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THE THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION ASA’s Register Online! March 3-5, 2016 Miami, FL See page 14 WWW.ASAONLINE.COM DECEMBER 2015 TM Construction Trends The Flight of the Managers— When a Compensation Problem is NOT a Compensation Problem Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Driving Building for the Future— Addressing Construction Industry Workforce Issues SPECIAL FEATURE: Drones in the Construction Industry Commercial Construction Marketing: How Do You Measure Up? On-Page SEO Subcontractors and the ACA: Preparing for 2016 Top Trends in Merchant Processing Legally Speaking: Do You Want to Be Paid for Extra Work?

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TH

E

THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION

ASArsquos

Register Online

March 3-5 2016 Miami FL bull See page 14

WWWASAONLINECOM DECEMBER 2015

TM

Construction Trends

The Flight of the ManagersmdashWhen a Compensation Problem is NOT a Compensation Problem

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Driving

Building for the FuturemdashAddressing Construction Industry Workforce Issues

SPECIAL FEATURE Drones in the Construction Industry

Commercial Construction Marketing How Do You Measure Up On-Page SEO

Subcontractors and the ACA Preparing for 2016

Top Trends in Merchant Processing

Legally Speaking Do You Want to Be Paid for Extra Work

Get Paid Faster

wwwtexturacorpcom 866-839-8872

EPPtradeTexturarsquos Early Payment Programtrade (EPPtrade) allows general contractors to offer subcontractors optional earlier payment With EPP subcontractors can get paid about 5 days after invoice approval ndash 30 to 90 days sooner than normal payment timing ndash in exchange for a modest fee

EPP works by leveraging the financial strength of the general contractorrsquos balance sheet and using Texturarsquos CPMreg solution to facilitate early payment to subcontractors through Texturarsquos financial partner Greensill Capital

Cash Flow Faster payments Predictable timing Non-recourse funds

Business Reduce business ownerrsquos risk Offer more competitive bids Stronger relationship with general contractors

Financials Reduce reliance on high-cost working capital Strengthen balance sheet Ability to fund growth expansion

TH

E

ASArsquosASArsquos December 2015

Quick Reference

ASAFASA CALENDAR 32

COMING UP 32

EDITORIAL PURPOSEThe Contractorrsquos Compass is the monthly educational journal of the Foundation of the American Subcontractors Association Inc (FASA) and part of FASArsquos Contractorsrsquo Knowledge Network The journal is designed to equip construction subcontractors with the ideas tools and tactics they need to thrive

The views expressed by contributors to The Contractorrsquos Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association Inc (ASA)

EDITORIAL STAFFEditor-in-Chief Marc Ramsey

MISSIONFASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research education and public awareness Through its Contractorsrsquo Knowledge Network FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry FASA provides subcontractors and specialty trade contractors with the tools techniques practices attitude and confidence they need to thrive and excel in the construction industry

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

SUBSCRIPTIONSThe Contractorrsquos Compass is a free monthly publication for ASA members and nonmembers Subscribe online at wwwcontractorsknowledgedepotcom

ADVERTISINGInterested in advertising Contact Tony Kozak at (716) 844-8174 or advertisingasa-hqcom

EDITORIAL SUBMISSIONSContributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article Feature articles should be no longer than 1500 words and comply with The Associated Press style guidelines Article submissions become the property of ASA and FASA The editor reserves the right to edit all accepted editorial submissions for length style clarity spelling and punctuation Send abstracts and submissions for The Contractorrsquos Compass to communicationsasa-hqcom

ABOUT ASAASA is a nonprofit trade association of union and non-union subcontractors and suppliers Through a nationwide network of local and state ASA associations members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team For more information about becoming an ASA member contact ASA at 1004 Duke St Alexandria VA 22314-3588 (703) 684-3450 membershipasa-hqcom or visit the ASA Web site wwwasaonlinecom

LAYOUTAngela M Roe angelamroegmailcom

copy 2015 Foundation of the American Subcontractors Association Inc

FeaturesTM

Departments

CONTRACTOR COMMUNITY 4

CONSTRUCTION IN THE COURTS 8

LEGALLY SPEAKING 30Do You Want to Be Paid for Extra Workby Ssara M Thompson

Get Paid Faster

wwwtexturacorpcom 866-839-8872

EPPtradeTexturarsquos Early Payment Programtrade (EPPtrade) allows general contractors to offer subcontractors optional earlier payment With EPP subcontractors can get paid about 5 days after invoice approval ndash 30 to 90 days sooner than normal payment timing ndash in exchange for a modest fee

EPP works by leveraging the financial strength of the general contractorrsquos balance sheet and using Texturarsquos CPMreg solution to facilitate early payment to subcontractors through Texturarsquos financial partner Greensill Capital

Cash Flow Faster payments Predictable timing Non-recourse funds

Business Reduce business ownerrsquos risk Offer more competitive bids Stronger relationship with general contractors

Financials Reduce reliance on high-cost working capital Strengthen balance sheet Ability to fund growth expansion

The Flight of the ManagersmdashWhen a CompensationProblem is NOT a Compensation Problem 10by Gregg Schoppman

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Driving 12by Michael Ahern

Building for the Future mdashAddressing Construction Industry Workforce Issues 16by Laura Cataldo

SPECIAL FEATURE Drones in the Construction Industry 18

Commercial Construction Marketing How Do You Measure Up On-Page CEO 22by Jason Myers

Subcontractors and the ACA Preparing for 2016 24by KC Cannon Jr

Top Trends in Merchant Processing 26by Kimberly Coley

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 3

Contractor Community

ENR Contractor Business Quarterly Profiles ASA President Tish Barker

In the Fall 2015 edition of ENR Contractor Business Quarterly 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker Haley-Greer Inc talks about what itrsquos like to lead the Dallas-based glass and curtain wall business what itrsquos like to be a woman ldquorunning a company in the male-dominated construction industryrdquo and what it means to her to lead a national organization like ASA

When she first became vice president and chief financial officer of Haley-Greer Inc in 1995 Barker proved her capability mdash and leadership ability mdash when she took and ldquoacedrdquo a state glazierrsquos licensing test Over the next two decades Barker has led Haley-Greer to become ldquoone of the most admired subcontractors in Texas for its complex glass workrdquo

As for being a woman in a male-dominated industry she said ldquoI just never thought of myself as any different from anyone else I think a woman is just a person thatrsquos qualified to do the workrdquo

Barker said shersquos ldquopassionaterdquo about ASA ldquoI think they do such a great job of preparing subcontractors of all sizes to do better work and to have a better business and be more successfulrdquo she said ldquoAnd if theyrsquore more successful then I always tell the general contractors lsquoThat means that your job is going to be more profitable itrsquos going to be done more timely and those people are going to be able to reach your visionrsquordquo

Read the full profile via the ASA Web site

President Obama Signs Subcontractor Payment Protections

On Nov 25 President Obama signed into law two key surety bond provisions as part of the National Defense Authorization Act of 2016 One provision requires individual sureties to pledge known and reliable assets to back their bonds and to relinquish control of those pledged assets to the federal government The second provision increases the bond guarantee from 70 percent to 90 percent to sureties in the bond guarantee program sponsored by the US Small Business Administration Subcontractors and suppliers on federal public construction projects have no control over the prime contractorrsquos choice of security provided to the federal government but they suffer the most harm financially if the provided security proves illusory ldquoUnder the new law subcontractors and suppliers on federal construction projects will know that adequate and reliable security is in place to assure that they will be paidrdquo said ASA Chief Advocacy Officer E Colette Nelson There will be either a corporate surety bond from a company approved by the US Treasury or assets from an individual surety with readily identifiable value pledged and relinquished to the federal government while the construction project is ongoing All persons and entities providing collateral to the federal government will now have to play by the same rules The SBA Surety Bond Guarantee Program was established to ensure that small and emerging contractors who do not qualify for surety bonds in the standard market have access to the bonds they need to participate in the federal construction market The sureties bring such contractors to the SBA and with the SBArsquos guarantee they bond such

contractors The new law will help more small contractors participate in federal projects and grow their businesses by giving incentives to more surety companies and bond producers to participate in the SBA program The new law will take effect one year after enactment to allow the Federal Acquisition Regulatory Council and the US Small Business Administration time to develop and publish a regulation

ASA NASBP and SFAA Say Surety Bonds Are Best Practice on P3s

ASA joined The Surety amp Fidelity Association of America and the National Association of Surety Bond Producers in a letter to the Federal Highway Administration contending that the US Department of Transportation should include performance and payment bonds as a best practice on public-private partnerships in guides it is preparing for state and local governments

ldquoThere are sound well-recognized public policy reasons for requiring performance and payment security for P3s and the FHWArsquos guide should reflect thatrdquo the associations wrote The end result of a P3 is a project that provides a public service or facility The risk to the public entity is increased in a P3 since the public entity is responsible to the taxpayers to deliver a public service or facility but the public entity does not choose or control the construction contractor and could suffer financial loss if the private partner defaults The associations concluded ldquoThe payment protection available for subcontractors suppliers and workers and the contract completion protection for public entities should not be compromised and reduced because some financiers and concessionaires are comfortable with less securityrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S4

The three associations supported DOTrsquos effort to provide technical assistance tools including model contract provisions to state and local governments undertaking P3 projects FHWA is developing the tools as part of its Build American Transportation Investment Center a one-stop-shop for state and local governments public and private developers and investors seeking to utilize innovative financing and P3s to deliver transportation projects BATIC was authorized by a Presidential Memorandum issued on July 17 2014

ASA and Surety Industry Associations Update P3 Guide

Construction of projects for public use through public-private partnerships continues to increase at all levels of government including at the state and local levels Many of the P3 programs authorized by the states however provide no payment protections for subcontractors and suppliers on P3 projects on which mechanicrsquos liens and the requirement for payment bonds most likely do not apply

ASA in collaboration with the National Association of Surety Bond Producers and The Surety amp Fidelity Association of America has reviewed the state laws authorizing construction projects to be financed by P3s and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds The revised guide published by ASA NASBP and SFAA ldquoPublic-Private Partnership Laws in the States including Surety Bond Requirementsrdquo (2015 Edition) will help subcontractors determine whether they have payment protections before they bid on a P3 project

ldquoMany people think that P3s are used only for expensive horizontal construction projects such as major bridge and highway construction but P3s are increasingly being used for vertical construction projects toordquo said ASA Chief Advocacy Officer E Colette Nelson ldquoThey are being used to construct public housing to renovate or construct educational facilities and to build or renovate public buildings and public parking facilitiesrdquo

During 2015 the District of Columbia and Georgia enacted new laws authorizing public-private partnerships both laws include requirements that P3 agreements include requirements for surety bonding Ohio clarified its 2014 law to assure that its director of transportation will require a performance and payment bond on the construction portions of the project

The chart also adds entries for a new Alabama law expanding the authorization of P3s for transportation projects a new Arkansas law that authorizes the use of P3s for unpaved state roads a clarification of a 2014 Maryland law a Virginia law that authorizes P3s for solar energy projects and another Virginia law that authorizes the use of P3s in an interstate transportation compact for Interstate 73

Nelson reminded ASA members to obtain a copy of and review the prime contractorrsquos surety bond before signing a subcontract and certainly before starting work Once a subcontractor obtains a copy of the bond it can expeditiously check the validity of bonds by confirming that the surety is licensed in the jurisdiction of the project and that the bond has been authorized by the surety

NASBP provides step-by-step guidance in its publication Always Verify Your Bond ASA supports its chapters in their pursuits of state legislation assuring payment protections for subcontractors on P3 projects in many ways including through its Subcontractor Payment Assurance on Public-Private Partnerships in Your State A Legislative Work Kit

ASA Tells OSHA Follow the Law

In comments filed on Oct 26 ASA called on the Occupational Safety and Health Administration to follow the clear language of its authorizing statute with respect to employer recordkeeping

ASA Chief Advocacy Officer E Colette Nelsonrsquos letter was sent in response to OSHArsquos request for comment on a proposed rule on the ldquoClarification of Employerrsquos Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illnessrdquo

OSHA issued its proposal in response to a 2012 ruling by the US Court of Appeals for the DC Circuit in AKM LLC dba Volks Constructors v Secretary of Labor In that case the court ruled that the Occupational Safety and Health Act does not allow the agency to cite an employer for a recordkeeping violation more than six months after the employer failed to maintain the required record ASA suggested that in its proposed rule OSHA is attempting to circumvent the court ruling by specifying that an employerrsquos duty to record an injury or illness continues for as long as the employer is required to keep the record of the recordable injury or illness That is according to OSHA the employerrsquos duty does not expire just because the employer fails to create the necessary records when first required to do so

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 5

Nelson pointed out that the OSH Act states ldquoNo citation may be issued under this section after the expiration of six months following the occurrence of any violationrdquo Nelson called on OSHA to withdraw its proposed rule

ASA and Construction Coalition Enter OSHA Dialogue on PELs

ASA in collaboration with 24 other construction industry associations submitted comments on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits in response to a Request for Information from the Occupational Safety and Health Administration

The Construction Industry Safety Coalition told OSHA ldquoTechnological and economic feasibility are issues of paramount importance to the construction industry Control measures to protect employees from health hazards in the general industry environment do not always work in the construction environment where work practices control measures and environmental conditions are highly variablerdquo

The coalition urged OSHA to follow key principles includingbull Any modeling used by OSHA

to buttress its technological feasibility analysis cannot and should not take the place of ldquoon-the-groundrdquo data gathering by the agency

bull Any model that OSHA uses to enhance its technological feasibility analysis must be validated before use

bull Any modeling used to demonstrate that a proposal is technologically feasible must be presented to stakeholders as part of a proposed rule and stakeholders given an opportunity to comment on it

bull OSHA must assess costs and economic feasibility on small entities

bull OSHA should analyze economic feasibility at a micro-level

In addition the coalition reiterated that OSHA must continue to consider construction separately from general industry and maritime given the unique and variable conditions on construction worksites OSHArsquos PELs which are regulatory limits on the amount or concentration of a substance in the air are intended to protect workers against the adverse health effects of exposure to hazardous substances Ninety-five percent of OSHArsquos current PELs which cover fewer than 500 chemicals have not been updated since their adoption in 1971

ASA Calls for Regulatory Accountability

In a letter to the US Senate ASA called for support of S 2006 the Regulatory Accountability Act of 2015 Introduced by Sen Rob Portman (R-OH) Sen Susan Collins (R-ME) Sen Angus King (I-ME) and four other original co-sponsors S 2006 modernizes the Administrative Procedure Actrsquos rulemaking process which has remained unchanged for nearly 70 years

The bill would bring into the 21st century the rulemaking process now used by agencies to write multi-billion-dollar rules bybull Increasing public participation

in shaping the most costly regulations before they are proposed

bull Requiring that agencies must choose the least costly option unless they can demonstrate that public health safety or welfare requires a more costly requirement

bull Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act

bull Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well tested and reviewed

bull Providing for a more rigorous test in legal challenges for those regulations that would have the most impact

Help ASA Fund Precedent-Setting Briefs with Tax-Deductible Contribution

As 2015 draws to a close and you consider how yoursquoll direct your year-end charitable giving consider how much more you can do to help construction subcontractors by sending a tax-deductible year-end gift to the Subcontractors Legal Research Fund of the Foundation of ASA

ASA finances its ldquofriend-of-the-courtrdquo briefs entirely by voluntary contributions to its Subcontractors Legal Defense Fund and FASArsquos SLRF So as you consider the size of your year-end gift please think about the magnitude and the importance of the challenges that subcontractors face every day mdash issues like slow or no final payment pay-if-paid clauses retainage a requirement to keep working even in the face of nonpayment broad-form indemnity misleading insurance coverages and more

As it looks ahead to the many precedent-setting court cases that impact construction subcontractors ASA has to calculate how much funding is available to fund ldquofriend of the courtrdquo briefs on each critical issue It will help so very much if you can send your year-end gift by Dec 31 FASA is a 501(c)(3) education foundation contributions to FASA

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S6

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Get Paid Faster

wwwtexturacorpcom 866-839-8872

EPPtradeTexturarsquos Early Payment Programtrade (EPPtrade) allows general contractors to offer subcontractors optional earlier payment With EPP subcontractors can get paid about 5 days after invoice approval ndash 30 to 90 days sooner than normal payment timing ndash in exchange for a modest fee

EPP works by leveraging the financial strength of the general contractorrsquos balance sheet and using Texturarsquos CPMreg solution to facilitate early payment to subcontractors through Texturarsquos financial partner Greensill Capital

Cash Flow Faster payments Predictable timing Non-recourse funds

Business Reduce business ownerrsquos risk Offer more competitive bids Stronger relationship with general contractors

Financials Reduce reliance on high-cost working capital Strengthen balance sheet Ability to fund growth expansion

TH

E

ASArsquosASArsquos December 2015

Quick Reference

ASAFASA CALENDAR 32

COMING UP 32

EDITORIAL PURPOSEThe Contractorrsquos Compass is the monthly educational journal of the Foundation of the American Subcontractors Association Inc (FASA) and part of FASArsquos Contractorsrsquo Knowledge Network The journal is designed to equip construction subcontractors with the ideas tools and tactics they need to thrive

The views expressed by contributors to The Contractorrsquos Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association Inc (ASA)

EDITORIAL STAFFEditor-in-Chief Marc Ramsey

MISSIONFASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research education and public awareness Through its Contractorsrsquo Knowledge Network FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry FASA provides subcontractors and specialty trade contractors with the tools techniques practices attitude and confidence they need to thrive and excel in the construction industry

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

SUBSCRIPTIONSThe Contractorrsquos Compass is a free monthly publication for ASA members and nonmembers Subscribe online at wwwcontractorsknowledgedepotcom

ADVERTISINGInterested in advertising Contact Tony Kozak at (716) 844-8174 or advertisingasa-hqcom

EDITORIAL SUBMISSIONSContributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article Feature articles should be no longer than 1500 words and comply with The Associated Press style guidelines Article submissions become the property of ASA and FASA The editor reserves the right to edit all accepted editorial submissions for length style clarity spelling and punctuation Send abstracts and submissions for The Contractorrsquos Compass to communicationsasa-hqcom

ABOUT ASAASA is a nonprofit trade association of union and non-union subcontractors and suppliers Through a nationwide network of local and state ASA associations members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team For more information about becoming an ASA member contact ASA at 1004 Duke St Alexandria VA 22314-3588 (703) 684-3450 membershipasa-hqcom or visit the ASA Web site wwwasaonlinecom

LAYOUTAngela M Roe angelamroegmailcom

copy 2015 Foundation of the American Subcontractors Association Inc

FeaturesTM

Departments

CONTRACTOR COMMUNITY 4

CONSTRUCTION IN THE COURTS 8

LEGALLY SPEAKING 30Do You Want to Be Paid for Extra Workby Ssara M Thompson

Get Paid Faster

wwwtexturacorpcom 866-839-8872

EPPtradeTexturarsquos Early Payment Programtrade (EPPtrade) allows general contractors to offer subcontractors optional earlier payment With EPP subcontractors can get paid about 5 days after invoice approval ndash 30 to 90 days sooner than normal payment timing ndash in exchange for a modest fee

EPP works by leveraging the financial strength of the general contractorrsquos balance sheet and using Texturarsquos CPMreg solution to facilitate early payment to subcontractors through Texturarsquos financial partner Greensill Capital

Cash Flow Faster payments Predictable timing Non-recourse funds

Business Reduce business ownerrsquos risk Offer more competitive bids Stronger relationship with general contractors

Financials Reduce reliance on high-cost working capital Strengthen balance sheet Ability to fund growth expansion

The Flight of the ManagersmdashWhen a CompensationProblem is NOT a Compensation Problem 10by Gregg Schoppman

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Driving 12by Michael Ahern

Building for the Future mdashAddressing Construction Industry Workforce Issues 16by Laura Cataldo

SPECIAL FEATURE Drones in the Construction Industry 18

Commercial Construction Marketing How Do You Measure Up On-Page CEO 22by Jason Myers

Subcontractors and the ACA Preparing for 2016 24by KC Cannon Jr

Top Trends in Merchant Processing 26by Kimberly Coley

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 3

Contractor Community

ENR Contractor Business Quarterly Profiles ASA President Tish Barker

In the Fall 2015 edition of ENR Contractor Business Quarterly 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker Haley-Greer Inc talks about what itrsquos like to lead the Dallas-based glass and curtain wall business what itrsquos like to be a woman ldquorunning a company in the male-dominated construction industryrdquo and what it means to her to lead a national organization like ASA

When she first became vice president and chief financial officer of Haley-Greer Inc in 1995 Barker proved her capability mdash and leadership ability mdash when she took and ldquoacedrdquo a state glazierrsquos licensing test Over the next two decades Barker has led Haley-Greer to become ldquoone of the most admired subcontractors in Texas for its complex glass workrdquo

As for being a woman in a male-dominated industry she said ldquoI just never thought of myself as any different from anyone else I think a woman is just a person thatrsquos qualified to do the workrdquo

Barker said shersquos ldquopassionaterdquo about ASA ldquoI think they do such a great job of preparing subcontractors of all sizes to do better work and to have a better business and be more successfulrdquo she said ldquoAnd if theyrsquore more successful then I always tell the general contractors lsquoThat means that your job is going to be more profitable itrsquos going to be done more timely and those people are going to be able to reach your visionrsquordquo

