Our team leaders are available to ensure the subs have all the information and equipment they need to accomplish the job.” Cummings has existing (decades-long, in some cases) relationships with multiple subcontractors, but the firm is always looking to build its bench. “We typically retain the information we receive from subcontractors because we never know when we’ll have project opportunities for subs, or when clients will ask us for referrals for trade work,” Anderson said. “Recently, we’ve had a lot of opportunities for metal stud and drywall, flooring, ceiling, glass and glazing and HVAC work.” Anderson added that Cummings pays its subcontractors on a weekly basis, rather than the typical turnaround time of 60-90 days following an invoice. Whenever possible, Cummings Properties makes a point to give its business to clients leasing space in its buildings. It now offers subcontractors special deals on office space at some of its properties, helping the firm strengthen relationships with the contractor community. To fill its square footage with clients in a competitive environment, Cummings strives to be a highly responsive property owner, as well as a socially responsible one. The large majority of the buildings managed by the firm are actually owned by a nonprofit

affiliate, Cummings Foundation, with all rental profits benefiting charitable causes. Anderson believes that the company’s philanthropy matters when it comes to its clients’ choices and loyalty. “Nobody loves paying monthly rent, but it’s more palatable for our clients in Foundation-owned properties because they know that 100 percent of all the building’s net earnings support nonprofits,” he said. Since its founding in 1986, Cummings Foundation has awarded more than $130 million to worthy causes in Greater Boston alone. Through its annual “$100K for 100” program, it awards grants of $100,000 each to 100 local nonprofits. “Cummings believes in investing in the communities where it operates and where its staff and clients live,” Anderson explained. He encourages charities to submit Letters of Inquiry through www.cummingsfoundation.org to be considered for a grant. With a strong reputation as a property owner and an impeccable record for corporate responsibility, the future looks bright for Cummings Properties. “We have no debt on our buildings, and even during challenging economic times when fewer buildouts are needed for clients, we invest in our people and our properties by engaging in rehab and upgrade projects,” Anderson said. And although the building boom in Boston and Cambridge has greatly benefited the entire region, Anderson reminds business owners of a salient fact: “Not everyone wants to commute to the city. Middlesex and Essex counties are great places to live and work, and we’ve got thousands of clients who will attest to that.” s

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The Professional Contractor

INSURANCE

BY BRYAN JUWA

Why is Employment Practices Liability Insurance Growing So Quickly?

ne of the most common misconceptions made by subcontractors today goes, “If I’m not contractually obligated to carry this coverage, then I don’t need it.” That could not be further from the truth, especially when it comes to Employment Practices Liability Insurance (EPLI). EPLI covers businesses against claims by workers alleging their legal rights as employees of a company have been violated, and it’s the fastest-growing line of insurance over the last five years. Ordinarily, defense costs are included in this coverage, and the policy protects against settlements associated with (but not limited to): •• Sexual harassment •• Discrimination •• Wrongful termination •• Breach of employment contract, etc. •• Negligent evaluation •• Wrongful discipline •• Deprivation of career opportunity •• Wrongful infliction of emotional distress •• Failure to employ or promote More often than not, a company owner mistakenly believes that their company is too small to need this coverage. Additionally, owners commonly believe that because their companies are family businesses, no employee would commit one of these acts against another and therefore, no employee would even have cause to sue. Therein lies the reason why this coverage is so important to carry! An employee does not have to be in the right for his accusation to ultimately cost the contractor thousands of dollars. Many times, personal injury lawyers take on cases on a contingency basis, sharing in a monetary settlement only if Bryan Juwa is an account executive with DeSanctis Insurance Agency Inc. He can be reached at 781-569-0140 or bjuwa@desanctisins.com.

Winter 2015

their client prevails. Some lawyers make it easy for an employee to file a claim against their employer, without the employee bearing the burden of coming out of their own pocket for upfront fees. Unfortunately, the employer doesn’t have the same luxury. Here are some example scenarios involving employment-related claims:

Example 1 ABC Construction hires John Doe as a project manager. After six months on the job it becomes clear to ABC Construction that John had oversold himself on his resume and he is not suited to continue in his position. He has cost the company significant money, mainly because of delays and mistakes made on his jobs. Some clients have gone as far as to tell ABC Construction that they will terminate their contract if he were to stay on. Upper management offers John an option: He can take a demotion to a role with fewer responsibilities, or he has to leave ABC Construction entirely. John is angry about this no-win situation so he hires an attorney and sues ABC Construction. The case goes to court and the overwhelming evidence proves that ABC Construction acted within its rights; the case is thrown out and John is not given any type of settlement. However, the case dragged on for a significant amount of time and ABC Construction was forced to pay over $70,000 in legal fees. Because there was no EPLI coverage in force, ABC Construction is forced to pay that amount out of pocket, even though there was no wrongdoing on their part. Had the EPLI coverage been in force, the defense costs (less the deductible) should have covered that cost.

Example 2 XYZ Construction has been in business for 30 years and all of the upper management have known each other since childhood. One day,

one of the owners sends an email to a longstanding employee and that employee is deeply offended by the content of the email and hires an attorney. The owner had no malicious intent and simply acted with poor judgment (but clearly did not expect the outcome that the company is now forced to deal with). The case goes to court and the owner (and more to the point, XYZ Construction) is found guilty of sexual harassment. The combination of the legal fees and settlement exceed $200,000, but XYZ had an EPLI in force and everything (less the deductible) is covered by the policy. In this instance it was a good employee who did not have a grudge against the company and the owner believed the email was innocuous. Had XYZ not had this coverage, it would have been a very sizeable financial blow.

Example 3 123 Construction hires Jane Doe to a low-level position and Jane is hoping to climb the ranks quickly. After six months, Jane approaches her boss, inquires about a raise and promotion, and is told that it is not yet possible. Sometime shortly after this discussion, 123 Construction promotes a male employee and Jane is furious. The male employee had been with 123 Construction for longer than Jane and was more qualified but it made no difference to Jane, so she sued for sexual discrimination. The case goes to court and the legal team for 123 advises them to settle for $20,000. Even though 123 had not done anything wrong, the fear was that if it went to trial, the settlement could end up much worse. At the end of the day, the legal fees and settlement cost 123 Construction over $50,000. There was no EPLI coverage in force and therefore, it was an out-of-pocket cost for the company. This same example would apply to cases of racial or age discrimination. In today’s litigious environment,

