services offered: · Marketing, Outreach & Networking · MBE/WBE/DBE/HUB Certification Referrals · Company Profile Resumes · Weekly Online Bid Briefs · Quarterly Newsletter · Contractor’s Tool Box Tip Guide · Technical Assistance & Electronic Training · Plans Center · Contractor’s Roundtable · Website: (abcatx.com) · Advocacy to set-up an appointment with the ABCA call 512-467-6894 to receive on-line Bid Briefs go to abcatx.com and click on the Bid Briefs link to review or download the Contractor’s Tool Tip Guide — Due to Covid Office Hours: 9am-4pm | Monday-Thursday Has been suspended. Communications is by e-mail and telephone until it is safe to meet in-person. (ABCA is housed in Business Resource Consultants’ Office) 6448 Hwy 290 East | Suite E-107 | Austin, TX 78723 E-mail Address: [email protected] Contractor’s Tool Tip Guide, Volume II & III a publication of the Austin Area Black Contractors Association © January 2008 | Updated Jan-Feb 2022
Page 2 Table of Contents Page No. Tool Tips 3-6 The New Normal: 8 Ways the Coronoavirus Crisis is Changing ConstrucƟon 7 Seven Steps to Prevent Common Mistakes In Contracts 8-11 Importance of Keeping and Maintaining Contract Records 12-18 How To Win Contract in a CompeƟƟve Environment 19-20 The DoƩed Line 7 Invoice Mistakes 21 Focus on PrevenƟve Care to Reduce Worker’s CompensaƟon 22-23 25 Common Mistakes Small Contractors Make with their Contracts 24-25 What is a Non Disclosure Agreement 26 U.S. OccupaƟonal Safety and Health AdministraƟon Inspect Workplaces 27 ConstrucƟon Terminologies
Page 3 U.S. jobsites are reopening but the industry will not be the same as it was before the COVID-19 outbreak. Are you ready for the paradigm shiŌ? In the span of two months, the coronavirus crisis has demanded sweeping changes from the U.S. construcƟon industry, and experts say many of them will remain in place even aŌer the outbreak recedes. As contractors prepare to return to work on sites that have been shut down by shelter-inplace iniƟaƟves, they will face an industry that has been drasƟcally changed by the both public health and economic effects of the pandemic. There are new factors coming into play now that you never thought about. Compies need to plan now to be prepared for the long term.” It’s an offer you simply can’t refuse. From a renewed emphasis on jobsite safety to longer project delivery Ɵmes and the increased influence of organized labor, the virus has upended many facets of the industry. Companies that try to return to a businessas-usual mentality will face a harsh new reality. “There’s been a paradigm shiŌ in many areas of construcƟon that is leading contractors to do many things differently than they did in the past. Here are eight ways that COVID-19 has altered the construcƟon industry for the near future and beyond. 1. Jobsites will be cleaner and safer The virus put a spotlight on the importance of worker health and safety, and U.S. contractors responded by implemenƟng new jobsite policies such as staggered shiŌs, employee temperature checks and top-to-boƩom disinfecƟons of jobsites, tools and machinery. A variety of protocols have been implemented to promote social distancing and employee health, including a ban on carpooling, a 100% mask and glove policy and well-stocked handwashing staƟons. This emphasis on cleaner, less crowded work areas is one that won’t recede aŌer the virus “dies down”. “A lot more health and safety measures will have to be implemented so that employees are comfortable returning to work.” The new normal will be reinforced by state, local and federal regulaƟons, and in the near future, OSHA could require employers to develop wriƩen infecƟous disease preparedness and response plans. Medical experts' belief that outbreaks across the world will come in waves for months or even years to come make safety plans important now and into the future. us does. Employers can no longer conduct business the same way as they did in the past,”. “Especially now, they need to be flexible and in many instances, creaƟve, as they think of new ways to perform certain tasks that they have performed in the same way for many years in the past.”
Page 4 2. Distancing will be the norm, via technology The current emphasis on social distancing on jobsites will likely conƟnue even aŌer the current health threat passes. “Can expect less group acƟviƟes and more clearly defined procedures and protocols for even some of the most rouƟne work tasks”. Even as the current outbreak subsides in many areas, state and local officials are puƫng measures in place to miƟgate risk on construcƟon sites going forward. For instance, new guidance in Washington state requires that jobsite employees keep 6 feet away from each other and non-compliance could lead to a project shutdown. The need for social distancing has also changed how contractors interact with project teams and with customers and companies have developed unique soluƟons to stay in touch. Los Angeles-based AECOM has launched an interacƟve web-based tool that allows clients to hold virtual public meeƟngs, a crucial component in the process of creaƟng public projects such as town halls, stadiums and concert venues. The plaƞorm allows AECOM employees and customers to engage with the public about the impact and benefits of proposed projects without leaving their homes. "It's exactly like a real public meeƟng, but without the in-person element. In addiƟon, in some areas of the country are implemenƟng remote technology for inspecƟons, a trend that will conƟnue aŌer the health crisis is over. For instance, when faced with a recent inspecƟon delay on a project in Nashville, Tennessee, general contractor DPR submiƩed 360-degree photos and videos to the local fire marshal for a virtual inspecƟon, allowing it to turn the project over on Ɵme. "Some really efficient ways of doing business is going to be developed." 3. Projects will take longer Many of the major safety changes on construcƟon sites will add to the Ɵme it takes to complete projects. While crucial to keeping workers healthy, techniques such suiƟng up with PPE, only allowing one trade on a site at a Ɵme and staggering work shiŌs will slow down progress and the days of fast-tracking a project may be over — at least for now, experts say. “ConstrucƟon schedules will not be the same as they used to be,” , during a recent COVID-19 webinar sponsored by DesƟnaƟon Medical Center, a public-private economic iniƟaƟve in Rochester, Minnesota. “Things will take a liƩle longer because we won’t be able to have lots of people in the same place at the same Ɵme.” Contractors are being advise to consider Ɵme constraints when bidding out new jobs to make sure the contract reflects a reasonable construcƟon schedule. The enƟre project team, including owners, architects, subs and other partners, needs to understand that at least in the near term, projects will take longer than before. “We’ll be planning jobs differently going forward,” he said. “These longer compleƟon Ɵmes aren't going to go away anyƟme soon and we need to be prepared going forward that if another wave of the virus does come back we’re in much beƩer shape and we’re much beƩer prepared.” 4. Telework will become more common The coronavirus has also brought major changes to construcƟon’s back offices. Forced to stay at home, many office employees have kept business operaƟons running via remote work, relying on technology like videoconferencing, emailing and texƟng to stay in touch. This naƟonwide experiment in telework will likely cause many leaders to think about making the pracƟce permanent. A recent Gartner study found that 74% of American companies will move at least 5% of their office workforce to permanently remote and nearly a quarter of respondents said they will move at least 20% to permanently remote posiƟons, according to a survey of the company's chief financial officers. “CFOs, already under pressure to Ɵghtly manage costs, clearly sense an opportunity to realize the cost benefits of a remote workforce,” said Alexander Bant, pracƟce vice president, research for the Gartner Finance PracƟce. 5. Union influence will grow Since World War II, the percentage of the U.S. construcƟon industry involved in union
Page 5 memberships has steadily declined, from about 87% of the workforce in 1947 to 12.8% in 2018. Nevertheless, since the pandemic began, trade unions have taken on renewed influence in many areas of the country by advocaƟng for members’ best interests in keeping sites operaƟonal and safe. Trade unions in New York state were instrumental last month in persuading government officials to shut down projects that were previously allowed to conƟnue, and in MassachuseƩs, two unions staged walkouts earlier this month in protest of what they deemed to be unsanitary working condiƟons. Other unions have wielded their influence to keep members on the job. Last month, North America's Building Trade Unions teamed up with the Associated General Contractors of America to ask government officials at all levels to make construcƟon an essenƟal service and exempt it from regional, state and local shutdowns. During the crisis, unions have provided a voice for workers who are struggling to decide whether they should stay home or go to work, said Mark Erlich, a fellow at Harvard University’s Labor and Worklife Program. Unions also help laborers find new work aŌer a layoff. “Clearly, being a union member has been enormously beneficial in the past few weeks,” he said. The appeal of unions will be stronger than ever going forward, Erlich said, a trend that “will likely come into conflict with costcuƫng measures that construcƟon employers will inevitably be considering once they reckon with the financial losses from the crisis.” To get ready for this trend, general contractors should be prepared to collaborate with unions and ensure they create work environments that meet their high standards for jobsite health and safety, even if they operate in tradiƟonally open shop states. “It’s going to cost more money and not going to be as efficient as in the past, but the market is going to force those types of changes,” Natarelli said. “There are new factors coming into play now that you or I never thought about. And people need to plan now to be prepared. 