Read the full profile via the ASA Web site

President Obama Signs Subcontractor Payment Protections

On Nov 25 President Obama signed into law two key surety bond provisions as part of the National Defense Authorization Act of 2016 One provision requires individual sureties to pledge known and reliable assets to back their bonds and to relinquish control of those pledged assets to the federal government The second provision increases the bond guarantee from 70 percent to 90 percent to sureties in the bond guarantee program sponsored by the US Small Business Administration Subcontractors and suppliers on federal public construction projects have no control over the prime contractorrsquos choice of security provided to the federal government but they suffer the most harm financially if the provided security proves illusory ldquoUnder the new law subcontractors and suppliers on federal construction projects will know that adequate and reliable security is in place to assure that they will be paidrdquo said ASA Chief Advocacy Officer E Colette Nelson There will be either a corporate surety bond from a company approved by the US Treasury or assets from an individual surety with readily identifiable value pledged and relinquished to the federal government while the construction project is ongoing All persons and entities providing collateral to the federal government will now have to play by the same rules The SBA Surety Bond Guarantee Program was established to ensure that small and emerging contractors who do not qualify for surety bonds in the standard market have access to the bonds they need to participate in the federal construction market The sureties bring such contractors to the SBA and with the SBArsquos guarantee they bond such

contractors The new law will help more small contractors participate in federal projects and grow their businesses by giving incentives to more surety companies and bond producers to participate in the SBA program The new law will take effect one year after enactment to allow the Federal Acquisition Regulatory Council and the US Small Business Administration time to develop and publish a regulation

ASA NASBP and SFAA Say Surety Bonds Are Best Practice on P3s

ASA joined The Surety amp Fidelity Association of America and the National Association of Surety Bond Producers in a letter to the Federal Highway Administration contending that the US Department of Transportation should include performance and payment bonds as a best practice on public-private partnerships in guides it is preparing for state and local governments

ldquoThere are sound well-recognized public policy reasons for requiring performance and payment security for P3s and the FHWArsquos guide should reflect thatrdquo the associations wrote The end result of a P3 is a project that provides a public service or facility The risk to the public entity is increased in a P3 since the public entity is responsible to the taxpayers to deliver a public service or facility but the public entity does not choose or control the construction contractor and could suffer financial loss if the private partner defaults The associations concluded ldquoThe payment protection available for subcontractors suppliers and workers and the contract completion protection for public entities should not be compromised and reduced because some financiers and concessionaires are comfortable with less securityrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S4

The three associations supported DOTrsquos effort to provide technical assistance tools including model contract provisions to state and local governments undertaking P3 projects FHWA is developing the tools as part of its Build American Transportation Investment Center a one-stop-shop for state and local governments public and private developers and investors seeking to utilize innovative financing and P3s to deliver transportation projects BATIC was authorized by a Presidential Memorandum issued on July 17 2014

ASA and Surety Industry Associations Update P3 Guide

Construction of projects for public use through public-private partnerships continues to increase at all levels of government including at the state and local levels Many of the P3 programs authorized by the states however provide no payment protections for subcontractors and suppliers on P3 projects on which mechanicrsquos liens and the requirement for payment bonds most likely do not apply

ASA in collaboration with the National Association of Surety Bond Producers and The Surety amp Fidelity Association of America has reviewed the state laws authorizing construction projects to be financed by P3s and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds The revised guide published by ASA NASBP and SFAA ldquoPublic-Private Partnership Laws in the States including Surety Bond Requirementsrdquo (2015 Edition) will help subcontractors determine whether they have payment protections before they bid on a P3 project

ldquoMany people think that P3s are used only for expensive horizontal construction projects such as major bridge and highway construction but P3s are increasingly being used for vertical construction projects toordquo said ASA Chief Advocacy Officer E Colette Nelson ldquoThey are being used to construct public housing to renovate or construct educational facilities and to build or renovate public buildings and public parking facilitiesrdquo

During 2015 the District of Columbia and Georgia enacted new laws authorizing public-private partnerships both laws include requirements that P3 agreements include requirements for surety bonding Ohio clarified its 2014 law to assure that its director of transportation will require a performance and payment bond on the construction portions of the project

The chart also adds entries for a new Alabama law expanding the authorization of P3s for transportation projects a new Arkansas law that authorizes the use of P3s for unpaved state roads a clarification of a 2014 Maryland law a Virginia law that authorizes P3s for solar energy projects and another Virginia law that authorizes the use of P3s in an interstate transportation compact for Interstate 73

Nelson reminded ASA members to obtain a copy of and review the prime contractorrsquos surety bond before signing a subcontract and certainly before starting work Once a subcontractor obtains a copy of the bond it can expeditiously check the validity of bonds by confirming that the surety is licensed in the jurisdiction of the project and that the bond has been authorized by the surety

NASBP provides step-by-step guidance in its publication Always Verify Your Bond ASA supports its chapters in their pursuits of state legislation assuring payment protections for subcontractors on P3 projects in many ways including through its Subcontractor Payment Assurance on Public-Private Partnerships in Your State A Legislative Work Kit

ASA Tells OSHA Follow the Law

In comments filed on Oct 26 ASA called on the Occupational Safety and Health Administration to follow the clear language of its authorizing statute with respect to employer recordkeeping

ASA Chief Advocacy Officer E Colette Nelsonrsquos letter was sent in response to OSHArsquos request for comment on a proposed rule on the ldquoClarification of Employerrsquos Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illnessrdquo

OSHA issued its proposal in response to a 2012 ruling by the US Court of Appeals for the DC Circuit in AKM LLC dba Volks Constructors v Secretary of Labor In that case the court ruled that the Occupational Safety and Health Act does not allow the agency to cite an employer for a recordkeeping violation more than six months after the employer failed to maintain the required record ASA suggested that in its proposed rule OSHA is attempting to circumvent the court ruling by specifying that an employerrsquos duty to record an injury or illness continues for as long as the employer is required to keep the record of the recordable injury or illness That is according to OSHA the employerrsquos duty does not expire just because the employer fails to create the necessary records when first required to do so

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 5

Nelson pointed out that the OSH Act states ldquoNo citation may be issued under this section after the expiration of six months following the occurrence of any violationrdquo Nelson called on OSHA to withdraw its proposed rule

ASA and Construction Coalition Enter OSHA Dialogue on PELs

ASA in collaboration with 24 other construction industry associations submitted comments on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits in response to a Request for Information from the Occupational Safety and Health Administration

The Construction Industry Safety Coalition told OSHA ldquoTechnological and economic feasibility are issues of paramount importance to the construction industry Control measures to protect employees from health hazards in the general industry environment do not always work in the construction environment where work practices control measures and environmental conditions are highly variablerdquo

The coalition urged OSHA to follow key principles includingbull Any modeling used by OSHA

to buttress its technological feasibility analysis cannot and should not take the place of ldquoon-the-groundrdquo data gathering by the agency

bull Any model that OSHA uses to enhance its technological feasibility analysis must be validated before use

bull Any modeling used to demonstrate that a proposal is technologically feasible must be presented to stakeholders as part of a proposed rule and stakeholders given an opportunity to comment on it

bull OSHA must assess costs and economic feasibility on small entities

bull OSHA should analyze economic feasibility at a micro-level

In addition the coalition reiterated that OSHA must continue to consider construction separately from general industry and maritime given the unique and variable conditions on construction worksites OSHArsquos PELs which are regulatory limits on the amount or concentration of a substance in the air are intended to protect workers against the adverse health effects of exposure to hazardous substances Ninety-five percent of OSHArsquos current PELs which cover fewer than 500 chemicals have not been updated since their adoption in 1971

ASA Calls for Regulatory Accountability

In a letter to the US Senate ASA called for support of S 2006 the Regulatory Accountability Act of 2015 Introduced by Sen Rob Portman (R-OH) Sen Susan Collins (R-ME) Sen Angus King (I-ME) and four other original co-sponsors S 2006 modernizes the Administrative Procedure Actrsquos rulemaking process which has remained unchanged for nearly 70 years

The bill would bring into the 21st century the rulemaking process now used by agencies to write multi-billion-dollar rules bybull Increasing public participation

in shaping the most costly regulations before they are proposed

bull Requiring that agencies must choose the least costly option unless they can demonstrate that public health safety or welfare requires a more costly requirement

bull Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act

bull Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well tested and reviewed

bull Providing for a more rigorous test in legal challenges for those regulations that would have the most impact

Help ASA Fund Precedent-Setting Briefs with Tax-Deductible Contribution

As 2015 draws to a close and you consider how yoursquoll direct your year-end charitable giving consider how much more you can do to help construction subcontractors by sending a tax-deductible year-end gift to the Subcontractors Legal Research Fund of the Foundation of ASA

ASA finances its ldquofriend-of-the-courtrdquo briefs entirely by voluntary contributions to its Subcontractors Legal Defense Fund and FASArsquos SLRF So as you consider the size of your year-end gift please think about the magnitude and the importance of the challenges that subcontractors face every day mdash issues like slow or no final payment pay-if-paid clauses retainage a requirement to keep working even in the face of nonpayment broad-form indemnity misleading insurance coverages and more

As it looks ahead to the many precedent-setting court cases that impact construction subcontractors ASA has to calculate how much funding is available to fund ldquofriend of the courtrdquo briefs on each critical issue It will help so very much if you can send your year-end gift by Dec 31 FASA is a 501(c)(3) education foundation contributions to FASA

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S6

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TH

E

ASArsquosASArsquos December 2015

Quick Reference

ASAFASA CALENDAR 32

COMING UP 32

EDITORIAL PURPOSEThe Contractorrsquos Compass is the monthly educational journal of the Foundation of the American Subcontractors Association Inc (FASA) and part of FASArsquos Contractorsrsquo Knowledge Network The journal is designed to equip construction subcontractors with the ideas tools and tactics they need to thrive

The views expressed by contributors to The Contractorrsquos Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association Inc (ASA)

EDITORIAL STAFFEditor-in-Chief Marc Ramsey

MISSIONFASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research education and public awareness Through its Contractorsrsquo Knowledge Network FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry FASA provides subcontractors and specialty trade contractors with the tools techniques practices attitude and confidence they need to thrive and excel in the construction industry

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

SUBSCRIPTIONSThe Contractorrsquos Compass is a free monthly publication for ASA members and nonmembers Subscribe online at wwwcontractorsknowledgedepotcom

ADVERTISINGInterested in advertising Contact Tony Kozak at (716) 844-8174 or advertisingasa-hqcom

EDITORIAL SUBMISSIONSContributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article Feature articles should be no longer than 1500 words and comply with The Associated Press style guidelines Article submissions become the property of ASA and FASA The editor reserves the right to edit all accepted editorial submissions for length style clarity spelling and punctuation Send abstracts and submissions for The Contractorrsquos Compass to communicationsasa-hqcom

ABOUT ASAASA is a nonprofit trade association of union and non-union subcontractors and suppliers Through a nationwide network of local and state ASA associations members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team For more information about becoming an ASA member contact ASA at 1004 Duke St Alexandria VA 22314-3588 (703) 684-3450 membershipasa-hqcom or visit the ASA Web site wwwasaonlinecom

LAYOUTAngela M Roe angelamroegmailcom

copy 2015 Foundation of the American Subcontractors Association Inc

FeaturesTM

Departments

CONTRACTOR COMMUNITY 4

CONSTRUCTION IN THE COURTS 8

LEGALLY SPEAKING 30Do You Want to Be Paid for Extra Workby Ssara M Thompson

Get Paid Faster

wwwtexturacorpcom 866-839-8872

EPPtradeTexturarsquos Early Payment Programtrade (EPPtrade) allows general contractors to offer subcontractors optional earlier payment With EPP subcontractors can get paid about 5 days after invoice approval ndash 30 to 90 days sooner than normal payment timing ndash in exchange for a modest fee

EPP works by leveraging the financial strength of the general contractorrsquos balance sheet and using Texturarsquos CPMreg solution to facilitate early payment to subcontractors through Texturarsquos financial partner Greensill Capital

Cash Flow Faster payments Predictable timing Non-recourse funds

Business Reduce business ownerrsquos risk Offer more competitive bids Stronger relationship with general contractors

Financials Reduce reliance on high-cost working capital Strengthen balance sheet Ability to fund growth expansion

The Flight of the ManagersmdashWhen a CompensationProblem is NOT a Compensation Problem 10by Gregg Schoppman

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Driving 12by Michael Ahern

Building for the Future mdashAddressing Construction Industry Workforce Issues 16by Laura Cataldo

SPECIAL FEATURE Drones in the Construction Industry 18

Commercial Construction Marketing How Do You Measure Up On-Page CEO 22by Jason Myers

Subcontractors and the ACA Preparing for 2016 24by KC Cannon Jr

Top Trends in Merchant Processing 26by Kimberly Coley

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 3

Contractor Community

ENR Contractor Business Quarterly Profiles ASA President Tish Barker

In the Fall 2015 edition of ENR Contractor Business Quarterly 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker Haley-Greer Inc talks about what itrsquos like to lead the Dallas-based glass and curtain wall business what itrsquos like to be a woman ldquorunning a company in the male-dominated construction industryrdquo and what it means to her to lead a national organization like ASA

When she first became vice president and chief financial officer of Haley-Greer Inc in 1995 Barker proved her capability mdash and leadership ability mdash when she took and ldquoacedrdquo a state glazierrsquos licensing test Over the next two decades Barker has led Haley-Greer to become ldquoone of the most admired subcontractors in Texas for its complex glass workrdquo

As for being a woman in a male-dominated industry she said ldquoI just never thought of myself as any different from anyone else I think a woman is just a person thatrsquos qualified to do the workrdquo

Barker said shersquos ldquopassionaterdquo about ASA ldquoI think they do such a great job of preparing subcontractors of all sizes to do better work and to have a better business and be more successfulrdquo she said ldquoAnd if theyrsquore more successful then I always tell the general contractors lsquoThat means that your job is going to be more profitable itrsquos going to be done more timely and those people are going to be able to reach your visionrsquordquo

Read the full profile via the ASA Web site

President Obama Signs Subcontractor Payment Protections

On Nov 25 President Obama signed into law two key surety bond provisions as part of the National Defense Authorization Act of 2016 One provision requires individual sureties to pledge known and reliable assets to back their bonds and to relinquish control of those pledged assets to the federal government The second provision increases the bond guarantee from 70 percent to 90 percent to sureties in the bond guarantee program sponsored by the US Small Business Administration Subcontractors and suppliers on federal public construction projects have no control over the prime contractorrsquos choice of security provided to the federal government but they suffer the most harm financially if the provided security proves illusory ldquoUnder the new law subcontractors and suppliers on federal construction projects will know that adequate and reliable security is in place to assure that they will be paidrdquo said ASA Chief Advocacy Officer E Colette Nelson There will be either a corporate surety bond from a company approved by the US Treasury or assets from an individual surety with readily identifiable value pledged and relinquished to the federal government while the construction project is ongoing All persons and entities providing collateral to the federal government will now have to play by the same rules The SBA Surety Bond Guarantee Program was established to ensure that small and emerging contractors who do not qualify for surety bonds in the standard market have access to the bonds they need to participate in the federal construction market The sureties bring such contractors to the SBA and with the SBArsquos guarantee they bond such

contractors The new law will help more small contractors participate in federal projects and grow their businesses by giving incentives to more surety companies and bond producers to participate in the SBA program The new law will take effect one year after enactment to allow the Federal Acquisition Regulatory Council and the US Small Business Administration time to develop and publish a regulation

ASA NASBP and SFAA Say Surety Bonds Are Best Practice on P3s

ASA joined The Surety amp Fidelity Association of America and the National Association of Surety Bond Producers in a letter to the Federal Highway Administration contending that the US Department of Transportation should include performance and payment bonds as a best practice on public-private partnerships in guides it is preparing for state and local governments

ldquoThere are sound well-recognized public policy reasons for requiring performance and payment security for P3s and the FHWArsquos guide should reflect thatrdquo the associations wrote The end result of a P3 is a project that provides a public service or facility The risk to the public entity is increased in a P3 since the public entity is responsible to the taxpayers to deliver a public service or facility but the public entity does not choose or control the construction contractor and could suffer financial loss if the private partner defaults The associations concluded ldquoThe payment protection available for subcontractors suppliers and workers and the contract completion protection for public entities should not be compromised and reduced because some financiers and concessionaires are comfortable with less securityrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S4

The three associations supported DOTrsquos effort to provide technical assistance tools including model contract provisions to state and local governments undertaking P3 projects FHWA is developing the tools as part of its Build American Transportation Investment Center a one-stop-shop for state and local governments public and private developers and investors seeking to utilize innovative financing and P3s to deliver transportation projects BATIC was authorized by a Presidential Memorandum issued on July 17 2014

ASA and Surety Industry Associations Update P3 Guide

Construction of projects for public use through public-private partnerships continues to increase at all levels of government including at the state and local levels Many of the P3 programs authorized by the states however provide no payment protections for subcontractors and suppliers on P3 projects on which mechanicrsquos liens and the requirement for payment bonds most likely do not apply

ASA in collaboration with the National Association of Surety Bond Producers and The Surety amp Fidelity Association of America has reviewed the state laws authorizing construction projects to be financed by P3s and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds The revised guide published by ASA NASBP and SFAA ldquoPublic-Private Partnership Laws in the States including Surety Bond Requirementsrdquo (2015 Edition) will help subcontractors determine whether they have payment protections before they bid on a P3 project

ldquoMany people think that P3s are used only for expensive horizontal construction projects such as major bridge and highway construction but P3s are increasingly being used for vertical construction projects toordquo said ASA Chief Advocacy Officer E Colette Nelson ldquoThey are being used to construct public housing to renovate or construct educational facilities and to build or renovate public buildings and public parking facilitiesrdquo

During 2015 the District of Columbia and Georgia enacted new laws authorizing public-private partnerships both laws include requirements that P3 agreements include requirements for surety bonding Ohio clarified its 2014 law to assure that its director of transportation will require a performance and payment bond on the construction portions of the project

The chart also adds entries for a new Alabama law expanding the authorization of P3s for transportation projects a new Arkansas law that authorizes the use of P3s for unpaved state roads a clarification of a 2014 Maryland law a Virginia law that authorizes P3s for solar energy projects and another Virginia law that authorizes the use of P3s in an interstate transportation compact for Interstate 73

Nelson reminded ASA members to obtain a copy of and review the prime contractorrsquos surety bond before signing a subcontract and certainly before starting work Once a subcontractor obtains a copy of the bond it can expeditiously check the validity of bonds by confirming that the surety is licensed in the jurisdiction of the project and that the bond has been authorized by the surety

NASBP provides step-by-step guidance in its publication Always Verify Your Bond ASA supports its chapters in their pursuits of state legislation assuring payment protections for subcontractors on P3 projects in many ways including through its Subcontractor Payment Assurance on Public-Private Partnerships in Your State A Legislative Work Kit

ASA Tells OSHA Follow the Law

In comments filed on Oct 26 ASA called on the Occupational Safety and Health Administration to follow the clear language of its authorizing statute with respect to employer recordkeeping

ASA Chief Advocacy Officer E Colette Nelsonrsquos letter was sent in response to OSHArsquos request for comment on a proposed rule on the ldquoClarification of Employerrsquos Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illnessrdquo

OSHA issued its proposal in response to a 2012 ruling by the US Court of Appeals for the DC Circuit in AKM LLC dba Volks Constructors v Secretary of Labor In that case the court ruled that the Occupational Safety and Health Act does not allow the agency to cite an employer for a recordkeeping violation more than six months after the employer failed to maintain the required record ASA suggested that in its proposed rule OSHA is attempting to circumvent the court ruling by specifying that an employerrsquos duty to record an injury or illness continues for as long as the employer is required to keep the record of the recordable injury or illness That is according to OSHA the employerrsquos duty does not expire just because the employer fails to create the necessary records when first required to do so

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 5

Nelson pointed out that the OSH Act states ldquoNo citation may be issued under this section after the expiration of six months following the occurrence of any violationrdquo Nelson called on OSHA to withdraw its proposed rule

ASA and Construction Coalition Enter OSHA Dialogue on PELs

ASA in collaboration with 24 other construction industry associations submitted comments on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits in response to a Request for Information from the Occupational Safety and Health Administration

The Construction Industry Safety Coalition told OSHA ldquoTechnological and economic feasibility are issues of paramount importance to the construction industry Control measures to protect employees from health hazards in the general industry environment do not always work in the construction environment where work practices control measures and environmental conditions are highly variablerdquo

The coalition urged OSHA to follow key principles includingbull Any modeling used by OSHA

to buttress its technological feasibility analysis cannot and should not take the place of ldquoon-the-groundrdquo data gathering by the agency

bull Any model that OSHA uses to enhance its technological feasibility analysis must be validated before use

bull Any modeling used to demonstrate that a proposal is technologically feasible must be presented to stakeholders as part of a proposed rule and stakeholders given an opportunity to comment on it

bull OSHA must assess costs and economic feasibility on small entities

bull OSHA should analyze economic feasibility at a micro-level

In addition the coalition reiterated that OSHA must continue to consider construction separately from general industry and maritime given the unique and variable conditions on construction worksites OSHArsquos PELs which are regulatory limits on the amount or concentration of a substance in the air are intended to protect workers against the adverse health effects of exposure to hazardous substances Ninety-five percent of OSHArsquos current PELs which cover fewer than 500 chemicals have not been updated since their adoption in 1971

ASA Calls for Regulatory Accountability

In a letter to the US Senate ASA called for support of S 2006 the Regulatory Accountability Act of 2015 Introduced by Sen Rob Portman (R-OH) Sen Susan Collins (R-ME) Sen Angus King (I-ME) and four other original co-sponsors S 2006 modernizes the Administrative Procedure Actrsquos rulemaking process which has remained unchanged for nearly 70 years