these claims are becoming rampant. Some people are trying to get paydays the fast and easy way, so even if you are not in the wrong, that doesn’t mean you can’t be taken to court and forced to pay legal expenses. Whether it’s a disgruntled employee, a crude email or something else entirely, these claims can get expensive in a hurry, and they are popping up more and more every day. Studies show than an employer is more likely to have an employment practices liability claim than a general liability claim. One carrier’s estimate is that the average costs of an EPL claim against a smaller company is approximately $50,000, when payment is made to a plaintiff. Jury verdict research shows that the median payout when a discrimination case goes to trial is a whopping $317,000. The policies will reimburse your company against the costs of defending a lawsuit in court and for judg-

ments and settlements. The policy covers legal costs, whether your company wins or loses the suit. Depending on the number of employees, the limits for this policy tend to be between $250,000 and $1,000,000. The cost of EPLI coverage depends on your type of business, the number of employees you have, and additional various risk factors such as whether your company has been sued over employment practices in the past. Typically, general liability policies exclude EPL coverage. You will almost never see employment practices liability insurance listed as an insurance requirement on a contract, but that does not mean that you still should not have this policy in place. Especially if you are smaller company and you feel that a lower limit is enough for you, the price is nominal and it’s something you should definitely address with your contractor-oriented insurance agent. s

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The Professional Contractor

MEMBER PROFILE

BY ANNA SIMS

E.M. Duggan Prepares to Celebrate 125th Anniversary

lot has changed at E.M. Duggan since Edward M. Duggan started the family business in 1891. Back then, the company was a small momand-pop shop on Boston’s Shawmut Avenue that provided homes with plumbing repair and maintenance work. Today, as the now Canton-based business prepares to celebrate its 125th anniversary in 2016, E.M. Duggan has an impressive resume to celebrate. Over the last several years, the company has offered its full-range of plumbing, HVAC, fire protection and preconstruction services to some of the area’s biggest projects, including the TD Garden, Patriot Place and the Vertex headquarters at Fan Pier. E.M. Duggan is also involved with the Millennium Tower, the 60-story, 685-foot residential skyscraper underway in the heart of downtown Boston. “That project is a feather in our cap. It’s the largest building in Boston that’s been built in recent memory,” said Rick Dorci, chief operating officer at E.M. Duggan. While the construction market may be booming for E.M. Duggan now, times have not always been easy. Len Monfredo, executive vice president of 14

Winter 2015

operations, joined the company in 2009 when E.M. Duggan, as well as the rest of the nation, was trying to escape the wrath of the Great Recession. “It was a very tough time. There wasn’t work going on,” Monfredo said. Rather than resorting to laying off employees, E.M. Duggan decided to invest in its future. “We actually picked up a lot of important people who were available because the construction industry was so dead,” Monfredo said. E.M. Duggan also improved its workspace, adding a state-of-the-art warehouse and plumbing facility and several other updates. “During the recession, we reinvested millions of dollars back into the company,” Mondredo recalled. “We were lucky – as soon as we were done, everything turned around. The Boston market just took off, and we were prepared for it. Our capacity was quadrupled by doing all of the work that we did.”

Employees First E.M. Duggan’s decision to update facilities and pick up workers, rather than cut jobs during the toughest years of the recession, not only shows the company’s shrewd business strategy, but also highlights its commitment to its employees. Monfredo believes the company’s talented workforce has been a major contributor to its success. “Over the years we’ve evolved and grown, we’ve

created a good culture and surrounded ourselves with the right people – and that was the biggest thing that kept the company moving,” Monfredo said. Dorci agreed. “Our success comes from the quality of people that we have [working for us],” he said. Associations like the Associated Subcontractors of Massachusetts also have played a role in E.M. Duggan’s success. “Any membership that connects you with people in your industry is an important thing. Industry relationships are everything,” Monfredo said. “It’s always good to network, even if it’s with your competitors. You see what they have going on and you always get something out of it.” Dorci highlighted E.M. Duggan’s “core values” and “family dynamics.” “With a family business, decisions are made in-house; it’s very easy to get things accomplished. It’s not like a corporation where you need to have a lot of red tape or there’s a lot of policies or procedures that get in the mix,” Dorci said. “Coming from that other side of business, where I did see that happen, it’s a pleasure to have those decisions made here.” Monfredo, a member of the business’s fifth generation, was quick to emphasize that the owners are not the only family to have multiple generations working in the business. “We have generations of families working for the company,” he said. “They’ve worked here 25, 30, sometimes 35 years, and their sons, daughters, nieces, nephews and cousins are here. It’s definitely a good environment. And obviously, if the

people who work here stay for so long and want their kids to work here, they think it’s good, too.” E.M. Duggan takes prides in providing its employees with a positive work environment. “We make decisions as a group and listen to everyone,” Monfredo said. “We try to be more of a results-driven place than a clock-punching place.” The company emphasizes the importance of collaboration through weekly meetings with divisions, monthly operations meetings and even impromptu barbeques. A couple of years ago, E.M. Duggan used funds from its recycling program to add a gym that employees can use whenever they want. The Boston Business Journal named E.M. Duggan as one of its “Best Places to Work in Massachusetts” in both 2014 and 2015. Looking forward, the company hopes to earn recognition for its commitment to safety, as well. “We’re really focused on safety. We believe that safety creates quality. If you come to our shops, you could literally eat off our floors,” Monfredo said. “There’s a lot of work going on in our shops, but we keep them very clean. We have a lot of quality control and rules in place.” Ultimately, though, E.M. Duggan is not nearly as interested in winning awards as it is in delivering results for both its clients and its employees. “We know not every company reaches the 125-year milestone,” Dorci said. “We’re proud to be in that spot.” “We just want to continue the legacy and keep nourishing the culture that got us to this point,” Monfredo said. “It’s not easy – obviously the industry has gone through a lot of change – but it’s been a pretty incredible ride.” s

WORLD CLASS. LOCAL TOUCH.