6. Demand for project types will change The coronavirus outbreak has reshaped the types of projects that will be built this year and for many years to come. Hospitality, retail and entertainment projects are likely to be in less demand while healthcare construcƟon and healthcare-related manufacturing projects could see more acƟvity, according to Charles HewleƩ Keith Prather, market intelligence expert for Olathe, Kansas-based business management consulƟng firm Pioneer IQ, agreed, saying that less reliance on Chinese-made building products will create a surge of new manufacturing- and supply chain-related construcƟon projects such as factories and warehouses. Experts are divided on how infrastructure iniƟaƟves will fare in the near future, with some noƟng that projects like road and bridge construcƟon could suffer as state DOT revenue declines because of decreased fuel tax revenues and that federal infrastructure funding may be waylaid as Congress turns its aƩenƟon to COVID-19 miƟgaƟon measures for business and unemployed Americans. Nevertheless, some public works projects have received a shot in the arm because of the pandemic. The Airport Improvement Program will invest $3.2 billion in the development and modernizaƟon of aviaƟon faciliƟes across the country, and the governors of some states, including Florida and Minnesota, have accelerated billions of dollars of transportaƟon projects in an effort to lessen the economic fallout from the coronavirus pandemic and to take advantage of fewer vehicles on the road. With so many sourcing challenges on the horizon, many American construcƟon firms will be hesitant to resume orders from Chinese suppliers, according to Prather. “How we source projects has a lot of weaknesses,” he said. “We believe that going forward there will be a lot of reshoring back in the U.S., where we’ll see an increase in our manufacturing ability here as well as heading into Mexico.” Many of his large contractor clients that are bidding out jobs include clauses in their contracts that call for as many as five backup sources for materials. Many are willing to pay higher prices for supplies coming from less risky locaƟons.
Page 6 7. Supply chains will recalibrate Even before the outbreak hit the U.S., the coronavirus created major global supply chain disrupƟons, especially of goods from China, the source of about 30% of U.S. building materials last year. Government containment efforts and uaranƟnes in China slowed or shut down factories in dozens of ciƟes and provinces, leading to a falloff in producƟon of everything from cars to smartphones. U.S. builders have noted delays and shortages in items like steel, surfacing and case goods. 8. Modular adopƟon will increase An enhanced focus on worker safety will help accelerate the industry’s move to offsite construcƟon methods. While contractors like PCL, Clark and Mortenson have relied on prefabricaƟon for many years, the coronavirus pandemic will moƟvate more firms to invesƟgate the benefits of offsite building. The assembly-line efficiency and climatecontrolled environment of factory producƟon can save on labor costs and shorten project schedules, but other advantages will take center stage in post-pandemic construcƟon, according to Natarelli, including increased site safety and reduced congesƟon. “It reduces the amount of Ɵme you’re in the field, and keeping the labor force in a controlled environment is good from a health standpoint, too,” he said. “So maybe now you have a job that went from six months to nine months and maybe this can shave that to eight months while you’re also promoƟng social distancing, too.” Source: ConstrucƟon Dive
Page 7 Seven Steps to Prevent Common Mistakes In Contracts ConstrucƟon contracts come in many shapes and sizes: from a handshake to several hundred-page agreements with numerous aƩachments. No maƩer the size, many of the same concerns exist and must be addressed. Here are seven quesƟons to ask yourself to avoid some of the most common mistakes: 1) Is this the right kind of agreement/project structure for me? Avoid an all-too-common mistake of presuming that some parƟcular form of project delivery, as reflected in a contract, will “fix” everything. For example, as design/build became prevalent, many project owners used it aŌer hearing someone tout benefits like “no claims” or “faster/less costly.” However, these benefits are only achieved in certain circumstances. Sure, design/build can proceed in a faster, less costly way. But that is achieved in part by giving the contractor greater flexibility. The more flexibility is taken away, the less of a benefit may accrue. For an owner that has precise ideas about what it wants built – whether aestheƟcally or funcƟonally – design/build may be incredibly frustraƟng and may not have the desired end result. Match the selected method with the expectaƟons of both parƟes and ensure that is what is described in the contract. 2) Does this accurately idenƟfy the work that either (a) my company is doing or (b) my company is hiring another company to do? Work scope is one of the criƟcal components to a contract and needs to be clearly defined to avoid problems later on. Scope has an intrinsic relaƟonship with both Ɵme and money; failures to adequately define what is in – or outside – scope puts both at risk. 3) Does the contract share risk in ways that are consistent with my expectaƟons? Key risk provisions include indemnity provisions, insurance provisions, changes and claims provisions, and limitaƟon of liability clauses. These need to be carefully draŌed to appropriately allocate risk. Failing to do so can create significant exposure or leave a company without recourse. In addiƟon, these provisions must be carefully evaluated under applicable law. Many states have statutes specifically limiƟng or defining the scope of indemnity; violaƟng those requirements can void the indemnity provision. 4) If the other party is responsible for certain risks, does the agreement provide me certainty of their ability to fulfill them if needed? Ongoing ability to pay is important and should be thoughƞully considered. For example, the strongest indemnity provision is worthless if the indemnifying enƟty cannot pay; consider managing this risk by pairing indemnity provisions with insurance. Consider whether a provision allowing a contractor to request proof of funding is needed. As an owner or upper Ɵer contractor, consider the use of payment, performance, warranty bonds. Parent guarantees and leƩers of credit may provide other ways of securing commitments. The Ɵme to manage this risk is when the contract is being negoƟated. AŌer a problem arises it may be too late. 5) Hopefully we won’t have any disputes, but if we do, is there a mechanism that works for me to resolve them? There is no one-size fits all dispute resoluƟon clause. Instead, ask yourself a number of quesƟons: Who will decide the dispute? Where will it be decided? How will it be decided – i.e., arbitraƟon, liƟgaƟon or some other process? When will it be decided – and when do you need it decided to manage further losses? What will be decided? What informaƟon will I need? What else am I worried about? Is confidenƟality paramount? Do I need immediate relief? Do I want to be able to appeal? Do I need someone to keep working during the dispute? Do I need to manage any risk related to for disparate results? All these quesƟons need to be thought through before one finds oneself in a dispute process in another state, governed by unfamiliar law and a never-ending process. 6) Is this agreement consistent with any other agreements I’ve signed on the project (or intenƟonally inconsistent)?For example, if I am making promises as the prime contractor, am I requiring my subcontractor to do the same thing? If I am a project owner and my contract with the prime contractor says the architect is going to do a number of things (like reviewing/approve pay applicaƟons, inspect the work, cerƟfy the project as complete), does my agreement with my architect require the same things? If not, problems can ensue. 7) Do I know what all the requirements really are? Does the agreement incorporate a number of other documents by reference? If so, be sure you know what are in those requirements. Is there a secƟon of “miscellaneous provisions”? If so, make sure to read them. Even if not reviewed, those items can become binding. Any issues need to be raised before signing on the proverbial “doƩed line.” Source: Julia M.I. Holden-Davis is a trial lawyer focused on the construc-