The bill would bring into the 21st century the rulemaking process now used by agencies to write multi-billion-dollar rules bybull Increasing public participation

in shaping the most costly regulations before they are proposed

bull Requiring that agencies must choose the least costly option unless they can demonstrate that public health safety or welfare requires a more costly requirement

bull Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act

bull Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well tested and reviewed

bull Providing for a more rigorous test in legal challenges for those regulations that would have the most impact

Help ASA Fund Precedent-Setting Briefs with Tax-Deductible Contribution

As 2015 draws to a close and you consider how yoursquoll direct your year-end charitable giving consider how much more you can do to help construction subcontractors by sending a tax-deductible year-end gift to the Subcontractors Legal Research Fund of the Foundation of ASA

ASA finances its ldquofriend-of-the-courtrdquo briefs entirely by voluntary contributions to its Subcontractors Legal Defense Fund and FASArsquos SLRF So as you consider the size of your year-end gift please think about the magnitude and the importance of the challenges that subcontractors face every day mdash issues like slow or no final payment pay-if-paid clauses retainage a requirement to keep working even in the face of nonpayment broad-form indemnity misleading insurance coverages and more

As it looks ahead to the many precedent-setting court cases that impact construction subcontractors ASA has to calculate how much funding is available to fund ldquofriend of the courtrdquo briefs on each critical issue It will help so very much if you can send your year-end gift by Dec 31 FASA is a 501(c)(3) education foundation contributions to FASA

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S6

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Contractor Community

ENR Contractor Business Quarterly Profiles ASA President Tish Barker

In the Fall 2015 edition of ENR Contractor Business Quarterly 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker Haley-Greer Inc talks about what itrsquos like to lead the Dallas-based glass and curtain wall business what itrsquos like to be a woman ldquorunning a company in the male-dominated construction industryrdquo and what it means to her to lead a national organization like ASA

When she first became vice president and chief financial officer of Haley-Greer Inc in 1995 Barker proved her capability mdash and leadership ability mdash when she took and ldquoacedrdquo a state glazierrsquos licensing test Over the next two decades Barker has led Haley-Greer to become ldquoone of the most admired subcontractors in Texas for its complex glass workrdquo

As for being a woman in a male-dominated industry she said ldquoI just never thought of myself as any different from anyone else I think a woman is just a person thatrsquos qualified to do the workrdquo

Barker said shersquos ldquopassionaterdquo about ASA ldquoI think they do such a great job of preparing subcontractors of all sizes to do better work and to have a better business and be more successfulrdquo she said ldquoAnd if theyrsquore more successful then I always tell the general contractors lsquoThat means that your job is going to be more profitable itrsquos going to be done more timely and those people are going to be able to reach your visionrsquordquo

Read the full profile via the ASA Web site

President Obama Signs Subcontractor Payment Protections

On Nov 25 President Obama signed into law two key surety bond provisions as part of the National Defense Authorization Act of 2016 One provision requires individual sureties to pledge known and reliable assets to back their bonds and to relinquish control of those pledged assets to the federal government The second provision increases the bond guarantee from 70 percent to 90 percent to sureties in the bond guarantee program sponsored by the US Small Business Administration Subcontractors and suppliers on federal public construction projects have no control over the prime contractorrsquos choice of security provided to the federal government but they suffer the most harm financially if the provided security proves illusory ldquoUnder the new law subcontractors and suppliers on federal construction projects will know that adequate and reliable security is in place to assure that they will be paidrdquo said ASA Chief Advocacy Officer E Colette Nelson There will be either a corporate surety bond from a company approved by the US Treasury or assets from an individual surety with readily identifiable value pledged and relinquished to the federal government while the construction project is ongoing All persons and entities providing collateral to the federal government will now have to play by the same rules The SBA Surety Bond Guarantee Program was established to ensure that small and emerging contractors who do not qualify for surety bonds in the standard market have access to the bonds they need to participate in the federal construction market The sureties bring such contractors to the SBA and with the SBArsquos guarantee they bond such

contractors The new law will help more small contractors participate in federal projects and grow their businesses by giving incentives to more surety companies and bond producers to participate in the SBA program The new law will take effect one year after enactment to allow the Federal Acquisition Regulatory Council and the US Small Business Administration time to develop and publish a regulation

ASA NASBP and SFAA Say Surety Bonds Are Best Practice on P3s

ASA joined The Surety amp Fidelity Association of America and the National Association of Surety Bond Producers in a letter to the Federal Highway Administration contending that the US Department of Transportation should include performance and payment bonds as a best practice on public-private partnerships in guides it is preparing for state and local governments

ldquoThere are sound well-recognized public policy reasons for requiring performance and payment security for P3s and the FHWArsquos guide should reflect thatrdquo the associations wrote The end result of a P3 is a project that provides a public service or facility The risk to the public entity is increased in a P3 since the public entity is responsible to the taxpayers to deliver a public service or facility but the public entity does not choose or control the construction contractor and could suffer financial loss if the private partner defaults The associations concluded ldquoThe payment protection available for subcontractors suppliers and workers and the contract completion protection for public entities should not be compromised and reduced because some financiers and concessionaires are comfortable with less securityrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S4

The three associations supported DOTrsquos effort to provide technical assistance tools including model contract provisions to state and local governments undertaking P3 projects FHWA is developing the tools as part of its Build American Transportation Investment Center a one-stop-shop for state and local governments public and private developers and investors seeking to utilize innovative financing and P3s to deliver transportation projects BATIC was authorized by a Presidential Memorandum issued on July 17 2014

ASA and Surety Industry Associations Update P3 Guide

Construction of projects for public use through public-private partnerships continues to increase at all levels of government including at the state and local levels Many of the P3 programs authorized by the states however provide no payment protections for subcontractors and suppliers on P3 projects on which mechanicrsquos liens and the requirement for payment bonds most likely do not apply

ASA in collaboration with the National Association of Surety Bond Producers and The Surety amp Fidelity Association of America has reviewed the state laws authorizing construction projects to be financed by P3s and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds The revised guide published by ASA NASBP and SFAA ldquoPublic-Private Partnership Laws in the States including Surety Bond Requirementsrdquo (2015 Edition) will help subcontractors determine whether they have payment protections before they bid on a P3 project

ldquoMany people think that P3s are used only for expensive horizontal construction projects such as major bridge and highway construction but P3s are increasingly being used for vertical construction projects toordquo said ASA Chief Advocacy Officer E Colette Nelson ldquoThey are being used to construct public housing to renovate or construct educational facilities and to build or renovate public buildings and public parking facilitiesrdquo

During 2015 the District of Columbia and Georgia enacted new laws authorizing public-private partnerships both laws include requirements that P3 agreements include requirements for surety bonding Ohio clarified its 2014 law to assure that its director of transportation will require a performance and payment bond on the construction portions of the project

The chart also adds entries for a new Alabama law expanding the authorization of P3s for transportation projects a new Arkansas law that authorizes the use of P3s for unpaved state roads a clarification of a 2014 Maryland law a Virginia law that authorizes P3s for solar energy projects and another Virginia law that authorizes the use of P3s in an interstate transportation compact for Interstate 73

Nelson reminded ASA members to obtain a copy of and review the prime contractorrsquos surety bond before signing a subcontract and certainly before starting work Once a subcontractor obtains a copy of the bond it can expeditiously check the validity of bonds by confirming that the surety is licensed in the jurisdiction of the project and that the bond has been authorized by the surety

NASBP provides step-by-step guidance in its publication Always Verify Your Bond ASA supports its chapters in their pursuits of state legislation assuring payment protections for subcontractors on P3 projects in many ways including through its Subcontractor Payment Assurance on Public-Private Partnerships in Your State A Legislative Work Kit

ASA Tells OSHA Follow the Law

In comments filed on Oct 26 ASA called on the Occupational Safety and Health Administration to follow the clear language of its authorizing statute with respect to employer recordkeeping

ASA Chief Advocacy Officer E Colette Nelsonrsquos letter was sent in response to OSHArsquos request for comment on a proposed rule on the ldquoClarification of Employerrsquos Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illnessrdquo

OSHA issued its proposal in response to a 2012 ruling by the US Court of Appeals for the DC Circuit in AKM LLC dba Volks Constructors v Secretary of Labor In that case the court ruled that the Occupational Safety and Health Act does not allow the agency to cite an employer for a recordkeeping violation more than six months after the employer failed to maintain the required record ASA suggested that in its proposed rule OSHA is attempting to circumvent the court ruling by specifying that an employerrsquos duty to record an injury or illness continues for as long as the employer is required to keep the record of the recordable injury or illness That is according to OSHA the employerrsquos duty does not expire just because the employer fails to create the necessary records when first required to do so

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 5

Nelson pointed out that the OSH Act states ldquoNo citation may be issued under this section after the expiration of six months following the occurrence of any violationrdquo Nelson called on OSHA to withdraw its proposed rule

ASA and Construction Coalition Enter OSHA Dialogue on PELs

ASA in collaboration with 24 other construction industry associations submitted comments on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits in response to a Request for Information from the Occupational Safety and Health Administration

The Construction Industry Safety Coalition told OSHA ldquoTechnological and economic feasibility are issues of paramount importance to the construction industry Control measures to protect employees from health hazards in the general industry environment do not always work in the construction environment where work practices control measures and environmental conditions are highly variablerdquo

The coalition urged OSHA to follow key principles includingbull Any modeling used by OSHA

to buttress its technological feasibility analysis cannot and should not take the place of ldquoon-the-groundrdquo data gathering by the agency

bull Any model that OSHA uses to enhance its technological feasibility analysis must be validated before use

bull Any modeling used to demonstrate that a proposal is technologically feasible must be presented to stakeholders as part of a proposed rule and stakeholders given an opportunity to comment on it

bull OSHA must assess costs and economic feasibility on small entities

bull OSHA should analyze economic feasibility at a micro-level

In addition the coalition reiterated that OSHA must continue to consider construction separately from general industry and maritime given the unique and variable conditions on construction worksites OSHArsquos PELs which are regulatory limits on the amount or concentration of a substance in the air are intended to protect workers against the adverse health effects of exposure to hazardous substances Ninety-five percent of OSHArsquos current PELs which cover fewer than 500 chemicals have not been updated since their adoption in 1971

ASA Calls for Regulatory Accountability

In a letter to the US Senate ASA called for support of S 2006 the Regulatory Accountability Act of 2015 Introduced by Sen Rob Portman (R-OH) Sen Susan Collins (R-ME) Sen Angus King (I-ME) and four other original co-sponsors S 2006 modernizes the Administrative Procedure Actrsquos rulemaking process which has remained unchanged for nearly 70 years

The bill would bring into the 21st century the rulemaking process now used by agencies to write multi-billion-dollar rules bybull Increasing public participation

in shaping the most costly regulations before they are proposed

bull Requiring that agencies must choose the least costly option unless they can demonstrate that public health safety or welfare requires a more costly requirement

bull Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act

bull Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well tested and reviewed

bull Providing for a more rigorous test in legal challenges for those regulations that would have the most impact

Help ASA Fund Precedent-Setting Briefs with Tax-Deductible Contribution

As 2015 draws to a close and you consider how yoursquoll direct your year-end charitable giving consider how much more you can do to help construction subcontractors by sending a tax-deductible year-end gift to the Subcontractors Legal Research Fund of the Foundation of ASA

ASA finances its ldquofriend-of-the-courtrdquo briefs entirely by voluntary contributions to its Subcontractors Legal Defense Fund and FASArsquos SLRF So as you consider the size of your year-end gift please think about the magnitude and the importance of the challenges that subcontractors face every day mdash issues like slow or no final payment pay-if-paid clauses retainage a requirement to keep working even in the face of nonpayment broad-form indemnity misleading insurance coverages and more

As it looks ahead to the many precedent-setting court cases that impact construction subcontractors ASA has to calculate how much funding is available to fund ldquofriend of the courtrdquo briefs on each critical issue It will help so very much if you can send your year-end gift by Dec 31 FASA is a 501(c)(3) education foundation contributions to FASA

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S6

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

The three associations supported DOTrsquos effort to provide technical assistance tools including model contract provisions to state and local governments undertaking P3 projects FHWA is developing the tools as part of its Build American Transportation Investment Center a one-stop-shop for state and local governments public and private developers and investors seeking to utilize innovative financing and P3s to deliver transportation projects BATIC was authorized by a Presidential Memorandum issued on July 17 2014

ASA and Surety Industry Associations Update P3 Guide

Construction of projects for public use through public-private partnerships continues to increase at all levels of government including at the state and local levels Many of the P3 programs authorized by the states however provide no payment protections for subcontractors and suppliers on P3 projects on which mechanicrsquos liens and the requirement for payment bonds most likely do not apply

ASA in collaboration with the National Association of Surety Bond Producers and The Surety amp Fidelity Association of America has reviewed the state laws authorizing construction projects to be financed by P3s and determined which programs provide payment assurances for construction subcontractors and suppliers through payment bonds The revised guide published by ASA NASBP and SFAA ldquoPublic-Private Partnership Laws in the States including Surety Bond Requirementsrdquo (2015 Edition) will help subcontractors determine whether they have payment protections before they bid on a P3 project

ldquoMany people think that P3s are used only for expensive horizontal construction projects such as major bridge and highway construction but P3s are increasingly being used for vertical construction projects toordquo said ASA Chief Advocacy Officer E Colette Nelson ldquoThey are being used to construct public housing to renovate or construct educational facilities and to build or renovate public buildings and public parking facilitiesrdquo

During 2015 the District of Columbia and Georgia enacted new laws authorizing public-private partnerships both laws include requirements that P3 agreements include requirements for surety bonding Ohio clarified its 2014 law to assure that its director of transportation will require a performance and payment bond on the construction portions of the project

The chart also adds entries for a new Alabama law expanding the authorization of P3s for transportation projects a new Arkansas law that authorizes the use of P3s for unpaved state roads a clarification of a 2014 Maryland law a Virginia law that authorizes P3s for solar energy projects and another Virginia law that authorizes the use of P3s in an interstate transportation compact for Interstate 73

Nelson reminded ASA members to obtain a copy of and review the prime contractorrsquos surety bond before signing a subcontract and certainly before starting work Once a subcontractor obtains a copy of the bond it can expeditiously check the validity of bonds by confirming that the surety is licensed in the jurisdiction of the project and that the bond has been authorized by the surety

NASBP provides step-by-step guidance in its publication Always Verify Your Bond ASA supports its chapters in their pursuits of state legislation assuring payment protections for subcontractors on P3 projects in many ways including through its Subcontractor Payment Assurance on Public-Private Partnerships in Your State A Legislative Work Kit

ASA Tells OSHA Follow the Law

In comments filed on Oct 26 ASA called on the Occupational Safety and Health Administration to follow the clear language of its authorizing statute with respect to employer recordkeeping

ASA Chief Advocacy Officer E Colette Nelsonrsquos letter was sent in response to OSHArsquos request for comment on a proposed rule on the ldquoClarification of Employerrsquos Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illnessrdquo

OSHA issued its proposal in response to a 2012 ruling by the US Court of Appeals for the DC Circuit in AKM LLC dba Volks Constructors v Secretary of Labor In that case the court ruled that the Occupational Safety and Health Act does not allow the agency to cite an employer for a recordkeeping violation more than six months after the employer failed to maintain the required record ASA suggested that in its proposed rule OSHA is attempting to circumvent the court ruling by specifying that an employerrsquos duty to record an injury or illness continues for as long as the employer is required to keep the record of the recordable injury or illness That is according to OSHA the employerrsquos duty does not expire just because the employer fails to create the necessary records when first required to do so

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 5

Nelson pointed out that the OSH Act states ldquoNo citation may be issued under this section after the expiration of six months following the occurrence of any violationrdquo Nelson called on OSHA to withdraw its proposed rule

ASA and Construction Coalition Enter OSHA Dialogue on PELs

ASA in collaboration with 24 other construction industry associations submitted comments on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits in response to a Request for Information from the Occupational Safety and Health Administration

The Construction Industry Safety Coalition told OSHA ldquoTechnological and economic feasibility are issues of paramount importance to the construction industry Control measures to protect employees from health hazards in the general industry environment do not always work in the construction environment where work practices control measures and environmental conditions are highly variablerdquo

The coalition urged OSHA to follow key principles includingbull Any modeling used by OSHA

to buttress its technological feasibility analysis cannot and should not take the place of ldquoon-the-groundrdquo data gathering by the agency

bull Any model that OSHA uses to enhance its technological feasibility analysis must be validated before use

bull Any modeling used to demonstrate that a proposal is technologically feasible must be presented to stakeholders as part of a proposed rule and stakeholders given an opportunity to comment on it

bull OSHA must assess costs and economic feasibility on small entities

bull OSHA should analyze economic feasibility at a micro-level

In addition the coalition reiterated that OSHA must continue to consider construction separately from general industry and maritime given the unique and variable conditions on construction worksites OSHArsquos PELs which are regulatory limits on the amount or concentration of a substance in the air are intended to protect workers against the adverse health effects of exposure to hazardous substances Ninety-five percent of OSHArsquos current PELs which cover fewer than 500 chemicals have not been updated since their adoption in 1971

ASA Calls for Regulatory Accountability

In a letter to the US Senate ASA called for support of S 2006 the Regulatory Accountability Act of 2015 Introduced by Sen Rob Portman (R-OH) Sen Susan Collins (R-ME) Sen Angus King (I-ME) and four other original co-sponsors S 2006 modernizes the Administrative Procedure Actrsquos rulemaking process which has remained unchanged for nearly 70 years

The bill would bring into the 21st century the rulemaking process now used by agencies to write multi-billion-dollar rules bybull Increasing public participation

in shaping the most costly regulations before they are proposed

bull Requiring that agencies must choose the least costly option unless they can demonstrate that public health safety or welfare requires a more costly requirement

bull Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act

bull Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well tested and reviewed

bull Providing for a more rigorous test in legal challenges for those regulations that would have the most impact

Help ASA Fund Precedent-Setting Briefs with Tax-Deductible Contribution

As 2015 draws to a close and you consider how yoursquoll direct your year-end charitable giving consider how much more you can do to help construction subcontractors by sending a tax-deductible year-end gift to the Subcontractors Legal Research Fund of the Foundation of ASA

ASA finances its ldquofriend-of-the-courtrdquo briefs entirely by voluntary contributions to its Subcontractors Legal Defense Fund and FASArsquos SLRF So as you consider the size of your year-end gift please think about the magnitude and the importance of the challenges that subcontractors face every day mdash issues like slow or no final payment pay-if-paid clauses retainage a requirement to keep working even in the face of nonpayment broad-form indemnity misleading insurance coverages and more

As it looks ahead to the many precedent-setting court cases that impact construction subcontractors ASA has to calculate how much funding is available to fund ldquofriend of the courtrdquo briefs on each critical issue It will help so very much if you can send your year-end gift by Dec 31 FASA is a 501(c)(3) education foundation contributions to FASA

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S6

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Nelson pointed out that the OSH Act states ldquoNo citation may be issued under this section after the expiration of six months following the occurrence of any violationrdquo Nelson called on OSHA to withdraw its proposed rule

ASA and Construction Coalition Enter OSHA Dialogue on PELs

ASA in collaboration with 24 other construction industry associations submitted comments on the management of hazardous chemical exposures in the workplace and strategies for updating permissible exposure limits in response to a Request for Information from the Occupational Safety and Health Administration

The Construction Industry Safety Coalition told OSHA ldquoTechnological and economic feasibility are issues of paramount importance to the construction industry Control measures to protect employees from health hazards in the general industry environment do not always work in the construction environment where work practices control measures and environmental conditions are highly variablerdquo

The coalition urged OSHA to follow key principles includingbull Any modeling used by OSHA

to buttress its technological feasibility analysis cannot and should not take the place of ldquoon-the-groundrdquo data gathering by the agency

bull Any model that OSHA uses to enhance its technological feasibility analysis must be validated before use

bull Any modeling used to demonstrate that a proposal is technologically feasible must be presented to stakeholders as part of a proposed rule and stakeholders given an opportunity to comment on it

bull OSHA must assess costs and economic feasibility on small entities

bull OSHA should analyze economic feasibility at a micro-level

In addition the coalition reiterated that OSHA must continue to consider construction separately from general industry and maritime given the unique and variable conditions on construction worksites OSHArsquos PELs which are regulatory limits on the amount or concentration of a substance in the air are intended to protect workers against the adverse health effects of exposure to hazardous substances Ninety-five percent of OSHArsquos current PELs which cover fewer than 500 chemicals have not been updated since their adoption in 1971

ASA Calls for Regulatory Accountability

In a letter to the US Senate ASA called for support of S 2006 the Regulatory Accountability Act of 2015 Introduced by Sen Rob Portman (R-OH) Sen Susan Collins (R-ME) Sen Angus King (I-ME) and four other original co-sponsors S 2006 modernizes the Administrative Procedure Actrsquos rulemaking process which has remained unchanged for nearly 70 years

The bill would bring into the 21st century the rulemaking process now used by agencies to write multi-billion-dollar rules bybull Increasing public participation

in shaping the most costly regulations before they are proposed

bull Requiring that agencies must choose the least costly option unless they can demonstrate that public health safety or welfare requires a more costly requirement

bull Giving interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act

bull Providing for on-the-record administrative hearings for the most costly regulations to assure that agency data is well tested and reviewed

bull Providing for a more rigorous test in legal challenges for those regulations that would have the most impact

Help ASA Fund Precedent-Setting Briefs with Tax-Deductible Contribution

As 2015 draws to a close and you consider how yoursquoll direct your year-end charitable giving consider how much more you can do to help construction subcontractors by sending a tax-deductible year-end gift to the Subcontractors Legal Research Fund of the Foundation of ASA