Insuring partnerships are built to last! www.MMA-NewEngland.com

The Professional Contractor

Millennium Tower Rises with the Help of Subcontractors Hundreds of Workers Navigate Tight Timetables and Spaces to Build Bostonâ&#x20AC;&#x2122;s Newest Landmark

By Jay Fitzgerald

Constructing a new tower at the site of the former Filene’s Basement retail store in the heart of Boston’s Downtown Crossing was bound to capture the attention and imagination of the city’s residents. Indeed, at times, previous pushes to redevelop the site became a favorite soap opera for many Bostonians, as plans started and stalled and eventually came to a complete stop amidst a deepening recession in 2008. Then Millennium Partners stepped in as the new, sole developer of the project in 2012 – and things finally started to happen, including the signing up of major tenants and the launch of construction in 2013. But there’s another aspect to the Millennium Tower Boston saga, beyond the rich and high-profile history of the site and the fact that an adjacent renovated building along Washington Street was designed by legendary architect Daniel Burnham in 1912: The residential Millennium Tower Boston would be 685 feet and 60 stories high, making it the third tallest skyscraper in Boston, behind the Hancock Tower (now known as 200 Clarendon and 790 feet tall) and the Prudential Tower (749 feet). And Millennium Tower Boston was also facing the fact that not since 1976, when the Hancock/200 Clarendon tower was completed, had Boston seen anything like this tower project – in terms of building height, materials, new building technologies and the sheer number of contractors, subcontractors and workers involved, all confined within a dense neighborhood with more than 200,000 people living and working there every day. The story behind the story – of how 65 subcontractors, 150 material suppliers, construction manager Suffolk Construction and Millennium Partners have worked together since 2013 – is one of intense pre-construction planning, precise execution and an unrelenting focus on safety, quality and hitting deadlines. The team has taken a “vertical assembly line” approach toward the tower’s construction – in which the lower floors of the tower were finished by subcontractors even while crews above were still pouring concrete for the upper floors. “It’s one of the most efficiently run projects I’ve seen in a while,” said John Cannistraro, president of Watertown-based J.C. Cannistraro LLC, one of dozens of subcontractors working on the $700 million project. “The job has been great, really lean with excellent execution among so many parties.” The Millennium Tower Boston project is now about 80 percent done – its topping off ceremony was held in midSeptember – and officials expect the residential tower of 442 luxury units (including a two-level club and lounge, dining, a health club and an indoor lap pool) to open its first phase this summer, on schedule. But the project really started well before construction crews ever hit the site: during seemingly endless pre-construction meetings between officials from Millennium, Suffolk and subcontractors. “It is the only way to get it done right and on time,” Rich Michaels, senior superintendent for Suffolk Construction, said of the multiple meetings to go over the fine points of FACING PAGE: RENDERING COURTESY OF MILLENNIUM PARTNERS LEFT PHOTO COURTESY OF LOU JONES; MIDDLE AND RIGHT, COURTESY OF PRUDENTE PHOTOGRAPHY

building Boston’s third-largest tower. “Everything has to be very organized and coordinated.” The project’s general statistics alone suggest the magnitude facing Suffolk Construction and all its subcontractors: 1.2 million square feet of horizontal construction; 61,000 cubic yards of concrete (including 6,000 cubic yards for its base mat, the largest continuous concrete placement in Boston’s history); 10,000 tons of reinforcing steel; 410 plate steel link beams (equating to 850 tons of steel); and 8,000 exterior curtain-wall panels. On any given day, up to 500 workers have been on site – and, at times, trucks hauling materials and equipment through Boston’s narrow and curving streets arrived at the site every six minutes or so. Careful choreographing of all the logistics on a daily, weekly and monthly basis – sometimes on days with 200 different activities going at the bustling site –is daunting, critical and simply a must, Michaels and many subcontractors said. “You’re dealing with such heights and all the workers and materials being hauled up by crane or elevators,” said John D’Elia, vice president of Worcester-based Greenwood Industries, a roofing and sheet metal subcontractor that’s working on the roofing and balconies at Millennium Tower. “It’s all about the details. Luckily, many subcontractors were familiar with each other and have worked together in the past. And Suffolk has been great.” Indeed, some subcontractors note that they worked together on a previous Millennium Partners project only a few years ago, Millennium Place at 580 Washington Street, just a few blocks away from the new tower. But that project was only 150 feet tall, or one-fifth the height of Millennium Tower.

Armies of Subs There have been a number of challenges and unique features to the Millennium Tower project. Among them were continued on page 18

ASM Members on the Millennium Tower Project • Automated Logic Contracting Services Inc. • Century Drywall Inc. • Daniel Marr & Son Co. • E.M. Duggan Inc. • Easton Concrete Cutting & Drilling Inc. • Gleeson Powers Inc. • Greenwood Industries Inc. • J.C. Cannistraro Inc. • J.M. Electrical Co. Inc. • JC Floorcovering Co. Inc. • Liberty Construction Services • Pavilion Floors Inc. • Pro Cut Inc. • Thermo-Dynamics International Inc. • Triple G Scaffold Services Corp. (excavation work)

The Professional Contractor

Millennium Tower Rises continued from page 17

PHOTOS COURTESY OF PRUDENTE PHOTOGRAPHY

having to excavate, refill and then re-excavate the cavernous hole for the building’s mammoth foundation. The re-excavation was necessary for construction design changes from the previous developer’s plan and to make the final product structurally sound and faster to build. Once the foundation’s base was set, construction on the actual building got underway – and many subcontractors still marvel at how, as the tower rose with each truckload of concrete poured, small armies of workers would converge on the lower floors to perform their work. In Cannistraro’s case, his team of workers installed fireprotection and plumbing systems. Like other subcontractors, J.C. Cannistraro LLC pre-fabricated as much of its work as possible off site, to save time once workers began installing items within the actual tower itself. Floor by floor, the concrete foundation rose higher – and floor by floor, and room by room, subcontractors were right below those higher up pouring the concrete, a process Suffolk Construction’s Michaels refers to as a “vertical assembly line.” After each subcontractor finished a lower-floor job, others would take their place, including drywallers from Century Drywall and others. Every job was carefully inspected and reinspected before the next subcontractor started its own work. “There was no float in this project,” said Cannistraro. “You have to get it right. There was no comeback work. When the topping off ceremony was held this fall, when the last bucket of concrete was poured, it was wonderful to look up knowing that interior finishes were already completed to the 15th floor.” At all times, all safety measures were, and still are, strictly enforced. The exterior of the tower was wrapped by a stateof-the-are safety “cocoon,” or a series of steel mesh screens wrapping around the building. Designed to protect both workers and pedestrians below, the screens, which were built by Peri-USA, were slotted into a rail system that allowed panels to slowly rise with the building of the tower. 18