Page 8 Importance of Keeping and Maintaining Contract Records ·Con- tract records are important because they serve as an audit trail of how the process was carried out. ·Contract records are the evidence of all actions taken to award contracts, and of the results of the monitoring and oversight of contract implementation. ·Contract records are the basis for internal and external audits, and are needed to determine compliance with the procurement legal and institutional framework. ·Maintaining contract transactions; equipment and material supply purchases; payroll; tax deductions; legal fees and other expenditures; to support income tax purposes; and to support transparency and accountability. Creating paper files Paper files need to be consistently labeled and logically organized. This guidance describes best practice to create and describe a paper filing system. This will ensure accurate, prompt retrieval for as long as the files are required. Every new file should be registered and maintained in a filing system, with a unique title so that it can always be identified. Classification A good file classification system should support the business requirements of those who use them and incorporate information to assist long-term management. It should be easy to understand and maintain. The classification system should have a structured referencing system with usually two, and no more than three, elements. Numbering systems should be applied consistently. There are several options: Naming The following information should always be provided on file covers: File reference – a unique reference for each new file. You may have different systems according to the type of information being managed. ·File title – a meaningful and accurate title should be given to each file. Date opened Date closed Contract File Folders
Owner – this should be the name of the individual who is responsible for the contents of the file System reference – if the file relates to a record or file eld on a computer system, you should record the case number or file name and path. Disposal date / action – date for disposal and the action that should be followed. The details will be provided in the retention schedule. Maintaining paper files Records contained in paper files should be managed according to business and legal requirements. This means they should be filed correctly, as soon as possible after receipt or creation. If an action is required, you should still file the document, in the appropriate place. Maintain a record of this circulation, to reduce the risk that the file will be misplaced. Documents should not be placed loose into files or folders. This helps prevent loss, damage or destruction. The following principles will help in maintaining an orderly filing system: ·File latest record on top. ·File in order of the date on which the document was written, not date of receipt. ·File attachments or enclosures immediately below the documents to which they relate. Place bulky items such as plans or drawings in a pouch or pocket with the contents described on its front. ·Do not file duplicates. Circulated papers should be marked in such a way as to identify the original or master set and copies. File the original and, if necessary, insert a file note into other files to indicate its location. File Lists/Log Where appropriate, for example where files are stored by reference, code or index number, it is good practice to maintain a list of the files. A file list should contain the following information: · File reference · File title · Date opened · Date closed · System reference · Keywords · Disposal details. If a spreadsheet or database is used to maintain the file list, it will not be necessary to maintain an index to those files. However, if a manual system is used, for most filing systems an index must also be maintained. This will, of course, not be needed for case files stored in alphabetical order. Page 9
Tracking files Movement of records outside the office must be tracked, for example when files are provided in response to a Data Protection request. File movement should be monitored using a tracking schedule, though it may be more appropriate to photocopy relevant documents than to issue the original file. An example of a tracking schedule is provided below: Closing files A file should be closed, and a new file created, if: · The file is no longer in use, for example a member of staff has left or a project has ended · No papers have been added for two years The file is no longer in use, but needs to be retained for legal reasons. Create a new part (a continuation file) and number accordingly when files become bulky – thick. It is sometimes a good idea to create a new part every year. When closing a file, you should remove: · Un-annotated drafts · Copies · Pro forma correspondence · Compliment slips · Publications, such as brochures, manuals, catalogues · Blank forms Copy, i.e. unsigned, minutes. · Page 10 File ref File title Borrower details Date out Date due Date back Name Job title Extension
The retention schedule describes the retention and disposal information for all records. You should check and ‘tidy up’ records that are to be retained permanently, or for longer than 12 years, to ensure that the contents do not include items that will damage paper, for example: · Post-it notes Steel paper clips Staples Rubber bands PVC sleeves and folders. Electronic media, such as floppy disks, should not be attached to or stored with paper files. Once a file has been closed the following actions may take place depending upon its retention period and the type of materials it contains: Immediate destruction – if records have reached their destruction deadline, they may be destroyed. · Retain for a period then dispose – records that are used frequently after closure (semi-active) may be kept on site. Responsibility for managing the files remains with the department or team concerned. Subsequent dis- posal must be agreed and all disposals properly documented. · Retain for a period then dispose – records that are used infrequently after closure, but have not reached their retention deadline, should be transferred to UCL’s off-site store. · Retain permanently – if records must be retained permanently, they should be held on site as long as they are in frequent use, during which period you remain responsible for their management. When their administrative use ceases, they should be transferred to off-site storage or archives, in consultation. Page 11
Page 12 PART 1: HOW TO WIN CONSTRUCTION PROJECTS IN A COMPETITIVE ENVIRONMENT Construction professionals have oftentimes approached project bidding by offering the lowest possible cost. But as the bidding process becomes increasingly complex, contractors are wondering how to win construction bid contracts in a competitive environment while also staying profitable. These days, having the lowest bid doesn’t necessarily mean you’re bidding competitively, and simply increasing your bidding volume usually only leads to wasting precious time and money. Check out these six easy tips for winning more construction bids with fewer proposals: Bid first, know your compeƟƟon and don’t chase every job An easy way to win more bids is stepping in before your compeƟƟon does. Keep an eye on construcƟon bidding marketplaces to create a profile and pre-empƟvely find jobs. · BidClerk This site provides commercial construcƟon leads and project informaƟon. · iSqFt A networking tool, iSqFt is specially designed to help construcƟon professionals connect and communicate. · ABCA’s Bid Briefs—provides governmental construcƟon leads and project informaƟon from the City of AusƟn, AISD and some private sectors · BidPlanroom Commercial construcƟon professionals use this site to join a bidder’s list, post projects and promote their company. (It’s free!)
Page 13 AddiƟonally, when preparing to bid on a project, know what criteria your compeƟƟon will use so you can bring more to the table. This means making your offer about more than just price. EssenƟally, you need to sell the fact that your services are beƩer. AddiƟonally, just because a construcƟon job is available doesn’t mean you should go for it. It can be more effecƟve to reduce the number of proposals you submit to improve the quality of your bids and select projects with a higher chance of success. ·Bid on jobs that best fit your niche. (Example: ResidenƟal versus industrial projects) ·Focus on projects that will result in repeat business. ·If a project requires specialƟes you don’t have, don’t bid. IdenƟfy the decision-makers and build trust ConstrucƟon professionals oŌen waste precious Ɵme by working with nondecision makers. It’s important to know who’s in charge of a project. To make headway, try to get face -Ɵme with the right people. (These days, there is usually more than one decision-maker.) A good way to start this is by gaining an understanding of the prospect’s organizaƟonal structure. It’s also important to note people want to do business with someone they trust. That’s why it’s important to build personal relaƟonships with your prospects so they see you as a person and not just a contractor. Highlight your qualificaƟons and deliver value Don’t be afraid to show off your qualificaƟons! Be straighƞorward in explaining why your team is right for the job. Showcasing your experience is a great way to set yourself apart from other companies. When your bid is close to someone else’s, someƟmes reputaƟon is all it takes to Ɵlt the scale in your favor. AddiƟonally, rather than focusing so much on price, promote your value. It’s important for construcƟon professionals to sell the fact they have a compeƟƟve advantage over other companies. It’s all about differenƟaƟng your brand. Market your crew as responsive experts who offer customizaƟon, quality control and excellent customer service. Customers oŌenƟmes value these aƩributes more than price. Do your homework, break down your bid and explain ROI When submiƫng a bid, it’s extremely important to know what project owners expect. This is especially true for design details. A helpful tacƟc involves talking to others who have worked with the project owners to get a feel for their preferences. Avoid merely showing a lump sum in your bid. Break down the cost to best highlight your thought process in areas like equipment allocaƟon and material costs. It’s all about giving a potenƟal client the right perspecƟve. AddiƟonally, prospects need to see the return on investment (ROI) they’ll gain by working with you. Be prepared to back up your informaƟon with hard data. Breaking down the data through case studies is a helpful method.