ASA finances its ldquofriend-of-the-courtrdquo briefs entirely by voluntary contributions to its Subcontractors Legal Defense Fund and FASArsquos SLRF So as you consider the size of your year-end gift please think about the magnitude and the importance of the challenges that subcontractors face every day mdash issues like slow or no final payment pay-if-paid clauses retainage a requirement to keep working even in the face of nonpayment broad-form indemnity misleading insurance coverages and more

As it looks ahead to the many precedent-setting court cases that impact construction subcontractors ASA has to calculate how much funding is available to fund ldquofriend of the courtrdquo briefs on each critical issue It will help so very much if you can send your year-end gift by Dec 31 FASA is a 501(c)(3) education foundation contributions to FASA

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S6

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

are tax deductible as a charitable contribution You can make your contribution through the ASA online store For more information visit the ASA SLDF Web site at wwwsldfnet

Dodge Data amp Analytics Economist Robert Murray Finds a lsquoNumber of Positives Going into 2016rsquo

Dodge Data amp Analytics economist Robert Murray forecasts total US construction starts to increase 6 percent to $712 billion for 2016 following the 13 percent increase estimated for 2015 which drew much of its lift from the volatile electric utility and gas plant category

ldquoWhile the rate of growth for total construction starts in 2016 will be less than what was reported during the 2012-2015 period there are still a number of positives going into 2016rdquo Murray wrote in the 2016 Dodge Construction Outlook

Speaking during Dodge Data amp Analyticsrsquo 77th annual Outlook Executive Conference on Oct 30 in Washington DC Murray vice president of economic affairs Dodge Data amp Analytics noted that residential building in 2016 ldquoshould maintain its upward track rising 16 percentrdquo He expects nonresidential building in 2016 to grow 9 percent ldquoregaining the upward momentum after the flat to slightly weaker performance in 2015rdquo Nonbuilding construction however is forecast to drop 14 percent after jumping 28 percent in 2015 he said

ldquoThis yearrsquos exceptional dollar amount for the electric power and gas plant category wonrsquot be repeated in 2016 given a sharply lower total for LNG [liquefied natural gas] export terminals combined with a modest reduction for new power plant startsrdquo he said ldquoThe public works sector awaits Congress passing

fiscal 2016 appropriations and a new transportation bill Both are expected to take place either in late 2015 or more likely the first half of 2016rdquo

While passing a new transportation bill would alleviate some of the uncertainty being experienced by state departments of transportation Murray said the benefits of having a new bill in place are expected to be more apparent in 2017 than next year Highlights by sector includebull Single Family Housing

+14 percent in dollars to $1874 billion (2015) and +20 percent in dollars to $2248 billion (2016)

bull Multifamily Housing +25 percent in dollars to $851 billion (2015) and +7 percent to $912 billion (2016)

bull Commercial Buildings +4 percent to $843 billion (2015) and +11 percent to $937 billion (2016)

bull Institutional Buildings +6 percent to $1102 billion (2015) and +9 percent to $1203 billion (2016)

bull Manufacturing Buildings -28 percent to $253 billion (2015) and -1 percent to $25 billion (2016)

bull Public Works +2 percent to $1224 billion (2015) and 0 percent to $1229 billion (2016)

bull Electric Utilities +159 percent to $60 billion (2015) and -43 percent to $34 billion (2016)

Employee Handbooks 2016 Required Changes

If your employee handbook hasnrsquot been updated in the past 12 months itrsquos out of date according to SESCO Management Consultants For examplebull Is your at-will statement an

invitation to a massive NLRA lawsuit (based on the NLRB ruling)

bull Do you realize that you canrsquot prohibit discussions on pay and benefits

bull Have you provided clear rules on overtime and off-the-clock work

bull Have you updated your FMLA policy to reflect same-sex marriage couplesrsquo rights to FMLA leave Do you know which same-sex marriages are considered valid

bull Have you changed your handbook to reflect the latest DOL rules on nursing mothers

bull Have you updated your leave policies to include time off for employees with relatives in the military or to prohibit moonlighting while on FMLA leave

bull Have you changed your ADA reasonable accommodations policy to include accommodating pregnant employees

bull Do you have a loyalty no-gossip or civility statement that could land you in court

ldquoYour employee handbook can be an invaluable organizational tool or an employment lawsuit waiting to happenrdquo SESCO said ldquoAnd in recent years Congress and state legislatures have been busy enacting laws that directly affect your employee handbookrdquo

ASA members receive complimentary human resources services provided by SESCO including Free Handbook Review SESCO staff will review and analyze ASA membersrsquo current employee handbook or policies to ensure compliance with federal and state employment regulations as well as to ensure the employee handbook is effective Contact SESCO at (423) 764-4127 or sescosescomgtcom to request a review and update to this critical document

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 7

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Construction in the CourtsEdited by R Russell OrsquoRourke Esq partner and chair of the Construction Law Group Meyers Roman Friedberg amp Lewis Cleveland Ohio

A brief review of recent cases that affect your business

Massachusetts Pursuant to a Sept 2 2015 decision the Supreme Judicial Court of Massachusetts Worchester held that an owner owes an implied warranty regarding the sufficiency of a designerrsquos plans and specifications to a construction manager at risk (ldquoCMARrdquo)

Courts throughout the country following the principles set forth in the 1918 United States Supreme Court case United States v Spearin routinely have held that an owner impliedly warrants the sufficiency of the plans and specifications of a design-bid-build project However a few court decisions have decided whether the ownerrsquos implied warranty of the designerrsquos plans and specifications applies to a public CMAR project

Coghlin Electrical Contractors Inc v Gilbane Building Company is one such decision deciding that the implied warranty also applies on CMAR projects The Coghlin decision addressed delays caused by design defects during the construction of a state hospital The court observed that although a CMAR project differs from a design-bid-build project because the CMAR may have some input in the design process a designer typically remains ultimately responsible for the design Therefore the court held that the public owner mdash who contracted with the designer mdash provided an implied warranty to the CMAR as to the sufficiency of the projectrsquos design plans and specifications

The Massachusetts court also observed that contract clauses requiring the CMAR to ldquocarefully studyrdquo and field verify conditions did not disclaim the ownerrsquos implied warranty Accordingly the court

allowed the CMAR to seek damages from the owner for delays caused by deficiencies in the design However the court held that the differences in responsibility for the general contractor in a design-bid-build project and those in a CMAR project affect the scope of the implied warranty This implied warranty on the CMAR project only is available to the extent the CMAR acted in good faith reliance on the defective design and acted reasonably in light of the CMARrsquos own design responsibilities The greater the CMARrsquos design responsibilities the greater the CMARrsquos burden would be to show that its reliance on the defective design was reasonable and in good faith Thus contractors and owners may want to be mindful of the allocation of design responsibilities and preconstruction service responsibilities when negotiating CMAR project agreements

Jim Sienicki and Chris Colyer are attorneys at Snell amp Wilmer LLP in Arizona They can be reached at jsienickiswlawcom (602) 382-6351 or ccolyerswlawcom (602) 382-6000

Ohio Resolving your construction disputes through arbitration is a right mdash assuming that you included it in your written contract mdash which you can lose if you are careless The Federal Arbitration Act (FAA) provides that a written provision in a contract to settle disputes through arbitration shall be valid irrevocable and enforceable save upon such grounds as exist in law or equity for the revocation of any contract That language is parroted by the Ohio Arbitration Act Most states have similar provisions concerning

arbitration The catch is the second half of the sentence If you are not mindful you can create ldquosuch grounds as exist in law or equity for the revocation of any contractrdquo

In the case Hunter v Rhino Shield published on Nov 5 2015 the Franklin County Ohio Court of Appeals held that a party to a lawsuit must claim its right to arbitrate without acting inconsistently with that right Here the defendant asserted its right to arbitrate for the first time in its Answer to an Amended Complaint Normally this could have worked but this happened after acknowledging the courtrsquos jurisdiction over it in its initial Answer mdash without referencing arbitration waiting seven months before filing its motion to enforce the arbitration clause exchanging discovery and scheduling depositions with the plaintiffs filing a motion for partial summary judgment asking the court to interpret and enforce a provision of the contract mdash a provision in the contract specifically reserved to the arbitrator requesting a jury view of the home disclosing its witness list opposing plaintiffsrsquo motions to compel and to amend their complaint and filing a motion for a protective order The court held that ldquotogether all these factors militate against a stay of the case pending arbitrationrdquo and focused on the defendantrsquos Motion for Partial Summary Judgment as ldquoinconsistent with the right to arbitrate because it places the dispute squarely before the court for resolution on the merits and demonstrates an election to proceed with litigation as opposed to arbitrationrdquo

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S8

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

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Corporate Discount - 22 discount on eligible wireless

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Following a long line of both Ohio and federal case law the court did acknowledge that ldquoa court will not lightly infer waiver of a right to arbitraterdquo placing the burden of proving the waiver on the party asserting the waiver requiring them to prove that the waiving party ldquoknew of the right to arbitrate and based on the totality of the circumstances acted inconsistently with that rightrdquo

The lesson mdash hire a knowledgeable construction attorney to review and negotiate your contracts and other legal documents and to help you understand their legal intricacies including your right to arbitrate if any Then thoroughly discuss your options before you file a lawsuit or in any way participate in a lawsuit filed against you

Russell OrsquoRourke is a partner and chair of the Construction Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He may be reached at (216) 831-0042 or email

Ohio When you receive a phone call from a company looking for information on a former employee that was a less than stellar performer or worse fired do you

(a) Ignore it(b) Confirm only the fact of prior

employment and dates(c) Give a truthful negative

referenceMost employers do either ldquoardquo or

ldquobrdquo while very few opt for ldquocrdquo Many employers avoid ldquocrdquo because they fear liability if the ex-employee loses a job because of a negative reference Yet in Ohio and elsewhere there is nothing illegal about providing truthful negative information

For example Ohio Revised Code 411371 creates a privilege for employers to provide information about the job performance of a

former employee to a prospective employer of that employee

An employer who is requested by an employee or a prospective employer of an employee to disclose to a prospective employer of that employee information pertaining to the job performance of that employee for the employer and who discloses the requested information to the prospective employer is not liable in damages in a civil action to that employee the prospective employer or any other person for any harm sustained as a proximate result of making the disclosure or of any information disclosed unless the plaintiff in hellip establishes hellip (1) hellip that the employer disclosed particular information with the knowledge that it was false with the deliberate intent to mislead the prospective employer or another person in bad faith or with malicious purpose or (2) hellip that the disclosure of particular information by the employer constitutes an unlawful discriminatory practicehellip

So if the practice of providing a truthful non-malicious good faith non-discriminatory negative reference is perfectly legal why are so many employers wary of doing it Consider Kienow v Cincinnati Childrenrsquos Hosp Med Ctr (Ohio Ct App 102315)

Kienow concerned a former employee of Cincinnati Childrenrsquos Hospital who failed to get hired by a new employer because of a negative reference she received from her former supervisor She sued claiming defamation and tortious interference with her employment She lost the defamation claim because she brought it too late but the tortious interference claim survived despite ORC 411371

In the courtrsquos wordsCincinnati Childrenrsquos maintains that Kienowrsquos complaint did not plead facts to overcome the statutory privilege But it is not obvious on the face of the complaint that the privilege applied there was no allegation that Dayton Childrenrsquos ldquorequestedrdquo information from Cincinnati Childrenrsquos or Morris

In other words because Kienow argued that her supervisor at Cincinnati Childrenrsquos reached out to her prospective employer without first being asked for the reference ORC 411371 might not apply

What does all this mean It means that even though employers hold a legal privilege to provide a negative reference the associated transactional costs from potential litigation (no matter how unlikely for an employer to lose) is enough of a deterrent such that negative job references are almost non-existent

Can you provide a negative reference on a marginal ex-employee Absolutely Should you That depends on your tolerance for the potential of litigation and your belief that people deserve a second chance elsewhere It is a good idea to speak with your attorney to develop a company policy regarding who in you company is permitted to provide references of any type and to decide what if any references should be provided

Jonathan Hyman is a partner and member of the Labor and Employment Law Practice of the Cleveland Ohio law firm of Meyers Roman Friedberg amp Lewis LPA He can be reached at (216) 831-0042 or email

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 9

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

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BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

The Flight of the Managers mdash When a Compensation Problem Is NOT a Compensation Problemby Gregg M Schoppman

Feature

The tides are turning once again For a time contractors relished the fact that most of their associates would stay put Gone were the days of job-hopping and resumes that looked more like patchwork quilts However the same forces that have allowed backlogs to grow have also created a new employee-driven marketplace The market now abounds with free agents leaving many contractors to question their own compensation models It is easy to assume that the attrition a firm experiences is primarily due to salaries and employee compensation For instance after years of compensation stagnancy resulting from the Great Recession it is no wonder that employees would experiment and look for greener pastures The first reaction is one of doubt ldquoThere is NO WAY the competition is paying thatrdquo As the flight grows from one person to an entire cadre of managers the knee-jerk impulse is to throw more money at the survivors While money may solve some of the firmrsquos ails is it really masking a deeper-rooted issue Does this reactionary behavior simply create an organization full of high paid dissatisfied associates

Is the Problem StrategicWhy is it that so many employers

think the root cause of their employeesrsquo departures lie within the compensation model Simply put this is all the employer hears For instance one could argue that leaving a firm for more money (ie ldquofor my family of course helliprdquo) is hardly controversial How often has ldquoleave on a positive noterdquo been pounded into the heads of a manager On the

other hand what if the real reason for an employee departure lies in the fact that they cannot stand their direct superior or that they feel their direct superior is an un-strategic twit What if that direct superior is you It seems like the high road offers a less bumpy ride over those last two weeks So it is easy to see why firms think their problems are bundled in their compensation model In fairness there is a contingent of people that are in fact driven by money However there is a larger segment of the population that wants to be connected with a winner Great construction leaders will often take an introspective approach and examine why someone would leave their firmbull ldquoWersquore not going anywhere helliprdquo

So often firms confuse activity for productivity What is the vision for the firm and how will they get there If the firm has a vision but it is merely an empty platitude employees can become deeply frustrated and perceive the firmrsquos leadership as apathetic and stagnant

bull ldquoOne second wersquore busy the next wersquore not helliprdquo Recession aside does the firm go from feast to famine in the course of 12 months regularly Management shifts from chief business developers to chief operations officers and then back again As the senior team slides from side to side on the ship most of the passengers and crew will be sick from all of the rockinrsquo

bull ldquoWe have no team depthhelliprdquo A team with no succession plan mdash at the top and across the firmrsquos key positions mdash has no future People in the firm see it and do not want to be last ones to turn the lights out

bull ldquoIrsquom just a cog in the wheel of this big machinehelliprdquo This is a deep issue in many firms and manifests itself as a senior management that provides the perception that they care little for the welfare of its associates and rest happily as long as work is getting done in the field

While none of these issues are insurmountable the longer they linger the more complicated the solutions become One of the easiest solutions is to routinely examine the health of the firm Ask the team ldquohow are we doingrdquo If you see sanitized answers consider having an outsider ndash a coach an accountant a consultant your legal counsel ndash serve as a sounding board Listen to for key indications that the problems are deeper than just a paycheck

What Else Are You Offering

ldquoMake hay while the sun is uprdquo This is the mantra of many contractors especially exiting the Great Recession After ldquositting idlerdquo for so long putting work in place appears to be the cure for managers and superintendents that thrive on construction activity As firms focus on limiting burgeoning overhead the inclination is simply adding ldquojust one more projectrdquo Managers manage and superintendents supervise mdash easy enough to fathom but what is your firm doing for your employees other than just paying them A manager can look at this sequence and see no end or more importantly no future In the same fashion as the ldquocog in the machinerdquo symptom it is important for a firmrsquos senior management team to examine their teamrsquos overall

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S10

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

development For instance consider the followingbull Long-term Plans mdash What is an

associate going to achieve in the firm long-term Even if an associatersquos long-term plans involve being a senior project manager what will their training plans look like

bull Innovation mdash What are you doing to keep your team razor sharp Running the engine at 8000 RPMs is bad and so is running your managers as hard What are you doing to train on new technology new trends etc

bull Training mdash And not just the obligatory OSHA 10 hours Many will argue ldquoBut what if we train them and they leaverdquo The same argument could be said as a corollary ldquoWhat if you donrsquot train them and they stayrdquo

bull Involvement in the Firm at 30000 Feet mdash Sometimes a manager gets a better perspective on their own work when they see it from a different altitude

bull Keep it Fun mdash Not everyonersquos definition of fun is the same but how does your firm make it fun We spend 60 percent to 70 percent of our life at work Why should this aspect be devoid of fun

So often managers and superintendents look like the ldquoDunkin Donutsrdquo maker of the old 1980s television commercials ldquoTime to make the donutsrdquo ldquoTime to build the buildingsrdquo It is easy to get caught up in the minutia of the day-to-day grind but it also leads to career fatigue and many questions about onersquos future

Maybe It Is the Compensation

Maybe the problem is the money but just not the way you think The first distinguishing characteristics that should be examined is a firmrsquos fixed and incentive compensation During the hiring phase base salary has a huge impact on a candidatersquos decision-making process Over time the variable compensation piece becomes much more important and

often drives many of the behaviors within a firm Consider the two compensation models in Figure 1

Figure 1 mdash The Continuum of Compensation Models

There are many firms that have migrated back and forth searching for the perfect compensation program ldquoThe Black Boxrdquo ensures that a team environment is created but leaves everyone in the firm confused about the criteria used to calculate each yearrsquos bonuses Additionally it fails to foster a spirit of meritocracy and could also create free-riders On the other hand a compensation program driven totally by project profitability will create a team focused on project profitability Forget team spirit especially if that affects onersquos annual compensation ldquoGood of the orderrdquo initiatives tend to suffer as time and resources spent in other areas will ultimately impact onersquos personal bottom lines While there is no perfect compensation system great firms consider the followingbull Thresholds and Guardrails mdash No

one can argue that a minimum floor be established as the firmrsquos minimum before any bonus funding takes place A minimum dollar value should be set in accordance with ownership desire for a return on their equity or some other financial benchmark The doors of the firm have to be kept open to make any bonus program viable

bull Transparency mdash The targets cannot keep moving The grading scales thresholds and parameters should be clear to everyone

bull Criteria that Speak to the Core Values mdash If the core values of the firm are ldquocustomer service safety and productivityrdquo those are the criteria that should be identified as bonus-worthy This hedges against having your best superintendent being on a job that is financially a failure but successful because of that individualrsquos merits Assuming the ldquobonus poolrdquo is funded they should be rewarded for exhibiting core values A firm cannot have core values but have their associates live their lives contrary to them This brings everything together

The key themes that every construction leader should recognize are that not every problem within the firm is tied to onersquos compensation When someone leaves the firm it should never be taken lightly Sure people will leave for a litany of reasons some of which have little to do with the workplace firm or strategic direction However so much can be gleaned from attrition and how to use this critical intelligence to drive processes and tools for the betterment of the firm The same people that are critical to running the projects of today will ultimately be running the business tomorrow

As a principal with FMI Tampa Fla Gregg Schoppman specializes in the areas of productivity and project management He also leads FMIrsquos project management consulting practice Prior to joining FMI Schoppman served as a senior project manager for a general contracting firm in central Florida He has completed complex and sophisticated construction projects in the medical pharmaceutical office heavy civil industrial manufacturing and multi-family markets He has also worked as a construction manager and managed direct labor Furthermore Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets He can be reached at (813) 636-1259 or gschoppmanfminetcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 11

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

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Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Improve Bottom Lines by Managing Driver Selection and Cell Phone Distracted Drivingby Michael Ahern

Feature

Consider 27 percent of all crashes involve cell phone use according to the National Safety Council and past performance of driving behavior is often a ldquopredictorrdquo of future driving outcomes according to the Insurance Institute for Highway Safety Effective controls for distracted driving and driver selection of employees who operate company-owned vehicles andor a personal vehicle for company business is critical to managing your commercial automobile exposure to loss

Cell Phones and Distracted Driving

Today there are more than 320 million wireless connections in the United States according to the National Safety Council And although public sentiment appears to be turning against cell phone use while driving many admit they regularly talk or text while driving The National Highway Traffic Safety Administration estimates that 9 percent of all drivers at any given time are using cell phones and the National Safety Council estimates about one in four motor vehicle crashes involve cell phone use at the time of the crash

Liability Cases Against Employers from Cell Phone Use by Employees

A jury found that a driver and the corporation that owned the vehicle were liable for $216 million because testimony revealed that the driver may have been talking with her husband on a cell phone at the time of the fatal crash according to the National Safety Council

An employee was involved in a fatal crash while making ldquocold callsrdquo as he

drove to a non-business related event on a Saturday night The firm did not own the phone or the vehicle but the plaintiff claimed that the company was liable because it encouraged employees to use their ldquocar phonesrdquo and lacked a policy governing safe cell phone use His firm settled the lawsuit for $500000 according to the National Safety Council

Most employers donrsquot realize they can be held liable if an employee causes an accident and injures another party while driving a company vehicle or using a personal vehicle for business-related activities Employers must realize the full extent of their exposure to liability The legal theory of respondeat superior or vicarious responsibility means that an employer maybe held legally accountable for negligent employee actions if the employee was acting within the

scope of his or her employment at the time of a crash The key phrase ldquoacting within the scope of his or her employmentrdquo can and has been defined broadly in cases of crashes involving cell phones according to the National Safety Council

Employers should be worried because bull Cell phone records can be

subpoenaed to prove the employee was on the phone

bull Other distractions cannot be identified to a specific time and many drivers donrsquot want to say they were distracted and not driving safely