Winter 2015

Every subcontractor team dispatched to upper floors was kept to strict schedules, if only because there’s only limited space on the project’s two cargo elevators. “To get up that high has been a challenge in and of itself,” said Steve Guarracino, operations officer at J.M. Electrical, a Lynnfield subcontractor working on carbon-monoxide exhaust systems and the interlocks for fuel systems to the tower’s emergency power generators. J.M. Electrical is doing work for Canton’s Automated Logic-New England, itself working for E.M. Duggan. Len Monfredo, executive vice president of E.M. Duggan Inc., said a number of innovative technologies and practices were used to ensure high quality, subcontractor coordination and faster construction, including extensive use of state-ofthe-art Revit software that allowed architects, engineers and subcontractors to review 3-D models of the tower before individual projects commenced. E.M. Duggan also relied extensively on pre-fabrication of about 50 percent of its HVAC components at its shops in Canton. Entire panels with pre-attached piping and pumps were shipped by truck to the work site and “literally put together like Lego pieces,” said Monfredo. But all the new technologies, materials and best construction practices alone weren’t, and aren’t, enough to guarantee high quality and timely construction. Ultimately, it’s taken scores of subcontractors collaborating closely with Suffolk and Millennium project managers, as well as among subcontractors themselves, to complete an incredibly ambitious project like Millennium Tower Boston, Monfredo said. “It’s a partnership, rather than someone saying, ‘You have to do this and you have to do that,’” he said. “They let subcontractors have a say and input on schedules and other matters.” The bottom line, Monfredo said, is that Millennium Tower Boston, when it opens its first phase this summer, will be a welcome new landmark for Bostonians. “And it will be done on schedule, believe me,” he added. s

ASK THE LAWYER: MASSACHUSETTS SICK LEAVE LAW

Q: An employer who offers 40 hours of PTO that may be used as sick time is not required by the Earned Sick Time Law to offer 40 hours of paid sick time on top of that, are they? A: Correct, provided that the PTO can be used under all the same terms and conditions as earned sick time. Q: Do employers with fewer than 11 employees have to provide earned sick time? A: Yes, they must allow employees to accrue and use job-protected sick time, but they do not have to pay for sick time.

t r ue

Q: Our policy states that employees are eligible for a paid holiday only if they come into work on the days immediately before and after the holiday – is that permissible under the Earned Sick Time Law? A: Yes, an employee’s inability to earn a reward for good attendance or to receive a holiday pay incentive based on an employee’s absence occasioning use of earned sick time shall not constitute an adverse action or interference with an employee’s rights under 940 CMR 33.08.

“

Do you have a question about the Sick Leave Law, or other employment-related issues? Give the ASM Legal Hotline a call at 617-742-3412. The Legal Hotline is also available for member questions relating to construction law (e.g., payment, bidding, lien law, etc.), which are answered by partners at the construction law firm of Corwin & Corwin LLP, counsel to ASM. DISCLAIMER: Information provided in this column or through the ASM legal hotline is for educational purposes only. It is not legal advice and should not be considered or relied upon as a substitution for consultation with an attorney. The legal and factual issues involved in any matter vary significantly. An attorney should be consulted with respect to the facts and law applicable to any specific legal issue.

col l aboration

Carolyn Hendrie, Principal Bargmann Hendrie + Archetype, Inc.

“

Photo: @ Bruce T. Martin

ASM has recently expanded its “Legal Hotline” to address questions from members on employment law issues, including employee leave, discrimination, wage and hour, hiring, firing and more. The questions are answered by David B. Wilson and Catherine E. Reuben of the Boston-based employment law firm Hirsch Roberts & Weinstein. Attorneys Wilson and Reuben each have more than 20 years of experience advising clients on all aspects of the employment relationship. In recent months, they have written extensively and given presentations on Massachusettsa’ new Sick Leave Law, which took effect July 1. Following are several of the most common questions they have received recently about the Sick Leave Law, from companies still learning about their obligations under the law. This new “Ask the Lawyer” column will be a regular feature in future issues of The Professional Contractor.

Battery Ventures, Boston

MARK RICHEY

WOODWORKING

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The Professional Contractor

TECHNOLOGY

BY WAYNE NEWITTS

Being Smart About Intelligence The Benefits of Enterprise Resource Planning Software

here is a saying that goes “If you’re so smart, why aren’t you rich?” The message here, of course, is that intelligence for its own sake is not as important as what you do with your intelligence. This is a lesson many of us learn the hard way when we leave school and enter the workforce. This is also a lesson that many companies struggle to incorporate into their business processes. The mantra “more information is better” exerts a powerful influence on business managers. But too often there is no explicit plan for how best to manage and make use of business information.

Building Silos The amount of data involved in construction work has been growing continuously as projects have continued to grow in complexity. The first impulse of a contractor whose business is growing and who is facing a growing pile of data is to organize this data. Move bills, receipts, and invoices into an accounting pile, move job schedules, change order requests, subcontractor contracts, plans and specs into a project management pile and so on. This is a rational and useful impulse. Organization of data allows contractors to employ specific software applications to help staff work more efficiently. Accounting data can be routed to accounting applications to manage payables and receivables. Project or work order data can be moved into scheduling applications and file sharing applications to help manage all the moving parts and people involved in a construction job. Personnel data can be captured in human resource management applications. Building these virtual silos of data helps companies build a better base of knowledge. Project managers can look for scheduling bottlenecks and vendor performance issues. Accounting can keep a close eye on project cash flow. Purchasing can better reconcile receivables against POs. These are examples of companies able to make better decisions informed by more accurate knowledge. This, however, calls to mind another saying: “A little knowledge is a dangerous thing.”

Wayne Newitts is marketing director at Dexter + Chaney, providers of cloud-based technologies and Spectrum Construction Software. He may be reached at wnewitts@dexterchaney.com.

Winter 2015

Creating Intelligence In the world of business management, knowledge can be power. But as you electrical engineers out there know, for power to do real work, things (i.e., voltage and current) have to be in phase – or close to it. In business, this translates to making sure that information and action are in sync – that information drives action which creates new information to drive the next action, and so on. In a model where information for different functional groups is stored and processed in separate silos, this is far from guaranteed. Consider the journey of a change order. Typically beginning with a construction or project manager in the field, it has the potential of requiring action from many different people from across the company – and from other organizations. Project managers may have to adjust their schedules, accounting may need to adjust WIP projections, purchasing may need to secure more or different materials, and owners may need to issue approvals. For a typical change order to be executed effectively, all of these things probably need to happen, and all are interrelated. A set of information needs to be delivered to the right people at the right time with enough context to help them make decisions. In other words, information that is communicated and given context creates intelligence. Context, and thus intelligence, comes from looking at a set of information in the light of all the other relevant information. Virtual silos, so useful in organizing and structuring data, can also inhibit the creation of intelligence by keeping key pieces of information isolated. But there is no need to knock them down. The job of enterprise resource planning (ERP) software is to serve as a platform to connect and correlate information from disparate parts of an organization into a contextually coherent whole. Serving up a common user interface and accessing a common database, a construction ERP still provides different applications to different users – accounting has their set, operations have theirs, etc. – while also providing the ability to share common information between applications. In other words, the job of ERP software is to provide business intelligence.