Page 14 Embrace technology, Boost Productivity The right technology can help control construcƟon costs and has the power to increase your team’s efficiency with common job site tasks such as: ·Trips to gather material ·Conference calls ·In-person meeƟngs ·Phone calls Mobile devices are being deployed on job sites every day. Technology can bring informaƟon right to a contractor’s fingerƟps. It can also improve communicaƟon between the field, office, operators, subcontractors and execuƟve team. Don’t forget that the younger workforce grew up with smartphones. They understand the latest technology that bolsters processes and efficiency. If it means saving Ɵme and money, as well as building bids more quickly and accurately, adopƟng new technology is crucial. Here are some cool mobile apps you should know about: Fieldlens – This helps improve project communicaƟon between a general contractor, subcontractor, architect and owner. You can document job issues with photos and keep track of to-dos. PlanGrid – A tool that instantly updates an enƟre team when there are changes made to any documents. HeavyJob – Not only does this app provide Ɵme entry funcƟons, but real-Ɵme data on producƟon levels. Autodesk BIM 360 – This program is great for highlighƟng safety and quality issues as well as managing field data. Contractors oŌen assume they lost a bid to a compeƟtor that came in below cost. However, that’s not always the case. Team producƟvity is oŌen a major factor in the construcƟon bid process. By boosƟng producƟvity, you’re likely to reduce costs so you can deliver more compeƟƟve bids. There are many easy ways to boost construcƟon producƟvity, such as the following: ·AdopƟng construcƟon producƟvity soŌware. ·Hiring a distributor partner for efficient material management services. ·Improving safety training.
Page 15 Don’t give up: Approach objecƟons as opportuniƟes It’s OK if your prospect has quesƟons or concerns at some point in the bidding process. Try to understand the true root of any objecƟons they raise so you can beƩer connect with them. ObjecƟons should be seen as an opportunity to get to know your potenƟal client beƩer. AddiƟonally, if you approach it in the right way, persistence is good for the bidding process. Staying in touch with potenƟal clients and being consistent could help increase your close rate. SomeƟmes it’s even worth it to point out that a compeƟtor did a good job with their presentaƟon, highlighƟng aspects like cost and Ɵming. But, showing consistent care and aƩenƟon to detail for a project shows dedicaƟon, which project owners are looking for. How to win construcƟon bid contracts: Have confidence Today’s construcƟon bidding environment may be compeƟƟve and complex, but uƟlizing the Ɵps above can help give you a leg up when it comes to winning projects. Have confidence in your people and services – and focus on building a foundaƟon of improved speed and accuracy. Here are three of the more common types of construcƟon contracts between project owners and contractors: ● FIXED PRICE. Fixed price construcƟon contracts, also commonly referred to as “lump sum” or “sƟpulated sum” contracts, are the most common types of construcƟon contracts. · COST PLUS. · GUARANTEED MAXIMUM PRICE. Part 2: 9 Steps to Signing a Successful ConstrucƟon Contract (Case Study) The construcƟon business is risky enough without contractual unknowns. Lower your risk by using this basic checklist for reviewing a contract. OŌen Ɵmes, general contractors and subcontractors are so excited to get a new job they will sign any contract put in front of them. I have even seen contractors sign lengthy contracts containing clauses that make it next to impossible to finish on-time, make a profit or ever win a contractual dispute in court. We were once asked to sign a general contract that included a little clause hidden in the fine print: "The owner has no obligation to pay unless the bank funds the payment.” Luckily, before signing, we followed our 9 Steps to Signing a Successful Construction Contract. We had that unacceptable payment clause changed to this: "The owner is liable to pay for the work regardless of whether the bank funds or not.”
Page 16 Most contracts are never awarded unƟl the last minute. This oŌen occurs the day before you’re needed out on the job site. Pressure is on to get started and sign the contract as fast as possible before you have adequate Ɵme to read it. But contractors must take the Ɵme and effort to review every contract before signing them. For every project, large and small, go through each step in the following checklist before puƫng your pen to paper and celebraƟng a new job. 1: Review Your Bid When you get a call telling you that you are the successful bidder, don’t get excited and put the cart before the horse. Before gearing up to start work, review your bid carefully. Have your bookkeeper check the math. Have your field superintendent and foreman check the labor and equipment figures. Call your major suppliers and subcontractors to confirm their bids. If all looks good, go on to the next step. 2: Review Complete Plans Subcontractors don’t oŌen get to see the complete set of plans when asked to submit their bids. Before signing a contract, review all plans and project documents including architectural, structural, civil, plumbing, mechanical and electrical plans; soils reports; addendums and finish schedules. On an office building project, the site concrete subcontractor poured the curbs, guƩers and sidewalks exactly as shown on the civil-grading plans. The next day, the architect asked the job superintendent if the rebar called out on the architectural plans had been installed in the freshly poured site concrete. The general contractor had never cross-checked the civil plans with the architectural plans, nor were any architectural plans ever issued to the site concrete subcontractor. Three weeks and $40,000 later, the contractor’s error was fixed. Never, Never, Never sign a contract without reviewing the complete set of plans. 3: Review All SpecificaƟons Because specificaƟon books are oŌen 3 inches thick, many contractors read only the secƟon that affects their trade. It is imperaƟve, however, to review all specificaƟon secƟons before you sign a contract. The general condiƟons secƟon, for example, contains contractual requirements for jobsite safety, submiƩals, cleanup, change orders and how to get paid. On a school project several years ago, an asphalt paving subcontractor got a call from the project superintendent that the locker room floor was ready to pave. Unfortunately for the paver, the asphalt flooring was called out in the finish schedule secƟon of the specificaƟons, and not shown on the civil or site plans! A complete set of plans, specificaƟons and the finish schedule would have eliminated this problem. Never, Never, Never sign a contract without reviewing the complete specificaƟons 4: Visit the Job Site Always send your field superintendent to the job site to look for any unforeseen condiƟons, conflicts with the project plans and logisƟcs concerns that can cause you grief later.
Page 17 5: Review the Job Schedule Before commiƫng to any project, make sure you completely understand and agree with the project schedule. Lost job profits generally can be aƩributed to improper scheduling of crews, poor supervision and lack of field coordinaƟon. And a schedule that’s too opƟmisƟc will result in a crunch at the end of the project, which costs everyone money. 6: Complete a Project Checklist When reviewing contracts, use this simple project checklist so you and your project team won’t overlook any important items. On the list be sure to include the following: Scope of work, inclusions and exclusions. • Insurance requirements. • Bonding requirements. • Payment procedures and cash flow requirements. • Person(s) authorized to approve field changes, etc. • Project schedule and long lead items. • Shop drawings and submiƩals. • MeeƟngs required to aƩend. • Permit requirements. • Site access, logisƟcs and parking. • Special tools and equipment requirements. • Contract close-out procedures. 7: Verify Project Funding Every general contractor and subcontractor has the right to know that a project has adequate funds. So, always ask for proof of funding. It can be awkward to ask, so I oŌen tell customers that my banker or bonding company won’t let us sign a contract without assurance there is money set aside to complete the project. Doing jobs without geƫng paid isn’t any fun. 8: Read Complete Contract Signing a contract prepared by someone else can be scary. The days of a handshake contract are long gone. Today, contracƟng is about contracts! If you don’t understand what you are signing, you won’t stay in business very long. Many contacts contain clauses that are one-sided and unfair. Carefully look over contract clauses dealing with such issues as these: • Payment, retenƟon and pay when paid • IndemnificaƟon • Conflict resoluƟon and disputes • ArbitraƟon versus court • Schedule issues • Failure to perform • Delays and weather • AcceleraƟon and terminaƟon • Liquidated damages • Change orders and back-charges • Cleanup and supervision
Page 18 Every construcƟon company must have a good construcƟon aƩorney. · Meet with your aƩorney at least twice a year. · List out the most important "red-flag” clauses to look for and decide what you will and will not sign. · Remember, you have the right to sign only what you agree with. · Never sign an unfair contract. · Cross out and change what you don’t agree with, iniƟal the changes and then sign the contract. #9: Execute Contract The construcƟon business is risky enough without unfair contracts. So, before you execute the contract, follow these nine steps to signing a successful contract and start out every project on a fair and level playing field.