With the risk of employer liability associated with employee use of cell phones while driving societyrsquos growing dependence on cell phones and the new laws restricting cell phone use while driving it is time mdash now more than ever mdash for employers to consider adopting or adapting comprehensive policies and practices concerning employee cell phone use Considerations include adopting cell phone policies prohibiting employees from using cell phones while driving for business purposes and while driving to and from work The restrictions typically include the use of hands-free headsets as cell phone distraction involves all types of driver distractions visual manual and cognitive Studies indicate itrsquos the conversation or cognitive distraction not the physical act of holding the phone that often contributes to accidents

While there is no guaranteed defense to liability developing appropriate policies training and enforcement mechanisms can help limit potential liability and increase public safety

Sample company driving policy languagebull Cellular phones should not be

used while operating a vehiclebull Allow voice mail to handle

your calls Return the calls and messages when you are not driving

bull If you need to place a call or send a text pull off the road to park in a legal and safe location

bull Ask a passenger to make or take the call

bull Inform regular callers of your driving schedule and when you will be available to talk

bull Keep your hands on the wheel and your eyes and mind on the road while driving

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S12

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

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Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

State legislatures have also responded by passing laws on cell phone use As of June 2015 according to the Governors Highway Safety Association bull Forty-six states ban all drivers from

textingbull Fourteen states and the District

of Columbia ban all drivers from talking on handheld phones

bull Thirty-eight states and the District of Columbia ban Graduated Driver License holders or teen drivers from any cell phone use

bull Twenty states and the District of Columbia have laws restricting cell phone use by bus school bus or transit drivers

The Insurance Institute for Highway Safety has a current listing about all US state laws

Companies with a strong safety cultures can help reduce the risk of injuring employees and the communities in which they live and work by banning the use of cell

phones while operating any vehicle while being used for company business

Driver SelectionEffective driver selection is one

of the most important things an employer can control to prevent vehicle accidents A company should manage a written Motor Vehicle Records program to assure that you are selecting the right employees to drive for your company and annually qualify them for acceptable driving records By successfully implementing or updating your program you can help ensure your company has reliable skilled employees who are familiar with their vehicles and qualified to operate those vehicles or their personal vehicle that may be used for company business

A study by the Insurance Institute for Highway Safety found the number of speeding tickets non-moving violations and accident history a

driver has in the past is in a direct relationship to the number of accidents that person will have in the future This has also been found to be true in other countries outside the United States These correlations includebull For every 1000 drivers with no

speed citations in the past three years they had 135 crashes in the next three years

bull For every 1000 drivers with one speed citation in the past three years they had 199 crashes in the next three years an increase of 47 percent

bull For every 1000 drivers with two or more speed citations in the past three years they had 273 crashes in the next three years an increase of over 100 percent compared to a driver with no speeding citations in the past three years

Evidence supports that speeding increases the probability of accidents but other traffic violations are often overlooked However a person with

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 13

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

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Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

non-speeding violations has an increased risk having an accident as well Findings includebull A person with any type of past

traffic violation has a higher risk of having an accident than someone with no violations

bull A person with no convictions on their driving record for the past three years can have a crash in the next three years

bull A person with two convictions on their driving record in the past three years is more than twice as likely to have a crash in the next three years as a driver with no past convictions

bull A person with six convictions on their driving record in the past three years is four times as likely to have a crash in the next three years as a driver with no past convictions

There is a strong pattern for drivers who have had accidents in past three years to have another accidentbull Drivers with no crashes in the past

three years may be involved in accidents in the next three years at a rate of one

bull A person with two accidents in the past three years is over two times as likely to have an accident in the next three years as someone with no past accidents

bull A person with four accidents in the past three years is almost four times as likely to have an accident in the next three years as someone with no past accidents

The increased probability for future accidents based on past accidents is almost the same as it is for past moving violations

Recommended MVR Guidelines

Whether MVRs are obtained by an employer or a third party managing the driver selection and ongoing qualification process is the employerrsquos responsibility There is a broad range of driving violations that CNA classifies into two major categories ldquoArdquo and ldquoBrdquo based on severity level that can be adopted as objective criteria Type A violations are more severe such as driving under the influence of alcohol or drugs speeding in excess of 14 mph over posted limit etc Type B

violations while still serious are less severe such as speeding 1-14 mph over the posted limit improper lane changes etc

CNA has created a Driver Account Driver Profile Tool that is based on proprietary CNA underwriting driver performance data It provides an insured with a snapshot of fleet driver performance which can then lead to quality benchmarking and improvement programs of driver selection Through this exclusive assessment CNA risk control consultants can advise and assist insuredrsquos in managing the effectiveness of driver selection

The CNA driver account profiles lowmoderatehigh risk is a CNA definition used to differentiate insured

driver selection quality The profiles are not necessarily an indication of insurability or overall account quality Using the definitions from the driver performance key enables the insured and CNA risk control to benchmark and set goals for improvement

When viewing the results that generate moderate or high risk an insuredrsquos response may be analogous as follows

While we may not like the results from our annual physical for example elevated cholesterol it is better that we know so we can consult with the doctor and via medication andor diet we can manage the cholesterol to a more healthy level Not knowing and taking no action will lead to elevated health risk

In much the same way with the MVR profile the customer may be disappointed to find they have a profile

that contains 5 percent of their drivers with Type A violations and 15 percent with Type B however they appreciate the information and can work with their CNA risk control consultant to improve their driver selection process

It is crucial for employers to know their employee driver profilersquos quality to help reduce the risk of serious consequences of physical and financial harm and perhaps and allegation or claim of negligent entrustment

Mike Ahern is an assistant vice president of construction at CNA CNArsquos construction segment provides a complete array of coverages for thousands of contractors and construction firms countrywide Through its unique and flexible insurance programs CNA has earned

the endorsement of many national construction trade associations for roofers electricians plumbers landscapers and many more For a complete list of CNA insurance solutions for this industry call 800-CNA-6241 or visit wwwcnacomconstruction Ahern can be reached at michaelaherncnacom The information examples and suggestions presented in this material have been developed from sources believed to be reliable but they should not be construed as legal or other professional advice Use of the term ldquopartnershiprdquo andor ldquopartnerrdquo should not be construed to represent a legally binding partnership Please remember that only the relevant insurance policy can provide the actual terms coverages amounts conditions and exclusions for an insured CNA is a registered trademark of CNA Financial Corporation Copyright copy 2014 CNA All rights reserved

Effective Jan 3 2012 the Federal Motor Carrier Safety Administration prohibits anyone operating a commercial motor vehicle from using hand-held cell phones while driving The National Safety Council in their Feb 21 2012 newsletter indicated that this ruling affects more than 4 million trucks and bus drivers

Commercial motor vehicle drivers are restricted from holding a mobile telephone to conduct a voice communication dialing a mobile telephone by pressing more than a single button or reaching for a mobile phone in an unacceptable and unsafe manner

Any violation of this restriction may result in a civil penalty imposed on drivers in an amount up to $2750 a civil penalty may be imposed on employers who fail to require their drivers to comply in an amount up to $11000 according to the US Department of Transportation Federal Motor Carrier Safety Administration

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S14

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

American Subcontractors Association Inc

1004 Duke St Alexandria VA 22314 wwwasaonlinecom (703) 684-3450 meetingsasa-hqcom

EARLY-BIRD

DISCOUNT ENDS

FEB 8 2016

REGISTERON LINE NOW

MARCH 3 ndash 5 2016 HYATT REGENCY bull MIAMI FLORIDA

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

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A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

THANK YOU SPONSORS

PLATINUM LEVEL

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

A national economist A pop-ular senior business consultant A national motivational speaker Our own government advocacy expert A luxurious dinner cruise on board a $5 million yacht And a skinny German juggler

SUBExcel 2016 promises to be another outstanding if not memorable event that in my opinion you wonrsquot want to miss Our annual convention will take place March 3-5 2016 in Miami Fla where we will commemorate our 50th anniversary I would like to personally invite you to attend

I also would like to invite you to arrive ear-ly to Miami to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm on Wednesday March 2 on the lower terrace of the Hyatt Regency Miami which overlooks the Miami River The annual convention will begin the following morning

One of the most recognizable economists Anirban Basu of Sage Policy Group Baltimore Md will kick off the program with the open-ing general session ldquoThe Economist Who Loved Merdquo on Thursday March 3 Basu is the chief economist to the Associated Builders and Contractors and the chief economic advi-sor to the Construction Financial Management Association

Also on Thursday ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo where registrants will partici-pate in a role-playing exercise and experience first-hand the challenges of a legislator deciding how to vote on controversial issues ldquoWill you be re-electedrdquo Nelson asks

Then wersquoll enjoy the hilarious ldquoHilby the Skinny German Juggle Boyrdquo who will entertain us during our keynote luncheon with his juggling and circus skills

On Thursday afternoon wersquoll have a ldquoShop Talk Round Tablerdquo where we will share in a

YOUrsquoRE INVITEDdiscussion about business issues and challenges

On Friday Chad Pearson of Plexxis Softare will facilitate a technology round table discus-sion ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo over break-fast and Stephane McShane of Maxim Consulting will pres-ent education workshops on ldquoPerformance-based Incentive Compensationrdquo and ldquoChange Order Managementrdquo

On Friday wersquoll also have an ldquoAsk an Attorneyrdquo panel discussion with the ASA Attorneysrsquo Council a ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors and built-in free time for many of us to explore Miami

On Saturday morning Dr Scott Sheperd a national speaker from St Louis Mo will give the keynote presentation ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh asso-ciate professor St Louis Universityrsquos John Cook School of Business and president of IntegTree will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

ASA will conduct its Annual Business Meeting from 1100 am to 1230 pm on Saturday

Finally SUBExcel 2016 will conclude with a 50th Anniversary Celebration on board the Biscayne Lady a 111-foot luxury yacht on Saturday March 5 The dinner cruise will include a reception banquet and awards gala Formal attire for this special event is encouraged

I hope you will be able to join us in this special anniversary celebration

Sincerely

Letitia ldquoTishrdquo Haley Barker2015-16 ASA PRESIDENT

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Conference AttireDress for education workshops general sessions committee

meetings council meetings task force meetings annual busi-ness meeting and special events is business casual Formal attire for the 50th anniversary celebration on board the Biscayne Lady is encouraged

Hotel InformationMake your online room reservations in the ASA room block

at the Hyatt Regency Miami at the special rate of $199 singledouble$244 triplequad The cutoff date for the room block is on or before 500 pm on Wednesday Jan 26 2016 Or call (888) 421-1442 and identify yourself as a member of the ldquoAmericanSubcontractors Association 2016rdquo

Check-in 400 pmCheck-out 1100 amParking $39 per night

Download a fact sheet about the hotel

Airport amp TransportationMiami International Airport (MIA) is 76 miles or a 16-minute

drive from the Hyatt Regency Miami Founded in 1928 MIA offers more flights to Latin America and the Caribbean than any other US airport is Americarsquos second-busiest airport for international passengers and boasts a lineup of more than 100 air carriers

Shuttle amp Taxi InformationPassengers at MIA are advised to ignore offers of

transportation from solicitors inside the terminal Solicitation of ground transportation is an illegal activity and many illegal solicitors are unlicensed and uninsured To obtain safe and legitimate ground transportation please be sure to go to the designated Taxi and Shuttle stands that are located at the lower-level curb outside of the baggage claim area where uniformed Miami-Dade Aviation Department staff members will be happy to assist you Please ignore any non-uniformed persons offering to assist with transportation or baggage Always seek out uniformed airport employees with MIA ID badges for assistance

Car Rental InformationThe Rental Car Center (RCC) just 1 mile east of MIA

houses 16 rental car companies in one stunning new 6500 vehicle facility The RCC is located at 3900 NW 25th Street Miami Fla 33142 Use the MIA Mover to connect between the airport and the RCC The MIA Mover Station is located on the 3rd level between Dolphin and Flamingo garages

Get proven business tips

from acclaimed speakers

that will transform your

company and your bottom

line to succeed in todayrsquos

construction markets

Learn about the latest

productivity-enhancing

products and services

provided by ASA exhibitors

REGISTRATIONEnjoy the excitement of

the Hyatt Regency Miami

On the Miami River in the

heart of downtown Hyatt

Regency Miami provides

luxurious amenities and

accommodations in a

vibrant setting Explore the

Riverwalk and shops at

Bayside Marketplace and

tour nearby tropical gardens

Enjoy special events

including the March 2

Presidentrsquos Welcome

Reception on the lower

terrace of the Hyatt

Regency Miami the special

50th anniversary celebration

on board the 111-foot luxury

yacht the Biscayne Lady

and other activities

Take a deeper look at your

industry your chapter and

your association and be part

of mapping our industryrsquos

path forward in ASArsquos

task force committee and

council meetings

amp much more

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

REGISTRATION

Early Registration (by Feb 8)(Add $200 if NOT staying at the Hyatt)

Regular Registration (after Feb 8)(Add $200 if NOT staying at the Hyatt)

1ST-Time ASA Member Attendee $795 $895

ASA Member $895 $995

2ND Company Registrant $699 $799

SpouseGuest AttendeeSpousesrsquo outings not included

$495 $595

Past National ASA President National ASA Chair Attendee $595 $695

ASA Non-Member $1095 $1195

New Executive Directors amp EDs Attending for the 1st Time Includes ED Outing

Complimentary Complimentary

All Other EDs (50 Discount) Includes ED Outing

$44750 $49750

EDUCATION DAY PASSESIf you are unable to attend the entire convention you can purchase a day pass for $350day and have access to all educational

workshops and committeetask force meetings for one day Day passes do not include entrance to ticketed events such as meal functions and social events See the registration form on page 11 for details

Register online at wwwSUBExcelcom mdash or complete and return the Printable Registration Form on page 11 to meetings asa-hqcom mdash on or before Feb 8 2016 to take advantage of the early-bird registration discounts You can still register at the regular price after Feb 8 2016 Full registration includes admittance to all educational workshops general sessions meal events social functions and committee and task force meetings Full spouse registration includes admittance to all educational workshops general sessions meal events social

functions and committee and task force meetings The cost of the two special spousesrsquo outings mdash a tour of Miami and a visit to the Vizcaya Museum amp Gardens mdash is not included but tickets may be purchased separately

Save $200 by staying at the convention hotel Hyatt Regency Miami 400 South East Second Avenue Miami FL 33131-2197 (305) 358-1234

Make your online room reservations in the ASA room block atthe special rate of $199 singledouble $244 triplequad

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

SPECIAL EVENTS

WEDNESDAY MARCH 2Presidentrsquos Welcome ReceptionLake Terrace Hyatt Regency Miami

2015-16 ASA President Letitia ldquoTishrdquo Haley Barker invites you to arrive in Miami early to attend the Presidentrsquos Welcome Reception from 530 pm to 700 pm Join colleagues and friends outside the Hyatt Regency Miami on the Lower Terrace overlooking the Miami River

THURSDAY MARCH 3Spousesrsquo Outing Miami City Tour130 pm to 430 pm

This fully guided bus tour will showcase some of the major sights in and around Miami Florida Spouses will visit the Art Deco District the Holocaust Memorial Wynwood the Botanical Garden Key Biscayne and Little Havana

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

FRIDAY MARCH 4Spousesrsquo Outing Vizcaya Museum amp Gardens130 pm to 500 pm

Villa Vizcaya built in 1916 now named the Vizcaya Museum amp Gardens is the former villa and estate of business-man James Deering of the Deering McCormick-International Harvester for-tune on Biscayne Bay in the present-day Coconut Grove neighborhood of Miami Fla The early 20th century Vizcaya estate dec-orated and furnished with antiques from Europe also includes extensive Italian Renaissance gardens native woodland landscape and a historic village outbuild-ings compound The landscape and archi-tecture were influenced by Veneto and Tuscan Italian Renaissance models and designed in the Mediterranean Revival architecture style with Baroque elements

The cost of this special outing for spouses is NOT included in the full spouse registration Individual tickets may be pur-chased online for spouses and guests

Executive Directorsrsquo Outing200 pm to 500 pm

ASA chapter executive directors will tour Little Havana experiencing the tastes sounds and atmosphere of the Cuban community in Miami

SATURDAY MARCH 550th Anniversary Celebration Reception Banquet amp Awards Gala630 pm to 1000 pm

Biscayne Lady Dinner CruiseThis yearrsquos SUBExcel reception ban-

quet and awards gala will take place on board the Biscayne Lady a 111-foot luxury yacht Boarding and cocktails will begin at 630 pm The cruise will set sail at 700 pm and will return at 1000 pm Formalattire for this special event is encouraged

The Biscayne Lady is where ASArsquoS 50th Anniversary Celebration will take place

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Discount pricing on maintenance repair and operating supplies

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Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

SPECIAL EVENTS CONFERENCE SCHEDULEsubject to change

WEDNESDAY MARCH 2800 am ndash 100 pm

Finance Committee Meeting

1000 am ndash 100 pmExecutive Committee Meeting with Lunch

Noon ndash 500 pm Registration Open

130 pm ndash 330 pm Chapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo Jon Bohm Driven Coaching Goodyear Ariz

130 pm ndash 330 pm EDsrsquo Council and ED Training

345 pm ndash 445 pm Joint Meeting of the Chapter Leadership Council and EDsrsquo Council

530 pm ndash 700 pmPresidentrsquos Welcome Reception

THURSDAY MARCH 3700 am ndash 500 pm

Registration Open

830 am ndash 915 amBreakfast

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo Anirban Basu Sage Policy Group Inc Baltimore Md

1045 am ndash 1100 amNetworking Break

1100 am ndash 1215 pmEducation Workshop mdash ldquoThe Race for Re-Electionrdquo E Colette Nelson ChiefAdvocacy Officer AmericanSubcontractors AssociationAlexandria Va

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo Jon Bohm Driven Coaching Goodyear Ariz

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

115 pm ndash 145 pmMini Workshop mdash Hilby the Skinny German Juggle Boy

130 pm ndash 430 pmSpousesrsquo Outing mdash Miami City Tour

145 pm ndash 200 pmNetworking Break

200 pm ndash 415 pmEducation Workshop mdash ldquoShop Talk Round Tablerdquo mdash Bring Your Business Issues to Discuss

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

230 pm ndash 430 pmExhibitor Set-Up

315 pm ndash 430 pmSilent Auction Set-Up

430 pm ndash 630 pmEXPO and Silent Auction

700 pm ndash 1000 pmASA-PAC Event

FRIDAY MARCH 4700 am ndash 500 pm

Registration Open

730 am ndash 845 amKeynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

900 am ndash 1015 amASA Task Force on Government Advocacy Meeting Part 1 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

900 am ndash 1015 amEducation Workshop mdash ldquoPerformance-based Incentive Compensationrdquo Stephane McShane Maxim Consulting Denver Colo

900 am ndash 1015 amExecutive Directorsrsquo SHARE

1015 am ndash 1045 amNetworking Break with Exhibitors

1045 am ndash Noon ASA Task Force on Government Advocacy Meeting Part 2 mdash Facilitated by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

1045 am ndash Noon Education Workshop mdash ldquoAsk an Attorneyrdquo a Panel Discussion with the ASA Attorneysrsquo Council

1045 am ndash Noon Executive Directorsrsquo SHARE

Noon ndash 130 pm ldquoSpeed Datingrdquo Luncheon Round Tables with Exhibitors

130 pm ndash 145 pmNetworking Break

130 pm ndash 300 pmExhibitor Break-Down

130 pm ndash 500 pmSpousesrsquo Outing mdash Vizcaya Museum amp Gardens

145 pm ndash 300 pmEducation Workshop mdash ldquoChange Order Managementrdquo Stephane McShane Maxim Consulting Denver Colo

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

145 pm ndash 300 pm ASA Task Force on the Subcontractors Legal Defense Fund Meeting

200 pm ndash 500 pmExecutive Directorsrsquo Outing mdash Tour of Little HavanaExperience the tastes sounds and atmosphere of the Cuban community in Miami

315 pm ndash 430 pm ASA Task Force on Contract Documents Meeting

500 pm ndash Evening on Your Own

600 pm ndash 1000 pmAttorneysrsquo Council Reception

SATURDAY MARCH 5700 am ndash 100 pm

Registration Open

730 am ndash 815 amBreakfast

800 am ndash Noon Attorneysrsquo Council Meeting

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo Dr Scott Sheperd St Louis Mo

900 am ndash 915 amNetworking Break

915 am ndash 1030 amEducation Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

915 am ndash 1030 amExecutive Directorsrsquo SHARE

1030 am ndash 1100 amNetworking Break

1100 am ndash 1230 pm Annual Business Meeting

1230 pm ndash 130 pmExecutive Committee and ASA Board of Directors Luncheon

130 pm ndash 430 pm ASA Board of Directors Meeting

1230 pm ndash 700 pmExplore Miami

630 pm ndash 1000 pmBiscayne Lady Dinner Cruise mdash 50th Anniversary Celebration Reception Banquet amp Awards Gala

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

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mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

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Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

SEE REGISTRATION FORM

WEDNESDAY MARCH 2

130 pm ndash 330 pmChapter Leadership Council and Leadership Training mdash ldquoUnlocking the Bestrdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you inspire others to bigger results while unlocking the best in yourself

130 pm ndash 330 pmEDsrsquo Council and ED TrainingmdashrdquoUnderstanding Yourself and Others Personality and Leadershiprdquo

Presented by Jamie Hasty SESCO Management Bristol Tenn

Effective leaders understand the importance of understanding their behavioral tendencies and how their style may affect others Truly superior leaders recognize the importance of assessing behavior and using that knowledge in assigning work direct-ing tasks and in creating efficient teams Further this assessment is vital in dealing with Boards of Direc-tors and association members Dur-ing this presentation participants will complete the DiSC Personal Profile to model their own leadership style

THURSDAY MARCH 3

915 am ndash 1045 amOpening General Session mdash ldquoThe Economist Who Loved Merdquo