Making Smart Choices Once a contractor’s business grows to point where separate software applications are no longer suf-

ficient, the search for an ERP system typically begins. Beyond knowing that they need a common platform that shares information across departments, most do not have a framework in mind in which to evaluate their options. Because switching ERP systems can be costly and time consuming, having this framework in place before a search begins is important. Here are several key criteria to consider in order to make a smart decision: Buy-in: An ERP system is only as useful as it is used. If it does not provide the applications that suit the needs of all groups, then people will find ways to work around it, compromising its value. Involve all departments in the evaluation of systems to help ensure they buy into using the one you select. Technology: When buying a car, performance, handling, and looks are big considerations. But at some point most people also look under the hood. Itâ&#x20AC;&#x2122;s just as important to understand how a software system is built. This is especially true now as the way we are using software is rapidly changing, from working with desktop-bound windows-based applications, to having our information and applications available anywhere from multiple types of devices. Make sure your system is designed to accommodate the way information is being shared and processed today, and look for software vendors with a track record of continuous development using the latest technologies. Workflow: Sharing information between applications is, by definition, a requirement of an ERP system. This keeps everyone on the same page and reduces duplicate data entry and errors. But it is only the beginning of what a construction ERP system can

(and should) do. Look for systems with tools that help manage the flow of information, moving data, documents, and requests for action between the right people at the right time. The result is a system that does more than just help you manage that flow of information â&#x20AC;&#x201C; it helps you manage the flow of work across your organization. Business intelligence: Extracting information and reports from your ERP system should not require an advanced degree in computer science. Nor should you be limited by a set of prepackaged reports that your vendor has deemed important. Your system should include a number of user-friendly tools to allow multiple users to see the business information they need in a way that helps them work. Look for a variety of reporting capabilities in a system, from user-configurable dashboards to tools that help users develop customized, sophisticated reports. Ease of use: Finally, regardless of initial buy-in, if a system is hard to learn and complicated to use, people will find ways not to use it. Just because ERP systems are powerful and comprehensive does not mean they have to be difficult to use. Avoid systems that have byzantine menu structures and convoluted internal processes. Look for systems that have intuitive navigation; that present intelligent options to the user depending on the task being performed; and that make it easy to move from one task to another. Implementing an ERP system at your company will help improve operational efficiencies and help inform smarter decisions across the organization. Will it make you rich? Well, that still depends on what you do with that intelligence. s

Raising the Bar Mass Maritime Academy Cadet Housing Buzzards Bay, MA Photo Credit: Christopher Harting

At Wayne J. Griffin Electric, Inc., we believe that the first step towards a successful project is understanding the needs of our clients. With over 35 years in the electrical contracting business, our commitment and passion to not only meet these expectations, but surpass them, remains steadfast. Our high standards mean never settling for anything less than excellence. Corporate Headquarters: 116 Hopping Brook Road Holliston, MA 01746 (508) 429-8830

www.waynejgriffinelectric.com

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The Professional Contractor

ASM’S BIENNIAL DINNER GALA

ASM Celebrates at Biennial Dinner Gala

New President Joe Bodio welcomes and thanks the members.

Three ASM members join ASM President Joe Bodio on stage to receive Quarter Century Awards, marking 25 years as members of ASM. From left: Joseph McCluskey of Edward G. Sawyer Co., Joseph Trodella of J & M Brown and Anthony Sacco of Apex Corporation. Missing from photo: Aluminum & Glass Concepts, Commercial Masonry Corp. and Energy Insulation Conservation.

New President Bodio recognizes outgoing President Rich Fisher

early 300 ASM members and guests enjoyed a wonderful evening at Boston’s Museum of Science on Oct. 29 for the 2015 ASM Biennial Dinner Gala & Elections. It was a rare opportunity to relax, reconnect with industry colleagues, and see what’s new at the Science Museum, which many had not visited in years! It was also an occasion to celebrate ASM’s 65 years of success, and express deep gratitude to Massachusetts House Speaker Robert A. DeLeo, who was on hand to receive ASM’s Outstanding Legislator Award for his support of the construction industry and subcontracting community. The event also marked the changing of the guard at ASM, with the election of ASM’s new President Joseph H. Bodio, along with a new team of Officers and Directors (see complete roster on facing page). It also featured the presentation of ASM’s prestigious Joseph M. Corwin Pinnacle Award to Steven P. Kenney, and recognition of six member companies newly added to ASM’s distinguished Quarter Century Honor Roll.

Meet ASM’s New President!

At the Oct. 29 event, Joseph H. Bodio of LAN-TEL Communications took the helm as president of ASM, succeeding Richard R. Fisher of Red Wing Construction. Bodio is the founder, president and CEO of Norwood-based LANTEL, a provider of tel-data cabling and security solutions for private and public owners throughout Massachusetts. In addition to serving on ASM’s board of directors since 2004, Bodio is the outgoing president of the Greater Boston chapter of the National Electrical Contractors Association (NECA). He brings 40 years of experience to his new role with ASM, including a variety of senior management positions for electrical and telecommunications firms. As president, Bodio is committed to strengthening ASM’s leadership role in the construction industry, by growing ASM’s membership, offering top notch seminars, and advocating for fairness in laws and regulations that affect the construction industry. “There is no organization that has done more for subcontractors, of every size and trade, both union and open shop,” he said. “It is an honor and a privilege to be able to work with my ASM colleagues to build on our record of success in improving business conditions for the subcontractors of the commonwealth.

ASM presents Outstanding Legislator Award to DeLeo ASM’s Young Professionals gather for a group photo in the shadow of TRex.

Lois Miller (second from left) with three generations of the Salem Glass family. 22

Winter 2015

At the Oct. 29 dinner gala, ASM was proud to honor Massachusetts House Speaker Robert A. DeLeo with its Outstanding Legislator Award in recognition of his long-standing support of the state’s construction industry and subcontracting community. DeLeo has represented the 19th Suffolk District (Winthrop-Revere) since 1991 and became House Speaker in 2009. As speaker, he has been a leader in spearheading innovation, economic development and job creation across the commonwealth, as well as investment in education, health care, transportation systems and more. At the same time, there is also no one who has been a better friend to the construction industry, as reflected in the passage of the 2010

Introducing ASM’s Newly Elected Officers & Directors Officers President Joseph H. Bodio LAN-TEL Communications Inc. President-Elect Susan M. Mailman Coghlin Electrical Contractors Inc. Vice President Steven P. Kenney N. B. Kenney Co. Inc.

Speaker of the House of Representatives Robert A. DeLeo accepts the Outstanding Legislator Award.