Page 19 The DoƩed Line: 7 invoice mistakes that waste Ɵme, money 1. Not knowing what's in the contract Reading a contract and knowing its terms are the first steps to geƫng invoices right. The contract contains informaƟon on which forms to use, billing and payment Ɵmelines and what informaƟon must accompany each payment request — this is important to know if you want to be able to pay bills and make payroll. "As basic as it sounds,” said Carl Oliveri, partner and construcƟon pracƟce leader at New York City accounƟng and consulƟng firm Grassi & Co, “that's where it all starts and stops. If you're not billing within the terms of the contract, you're not going to get paid.”Mostly, the confusion arises in the relaƟonship between subcontractor and general contractor, but GCs need to be aware of the requirements aƩached to their invoicing procedures with the owner. General contractors and subs "don't review [the requirements] prior to the contract formaƟon, and then are shocked as to what is in there.” When a project uses construcƟon loans, for instance, there could be specific requirements that flow down from loan terms into the general contract, said aƩorney Timothy DeHaut, co-chair of the construcƟon law pracƟce at Giordano Halleran & Ciesla in the New York City area. For instance, prior to payment, the GC could be asked to sign away the right to any claims against the project through the date of payment so as to minimize the owner’s and lender’s exposure to change orders or unexpected costs. This can happen to subcontractors as well, he said, and recommends that all contractors try to negoƟate terms of lien waivers or other documents that could cut into their rights to bill for extra work. General contractors and subs "don't review [the requirements] prior to the contract formaƟon,” DeHaut said, “and then are shocked as to what is in there.” Another big mistake contractors make when it comes to pay applicaƟons is not turning them in at all, although this is a problem that really applies to subcontractors that don’t have the administraƟve support staff to handle invoicing, Oliveri said. The individuals who run those companies, he said, don’t look at projects as the profit centers they are but instead see the billing funcƟon as a burdensome task. Filling out paperwork takes away from what they’re doing, he said, which is running their jobs. What they don’t understand, however, is that each project has to sustain itself, and the only way it's going to be successful is to get cash into the business. However, if a subcontractor does neglect to turn in a bill, the general contractor, which must submit a pay requisiƟon to the owner for all work completed, might have it covered and then turn in a bill for the sub’s work so the GC can get paid on schedule. One reason a general contractor would pay the subcontractor anyway, said Oliveri, is because of the “pay when paid” clauses that are in many subcontracts. This obligates the general contractor to pay a subcontractor if it has received payment from the owner for the subcontractor’s work. Another reason, he said, is that general contractors don’t want disrupƟons caused by a cash-poor subcontractor —i.e. material suppliers refusing to deliver because they haven’t been paid or employees not showing up because they haven’t seen a paycheck. 2. Submiƫng incorrect invoices Even when construcƟon firms do submit their billing on Ɵme, someƟmes the invoices aren't for the right amount. Subcontractors especially, DeHaut said, may try to front-load a pay applicaƟon to get a liƩle extra cash flow by staƟng that they have completed a higher percentage of work than they actually have. “That’s never a good idea,” he said. SomeƟmes those applicaƟons sail through, but if the architect or a bank inspector checks the project paperwork to verify the numbers, it can lead to a loss of the sub's credibility and delays the payment process. But one area where contractors can oŌen bill legiƟmately in advance of work performed — but don’t — is when the necessary materials have been delivered to the site or to an approved offsite storage locaƟon. That issue, DeHaut said, should be worked out before subcontractors sign their contracts. Depending on the trade, the materials could represent a significant porƟon of the subcontract amount, and the subcontractors’ suppliers might not wait unƟl aŌer installaƟon to be paid. 3. Making change order mistakes And then there are change orders. Mistakes here tend to happen more on subcontractor applicaƟons and are oŌen a result of miscommunicaƟon in the field. Contractors might think addiƟonal work they have performed is approved, even though they haven’t received a fully executed change order from
Page 20 the customer yet, so they bill for it anyway. In a system like Textura, Rowe said, unapproved change orders won’t process, so it brings the issue to the forefront right away. In order to help avoid confusion around change orders, DeHaut said, using the American InsƟtute of Architects’ G702 ApplicaƟon for Payment and the accompanying G703 ConƟnuaƟon Sheet forms help keep paying status and change order informaƟon organized. “It’s an accurate reflecƟon of the work,” he said, “and makes the job [of tracking them] easiethe r. [The forms are] upfront and tend to help avoid disputes at the end 4. Not paying aƩenƟon to clients' billing processes Some of the problems that subcontractors, parƟcularly smaller ones, have with compliance to the terms of a contract are someƟmes due to their limited experience with a wide variety of clients. These companies have spent years doing business with just a few general contractors and just assume other general contractors conduct business the same way. Oliveri said subs should try to make a concerted effort to get to know the billing process and schedule of each client. There might even be a contract clause that allows billing twice a month instead of just once, which is most common in subcontracts. For cash flow, that could be a game changer. Sarah Rowe, accounƟng director for general contractor Gray ConstrucƟon in Lexington, Kentucky, said the company, which performs work in several states, requires that most subcontractors use Textura, which is a popular payment processing soŌware. Using Textura, she said, has streamlined Gray’s subcontractor pay applicaƟon process because all of the required documents — including lien waivers — must be uploaded with the electronic pay request. This cuts down on the confusion that accompanies the typical monthly paper swap at billing Ɵme and gets Gray’s subcontractors paid about five days earlier. Even so, some subcontractors will not submit the required documents, and Rowe said she believes that it’s because they’re just not aware of the contract requirements. 5. Failing to communicate with subs This lack of communicaƟon, Rowe said, usually starts at the beginning of a project between the subcontractor’s project management team and accounƟng department. Many Ɵmes, a sub’s accounƟng team is not involved with contract negoƟaƟons and is not made aware of billing procedures unƟl it isn’t paid. “So once [our accounƟng department] gets past the [subcontractor’s] project team to the accounƟng group,” she said, “they know what's required, and then it becomes part of the monthly process, and their payments are not held up.” “What you really need to do in that instance is create a bridge between project management and accounƟng,” Oliveri said. “You need to break down the silo between office and field, and the best kind of posiƟon [for that] is a project accountant, who is going to be able to work with all the project managers on financial data.” 6. Submiƫng invoices late Contractors might think addiƟonal work they have performed is approved, even though they haven’t received a fully executed change order from the customer yet, so they bill for it anyway. In a system like Textura, Rowe said, unapproved change orders won’t process, so it rings the issue to the forefront right away. In order to help avoid confusion around change orders, DeHaut said, using the American InsƟtute of Architects’ G702 ApplicaƟon for Payment and the accompanying G703 ConƟnuaƟon Sheet forms help keep paying status and change order informaƟon organized. “It’s an accurate reflecƟon of the work,” he said, “and makes the job [of tracking them] easier. [The forms are] upfront and tend to help avoid disputes at the end.” 7. Not negoƟaƟng retainage Subcontractors also miss opportuniƟes to apply for a reducƟon in the amount of retainage that general contractors oŌen hold out of their payments because they don’t realize they can. Typically, 10% of the contract amount is withheld, but that is someƟmes reduced to 5% or lower when the project hits a certain percentage of compleƟon milestone. “I definitely feel like the subcontractor community should become very well educated in that because there are certain states that have very specific retainage rules, and if they're not aware of that, they could be missing out,” Rowe said. The real lesson here, Oliveri said, is that contractors and subcontractors should be billing as oŌen as they can for as much as they can within the limits of their contracts. The DoƩed Line series is brought to you by AIA Contract Documents®, a recognized leader in design and construcƟon contracts. To learn more about their 200+ contracts, and to access free resources, visit their website. AIA Contract Documents has no influence over ConstrucƟon Dive's coverage within the arƟcles, and content does not reflect the views or opinions of The American InsƟtute of Architects, AIA Contract Documents or its employees.