Presented by Anirban Basu Sage Policy Group Inc Baltimore Md

Basu will provide a detailed data-driven update of the performance of the global national and relevant

regional economy He will pay special attention to key aspects of economic life including trends characterizing financial real estate energy and labor markets

1215 pm ndash 115 pmKeynote Luncheon mdash Hilby the Skinny German Juggle Boy

1100 am ndash 1215 pmExecutive Director Education Workshop mdash ldquoInspired Leadershiprdquo

Presented by Jon Bohm Driven Coaching Goodyear Ariz

An interactive workshop to help you build a growing organization and a high performing team by leading vol-unteers with inspiration and purpose

1100 am ndash 1215 pm Education Workshop mdash ldquoThe Race for Re-Electionrdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

Citizens are often quick to forget the geographic nature of government in the United States No matter what groups are involved in an issue on Election Day it all comes down to the people who live and vote in a Congressional district No matter how cynical you are this case study will help you understand how critical it is for a lawmaker to respond to the district from which he or she is elected In this case study and role-play yoursquoll experience first-hand the challenges of a legislator deciding how to vote on controversial issues Will you be re-elected

200 pm ndash 315 pmExecutive Director Education Workshop mdash ldquoMeeting the State Legislatorrsquos Committee Challengerdquo

Presented by E Colette Nelson Chief Advocacy Officer American Subcontractors Association Alexandria Va

The legislative process is full of un-certainty This is particularly true in the committees of state legislatures Some votes are more important than others as are some lawmakers and depend-ing on where they live some grass-roots advocates So strategy is criti-cal for grassroots organizers like ASA chapter leaders In this case study and role-play yoursquoll experience the challenges of a legislative committee as you pass a bill through the legisla-ture while at the same time defeating the legislation of your opponents

200 pm ndash 415 pm Education Workshop mdash ldquoShop Talk Round Tablerdquo

Bring your business issues to discuss

FRIDAY MARCH 4

730 am ndash 845 am Keynote Breakfast Technology Round Tables mdash ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo

Presented by Chad Pearson Director Of Business Development Plexxis Software Woodbridge Ontario Canada

Finding the right technology for your organization can be an overwhelming task riddled with tough questions How do you search through the endless options Is your trade

EDUCATION PROGRAMS

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

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Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

becoming an app-driven industry Is there really a complete solution Learn from IT professionals and fellow members on how to build your road map to a better more productive business

900 am ndash 1015 am Education Workshop mdash ldquoPerformance-based Incentive Compensationrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Eighty-four percent of organizations offer some form of reward programs to employees A well-designed compensation plan rewards both individual and group performance is connected to the performance management system and incentivizes certain behaviors Developing internal processes is critical to an effective incentive compensation system Stephane McShane will explain the importance of defined standards and processes identify how to utilize the right tools to drive desired outcomes and illustrate how to measure performance with objective metrics and establish KRA-based job descriptions

1045 am ndash NoonEducation Workshop mdash ldquoAsk an Attorneyrdquo

A panel discussion with the ASA Attorneysrsquo Council

145 pm ndash 300 pm Education Workshop mdash ldquoChange Order Managementrdquo

Presented by Stephane McShane Maxim Consulting Denver Colo

Effective change order management can dramatically reduce a subcontractorrsquos risk and increase

profitability This interactive course explores the change order process from a subcontractorrsquos view point and provides participants with hands-on training in recognizing scoping pricing and negotiating change orders This course culminates in a mock negotiation where participants can immediately practice the skills that they have learned

145 pm ndash 300 pmEducation Workshop mdash ldquoRisk Management Panelrdquo Jonathan Watras Zurich Endina Minn Michael Ahern CNA Insurance Co Chicago Ill and others

This panel of construction insurance experts will discuss proven best practices to improve your companiesrsquo risk management

SATURDAY MARCH 5

815 am ndash 900 amSaturday Keynote Presentation mdash ldquoTo Manage Stress Rekindle Your Spiritrdquo

Presented by Dr Scott Sheperd St Louis Mo

Dr Sheperd uses a humorous but thought provoking approach that both challenges the audience to accept responsibility for their own lives and gives them strategies to improve the quality of those lives ldquoI donrsquot want people to just feel good at the end of my talk and have it last two hours or even two weeks I want them to have ideas they can use after they leave because that is when the work beginsrdquo

915 am ndash 1030 am Education Workshop mdash ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo

Presented by Dr Nitish Singh associate professor St Louis Universityrsquos John Cook School of Business and president IntegTree

The increasing number of regulations their increasing complexity and the broad application of those regulations means that determining if one is lsquoin compliancersquo is becoming ever more difficult Therefore to adjunct your regulatory compliance regimen you need to avoid many of the ethical pitfalls from which compliance regulations grow (eg dishonesty fraud and so on) Compliance communications can be an effective tool toward addressing key ethical blind spots which are at the root of various compliance concerns However you need to first identify these blind spots and then align your compliance training to effectively address them

EDUCATION PROGRAMS

BRING YOUR SPOUSESUBExcel 2016 will take place March 3-5 2016 at the Hyatt Regency Miami ASA warmly invites you to register and bring your spouse with you to SUBExcel 2016

Your spousersquos full registration includes admittance to all social functions educational sessions and other meetings If your spouse is interested in participating in the outings you can purchase single event tickets separately

Early-Bird Discounts End Mon Feb 8 2016

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

SEE REGISTRATION FORM

La Epoca (imported from Havana) Visitors can shop all day lunch on food from almost any-where in the world visit art and historical muse-ums or just stroll the streets of Miamis historic district Also the destination for world-class jew-elry shopping including the Seybold Building which boasts more than 280 jewelers Take the Downtown Miami Partnership historic walk-ing tour every Saturday at 1030 am Call for reservations

McCormick Place Miami McCormick Place is a creative ecosystem integrating art music fashion and design Located in the heart of Downtown Miami it is the ideal venue for captivating and experiential event production Built in 1924 as a US Customs Warehouse the building was once used as a lookout post to spot nefarious characters entering Downtown via Biscayne Bay and The Miami River Today McCormick Place has been transformed into a cultural utopia containing a fine arts gallery a unique special events venue artistic studios and creative offices The venue consists of a ground floor 3400-square-foot gallery and up to an acre of outdoor event space featuring more than 100 private on-site parking spaces

MDC Museum of Art + Design Exhibits the work of renowned and emerging con-temporary artists Regular museum hours are Wednesday Thursday Friday Saturday Sunday 12 pm ndash 5 pm We are open late every first Friday of the month 12 pm ndash 8 pm Free admission

EXPLORE MORE THINGS TO DO IN DOWNTOWN MIAMI

MDC Museum of Art + Design

Peacuterez Art Museum Miami Located in Downtown Miamirsquos Museum Park along-side Biscayne Bay Peacuterez Art Museum Miami (PAMM) is Miami-Dade Countys flagship museum presenting international art of the 20th and 21st centuries Designed by prize-winning architects Herzog amp de Meuron the state-of-the-art facility offers 200000 square feet of indoor and outdoor program space including flexible galleries an education complex the PAMM Shop with unique gifts art books and furnishings and Verde waterfront restaurant and bar

HistoryMiami Museum This premier cul-tural institution and Smithsonian Affiliate is committed to gathering organizing preserv-ing and celebrating Miamis history as the unique crossroads of the Americas It accom-plishes this through exhibitions city tours edu-cation research collections and publications The exhibitions rotate annually and Tropical Dreams A Peoples History of South Florida is on permanent display Visitors can also stop in at the Archives and Research Center to peruse the non-circulating library featuring documents and more than one million photographs Group tours are available by reservation only Call for tour prices and times Open Monday through Saturday 1000 am to 500 pm and Sunday noon to 5 pm

El Cielo by Chef Juan Manuel Barrientos El Cielo by Chef Juan Manuel Barrientos modern creative style has been inspired not only by the molecular gastronomy movement and his ancestral roots of Colombia but also a desire to combine the schools of cooking and neuroscience Chef Barrientos

is concerned not only with making his food taste heavenly but also how it makes his cus-tomers feel and what emotions it awakes in them Guests begin a culinary journey of the senses in one of the restaurants leather-backed chairs as the sun shines through the glass wall while the river outside soothes the soul - and let Barrientos play with their palates and their minds Private room for groups available Outdoor Dining Reservations Required

Mary Brickell Village This retail and res-taurant destination is right in the center of everything Tenants include Balans Restaurant Rosa Mexicano PF Changs Oceanaire Room Starbucks and Regions Bank

Miami Center for Architecture amp Design This is the place for anyone inter-ested in design and the built environment with community meeting space and educational programs to enhance public appreciation for art and design It is home to AIA Miami as well as the Visitors Center for Downtown Miami The Visitors Center is everything Miami - cul-tural events attractions maps information and more It houses flexible exhibitgallery space that accommodate lectures seminars meet-ings private events and includes a store for architecture and design-oriented books and gifts space for urban lab studios and flex meet-ing rooms The Center houses exhibitions cele-brating the architecture of the City of Miami

Downtown Miami Shopping DistrictHistoric Flagler Street is the heart of the City of Miami Hundreds of stores and shops make up the Downtown Shopping District anchored by Macys Marshalls Ross Dress for Less and

THINGS TO DO

Miami Center for Architecture amp Design (photo by Silvia Ros)

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Registration FormComplete amp return to American Subcontractors Association

1004 Duke Street Alexandria VA 22314-3588Phone (703) 684-3450 | Fax (703) 836-3482

Email meetingsasa-hqcom | Web site wwwasaonlinecom

Attendee InformationName ___________________________Title _____________________________Nickname for Badge ________________

Company _________________________Address __________________________CityStateZip ______________________

Email Address _____________________Phone Number ____________________Dietary Restrictions Yes No

Additional Employee(s) (if applicable)Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

Name ____________________________Title _____________________________

Nickname for Badge ________________Email Address _____________________

Phone Number ____________________Dietary Restrictions Yes No

SpouseGuest (if applicable)Name ____________________________ Nickname for Badge ________________ Dietary Restrictions Yes No

Registration Fee (Includes admittance to social functions educational sessions committee task force amp council meetings)

QtyEarly

Registration (by Feb 8)

Regular Registration (after Feb 8)

Add $200 if NOT staying at Hyatt Regency Miami

1st Time ASA Member Attendee x $79500 $89500 = $ASA Member x $89500 $99500 = $2nd Company Registrant x $69900 $79900 = $SpouseGuest Attendee x $49500 $59500 = $Past National ASA PresidentNational ASA Chair Attendee x $59500 $69500 = $

New Executive Director amp EDs Attending for 1st Time Includes ED Outing x Complimentary Complimentary = $

All Other EDs Includes ED Outing x $44750 $49750 = $ASA Non-Member x $109500 $119500 = $

Voluntary contribution to the ASA Chapter Scholarship Fund ($2500 suggested) = $Voluntary contribution to the ASA Subcontractors Legal Defense Fund ($10000 suggested) = $

RSVP I will attend the banquet on Saturday March 5 There will be people in my party

Single Event TicketsThursday March 3 City Tour (NOT included with registration) tickets x $5000 = $

Friday March 4 Viscaya Museum Tour (NOT included with registration) tickets x $4000 = $

Saturday March 5Attorneysrsquo Council Pass (INCLUDED with registration pricing for spouseguests NOT registered)

tickets x $17500 = $

Saturday March 5 Banquet (INCLUDED with registration andpricing for spouseguests NOT registered) tickets x $17500 = $

Education Day Passes (Pass permits entry to education sessions and council meetings for 1 day [social amp meal functions are NOTincluded] Cost is $350 per day Indicate days for which you would like a pass)

of TicketsThursday March 3 Friday March 4 Saturday March 5 $35000 x = $

TOTAL PAYMENT AMOUNT = $

Method of Payment (All faxed and emailed registrations MUST include a credit card number)Check enclosed (payable to American Subcontractors Association Inc)

Check _______________ or Charge my American Express MasterCard VisaCard __________________________________________ Expiration date _______________Billing Address________________________________________________________________Authorized Signature __________________________________________________________Print name as it appears on credit card ____________________________________________

Cancellation amp Refund PolicyFull registration fees will be refunded

if a written cancellation notice is received at ASA Headquarters by Feb 8 2016A $50 processing fee will be deducted from refunds made after Feb 8 2016 No refunds will be made after Feb 19

2016 All cancellation requestsmust be made in writing

codesubx16

March 3-5 2016 mdash Hyatt Regency Miami Florida

THINGS TO DO

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THEVALUE OF IN-CAB BEHAVIORTR AINING FROM CNA

A STAGGERINGSTATISTIC INSPIRESA LIFE-SAVING RULE

When a recent safety webinar revealedthat 280000 drivers are involved inserious accidents every year CalvinBerger of Calberg Contracting took CNArsquosrecommendation to heart and postedplacards restricting cell phone use in eachof his companyrsquos vehicles Now CalbergContracting is filing fewer claims andCalvinrsquos enjoying a handsome bonus forworker safety and performance

When yoursquore looking for risk controlprograms that keep workers dialedin to relevant industry trends hellipwe can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

TURN UP THE VOLUME amp WATCH ASArsquoS NEW SUBEXCEL 2016 VIDEO

Turn up the volume and watch the new ASA video ldquoSUBExcel 2016 mdash We Build Excellencerdquo about ASArsquos upcoming annual convention and commemorative anniversary celebration March 3-5 2016 in Miami

ldquoItrsquos going to be very exciting because itrsquos ASArsquos50th anniversaryrdquo said 2015-16 ASA President Letitia ldquoTishrdquo Haley Barker ldquoWe have lots of great things a lot of great celebrations [planned] as well as some new educational programs for the lead-ers of the companies Itrsquos going to be an awesome event so I really would like everybody to mark their calendar and plan to be thererdquo

Register online by the Feb 8 2016 early-bird deadline and make your hotel reservations online to stay in the ASA room block at the Hyatt Regency Miami ASA has negotiated a room rate of $199 singledouble or $244 triplequad and the cutoff date for the room block is on or before 500 pm Eastern time on Jan 26

The education program will be top-notch OnThursday economist Anirban Basu will present ldquoThe Economist Who Loved Merdquo Then ASA Chief Advocacy Officer E Colette Nelson will present ldquoThe Race for Re-Electionrdquo Hilby the Skinny German Juggle Boy will enter-tain us during a keynote luncheon

followed by a mini workshop In the afternoon subcon-tractors will discuss business issues and challenges dur-ing a ldquoShop Talk Round Tablerdquo On Friday Chad Pearson of Plexxis Software will facilitate the Keynote Breakfast Technology Round Tables ldquoOutpacing Technology Trends and Rising Expectations in the Tradesrdquo Then Stephane McShane of Maxim Consulting will present ldquoPerformance-Based Incentive Compensationrdquo and a panel discussion with the ASA Attorneysrsquo Council ldquoAsk an Attorneyrdquo will conclude the morning education programming In the afternoon McShane will present ldquoChange Order Managementrdquo During a concurrent time-slot Jonathan Watras of Zurich and Michael Ahern of CNA Insurance Co will facilitate a ldquoRisk Management Panelrdquo discussion of best practices On Saturday Dr Scott Sheperd will present ldquoTo Manage Stress Rekindle Your Spiritrdquo and Dr Nitish Singh of St Louis University will present ldquoWhat We Need to Communicate amp Why Toward Effective Compliance Communicationsrdquo ASArsquos special 50th anniversary cel-ebration will take place on board the luxury yacht The

Biscayne Lady Saturday night For the full schedule and education program visit SUBExcel 2016 online

Visit SUBExcel 2016 for more information or enter through the wwwSUBExcelcom portal Be sure to download the new brochure and join the ASA Facebook Event Page

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

wwwSUBExcelcom

March 3-5 2016Hyatt RegencyMiami Florida

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Feature

Building for the Future mdash Addressing Construction Industry Workforce Issuesby Laura Cataldo

The economic reports sound quite promising for the construction industry 22 percent increase expected for 2016 private construction is booming and infrastructure investment is strong Yet almost every economic forecast includes a warning that the lack of skilled workers will make this growth opportunity next to impossible to meet

Predictions of workforce shortages may be scary but they can help us understand the challenges our industry faces and identify solutions for ASA members and chapters

War for TalentThere are many reasons why the

workforce shortage is hitting the construction industry hardbull Aging workforcebull Dislocated workers that are not

returning to constructionbull Lack of diversificationbull Image issues with younger

generationsThe impact that the recession had

on the retirement of Baby Boomers has been well publicized Many that were near or at retirement age elected to remain in the workforce after

losing a substantial amount of their retirement funds These same workers are now planning an exit strategy if they have not left the industry already Interestingly the construction industry skilled trades are older on average than other industries More than 53 percent of the trades are over the age of 45 compared to only 44 percent of other industries Given the physically demanding nature of the construction trades this statistic seems counterintuitive but does an outstanding job of demonstrating that we have an aging workforce

A recent Wall Street Journal article ldquoWhere have all the construction workers gonerdquo found that many of the workers laid off during the recession have moved on to other industries and have no plans to return Recent employment numbers suggest that the nation is nearing a saturation point of eligible employment With nationwide unemployment close to half of 2010 and as low as 43 percent in some states there simply is not a surplus of workers available to work

The demographics of the construction workforce do not match the labor force In 2010 the workforce was composed of 15 percent Latinos 12 percent African Americans and 5 percent Asians Very few companies

can state that their workforce aligns with national statistics The reality is that on average the construction workforce is middle-aged white males The strategy moving forward must include the implementation of change to bring the demographics in much closer alignment to national statistics To accomplish this necessary action the construction industry needs to do much more to diversify its workforce This would also include significant efforts to attract women to the construction workforce as well

Many schools across the country have adopted a ldquocollege for allrdquo mentality that has negatively impacted the construction industryrsquos ability to reach young people Career and Technical Education has been declining for the last 20 years as schools emphasized college preparation not career preparation Students today do not have the opportunity to experience the high-tech nature of the rapidly changing construction industry In fact some counselors threaten construction careers as the ldquolast choicerdquo if you cannot make it in the high school system What happened to seeking the ldquobest and brightestrdquo

No wonder economic reports are undermined by warnings of a workforce shortage mdash the construction

Labor Force by Race 2010 Projected through 2050The share of whites in the labor force will decline by 19 percentage points while African-Americans and Latinos combined will rise by 15 percentage points by 2050

215

12

5

66 2010

5

30

128

45 2050

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S16

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

industry workforce is aging itrsquos not diverse enough and it isnrsquot attractive to young people That said there is plenty of good news on the horizon for the industry and opportunities to engage in workforce initiatives on the local level bull Both federal and state governments

are committed to workforcedevelopment as it is critical toeconomic development

bull Education is starting to shift back toan emphasis on college and careerpreparation providing the perfectopportunity for the industry to reachout an engage the future workforce

bull The construction industry is unitingthrough national efforts to findsolutions to recruit and retain afuture workforce

A main topic at this yearrsquosNational Governorrsquos Conference was workforce development Economic development is only possible when employers are successful and this requires a productive workforce The Federal Workforce Innovation and Opportunity Act provides $98 billion a year and is the single largest source of federal funding for job training and career services WIOA promotes apprenticeship and industry credentials such as NCCER and provides reimbursement for employer-driven work-based training Sounds too good to be true doesnrsquot it

How can the construction industry position itself to get access to this $98 billion to ease its workforce challenges Opportunity America has partnered with industry organizations and construction employers to develop this Roadmap to Workforce Solutions The roadmap identifies four ways that companies can engage workforce development in their own communities

Influence PolicyWIOA funds are awarded to each

state by the Department of Labor State and local Workforce Investment Boards are the bodies that identify which industries get priority for funding determine how much money is awarded and provide training and employment services ASA members and chapters can have significant influence by volunteering to serve

on state and local WIBs At the very least make sure that the construction industry is represented on these boards As with most things in life you have to be at the table in order to take advantage of the opportunities available Find your workforce board httpwwwservicelocatororgworkforcecontactsasp

Hire WorkersIf your company participates in a

registered apprenticeship program WIOA provides funds to make hiring pre-apprentices and apprentices easier One Stop Centers are the outreach arm of local WIBs where job seekers can access job listings and career services Most of the potential employees that you will engage through the One Stop Centers are untrained in the skills required by the construction industry WIOA funds can be used to provide basic skill training test readiness and work experience for those interested in the apprenticeship pathway Individual Training Accounts provides vouchers for individuals to receive training through community colleges vo-tech centers for-profit training centers trade associations or union training programs The local WIB will help connect you with other partners such as Community Based Organizations that can assist the hiring process by targeting outreach programs at a more diverse population

Partner with EducatorsEngagement at the local level with

the K-12 school system is critical to educating teachers students and parents about the tremendous career opportunity our industry offers This can be as easy as offering to donate equipment and materials for classroom projects hosting jobsite visits providing guest speakers in the classroom participating in organized outreach programs like ACE Mentoring and utilizing students for job shadow and internship employment Dispel the myth that a construction career means you shut the door to continuing education by sharing information about apprenticeship and the tremendous opportunities to advance Many educators and guidance counselors

do not understand the apprenticeship system and that many states offer technical college credits for apprenticeship Unlike most industries construction is one of the few where you can start out at virtually any position and end up owning your own company some day if that is your goal We have a great story to tell we just need to get out there and tell it in order to engage a future workforce

Seek Training ReimbursementOn-going training is very common in

the construction industry as changing technology OSHA requirements and owner demands require a skilled workforce Under WIOA employers can seek funding for on-the-job and incumbent training for new and existing employees On-the-job training funds cover 50 percent to 75 percent of the traineersquos wages for a limited duration in order to give workers the knowledge and skills necessary to do the job Customized training to meet specific requirements of a job such as Signaling training also qualify for reimbursement as long as the training results in an industry recognized credential