Prompt Pay Law and last year’s 5 Percent Retainage Law, as well as the 2014 Unemployment Insurance Reforms that have kept UI taxes in check for contractors. In his remarks at the event, DeLeo expressed pleasure in knowing these laws have helped strengthen the finances of hundreds of subcontracting companies throughout Massachusetts. The packed house at the Museum of Science gave DeLeo a well deserved standing ovation in appreciation for all he has done to help make it easier to do business as a subcontractor in the commonwealth.

Scott H. Packard Chapman Waterproofing Company Treasurer Russell J. Anderson Southeastern Metal Fabricators Inc. Past President Richard R. Fisher Red Wing Construction

Directors Steven T. Amanti E. Amanti and Sons Inc. Nardine J. Bellew General Safety Services Inc. Matthew A. Brown Greenwood Industries Inc. Christopher M. Buell Wright Architectural Millwork Corp. Stephen J. Capone Capone Iron Corporation R. Lindsay Drisko ENE Systems Inc. Roger A. Fuller R & R Window Contractors, Inc. Peter J. Gormley New England Waterproofing, Inc. Wayne J. Griffin Wayne J. Griffin Electric Inc. Robert B. Hutchison The Cheviot Corporation Dana E. Johnston Jr. Fall River Electrical Associates Co., Inc.

William J. (Mac) Lynch William F. Lynch Co. Inc. Jeffrey T. Marr Jr. Marr Scaffolding Company Erik S. Maseng Viking Controls Inc. James B. Miller Salem Glass Company Bernard K. Quinlan The Sullivan Group Nancy H. Salter Front Line Inc. Frank J. Smith Eastern Insurance Group LLC Construction Division David E. Wilson, Esq. Corwin & Corwin LLP Exec. Secretary & Counsel Monica Lawton Associated Subcontractors of Massachusetts Executive Director/CEO & Clerk

Bodio congratulates Steve Kenney on receiving the Joseph M. Corwin Pinnacle Award.

ASM Presents Joseph M. Corwin Pinnacle Award to Kenney

At the Biennial Dinner Gala Steven P. Kenney of NB Kenney Company became just the ninth individual to receive ASM’s prestigious Joseph M. Corwin Pinnacle Award, which recognizes outstanding dedication, leadership and service to ASM and the subcontracting industry. As an active member of the ASM board for over 20 years, Kenney has served in a variety of leadership roles, including president from 2000–2002; several terms as vice president, and 20 years as “grand master” of ASM’s legendary annual Golf Tournament. He has also been at the forefront of ASM’s major legislative initiatives, including prompt pay, retainage, unemployment insurance reform, public construction reform and more. Through his tireless actions, Kenney epitomizes the spirit of ASM’s founding father, Attorney Joseph M. Corwin, who served as counsel to the association for more than 40 years, and in whose memory the award is named. There is no one more deserving of this distinguished award than Kenney, and ASM was proud to present it to him at the Biennial gala event. s

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The Professional Contractor

LEGAL

BY DAVID B. WILSON, ESQ., AND TOBIAS W. CRAWFORD, ESQ.

Navigating Potential Potholes Medical Marijuana in the Workplace

arijuana is the common name for the cannabis plant. Marijuana may be selectively bred to produce high levels of THC, a psychoactive cannabinoid. THC interferes with the normal functioning of neurotransmitters in the brain, causing users to feel “high.” The “high” alters perceptions and mood, impairs coordination and creates a difficulty with thinking and problem solving. It also disrupts learning and memory. On the other hand, medical marijuana has been found to provide relief to patients in chronic pain, patients with chronic illness, such as HIV, or nerve pain, seizure disorders, Crohn’s disease, Tourette’s syndrome and other chronic ailments. Kim Quiggle, a medical marijuana expert, performed a medical study on over 10,000 chronically ill and terminally ill patients who used medical marijuana. The study provided compelling evidence that medical marijuana was a safer alternative to many pharmaceutical drugs available, especially for those with cancer and HIV/ AIDS. Quiggle’s study was instrumental in the 2013 issuance of the Cole Memorandum, in which the Department of Justice (DOJ) made clear that the prosecution of medical marijuana users and cultivators in compliance with state medical marijuana laws is not a federal priority.

Federal Law The federal government criminalized marijuana possession in 1970 with the passage of the Controlled Substances Act (CSA), under which marijuana is classified as a Schedule 1 drug making its manufacture, distribution, or possession a criminal offense except for approved research Even where medical marijuana is legal under state law, a user may still face prosecution under federal law. In Gonzales v. Raich, 545 U.S. 1 (2005), the Supreme Court held that the Commerce Clause permitted Congress to prohibit the cultivation and use of marijuana even though such cultivation and use complied with California’s medical marijuana law. David B. Wilson is a founding partner and Tobias W. Crawford is an attorney with the Boston-based labor and employment law firm of Hirsch Roberts Weinstein LLP. They can be reached at 617-348-4300 or individually at dwilson@ hrwlawyers.com or tcrawford@hrwlawyers.com.

Winter 2015

In the 2013 Cole Memorandum, however, the DOJ stated that commercial cultivators acting in compliance with a state regulatory regime should not face prosecution unless their conduct threatens federal priorities, such as preventing intrastate sales of marijuana and the distribution of marijuana to minors.

State Law Twenty-three states and the District of Columbia have legalized marijuana for medical purposes. The states of Washington, Colorado, Oregon and the District of Columbia have legalized it for all purposes. On the other hand, the Americans with Disabilities Act explicitly excludes employees “currently engaging in the illegal use of drugs” from its coverage and the courts have to date declined to read employment protections into state medical marijuana laws.

Coats v. Dish Network Brandon Coats was in a car accident at age 16 that left him with a broken spinal cord, rendering more than 80 percent of his body paralyzed. As a consequence, he suffers from severe, involuntary muscle spasms and seizures. Coats initially used prescription drugs to combat these spasms, but his doctors eventually recommended medical marijuana, and Coats joined Colorado’s medical marijuana registry in 2009. At the time, Coats worked as a telephone operator for Dish Network, which has a zero tolerance drug policy. In 2010, after Coats tested positive for marijuana during a drug screening, he was terminated. Dish Network did not contend that Coats was impaired while at work; only, that he failed the drug test for off-thejob marijuana use. Under Colorado law: “It shall be a discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee’s engaging in any lawful activity off the premises of the employer during nonworking hours.” Colo. Rev. Stat. § 24-34-402.5. In June 2015, the Colorado Supreme Court upheld Coat’s termination finding that the term “lawful” refers only to those activities that are lawful under both state and federal law. Therefore, employees who engage in an activity such as medical marijuana use that is permitted by state law

but unlawful under federal law are not protected by the statute.