Page 21 Focus on PrevenƟve Care to Reduce Workers’ CompensaƟon Claims The construcƟon industry’s long struggle to deliver affordable health care to its workers is an expensive problem, raising costs for everyone involved. The industry’s parƟcular exposure to work-related injuries is the basis for raising eMod scores, which in turn increases workers’ compensaƟon premiums. For too many Americans, meaningful access to basic health care is out of reach. That number is climbing higher as more and more employees are hit with significant cost increases to their employer-sponsored plans. High health insurance deducƟbles means out-of-pocket costs increase for the worker, so many will opt to go without health care benefits. When more and more employees decline coverage due to cost, employers will experience increased use of their workers’ compensaƟon plans, driving eMod scores up. When employees don’t have access to meaningful health care, workers’ compensaƟon plans become the de-facto route to treatment. It’s a vicious cycle. In the absence of an affordable health care plan offered to employees, business leaders oŌen will see the following situaƟon play out: Employee is hanging holiday lights on Saturday aŌernoon and hurts their back. Without affordable access to care, they’ll most likely just rest up rather than seek treatment, leaving them vulnerable to further injury. The next week, while stacking materials on the jobsite, the employee hurts their back and, suddenly, workers’ compensaƟon enters the equaƟon. Coincidence? It’s possible. However, situaƟons such as these could be avoided by delivering access to high-quality, low-cost health care that allows an employee to get the care they need without having to potenƟally abuse the workers’ compensaƟon plan for treaƟng off-job injuries. A SOLUTION So how can commercial and industrial construcƟon business owners, professionals and industry suppliers handle the increasing cost of health care for their employees and reduce the overall cost of workers’ compensaƟon premiums? They must look for the innovators in the industry. New paƟent-focused plan models based around preventaƟve care delivery are breaking through the logjam of health care coverage. As a result, these new health care plans are rapidly gaining ground over tradiƟonal forms of health insurance because they are providing real, meaningful and affordable access to care. For instance, a foundaƟonal care plan could effecƟvely break down access barriers by iniƟally delivering professional telemedicine health care services. Look for 24 hours a day, seven days a week availability with a choice of English- or Spanish-speaking providers. This newfound, round-the-clock access would be a boon for employees who work long hours and oŌen can’t find convenient off-hours to visit a doctor, as well as for non-naƟve speakers who might otherwise avoid the doctor’s office. But what about Ɵmes when an employee needs in-office care? Studies show that cost is sƟll a problem for many, especially when there is a copay. In fact, in a recent naƟonal survey, 40 percent of Americans said they hadn’t seen a doctor in the last 12 months due to costs. Another 32 percent reported skipping a needed prescripƟon due to the cost. A foundaƟonal health care plan could offer something that would be seen as radical in the marketplace—primary care office visits with no addiƟonal out-of-pocket costs to employees. In addiƟon to telemedicine and in-office primary care, imagine if labs and even chiropracƟc care could be addiƟonal benefits offered with $0 copay and no-deducƟble? Suddenly, health care would be transformed into actual, usable health care benefits. Most industry experts agree that the cost of turnover for a $10 to $12 hourly employee is between $3,000 and $4,000. For many construcƟon posiƟons that require specialized training, this cost is much higher. Offering foundaƟonal health care plans with primary care that’s readily available could not only help workers stay healthier, but also improve retenƟon rates. In a highly compeƟƟve labor market, many companies are now leveraging affordable core health care plans and offering them for free to their employees. The result? Significantly healthier and happier employees and reduced turnover. AddiƟonal insurance opƟons could be offered as a “buy-up” for catastrophic or high-dollar care needs. Of course, everyone has a different definiƟon of catastrophic. To a $10 to $12 hourly employee that number might be $200. To a manager or supervisor that number might be higher. Each type of employee will likely have different financial protecƟon requirements depending on their age, marital status and overall health. ConstrucƟon companies can realisƟcally deliver health care benefits to all employees without breaking the bank, which is becoming a more pressing concern every day. With the right delivery model and plans, the costs to provide benefits would be a fracƟon of those associated with increases in workers’ compensaƟon premiums. It can also help commercial and industrial construcƟon business owners, professionals and industry suppliers offset the opportunity costs of not having the right employees (and enough employees) on the team. It’s a winning bid for all. Sources: David Slepak | ConstrucƟon ExecuƟve Health Care | Recruitment/RetenƟon HR Workforce Development
Page 22 25 Common Mistakes Small Contractors Make With Their Contracts 1.When performing as a subcontractor, not reading and fully understanding the contract (or subcontract terms). 2.Not getting up front, a signed copy of the Prime’s contract with the other party’s (usually the owner’s) signa- ture, along with a copy of the Prime’s payment bond. 3.Not reviewing the documents or exhibits that are incorporated into the contract (or subcontract) by reference. 4.Not reviewing the terms of the Prime’s contract with the governmental agency or the property owner before signing a subcontract that is subject to the terms of the Prime’s contract with the governmental entity or owner. 5.Not insisting that the subcontractor’s Schedule of Values be specifically incorporated by reference into the subcontract (especially in lump sum contracts). 6.Not insisting that the same delay damage, changed conditions or time extension clauses, rights, and benefits enjoyed by the Prime be included in the subcontract. 7.Not insisting that the work to be performed under a lump sum contract be specifically delineated (in detail) with language specifically excluding any other work not so listed, and not having such list be incorporated into the contract or subcontract and signed by the Prime or Owner. 8.Failing to carefully review subcontract terms to make sure Prime has not transferred or required subcontractor to waive claims for liability, damage or delay caused by the Prime or other tier subcontractors. 9.Not insisting on a delay damage or time extension clause protecting subcontractor from delays caused by other subcontractors, inspections, owner or changed conditions. 10.Not requiring that the Prime’s or the Owner’s “Notice To Proceed:, “Stop Work Orders” or other time and performance matters be made in writing. 11.Not requiring that all change order and/or additional work request be in writing before performing. 12.Not insisting that all notices of defective, substandard or unacceptable work be made timely and in writing; and include a reasonable opportunity to cure, and not requesting that acceptance of the cure work be in writ-ing. 13.Not inserting and insisting upon language entitling the subcontractor to attorney fees in the event of a dispute resulting in litigation or A.D.R. should the subcontractor be the prevailing party. 14.Failing to verify that the contract language governing any price, fee formula or fee calculation is correct and that when applied accurately, reflects the intended agreed upon amount (s).