Trade associations like ASA are in the perfect position to help members develop local regional and statewide partnerships to address workforce strategies Utilize the collective experience geographic reach and resources of members and industry partners to make the largest impact on the workforce opportunities that are facing us

Laura Cataldo associate director at Maxim Consulting Group works with construction organizations of all sizes to evaluate business practices and assist with management challenges Having worked in the construction industry for over 20 years Cataldo offers a depth of experience working with contractors associations and workforce partners to improve profitability and succeed in the changing marketplace She understands the challenges of todayrsquos construction marketplace and is keenly in touch with future trends She can be reached at (608) 616-2835 or lauracataldomaximconsultingcom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 17

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

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FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

SPECIAL FEATURE

Drones in the Construction Industry

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S18

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

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Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

More Than Blue Skies Above The Growing Use of Dronesby Michael Alberico and Jay Shelton

Unmanned Aerial Vehicles (UAVs) or drones are often used to enhance public safety support agriculture help the environment monitor the climate and mitigate disasters

The construction industry is slowly jumping on the drone bandwagon as these devices are extremely cost-effective and can be used in several capacities including

bull surveying large areas

bull providing real-time data on jobprogress

bull identifying potential hazards

bull scaling bridges and buildings toassess condition through high-resolution images and

bull making basic repairsBut with this newer technology

comes complex challenges specifically related to insurance and privacy liability For instance a contractor could be building a road and while surveying it the drone inadvertently takes images of nearby homeowners in their backyard This invasion of privacy could mean a lawsuit

A recent Reuters Ipsos poll cited that 73 percent of respondents wanted regulations for drones and 71 percent thought that drones should not be allowed to operate over someone elsersquos home Even President Obama weighed in by ordering the Federal Aviation Administration (FAA) and other US agencies to make sure drones are not dangerous and donrsquot violate peoplersquos privacy

The national attention and concern over privacy is warranted as drones become more mainstream especially for contractors looking to be more economical The FAA forecasts that the number of commercial drones could reach 7500 by 2020 other reports estimate the number could be as high as 20000

Currently it is illegal to fly drones for commercial purposes unless the operator has a specific exemption from the FAA for testing or government use Looking ahead commercial drone flights could be legalized under

proposed rules issued by the FAA on Feb 15 If adopted the new rules would allow any company to fly a UAV so long as it abides by specific guidelines

bull Commercial pilots will now beconsidered operators and mustpass a test at a FAA facility obtaina certificate rated for flying a smallunmanned aircraft and renew thattest every two years

bull Operators must be at least 17 yearsold

bull Commercial drones have to stayunder 500 feet as well as fly onlyduring the day and within anoperatorrsquos line of sight

bull Rules apply to all units classified asa ldquosmallrdquo unmanned aircraft whichthe FAA defines as 55 pounds

Even with the FAA rule changesUAVs carry a host of other risks for construction companies including bodily injury and property damage UAVs can strike buildings cars and other property especially if ldquoloss of linkrdquo happens where the operator loses contact with the drone Another concern is that current commercial general liability policies generally exclude aviation risk

Minimizing Risk for Construction-Related Businesses

There are a few ways construction companies can mitigate the risks associated with UAVs For instance a company operating UAVs should understand the FAA rules prior to operation and remain fully compliant If hiring a company that operates UAVs make sure there is a contract that indemnifies the company from losses that occur as a result of UAV operations

Finally implement a financial backstop from losses by purchasing UAV insurance This is a relatively new product and Lexington Insurance is one of the first to offer a standalone policy as well as an endorsement on existing policies Many operators are small entities and may be able to wrap all of their insurance into one policy that

has professional general and aviation liability together

As this industry continues to evolve and utilize more technology the biggest challenge for insurers will be evaluating three key areas of risk the quality of the equipment the qualification of the operator of the equipment and what is the environment in which the UAV is being operated For companies that utilize UAVs addressing the key underwriting risks and implementing best practices will ensure the use of UAVs remains practical and cost-effective

Michael Alberico is a Senior Vice President and Construction Practice Leader at Assurance He maintains a special focus on the construction industry as well as alternative risk financing With nearly 30 years of experience Michaelrsquos primary responsibility is to provide a comprehensive and integrated risk management program that fully addresses risk needs while maintaining price sensitivity Michael graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Arts degree in History Michael can be reached at malbericoassuranceagencycom httpwwwassuranceagencycom Jay Shelton is the Senior Vice President of Risk Management Services at Assurance He performs a full range of risk and insurance management functions including policy selection and negotiation broker and TPA management claim management risk identification forecasting model development trend analysis OSHA and EPA compliance and the development of performance benchmarking Jay is a veteran of the United States Marine Corps earned a Master of Business Administration from Notre Dame University and a Bachelor of Science degree in Criminal Justice from Indiana University Jay can be reached at jsheltonassuranceagencycom httpwwwassuranceagencycom Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 19

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

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Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

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d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

The use of unmanned aerial vehicles (UAVs) or drones on construction jobsites is in the early adopter phase but the initial results are compelling

The goal of using UAVs is to reduce costs associated with poor communications from the field reduce material theft from the jobsite and increase worker safety The primary role of UAVs is to provide real-time reconnaissance and surveillance from the jobsite in the form of high-definition (HD) video still images and light detection and ranging (LIDAR) to create 3-D models These images and modelscan be superimposed over existingplans and each other in order to

bull identify changes

bull provide evidence

bull proactively solve or prevent issues

bull communicate more effectively andefficiently and

bull report cost time and energysavings

Rapid advances in camera sensingaeronautics battery and autopilot navigation technologies have helped make UAVs affordable reliable and easy to operate These small vertical take-off or landing (VTOL) multi-propeller helicopters (called quadcopters) can be equipped with cameras or LIDAR As long as the UAV weighs less than 44 pounds and travels less than 400 feet (120 meters) it is considered ldquoHobby Classrdquo and there is no need for a permit from the Federal Aviation Administration

Although they have raised many privacy issues UAVs have great potential on jobsites Todayrsquos UAVs use GPS position sensors accelerometers and gyroscopes plus the main processor all of which enable drones to orient themselves and follow routes independently The use of HD cameras for video (real time and recorded) and still images are common in the market Depending on the batteries UAVs can fly for up to several hours are barely louder than a bee and are simply recharged when they run out of power UAVs can be controlled through joysticks PC and laptop software and iPad and iPhone apps

Drones Show Potential to Aid Jobsite Safety and Efficiencyby Judy Schriener and Paul Doherty

There are two primary areas of research concerning jobsite reconnaissance and surveillance photogrammetric analysis and LIDAR Both are using UAVs to create a 3-D model of the jobsite that is compared with site plans and construction documents allowing significant deviations in construction progress process materials and methods to be identified A simple report can superimpose the site plansconstruction documents over the images or LIDAR data model to communicate deviations indicated by colored patterns As a result construction teams can adapt plans to the current needs

Currently the Georgia Institute of Technology Siemens and the University of Pennsylvaniarsquos General Robotics Automation Sensing and Perception (GRASP) Laboratory are all conducting UAV experiments and pilot projects Georgia Techrsquos focus is on using UAVs for safety inspections in the construction industry Two-way real-time communication can occur anywhere on the jobsite via live videoaudio connection between workers in the field and the safety manager using the UAV as a video phone Being able to move around the site quickly using the drone can improve the safety managerrsquos efficiency by an estimated 50 percent

As the emerging use of drones continues some future uses can be seen in UAV-based construction and installation prototypes at GRASP at the University of Pennsylvania Reducing the need for humans to perform high-risk tasks could be the first application of UAVs Additionally UAVs could be miniaturized as inexpensive and disposable nanobots that do repair and maintenance in difficult-to-reach or high-risk spaces

There are two major areas of concern with the use of UAVs

bull The potential to view drone-basedreconnaissance as spying leading tolegal action based on privacy issues

bull The potential liability of UAV-inducedinjuries due to failure misusedistraction or operator error

UAVdrone operation on jobsites is in its infancy in the same way email came on the scene 20 years ago It is an exciting future with untold potential

Judy has been covering innovative technology in the AEC space since 1995 while at ENR She created the industryrsquos first blog on constructioncom As Managing Online Editor for McGraw-Hill Construction she rode the Dot-Boom bubble until well past its decline into the Dot-Bomb era living in and covering in detail the ups and downs of that tumultuous time and continued to cover technology long afterward Judy is the author of Building for Boomers Guide to Design and Construction with Co-Author Mike Kephart and currently is the host of a radio Show ldquoOff the Record with Judyrdquo on the RockStarRadioNetworkcom which airs every Tuesday at noon ET with old podcasts on iTunes Paul Doherty AIA is the President and CEO of the digit group inc and is one of the global industryrsquos most sought after thought leader strategist and integrator of process technology and business A Senior Fellow of the Design Futures Council Paul is an author educator analyst and advisor to Fortune 500 organizations global government agencies prominent institutions and the most prestigious architectural engineering and contracting firms in the world A former Fortune 500 corporate officer Paul is a licensed architect and prominent and highly-rated speaker at numerous industry events around the world He has been appointed as a guest lecturer at leading universities throughout the world Paulrsquos current work is focused on Smart City solutions in the USA Europe MENA India Southeast Asia and China Concurrently Paul is the co-founder and producer of the critically acclaimed AEC Hackathon (wwwaechackathoncom) that launched at Facebook Headquarters in Silicon Valley in November 2013 Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S20

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

For more than 2500 years the crane has ruled the construction site But is all that about to change Unmanned Aerial Vehicles (UAVs) also known as drones have rushed into the world of construction

They are challenging how and what type of construction is being performed In its simplest form a drone is a platform of processors sensors and propellers running software that is connected to other software through the use of wireless network connections More complex manifestations of drones include but are not limited to Boeing CH-47 Chinook helicopters (without a pilot) or automated synchronous cooperation of many UAVs to achieve complex tasks such as lifting material to any point on a construction site

Do drones have the ability to replace cranes in the near future or does cooperation between the two better express what is about to happen on the construction site Can the cost per hour of a helicopter be priced reasonably enough to potentially replace cranes if human resources are removed from the equation Will drones be able to lift materials or access any point on the construction site and then be used for other tasks to the extent that they are more valuable to the construction process Will manufacturers begin to design materials with drones in mind In short can drones replace cranes

The chart illustrates the potential for drones to deliver greater value to the construction process Is it realistic that drones will replace the crane anytime soon No Is cooperation between drones and cranes more realistic Yes Drones have the immediate potential to make construction more efficient through lifting materials and tools like a crane but in a different and more productive way

How Today automated drones can deliver tools small materials and food to the jobsite saving time that workers spend traveling vertically or horizontally This process improvement could potentially make skilled laborers more productive during the day leading to a faster build process while improving the efficiency of the crane to perform higher priority tasks and reducing elevator traffic so more deliveries could be made

Will Drones Replace Cranes or Can They Coexist by Michael P Zucchi

As the number of human resources on the jobsite declines through prefabrication robotics and automation the number of drones and the size of drones on the jobsite will increase There is an inverse relationship between humans and onsite technology

Industry Challenges The challenge the construction

industry is facing has forced firms to search for answers in technology Technology firms have been quick to answer the call but in doing so they have disrupted the entire industry allowing competition to come from anywhere Construction firms must think outside the box and find answers to shrinking profit margins increased liability higher labor costs and faster build schedules

Drones are becoming part of that solution For instance use of drones can limit the time and availability in which elevators are being used to move materials and tools to any point on the construction site (whether it be horizontal vertical inside or outside) The result is increased utilization of elevators cranes and skilled labor with an overall increase in job efficiency

Drones can add value to the construction process by delivering material from staging areas that are not located at the base of the construction site delivering the material directly where it is needed freeing up the delivery space below for larger high-priority items that need to be delivered by crane

If helicopters can be used to install heavy machinery to roofs of buildings then why canrsquot an automated unmanned helicopter (simply a different size drone) do the same What is the cost when labor is removed from the equation Drones are the answer to many of these challenges The versatility flexibility and the ability to be automated are just too valuable to ignore

Into the Future The possibility of drones totally

replacing cranes is highly unlikely but a world of cooperation between automated drones and automated cranes is the vision of the immediate

future Cooperation on a construction site will lead to a more efficient and automated processes

Cranes will continue to be the workhorses on the construction site of tomorrow along with drones and other technologies that are specifically fitted to work in conjunction with cranes to improve equipment utilization and construction process efficiency What will most undoubtedly change is the amount of technology the level of automation and reduction of human resources used in the construction process

A drone captured aerial views of Applersquos new Cupertino campus SkyCatch has created a fully automated drone system with flight reservation flight data streaming and battery changes The same can be found with cranes as Trimble has shown with its automated crane system In the near future materials will be tagged with Radio Frequency Identifiers (RFID) that will identify location and automatically instruct the crane to pick up and deliver to the construction site with computer-aided efficiency With the power of these two automated devices the construction site will change forever

The trend to remove humans from processes in order to reduce costs increase efficiency reduce liability increase building speed reduce errors and increase safety will continue and be amplified by automated systems in cranes and drones The fully automated construction yard will operate as a system of systems and will reshape competition within the construction industry by erasing the boundaries between traditional building roles and other industries

Michael P Zucchi CEO of ZBRELLA Technology Consulting is a Solutions Orchestrator by day and a futurist by night He takes pleasure in dreaming up new ways to disrupt the world with technology by night and builds those very same systems by day to understand and automate the world He is the CEO of a futuristic fun and thought provoking technology firm that changes the way we live Reprinted with permission from Construction Executive a publication of Associated Builders and Contractors Services Corp Copyright 2015 All rights reserved

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 21

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

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Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Feature

Commercial construction marketing mdash specifically on-page SEOmdash is an important part of your marketing but many do it completely wrong

The commercial contractor has an especially difficult job stand out in the sea of consumer-oriented businesses with huge advertising and SEO budgets Do you want to advertise your commercial contracting business online Great yoursquoll be competing with every residential player out there This drives advertising costs from Web pay per click (PPC) or pay per impression (CPM) based advertising on Google and other platforms to exorbitant levels

Furthermore quality is diluted by the traffic (clickers) who more often than not are looking for some residential solution Enter the organic SEO tactic A wise commercial contractor expends resources to bolster performance in organic SEO of specific commercialindustrial contracting phrases This process of SEO optimization is neither

fast nor is it a one-time project In fact it requires a consistent focus and constant re-education to keep up with search-engine algorithm (methodology) changes that occur at least each quarter

Driving Inquiries Via the Web

The lionrsquos share of the traffic to Web site is driven by Google Half of a Web sitersquos traffic will typically come from search results About 60 percent of all Internet-enabled devices connect to Google on a daily basis

Every time we turn around another search-engine change has emerged creating havoc with Web site owners It is a bit of a shell game for Web site owners and SEO specialists Google will adjust its formula to increase or decrease the weight of factors used to determine the ranking of a Web page in the search engine results page (SERP) Why do they do this Because everyone is trying to improve Web site rankings by leveraging the on-

page and off -page SEO methods When one method is overused creating a poor result-set the mighty Google will adjust the weighting to rebalance the results

There seem to be three camps of people when it comes to their focus on SEO the avoider the dabbler and the committed Regardless of which camp you belong to currently you must realize that the changes to search engines are perpetual and with each change comes new adjustments that increase or decrease the impact to anything you may have done to ldquoimproverdquo your sitersquos performance In todayrsquos ever changing search engine landscape the commercial contractor must be distinguished from consumer-oriented businesses

Four Factor FormulaThe most important factor for a site is the on-page (within the site) factors Off-page SEO is mostly about creating votes of confidence and relevance from third-party sites and

Commercial Construction Marketing How Do You Measure Up by Jason Myers

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S22

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

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(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

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All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

is not as important in todayrsquos search engine landscape as it once was There are four distinct factors in a successfully executed SEO-friendly Web site

Platform + Architecture + Curation + Content

On-Page SEO

Platform The platform you use must be fast Page load times represent a major factor in the search engine indexing robot (Bot) being able to fully index the site Take a look at your site using Google Webmaster Tools It will show you the latency or speed issues that may be affecting the Bot crawls

Most contractor Web sites use GoDaddy shared hosting or something comparable This exposes the site to traffic spikes on any number of the hundreds or thousands of sites hosted on that single server There are three issues caused by seemingly ldquoaffordablerdquo shared hostingbull Latency or speed issues caused

by neighbors hogging all of the server processing power and bandwidth

bull Guilt by association if there are spammers on the same server the search engine can penalize your site

bull Malicious attacks resulting in hidden malicious code on the sites that phish or otherwise compromise the visitor stealing data and other nefarious activities One insecure site on the server can jeopardize the whole network of neighbor sites on the server This is much like an outbreak of the flu in a family because of contamination and close proximity Thousands of sites in a 2 square foot box is the epitome of close quarters

Architecture Architecture is how the site is designed from a Bot perspective Specifically can the Bot crawl the sitersquos navigation and content in a logical fashion Is the structure of the site logical and does it allow for proper meta information

Curation Curation is the portion where the business owner or Web site person steps in and adds information to the Web site using the content management system However this is not to be confused with content Typically during this process is where many on-page SEO mistakes are born For example while adding pictures of a project the curator skips the meta information on the image (alt tag) This creates an issue for the Bot to determine what the image represents and that affects the page the image appears on by reducing the evidence to the Bot as to what the page is about In another common scenario the curator is adding content to a post or page in a content management system (CMS) and forgets to use proper title description keywords and other meta information to help the search engine The result is poor SEO

Content Content is something that has become more and more talked about in terms of SEO and its importance It makes sense that the Bot is trying to determine what the site is about in as human a way as possible Many Webmaster and SEO experts will try to game the system However the reality is that good information is looked upon favorably Information that is poor stale or poorly written will get penalized in terms of the search engine ranking for relevant keywords and key phrases The key is to create fresh evolving content mdash give the Bot something to chew on In recent years the Bots have favored fresh almost up-to-the-minute information Face the fact that with billions of Web pages freshness is better than stagnation

Think in terms of the three Rs

Relevance Recentness and Readability

Contractors will often perform well on the Relevance and Readability but fail miserably at Recentness There can be many reasons for this One of the most common is that the Web site is difficult to update or requires outside resources This creates a real barrier to fresh information being updated on a regular basis

This can be easier than you think The challenge for a contractor Web site owner is to architect build populate update and promote a proper Web site This task seems like a one-time endeavor however we know that recentness of information is important Indeed it is a tall order Especially for the resource constrained contractor who focuses on their business of contracting and making revenue and mitigating risk Make no mistake your Web site is part of your business Your Website is part of your marketing

There are a few things you can do to help promote your business more effectively One of the most powerful tools you can leverage is the ProView from The Blue Book Building amp Construction Network ProView was designed architected built for SEO and is constantly modified to keep up with all of the search engine updates Because The Blue Book Networkrsquos Web site has a very high trust rank and authority your ProView-listed business is promoted to search engines ProView presents industry-specific buyer-focused information about your company Most importantly it is easy to use and ensures that your information is optimized

Jason Myers is a speaker and global thought leader on growing companies using effective and efficient marketing He was a speaker at The Blue Book Networkrsquos Baltimore ldquoWhorsquos Whordquo Showcase in October 2015 To learn more download the white paper at wwwcontractor-seo-challengescom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 23

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

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Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

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Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

FeatureSubcontractors and the ACA Preparing for 2016by KC Cannon Jr

After numerous delays and extensions provisions of the Affordable Care Act have taken effect for employers of various sizes And while itrsquos true many of these changes primarily impact employers with 50 or more employees there are a few issues that smaller employers need to be aware of when it comes to ACA compliance

Is Your Company Subject to the ACA

Employer taxes for non-compliance in 2015 are based on the average number of full-time equivalent employees the company had in 2014 (other than newly established companies) If the company averaged 100 or more FTEs in 2014 then taxes can apply for any full-time employee who was not offered medical insurance coverage during 2015 In 2016 employer taxes will apply if the company averaged 50 or more full-time equivalent employees in calendar 2015

Even if the employer taxes donrsquot apply this year if the company averaged 50 or more full-time equivalent employees in 2014 the company must report employer-sponsored medical insurance information to each full-time employee in early 2016 (on IRS form 1095-C) and file a summary report with IRS on form 1094-C

And even if the company averaged fewer than 50 full-time equivalent employees in the prior year if the company sponsored a self-insured medical plan in 2015 they must report information to employees who were covered in the plan including spouse and dependent coverage and to the IRS in early 2016 on forms 1095-B and 1094-B

Notice that both taxes and reporting are based upon prior year averages Even if the companyrsquos employment levels in 2016 or for this year are expected to be fewer than 50 full-time employees the company can still be subject to both ACA taxes and reporting because of the prior year averages

Individual Mandate and Davis-Bacon Compliance

While the 2016 employer tax applies only to companies that averaged 50 or more full-time equivalent employees in 2015 the ACA requirement for all individuals to have health insurance is in full force If an individual is not offered health insurance through their company they are forced to apply for coverage via either a state or federal exchange Rather than making important employees fend for themselves subcontractors who work on government-funded jobs like those subject to the Davis-Bacon Act or state and local prevailing wage laws can use the fringe portion of the wage determination to assist in providing health insurance for their workers mdash and benefit their businesses

Fringe dollars paid for bona fide fringe benefits are exempt from payroll taxes such as FICA FUTA SUTA and in most states workersrsquo compensation This creates significant savings on payroll burden In addition when these savings are passed on in the form of lower job costs bidding on government jobs becomes more advantageous A conservative estimate is that these assessments add a cost of 25 cents for each dollar paid as additional cash wages instead of used to provide fringe benefits In addition to health insurance fringe dollars can be used for dental vision and life insurance and retirement plans