Legislatures Respond to Protect Employees Eight of the last 13 states to enact medical marijuana laws have included provisions to protect employment in some circumstances. These states are: Arizona, Connecticut, Delaware, Illinois, Maine, Rhode Island, Minnesota and New York. Rhode Island and Connecticut both prohibit employers from penalizing an employee “solely” on the basis of his/her “status” as a medical marijuana user. Rhode Island, but not Connecticut, explicitly permits an employer to enforce a “drug testing, zero-tolerance, or drug free workplace” policy against a medical user. New York’s law deems medical users automatically “disabled” within the meaning of its disability discrimination law. Like many states, Rhode Island, Connecticut and New York do prohibit on-premises use and/or impairment.

Drug Testing There are no statutory limitations on an employer’s right to conduct drug testing as a condition of employment. In order to conduct random drug testing of its employees, a Massachusetts employer should be prepared to show that it has a legitimate interest in its employees being drug free. See Webster v. Motorola Inc., 418 Mass. 425, 432-34 (1994). We strongly recommend that employers have a company policy that allows them to conduct reasonable suspicion testing if they believe an employee is under the influence of drugs or alcohol while at work. Medical marijuana being legalized does not mean employers should forego drug testing. Nevertheless, a drug testing policy should be well thought out and put in writing. We recommend an employer consider implementing testing at the following levels: •• Pre-employment •• Reasonable suspicion •• Post-accident •• Random For some employers pre-employment testing may be enough, while for others reasonable suspicion and post accident

testing may be enough. Employers that engage in random testing must follow strict protocols to make sure its tests are truly random. Every step of the way the Massachusetts employer must bear in the mind the balancing test and constantly evaluate whether its legitimate, business interests outweigh the employee’s interest in their own privacy? Most good drug testing policies focus on safety sensitive positions only and have a strict evaluation and testing procedure for managers and retesting to confirm results.

Reasonable Suspicion Checklist We recommend that an employer have a reasonable suspicion checklist which supervisors are trained to go through with at least one witness present when observing an employee suspected of being under the influence. Signs of current impairment include: •• Bloodshot eyes •• Poor coordination •• Drowsiness •• Perception of time •• Odor or cover-up

Conclusion The legalization of medical marijuana has provided much relief for many people in chronic pain who have not been able to find relief from pharmaceutical drugs. Although not required to, many employers are willing to accommodate such employees in the workplace. However, marijuana is still illegal under federal law. Employers who have employees working in “safety sensitive” positions or who choose to have a zero tolerance policy for Schedule I drugs are not required to accommodate medical marijuana users. The Americans with Disability Act does not protect employees from a violation of federal law. Employees who fail the employer’s drug test for marijuana use can be terminated based on the current federal law. The law continues to evolve at the state level, but real change will only come if federal law legalizes marijuana for medical use. s

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The Professional Contractor

MEMBER NEWS

Capone Iron Corp. Breaks New Ground in New Hampshire

Capone Iron Corporation recently held a groundbreaking ceremony for its new structural steel fabrication plant in the far northern New Hampshire city of Berlin. The company is performing a major upgrade of a 30,000-square-foot building previously owned by the Community College System of New Hampshire, including a new 2,000-square-foot addition that will serve as an office and support facility. While Capone Iron’s plans originally called for a small satellite facility, senior management ultimately decided on a complete structural steel and miscellaneous metal fabrication plant, similar to their existing plant in Rowley, Massachusetts.

NE Lab Partners with Stevens Industries

New England Lab, which provides specialized lab furniture solutions to life science companies and research facilities conducting medical research, is teaming with Stevens Industries, known for its high-end thermally fused melamine and high-pressure laminate products, including those used frequently in healthcare patient rooms, pre-K-12 classrooms and corporate break rooms – areas that can be furnished alongside laboratory spaces or even when lab furniture is not required! New England Lab will now function as Stevens Industries’ representatives for the New England region. 26

Winter 2015

Marr Companies Shifts into High Gear for Rodman Ride for Kids

For the 25th consecutive year, the Marr Companies’ cycling team participated in the Rodman Ride for Kids to raise money for the Boys and Girls Clubs of Dorchester, founded in 1971 by Daniel F. Marr Jr. and Robert L. Marr in memory of their father, Daniel F. Marr Sr. The company has raised over $463,000 over the past 13 years through their participation in the widely respected charity endeavor, which supports at-risk youth.

Guarracino Elected to Massachusetts Building Congress Board

Capital

CARPET AND FLOORING

Specialists Inc.

J.M. Electrical Company’s Matthew Guarracino was recent elected as treasurer of the Massachusetts Building Congress’ (MBC). In addition to participating in MBC board meetings, Guarracino will also serve on the finance and membership committees.

Capital Carpet Now the Exclusive US Distributor of Aqua Step

Through its affiliated sister company Prime Surface Covering Inc. , Woburn-based Capital Carpet & Flooring Specialists is now the exclusive U.S. distributor of Aqua Step, the first generation of 100 percent waterproof flooring. Aqua Step, a laminate tile flooring which offers total water resistance, can be used in commercial and residential applications where traditional laminates can’t. s

SAFETY

BY JEFF MORGAN

Winter Safety in Any Climate

usinesses with a fleet of vehicles face a variety of challenges during the winter months. With fewer hours of daylight and more hazardous road conditions caused by rain, sleet, snow or ice, safe driving practices and proper vehicle maintenance can go a long way in controlling costs and increasing efficiencies for drivers and their vehicles. The advantages can include everything from reducing the chances of vehicle collisions, personal injuries, worker compensation claims and downtime to avoiding expensive repairs caused by excessive wear and tear on a vehicle. In addition to having a good driver training program that includes a written fleet safety policy, it’s important to make sure drivers are familiar with some of the newer emergency icons that may light up on the dashboard to signal problems that need to be addressed. These icons include: Traction control, also called acceleration slip regulation (ASR), is designed to ensure maximum contact between the road surface and the vehicle’s tires when accelerating from a complete stop or speeding up to pass another vehicle, particularly under less than ideal road conditions. Stability control utilizes speed sensors on each wheel, as well as steering-angle sensors and a hydraulic modulator control to increase traction during potential side-skidding situations. The antilock braking system (ABS) senses and prevents wheel lock-up to improve traction and steering during hard braking. Because the ABS allows drivers to steer while applying maximum braking, there is greater vehicle stability in an emergency and this can make a significant difference in avoiding obstacles. The tire pressure monitoring system (TPMS) uses pressure sensing transmitters mounted inside each tire to monitor an unsafe change of 25 percent or more in the air pressure in one or more of a vehicle’s tires. While it is never a good idea to skip or postpone routine maintenance, it is essential to be vigilant about maintenance in the winter, especially for the following. Inspect wiper blades, windshield washers and washer fluid level. Seal any windshield cracks, which tend to spread in the winter. Also check each vehicle’s battery for load capacity and the