Page 23 15.Not deleting language which would allow Prime to issue joint checks to subcontractor’s suppliers, tier subcontractors at Prime’s sole discretion, and to then impose an administrative fee on the subcontractor for the service. 16.Not requiring at each stage of completed work (or shipment of materials), the Prime or Owner’s signature confirming acceptance or receipt. 17.Failing to be aware of and timely comply with all written notices and requirements such as, (Notice of Delays, Changed Conditions, Request For Extensions, Default by Prime/Owner, Request for Mediation, etc.). 18.Failing to comply with statutory deadlines and statutory notice requirements for liens, retainage, etc.; and not pursuing enforcement of valid claims, debts or entitlements. 19.Not insisting than any amendments or modifications of contract or subcontract be submitted in writing or to confirm same in writing before doing the work. 20. Failing to establish and maintain mechanisms/procedures to verify prime or owner’s receipt of written notice, example: faxed notice-receipt verified by print out; certified letters with return receipt; signed copy confirm-ing receipt of notice. 21.Failing to insist that language to be included in subcontract be extended to subcontractor the same late payment interest given by statute to the Prime contractor on governmental projects. And, where a Prime insists on making the subcontractor’s payment dependent upon Prime’s receipt of payment from the governmental or private owner, the subcontractor should insist the following or similar language be inserted at the end of such payment due clause of subcontract with Prime. “Except, however, in the event a dispute arises between Prime and Owner regarding payment, change orders, changed conditions or delays, and such dispute results in or causes a delay in the Prime’s payment to the subcontractor in excess of forty-five (45) days from the date subcontractor’s invoice or billing to Prime, payment shall be due on or before the expiration of such forty-fifth (45th) day. Failure of Prime to comply herewith shall constitute breach entitling the prevailing subcontractor to attorneys fees”. 22.Failing to maintain a daily log of work done, hours worked and by whom, with time value and performance cost (equipment rental, insurance, etc.) accurately recorded or tracked (especially once a delay or changed condition occurs). 23.Failing on a large or extensive project to insert into contract or subcontract, language creating Prime or Owner liability for delay of Notice to Proceed beyond a pre-designated date with accompanying reliance on breach language. 24.Failing to obtain written acceptance of work material where contract required an agreement for substituted work or material. 25.Failing to have an attorney review all contracts before signing; and not making it a practice of adding one percent (1%) to each bid as a set aside for attorney fees. Source: Beverly Landers & Associates
Page 24 What is a Non-Disclosure Agreement? NDA—Confidentiality agreements, also known as Non-Disclosure Agreements ("NDA"), are designed to protect crucial and commercially sensitive business information, for example, manufacturing processes, secret recipes, customer lists, know-how, ideas, business plans and technical data An NDA is a legally binding contract that requires parties to keep confidentiality for a defined period of time. ... As these agreements play such a vital role in protecting the future of a company, it's important that you take the construction of the clauses in an NDA seriously. NDAs protect sensitive information. By signing an NDA, participants promise to not divulge or release information shared with them by the other people involved. ... The type of information covered by an NDA is virtually unlimited. In fact, any knowledge exchanged between those involved can be considered confidential. And while every non-disclosure agreement is as unique as the parties and the agreement involved, terms of 1 – 10 years are standard, with the duration of confidentiality lasting indefinitely on trade secrets and as long as possible (or as is necessary) for other forms of IP. The name of the product, company and details of the sale must be kept by anyone involved in the process. A valid and completely binding NDA may be drafted by an experienced lawyer versed in contractual agreements. NDAs should never be used to prevent people from speaking about unlawful or potentially criminal activity. However, when it comes to protecting your innovations and intellectual property, NDAs are vital in preventing others from sharing your business ideas and methods with potential competitors
Page 25 What Risks are Associated with Signing a Non-Disclosure Agreement? Non-disclosure agreements (NDA) are oŌen used in the technology world as a form of legal control. Many organizaƟons even exchange NDAs amongst themselves; however, an NDA is never risk-free. When looking at an NDA from the perspecƟve of an organizaƟon that is asked to sign an NDA that favors another party, that organizaƟon is being asked to agree to the following: ·Agree that another organization is giving them some sort of sensitive information ·Agree that they won’t disclose that sensitive information to unauthorized people ·Agree that they are not going to use that sensitive information in their organization without authority Although these stipulations may appear to be cut-and-dry, they are not. These conditions can often be hard to comply with, regardless of the size of your organization, and it is typically recommended that an organization who has been asked to sign an NDA seek the advice of legal counsel. In most cases, legal counsel will be able to assist you in negotiating the terms of an NDA to avoid any potential breaches of contract and reduce the risks of signing an NDA. What is the Risk Associated with A Non -Disclosure Agreement? Many NDAs have a clause that defines the amount of Ɵme that you are not to disclose the sensiƟve informaƟon. If an organizaƟon asks that you won’t disclose their informaƟon forever, that places you at a greater risk of violaƟng the NDA. You might instead offer that you would be willing to sign a limited NDA, and request that the obligaƟon for disclosure be only six months. You might also include a clause that limits your liability so that you aren’t exposed to unlimited liability if you breach the NDA. UlƟmately, before you agree to sign an NDA, we recommend that you pause and think carefully about it, seek legal counsel, and think about how you can negoƟate a narrower scope for various obligaƟons. Source: Google
U.S. OccupaƟonal Safety and Health AdministraƟon Inspect Workplaces Every year, the U.S. OccupaƟonal Safety and Health AdministraƟon (OSHA) inspects workplaces around the country for safety and occupaƟonal hazards. In 2019 alone, OSHA conducted 33,393 inspecƟons – more than half of which were un-program inspecƟons. There are six reasons OSHA might come knocking on the door. They are (in order of priority): 1. Imminent danger situaƟons 2. severe injuries and illnesses 3. worker complaints 4. referrals 5. targeted inspecƟons and 6. follow-up inspecƟons OSHA determines which workplaces are the most hazardous by using the Days Away, Restricted or Transferred (DART) rate, a measurement of workplace injuries and illnesses that result in Ɵme away from work, restricted job roles or permanent transfers to new posiƟons. Companies with a rate of seven or higher are immediately listed on OSHA’s inspecƟon list. To calculate the company’s DART rate using this formula: (N/EH) x 200,000, where “N” is the number of cases involving days away from work, restricted work acƟvity or job transfers due to an incident and “EH” is the total number of hours worked by all employees in the calendar year. During an inspecƟon, OSHA’s compliance safety and health officers scruƟnize nearly every component of a company’s health and safety programs, including the working condiƟons, wriƩen policies and procedures, employee trainings, record keeping requirements, documentaƟon of rouƟne safety inspecƟons and more. When companies are not well prepared, an invesƟgaƟon can result in heŌy fines and penalƟes. To keep the company off OSHA’s list, here are four Ɵps to help prepare for an OSHA inspecƟon: Educate the team. It’s not uncommon for OSHA compliance safety and health officers to hold interviews with employees during an inspecƟon, so it’s important that every employee understands what the process might look like. Some insurance companies provide free consultaƟons on OSHA preparedness and can send a representaƟve to train managers and team members who might be involved in the inspecƟon. Be sure to discuss this possibility with the company’s broker. Assign an inspecƟon oversight commiƩee. Gather a group of employees who will be responsible for escorƟng the inspector around the worksite. These team members should be fully veƩed on the company’s safety procedures. For example, it’s important that they make sure records are easily accessible during an inspecƟon, coordinate interviews with employees if the inspector asks, take notes and photographs during the inspecƟon to note any citaƟons that will need to be corrected, among other things. Get paperwork in order. OSHA inspectors will request company records of all workrelated injuries and illnesses. Make sure OSHA 300 logs are organized and updated regularly – well before an inspecƟon is even suspected. Train employees on how to log incidents with accurate and detailed informaƟon in case inspectors have any quesƟons about an incident. Page 26
OSHA InspecƟon StaƟsƟcs FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Total InspecƟons 36,163** 35,820 31,948 32,408 32,023 33,393 Total Programmed InspecƟons 19,222 16,527 12,731 14,377 13,956 14,900 Total Un programmed InspecƟons 16,941 19,293 19,217 18,031 18,067 18,493 Fatality/Catastrophe InspecƟons 850 912 890 837 941 919 Complaints InspecƟon 9,570 9,037 8,870 8,249 7,489 7,391 Referrals* 3,829 6,569 6,691 6,286 6,463 6,718 Other Unprogrammed InspecƟons 2,525 3,686 2,766 2,659 3,174 3,465 Page 27 * 2020 and 2021 Stats have not been released Source: Parker Rains - Senior Vice President, Fisher Brown BoƩrell Insurance; and OSHA There were 4,764 fatal work injuries recorded in the United States in 2020, a 10.7-percent decrease from 5,333 in 2019. Key Takeaways from 2021 Workplace Injury Statistics StaƟsƟcs are numbers, but they offer much more than a look at how many people got injured or where. They invite us to look at trends and take a deeper look at their own risk management in a strategic aƩempt to prevent future incidents. So what can we learn from the 2021 staƟsƟcs? ·Roofers have an incredibly high fatality rate, and OSHA’s fall protecƟon standards make the list of most commonly cited standards twice. Now is a great Ɵme to double-check your fall protecƟon program: do you have the equipment needed and does it fit every team member? does everyone have the training needed to idenƟfy risks and work safely at heights? ·Carrying heavy objects is an incredibly common way to get injured. If your TRIR and LTRIR have plateaued, consider manual handling training for workers. Ergonomic injuries can seem small and go unreported, but one wrong move can turn pain point into a full-blown recordable and compensable injury. Injuries and fataliƟes related to driving on are on the rise. Everyone has a role to play in keeping roads and worksites safe. Consider running safe driving toolbox talks to reiterate driving skills and remind workers of your policies on distracted driving. Managing the many sides of safety can be tough. Safesite can help you organize and deploy your safety program. Check out the list of safety acƟons you can complete in under two minutes with the Safesite app.