If you do government work make sure you work with a partner that can provide education regarding ACA provisions and assist in designing a benefits plan that works for your company and your employees Work with your broker to find a third party administrator that specializes in prevailing wage benefits for government contractors

Employee or Independent Contractor

One important issue employers of any size should look into is whether workers are properly classified Subcontractors who use independent contractors on projects should work with legal counsel to determine whether these workers in fact meet the guidelines to qualify as independent contractors and retain documentation as to how this determination was reached

In addition to traditional misclassification concerns like retroactive employment taxes and workersrsquo compensation premiums the proper classification is important to determine whether the ACA employer taxes or required employee reporting apply While this is an especially ticklish issue for subcontractors who are right ldquoon the bubblerdquo of having 50 full-time equivalent employees the implications of being determined to have improperly classified your workers are far-reaching

In late July 2015 the DOL received guidance instructing the agency to use the broader definition of ldquoemployrdquo found in FLSA regulations While this guidance may be challenged itrsquos important to be aware of several key factors in this guidancebull The employerrsquos title for the worker

is irrelevant

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S24

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

Local products and service at over 2600 stores

mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

DISCOUNT PRICINGfor AMERICAN SUBCONTRACTORS ASSOCIATION MEMBERS

Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

bull The fact that an employer issues a 1099 for the worker only proves that the employer does not view the worker as an employee

bull The FLSA statute referenced in the guidance defines ldquoemployrdquo as ldquoto suffer or permit to workrdquo

bull The legal test is whether the worker is economically dependent on the employer or in business for himselfherself

bull The guidance states that ldquomost workers are employees under the FLSArsquos broad definitionsrdquo

In addition to the above guidance factors the DOL continues to apply six economic realities factors in determining whether a worker is an independent contractor or employee none of the six factors is considered determinative and all six factors must be considered in each case

The six factors arebull Whether the individualrsquos work is

an integral part of the employerrsquos business

bull Whether the worker has an opportunity for profit or loss

bull The nature of the workerrsquos investment in the company

bull The workerrsquos use of business skills and initiative as opposed to technical skills

bull The permanence or indefiniteness of the relationship

bull The nature and degree of the employerrsquos control

Regardless of whether the broader FLSA guidance is challenged in light of the widespread crackdown on misclassification every employer who uses independent contractors should take steps to ensure workers are properly classified

While the impact of the ACA on smaller employers in 2016 such as subcontractors may be nowhere near as extensive as it is for larger employers it will still be felt Taking steps now to prepare can help to ensure compliance and a benefits strategy that creates a win for both your workers and your company Finding the right partner will enable subcontractors to spend more time focusing on managing and growing their business

KC Cannon Jr is a regional vice president of Fringe Benefit Group which has been helping the construction industry design and administer fringe benefit programs since 1983 Cannon can be reached at (866) 670-7442 infocontractorsplancom

IRS RECORDED WEBINARS FOR EMPLOYERS HEALTH CARE LAW

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Actrsquos employer provisions and related tax requirements If you are a business owner tax man-ager employee benefits manager or health coverage provider you can access and review these videos any-time to better understand how the health care law may affect your organization

Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed informa-tion on the specific tax provision mentioned in the title

Employer Shared Responsibility Provision (47 minutes) Learn about determining applicable large employer status payments and transition relief for 2015

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes) Learn about employer-spon-sored health coverage information reporting require-ments for applicable large employers including who is required to report what information the law requires you to report and how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes) Learn about the information reporting requirements for providers of minimum essential coverage including employers that provide self-insured coverage Learn about who is required to report what information the law requires you to report and how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs Businesses Tax Professionals Governments and Non-Profits After clicking on one of these tabs simply select ldquoAffordable Care Actrdquo from the list of topics on the left side of the screen and you will see a list of recordings about these and other ACA topics

In addition to videos about the tax provisions of the Affordable Care Act there is a wide range of videos on other tax topics for individuals businesses and tax pro-fessionals For more information about the Affordable Care Act visit wwwirsgovAffordable-Care-Act

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 25

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

Local products and service at over 2600 stores

mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

DISCOUNT PRICINGfor AMERICAN SUBCONTRACTORS ASSOCIATION MEMBERS

Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S26

Feature

Top Trends in Merchant Processingby Kimberly Coley

The subject of electronic payment acceptance and processing has gone mainstream No longer does one have to read obscure financial technology blogs to learn about EMV chip cards digital wallets like Apple Pay and Android Pay mobile acceptance tools and data security measures to prevent breaches Itrsquos jumped from the back pages to the headlines

EMV CardsEMV cards also called ldquochip

cardsrdquo or ldquosmart cardsrdquo are plastic cards that use a much more secure technology that was introduced in 1996 as a means to combat magnetic stripe fraud An embedded computer chip securely stores account data and processing rules

The microchip on EMV cards cannot be duplicated making the data stored on them virtually impossible to capture and clone And EMV transactions are much

more secure than mag-stripe transactions as a result of strong cardholder authentication combined with a unique cryptographic code that is sent and verified with each transaction reducing the value of stolen data

With EMV the consumer inserts his or her credit or debit card face up into a slot on a payment device where it remains until the transaction is complete This allows the card the reader and the bank to have an electronic conversation and share important information that helps validate that the card is authentic

To stem the tide of fraud and propel the rollout of EMV cards and devices the card brands introduced incentives that took effect in October Known as the ldquoLiability Shiftrdquo it occurs when a fraudster presents a counterfeit card (and in some cases a lost or stolen card) at the point of sale The entity mdash card issuer or merchant mdash using the least secure technology

will be responsible for the cost of the fraudulent transaction With EMV a merchant that can only process mag-stripe cards may be held liable for the costs of any in-person fraud resulting from certain counterfeit cards

Those who think they are off the hook because they rarely accept in-person payments should think again Once fraudsters get locked out of in-person fraud opportunities they will set their sights on e-commerce businesses and the fraud will migrate online as it has in every other country that adopted EMV

Wallets and WatchesWallets and watches have gone

digital Both Apple and Android have introduced secure methods to store payment card data in a phone or other device A consumer can pay with a simple tap of his or her phone or watch leveraging a contactless standard called Near Field Communication that

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

Local products and service at over 2600 stores

mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

DISCOUNT PRICINGfor AMERICAN SUBCONTRACTORS ASSOCIATION MEMBERS

Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

New On-demand Video from FASAWhen it comes to managing your business the Foundation of ASA is your partner in education View and listen to FASArsquos on-demand videos at an individual workstation or in a conference room for group training Your order includes access to the on-demand video any time and as many times as yoursquod like This is just one of the on-demand videos available through the FASA Contractorsrsquo Knowledge Depot to meet your business management training needs

Contractorsrsquo Knowledge Network

Order online at wwwcontractorsknowledgedepotcom or call ( 703 ) 684-3450 Ext 1321

ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo (Item 8083)As the construction industry increasingly adopts the use of mobile software and gadgets many companies are faced with the challenge of convincing their workforce to use and become proficient in new technologies Learn how to help your project team understand the value of using new technology with the video-on-demand ldquoImplementing Technology for the Jobsite Turning Refusers into Adoptersrdquo Julian Clayton FieldLens New York NY provides a road map for helping tech resistors adopt tech tools and examines strategies for helping bridge the gap between tech savvy millennials and veteran experienced project team members to ensure that the strengths of both groups contribute to the effectiveness of your workforce

$65 Members $95 Nonmembers

TM

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 27

is included in most EMV-enabled card readers Better yet actual card numbers are replaced with tokens for processing so account data cannot be compromised

And companies like Uber are making in-app purchases frictionless for everyone involved Actual money and cards never change hands Consider how advances in mobile at your business for functions like online alerts and text-to-pay can greatly shrink time-to-receivables metrics

Replacing a card with a phone as a new way to pay may be just the tip of the iceberg The card brands are already experimenting with innovations such as wallet-enabled vehicles Imagine if a delivery driver could pull up to a job site drop his or her load and accept payment instantly without having to fill out paperwork or handle credit and purchasing cards

Fraud MitigationCyber criminals break into data

centers and steal valuable credit card data which can easily be sold on the black market The adoption of EMV technology will greatly eliminate in-person fraud and force criminals to set their sights on companies that do business online Not only are the data centers at risk for being breached but the stolen data can then be used to make subsequent e-commerce purchases This puts further pressure on organizations to invest in solutions and processes that help mitigate the threat while not impacting sales or the bottom line Businesses need to arm themselves with advanced data security and fraud mitigation solutions including end-to-end encryption tokenization and fraud detection

Payment tools that remove actual data from your systems not only mitigate fraud they can also reduce PCI compliance scope and the associated headaches

A secure B2B-hosted portal offers control over the look and feel of payment and bill collection pages while allowing businesses to securely capture credit card andor purchasing card data never passing or transmitting sensitive data through the businessrsquos enterprise

Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen It facilitates the card-on-file payments for subscription recurring and installment plans

What could a business do differently if fraud didnrsquot exist Accept more orders from more people in more places Expand to geographiesvertical markets previously considered too risky

Kimberly Coley is vice president of national accounts for Merchant e-Solutions a Cielo company in Redwood City Calif She can be reached at (310) 666-2627 or kcoleymerchante-solutionscom

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

Local products and service at over 2600 stores

mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

DISCOUNT PRICINGfor AMERICAN SUBCONTRACTORS ASSOCIATION MEMBERS

Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

1100 Via Callejon Suite A San Clemente CA 92673

suretysouthcoastsuretycomwwwsouthcoastsuretycom

(949) 361-1692 Fax (949) 361-9926(800) 361-1720

DOI Lic 0B57612The Bond Only Agency

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

Local products and service at over 2600 stores

mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

DISCOUNT PRICINGfor AMERICAN SUBCONTRACTORS ASSOCIATION MEMBERS

Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Exclusive savings with the worldrsquos largest online travel agency

Save 10 on hotel bookingsmdashover and above Expediarsquos industry leading prices

bull Visit wwwmynppcom click on ldquoJoin Nowrdquo

bull Select ldquoCompanyrdquo then ldquoConstructionrdquo then ldquoCommercialrdquo

bull Select ldquoAmerican Subcontractors Associationrdquo from the Association dropdown menu and complete enrollment

Access the nationrsquos largest and most reliable 4G LTE network

Corporate Discount - 22 discount on eligible wireless

calling plans $3499 and higher (five line minimum two corporate lines required)

$20 for 3GB data on 3G4G devices or $30 for 5GB with Mobile Hotspot on 4G smartphone devices for corporate subscribers

Text Message Offer - 250 per month for free 500 per month for $5 or unlimited per month for $10

Employee Discount - Up to 18 discount on eligible wireless calling plans $3499 and higher (15 discount plus 3 if enrolled in paperless billing and My Verizon)

Accessories - 25 discount on select accessories

Eligibility Requirement Company must be a commercial construction company home builder remodeler or other trade craftsman

All Verizon Wireless offers are for a limited time only and are subject to equipment availability Verizon Wireless reserves the right to change or modify all offers at any time without notice All terms and conditions are subject to and governed by Verizon Wirelessrsquo Agreement with Customer including but not limited to Customer eligibility requirements Every effort is made to ensure the accuracy of the Verizon Wireless offers however Verizon Wireless is not responsible for any errors or omissions

The American Subcontractors Association partners with NPP to provide discounts on products and services NPP negotiates the rates and makes them available to ASA members

NPP MEMBERSHIP IS FREE Available products includeWireless ServiceOffice SuppliesTravelFacility Maintenance

Tech DevicesFleet ManagementRemote Surveillanceand more

Discount pricing on maintenance repair and operating supplies

Local products and service at over 2600 stores

mynppcom8008103909customerservicemynppcom

copy 2015 National Purchasing Partners

Fuel up at over 98 of all major brand fuel retailers nationwide

Discounts on Industrial Coatings Chemical Coatings Architectural Coatings and Paint Supplies

Signing up to be an NPP member is free and easy

HOW TO GET STARTED

DISCOUNT PRICINGfor AMERICAN SUBCONTRACTORS ASSOCIATION MEMBERS

Start saving today on over 150000 brand-name products

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

Legally Speaking

Do You Want to Be Paid for Extra Workby Sara M Thompson

The answer to this question should be a resounding ldquoYESrdquo However subcontractors often place themselves in positions where they perform ldquoextra workrdquo without being paid Extra work is work that is beyond the scope of work contracted for by the general contractor and subcontractor in the subcontract

There are two common traps a subcontractor can fall into when performing extra work One a subcontractor will agree to perform extra work without obtaining a written signed change order Two a subcontractor decides not to pursue delay damages caused by intentional interference or wrongful act by the owner

Hypothetically an owner wants a building constructed in Texas in time for an event A subcontractor John Doe Inc performs services related to the installation of flooring John Doe Inc enters into a subcontract with the general contractor GC LLC The subcontract states that John Doe Incrsquos scope of work includes installation of linoleum in the main lobby of the building John Doe Inc begins installing linoleum flooring in the main lobby of the building After completing 40 percent of the installation the owner decides it does not like the appearance and instead requests hard wood flooring GC LLC and John Doe Inc orally negotiate a change order for the new type of flooring labor and materials

During negotiations John Doe Inc advises GC LLC that it will take

a substantially greater amount of time to install wood flooring The linoleum has to be removed the wood has to be selected by the owner and supplied from out of state and installed by John Doe Inc The owner acknowledges the delay this change will cause However the owner continually fails to respond to requests for information and requests for a change orders related to the new flooring But in the meantime insists the schedule be met Lo and behold the project runs behind schedule John Doe Inc incurs delay damages as a result of the ownerrsquos intentional acts

John Doe Inc approaches GC LLC for payment of the extra work GC LLC approaches the owner and the owner refuses to pay for the extra work because there is no written change order Also John Doe Inc seeks recovery of the delay damages The owner advises GC LLC that it will not pay GC LLC the delay damages due to the no-damages-for-delay provision in the contract Thus GC LLC will not pay John Doe Inc for its delay damages Rather than press the issue John Doe LLC decides to forgo its delay damages How could these two situations be avoided First obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Written Change OrderThe best way to ensure that you

will be compensated for ldquoextra workrdquo on a project is to have the extra work approved and the change order signed by the owner andor general contractor An oral change order usually occurs on the project site and is discussed among the parties Inevitably after the extra work is performed and the subcontractor seeks payment for that extra work the owner will deny the request claiming the extra work is part of the original subcontract Without a written document memorializing this agreement it will be an uphill battle for the subcontractor to get paid for the extra work The oral change order will likely be an unenforceable contract

Practically speaking it is in the best interest of the subcontractor to write down the scope of the extra work into a change order Include on the document the exact extra work being completed and the agreed upon cost of the extra work including materials and labor Also reference the job number and original subcontract number to make it clear that the change order applies to the original subcontract An important reason to get the change order in writing is that a general contractor is more likely to get the owner to approve the change order in writing if it means the general contractor will be paid for the change This is more likely to happen if the change order is in writing

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S30

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

It is also important for a subcontractor to train its staff to understand the importance of obtaining a written signed change order before performing the extra work on a project Because this can be practically difficult on a job site it is a step that is often missed by the subcontractorrsquos crew However as difficult as it might be in the moment it is much more difficult getting paid for extra work after the project is completed when there is not a written signed change order A general contractor might also convince the subcontractorrsquos staff to make an in-field change to do extra work It will be important for the subcontractorrsquos staff to document the change in writing to the general contractor via emails andor letters The subcontractor should note the change was made what kind of change was made how much it cost extra from the original subcontract price and what materials were used It would also be helpful during this process to make sure the general contractor acknowledges in writing that the change was made outside the scope of the work called for in the subcontract

If you feeling like being charitable and providing extra work for free then proceed without a written signed and agreed upon change order If you would like to get paid for the extra work do your best to obtain a written signed and agreed upon change order Remember whoever wins in court is often times the one with the most written documentation

The lsquoNo-Damages-for-Delayrsquo Provision

A subcontractor that enters into a change order for extra work that is then interfered with by the ownerrsquos intentional acts andor wrongful conduct may recover its delay damages suffered a result of the interference with the work to be performed under the change

order A subcontractor is entitled to recover delay damages caused by the active interference with the contractorrsquos work or other wrongful conduct including arbitrary and capricious acts as well as willful and unreasonable actions Zachry Const Corp v Port of Houston Auth 449 SW3d 98 117 (Tex 2014) A no-damage-for-delay provision is not enforceable if it prohibits the recovery of delay damages caused by another entityrsquos intentional conduct

For example in Zachry Construction Corporation the general contractor entered into a change order with the owner for extra work not contemplated for in the original agreement The contractor would construct a cut-off wall through the middle of the project in the ship channel because nine months into the project the owner decided it wanted additional space for the ships which required a sixth 332-foot section to the wharf The owner and general contractor negotiated the change order for the extra work During negotiations the owner promised the general contractor that it would not impose liquidated damages for the delay as long as a ship from China could dock when it arrived However the agreement to conditionally waive the delay damages was not included in the change order A few weeks later the owner changed its mind and basically ordered the general contractor to revise and resubmit its plans without the cut-off wall called for in the change order The general contractor protested stating that changing the plans would cause delays with the project but ultimately followed the orders of the owner knowing that it would delay completion of the project Despite this fact the general contractor delivered on its negotiated change order promise and the ship from China docked when it arrived However the owner still withheld liquidated damages from the general contractorrsquos work despite its oral

agreement during negotiations The general contractor ultimately sued the owner for delay damages caused by the ownerrsquos refusal to allow the general contractor to perform under the change order The owner refused to pay the delay damages citing a ldquono damages for delayrdquo provision in the contract The Texas Supreme Court ultimately found the provision unenforceable due to the ownerrsquos interference with the performance of the work

Practically speaking the general rule under Texas law is that ldquono-damages-for-delayrdquo provisions are enforceable However the provision will likely not be enforceable if the delay was caused by an intentional or wrongful act of the party seeking to avoid payment of the delay damages Thus if the owner intentionally or wrongfully interfered with the subcontractorrsquos performance of its extra work the subcontractor should ask to be paid for its damages caused by the delay

ConclusionTo avoid providing free work on

a project obtain a written change order Secondly recognize that under Texas law the no-damages-for-delay provisions may not be enforceable if the provision protects a party from paying for delay damages incurred as a result of the partyrsquos own intentional acts andor wrongful conduct

Sara Thompson is an attorney with LeClairRyan Houston Texas LeClairRyan is a national law firm composed of over 380 attorneys providing business counsel and client representation in corporate law and litigation to a wide variety of clients across the nation Thompsonrsquos practice involves construction law representation and litigation general commercial litigation and employment litigation She can be reached at (713) 752-8348 or sarathompsonleclairryancom

T H E C O N T R A C T O R rsquo S C O M P A S S d e c e m b e r 2 0 1 5 31

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

January 2016

12 ndash Webinar The War for Talent Drives Construction Pay Higher Pay Trends in the Construction Industry

14-16 ndash ASA Mini-Committee Week Executive and Finance Committee and Rap Council Meetings Hilton Garden Inn Scottsdale

February 2016

9 ndash Webinar Negotiating Retainage

March 2016

3-5 ndash SUBExcel 2016 Miami Fla

April 2016

12 ndash Webinar The Payment Dance in the Construction Industry

May 2016

10 ndash Webinar Websites Email Social Media and Your Domain Name

June 2016

14 ndash Webinar Damages For Lost Labor Productivity

ASAFASA Calendar

Coming Upin the January 2016

Issue of ASArsquos

THEME Finding New Markets

bull Specialized and Generalized Niche Market Strategies

bull Using Technology to Drive Contractor Success

bull Dangers of Expanding into New Markets

bull Hot Construction MarketsmdashDonrsquot Get Burned

bull Job Costing with QuickBooks

bull Going Digital

bull Legally Speaking Improving Cash Flow

PAST ISSUESAccess online atwwwcontractors

knowledgedepotcom

TH

E

Contact information for all ASA and FASA eventsprogramswwwasaonlinecom educationasa-hqcom

TM

Small Business Capital

DANIEL McGLONE

PAST PRESIDENT OF ASArsquoS NEW JERSEY CHAPTER

OFFICE (732) 297ndash 8184

E INFOSMARTCHOICEUSALLCCOM

FUNDING UP TO $2000000 THE BEST FACTORING RATES THE MOST FLEXIBLE TERMS APPROVED IN 1 HOUR FUNDED IN 48 HOURS

d e c e m b e r 2 0 1 5 T H E C O N T R A C T O R rsquo S C O M P A S S32

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved

To learn more about CNArsquos coverages and programs for building contractors contact your independent agent or visit wwwcnacomconstruction

IN AN INSTANTCALVIN BERGER SAW THE VALUE OF IN-CAB BEHAVIOR TR AINING FROM CNA

A STAGGERING STATISTIC INSPIRES A LIFE-SAVING RULE

When a recent safety webinar revealed that 280000 drivers are involved in serious accidents every year Calvin Berger of Calberg Contracting took CNArsquos recommendation to heart and posted placards restricting cell phone use in each of his companyrsquos vehicles Now Calberg Contracting is filing fewer claims and Calvinrsquos enjoying a handsome bonus for worker safety and performance

When yoursquore looking for risk control programs that keep workers dialed in to relevant industry trends hellip we can show you morereg

JUNE 5TH 1108 AM

The examples provided in this material are for illustrative purposes only and any similarity to actual

individuals entities or places is coincidental Please remember that only the relevant insurance policy

can provide the actual terms coverages amounts conditions and exclusions for an insured All products

and services may not be available in all states and may be subject to change without notice CNA is a registered

trademark of CNA Financial Corporation Copyright copy 2015 CNA All rights reserved