electrical/charging system, as well as all belts and hoses for softness and wear. Match dimensions indicated on the tire information decal for new tires to help avoid inaccurate speedometer/odometer readings, ABS brake malfunctions and multiple engine and transmission errors. Some vehicles with all-wheel drive require replacement of all tires at the same time because of potential driveline problems. Consult your owner’s manual or a fleet management professional for additional information. Use a quality air pressure gauge to check pressure at least once a week. Correct tire pressure helps extend tire tread life and gas mileage and contributes to good traction and handling. Rotation of the tires, recommended every 10,000 miles, will also extend the tire life further. This is especially true for front wheel drive vehicles. Seasonal blends of gasoline will ensure better performance in the winter. Always consult your owner’s manual for recommendations regarding grade or octane of fuel. While gasoline that is too low in octane can drastically affect vehicle performance, higher octane can drive up expenses unnecessarily. Last but not least, check the vehicle’s emergency roadside kit to make sure it is winter ready. Items may include a cell phone car charger or extra battery, first aid kit and extra winter clothing, including gloves and boots, as well as a flashlight, tire gauge, fire extinguisher and snow shovel. Even with roadside assistance, being prepared can increase safety, reduce stress and make waiting for assistance more comfortable. s Jeff Morgan is a senior account executive for Enterprise Fleet Management in New England and can be reached at 781-983-1552. Visit the company’s website at www.efleets.com or call toll free 1-877-23-FLEET.

The Professional Contractor

YEAR-END PROJECT PHOTO GALLERY 1 Dec-Tam (North Reading) was tasked with the removal of asbestos-containing materials and PCBs from a boiler house at the former Bostik site in Middleton, along with its demolition and its adjacent 125-foot brick smokestack … with the help of an 80-ton crane, a man lift and pneumatic guns!

2A 2B 2C Drake Company (Holliston) assisted Thayer Academy with the installation of new sod for their campus. Pictures include the site prep work, the placement of a 4-inch perforated lateral to drain across the “infields” and rolls of sod prior to final application. 3A E.M. Duggan’s (Canton) work at the Thermo Fisher Scientific facility in Waltham included 6-inch and 4-inch dry valves for a fire protection system.

3B E.M. Duggan also installed the heat exchangers at the new luxury Zinc Apartment building in Cambridge. 4A J&M Brown Co., Inc. (Jamaica Plain) completed the comprehensive electrical construction of 100 Pier 4, a new luxury residential high-rise in Boston’s Seaport District. The work included installation of the facility’s primary and emergency power, stateof-the art lighting and lighting control system, fire alarm system and tel-data and security systems at the 21-story residential tower. The project also included electrical fit-out for all 369 residential units, the fitness center and the underground parking garage.

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5B Winter 2015

4B J&M Brown Co. Inc. performed extensive electrical work at Twenty/20 at Northpoint, the new 20-story luxury high-rise apartment tower in Cambridge. The company provided core and shell electrical construction at the 400,000-square-foot building, including installation of the structure’s primary and emergency power, lighting and lighting controls, fire alarm and security systems. 5A 5B J.M. Electrical Co. Inc. (Lynnfield) finished an energy efficiency upgrade for Georgetowne Homes, the largest affordable housing preservation project in Massachusetts’ history. J.M. Electrical’s team updated the building’s heating system for 928 housing units, installed central boiler plants and installed a variable refrigerant monitoring system for the building’s community center. 6A 6B Longden Company (Hudson) installed a Tate Raised access flooring system with underfloor air distribution and prefinished

wood panels in the showroom area at the New Balance Corporate Headquarters in Brighton, Massachusetts. 6C Longden Company assisted with the construction of a cleanroom in Wilton, Connecticut for ASML – the world’s leading provider of lithography systems for the semiconductor industry 7A Marr Companies (South Boston) is responsible for the interior scaffolding at Northeastern University’s 220,000-square-foot interdisciplinary Science & Engineering Complex.

7B Marr also supplied multiple lifts for the installation of Janet Echelman’s one-ton aerial sculpture over the Rose Kennedy Greenway in Boston. 7C Marr Scaffolding Company’s Hydro Mobile Division supplied more than 20 mast climbers for façade work on the One Canal project, a mixedused development near Boston’s TD Garden. Sitting atop the Route 93 South tunnel and Boston’s MBTA subway lines, the mast climbers proved essential in enabling a variety of trade workers to perform the building’s exterior work.

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YEAR-END PROJECT PHOTO GALLERY 7D Marr installed two pre-engineered platforms at the Lonza Biologics Facility in Portsmouth, New Haven. 25-foot and 50-foot-tall platforms were designed to load heavy material into the mechanical facility, and were built using a steel Shore-X system combined with uniform-sized steel and aluminum joists at the deck level.

7E 7F Daniel Marr & Son erected the steel superstructure and precast concrete façade at the AvalonBay Tower in Boston’s North Station, a 38-story high-rise that will stand out as the tallest residential building in that area. 8A 8B New England Waterproofing (Natick) applied waterproofing sealant (shown in blue) to the wood sheathing of the new Beauport Hotel in Gloucester, built on the site of the original Birdseye frozen food packaging plant. 9A R&R Window Contractors Inc. (Easthampton) worked on a fast-track project at the UMass Amherst central heating plant consisting of a segmented radius top Kawneer curtain wall system with silkscreenpatterned glass on one entire elevation of the building, as well as a three-sided bump out curtain wall surrounding the stairwell on the sides and the roof. 9B R&R Window did in-house fabrication and glazing for all the custom unitized curtain walls, glass canopies, composite panels and entrances for the University of Massachusetts’ six-story, 360,000-square-foot Life Science Laboratories Building in Amherst.

10A

10B

9C R&R Window also fabricated and installed 35,000-square-feet of customdesigned aluminum curtain wall with 1.5-inch-thick heat mirror insulated glass for the Manchester Community Technical College, which is considered a model by the Connecticut Community College System for their other campus expansions. 10A T.J. McCartney Inc. (Charlestown) did interior work at the Harvard Art Museum. 10B 10C T.J. McCartney also performed interior work at the Museum of Fine Arts in Boston.

10C 30

11 Winter 2015

11 Wayne J. Griffin Electric Inc. (Holliston) installed and completed electrical and site lighting for the new 100,000-squarefoot Cabela’s outdoor store in Berlin, Massachusetts. s

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