Page 28 When most people think of fraud, things like email viruses, phone scams, and stolen credit card information come to mind. While most businesses have implemented safeguards to prevent and detect these external threats, many business owners overlook the potential for occupational fraud — that is, fraud committed internally. According to a 2018 global study by the Association of Certified Fraud Examiners (ACFE), the construction industry is the ninth most affected industry when it comes to occupational fraud. Luckily, there are ways to spot potential threats and mitigate the risk of this underestimated crime. Understanding Occupational Fraud Occupational fraud involves the use of one’s occupation for the deliberate misuse of an organization’s resources or assets with the goal of personal gain. This includes misconduct by employees, management, and even owners. Regardless of the perpetrator, the activity is almost always secretive, policies are usually violated, and the activity is committed for financial gain. According to the ACFE, fraud is more likely to happen at the employee level than at the executive level. However, the dollar value associated with fraud significantly increases with the perpetrator’s seniority. Criminal motives are typically the result of stressors, such as illness, excessive debt, or a spouse losing their job. This financial or emotional pressure mixed with the opportunity to commit the crime often leads to the rationalization that the company can “afford” the loss. This “fraud triangle” model is used to illustrate the possible factors that drive someone to justify and commit the crime. Common Fraud Schemes According to the ACFE, the most common fraud schemes within construction include corruption (42%), followed by billing (37%), and financial statement fraud and noncash schemes (tied at 23%). Corruption is a general term covering things like kickbacks, straw vendors, fictitious suppliers, bribery, bid-rigging, and conflicts of interest. Billing schemes include inflated costs on invoices, invoices for nonexistent projects, or invoices for labor performed on personal projects. Accounts payable manipulation, check and payment tampering, fake or manipulated PDF documents, and cyber security are also frequent contenders. Identifying Fraud There are certain behavioral trends that typically accompany occupational fraud. Unexplainable purchases of luxury items such as cars and extravagant vacations could point to someone living beyond their means. Employees that foster unusually close relationships with vendors or customers can also be cause for concern, especially if the employee safeguards information or becomes secretive about the account. Employees exhibiting a “wheeler-dealer” attitude that allows them to work outside of routine procedures can often abuse power and trust. Employees that do not take vacation or relinquish duties can also indicate suspicious activity. Among other things, being aware of these red flags and changes in behavior can help identify potential misconduct and stop perpetrators early on.
Page 29 Preventing Fraud Creating a robust code of conduct and proactively enforcing internal controls can help strengthen security and mitigate major risks of loss. This doesn’t have to mean hiring more personnel, which can often be cost prohibitive. There are plenty of effective checks and balances that contractors can implement to minimize the risk and impact of fraud: · Strong code of conduct and tone at the top. Frequently monitoring data for sudden changes or disparities in financials and bank statements ā · Enforcing job rotation and mandatory vacation to ensure no single employee has consistent power over a particular function ā · Frequent review of expense reimbursement and budget to actual reports to discourage cost manipulation ā · Conducting internal fraud training and creating a confidential hotline for employees to report suspicious behavior ā · Surprise audits to deter employees from manipulating systems or controlls · ā External audits of financial reporting and internal controls to monitor and ensure segregation of duties (especially the purchasing and procurement process) Even when fraud is caught, fear of bad publicity and costly legal fees often keep the crime out of court. Many business owners prefer private settlements and internal discipline to minimize cost and time away from the business. However, since many repeat offenders go unprosecuted, it’s critical to take legal action in order to alert future employers of an employee’s criminal record. With these tips for understanding, identifying, and preventing occupational fraud, owners and stakeholders can rest assured they are being proactive in mitigating the risk for their business.
ConstrucƟon Terminologies You Should Know! Contractor -- Is an individual with experience and educaƟon capable of interpreƟng and analyzing a set of plans and specificaƟons for a project, esƟmaƟng the quanƟƟes and cost of all labor, materials, equipment, overhead and profit necessary to construct the project in a given length of Ɵme for a set contract price. Owner -- Is the party that owns and finances the project either from own resources or from external financing sources. The owner may be the public or private sector. Pubic Owner -- Ranges from agencies of the federal government to state, county and municipal enƟƟes, e.g…boards, commissions and authoriƟes. Public projects are paid by appropriaƟons, bonds, tax levies or other forms of financing and are built to meet some defined public need. Private Owner -- May be an individual, partnership, corporaƟon or a combinaƟon. Some private owners have the structure built for their own use, e.g…business, habitaƟon or other types of structures. However, most private owners do not intend to become the end users. In most cases, the structure is to be sold, leased or rented to others. Architect or Engineer -- Is known as the design professional who is a part of the firm that designed the project. Prime Contractor -- Also known as the general contractor, is the business firm that is in contract with the owner for the construcƟon of the project, whether in its enƟrety or for some specialized porƟon. The prime contractor brings together all of the diverse elements and inputs of the construcƟon process into a single coordinated effort. The primary funcƟon of the prime contractor is close management control of the construcƟon process. Subcontractor -- Is a firm that engages in a specialty trade to execute a parƟcular porƟon of the overall construcƟon project for a general contractor. Subcontractors are usually able to perform their work specialty much more quickly and at a lesser cost than the general contractor. ConstrucƟon Management – There is no universally accepted definiƟon for construcƟon management. It is a term that means different things to different people. In what might be considered as the typical arrangement, the owner contracts with an architect-engineer for design services and with a construcƟon manager for specified professional services, i.e… advising and recommending construcƟon alternaƟves; furnishing informaƟon concerning cost, labor, and material availability; scheduling and managing the project from start to finish. Page 30
CITY OF AUSTIN MAYOR & COUNCIL MEMBERS Steve Adler, Mayor Alison Alter, Council Member, Mayor Pro-Tem, District 10 Natasha Harper-Madison, Council Member District 1 Vanessa Fuentes, Council Member District 2 Sabino “Pio” Renteria, Council Member District 3 Jose “Chita” Vela, Council Member District 4 Ann Kitchen, Council Member District 5 Mackenzie Kelley, Council Member District 6 Leslie Pool, Council Member District 7 Paige Ellis, Council Member District 8 Cathy Tovo, Council Member, District 9 OFFICE OF THE CITY MANAGER Spencer Cronk, City Manager Rodney Gonzales, Assistant City Manager and overseer of Small Minority Business Resources Department COLLABORATIVE PARTNERS City of Austin Small and Minority Business Resources Department City of Austin Austin Energy Business Development & Contract Compliance Division City of Austin Capital Contracting Office City of Austin MBE/WBE & Small Business Advisory Committee Asian Contractor Trade Association US Hispanic Contractors Association de Austin Associated General Contractors of America, Austin Building Branch Associated Builders & Contractors, Central Texas Chapter Travis County, HUB Office Capital Metropolitan Transportation Authority DBE Program Texas Facilities Commission, HUB Office Austin Independent School District HUB Office Austin Community College, HUB Office Business Resource Consultants Publisher of the Austin Area Black Contractors Association’s TOOL BOX TIPS GUIDE© Revised: August 2008 | July 2009 | August 2010 | February 2011 February 2012 | February 2013 | January 2014 | January 2015 | June 2015 January 2016 | June 2017 | January 2018 | January 2019 | April 2020 | January 2021| January/February 2022
Help Grow Your Business ô Get MBE/WBE/DBE CerƟfied with the City of AusƟn! The Small and Minority Business Resources Department (SMBR) is looking for a few good Contractors! So, get MBE certified and learn how to take advantage of the many construction opportunities offered by the City of Austin! Grow Your Business! Get CerƟfied as a Minority Business Enterprise with the City of Austin Take Advantage of the many opportunities offered by the City in construction procurement Sign-up for the many services offered by the Austin Black Contractors Association to assist you with these efforts Start Growing your business today! Request a Certification Application Packet or retrieve from SMBR’s website. Upon completion, e-mail, or mail via postal service or drop off application to: City of Austin Small and Minority Business Resources Department Attention: Certification Division 811 Barton Springs Road, Suite 805 | Austin, TX 78704