By Jonathan Squires

The first half of 2013 brought some positive news to new home builders, Standard and Poor's Real Estate Finance Group reports. The combination of low mortgage rates and falling price levels in recent months have caused a jump in the average price of home builder sales. Consumers have a limited pool of existing homes for consideration, since investors scooped up large numbers of distressed property for rental conversion during the economic downturn.

As buyers venture into the new home construction market, they are looking for affordable, eco-friendly homes. A 2013 survey by realtor.com found 85 percent surveyed would like to own an eco-friendly home. Along with affordability, builders should expect increased consumer interest in building materials that promote sustainability and conserve energy for the community to increase. In addition to adding homes to the market with built-in sustainable features, environmentally-conscious consumers today demand builders participate in recycling and energy management practices.

Building from Trash

It is easier to incorporate recycling programs into new construction projects today than in past decades. National and local conservation efforts continue to introduce new incentives and programs to support consumers and commercial enterprises. For example, the city of Houston and the Building Materials Reuse Warehouse partnered to encourage participation in the 2013 National Reuse Contest Building Competition, sponsored by The Reuse People. Entrants are challenged with building a house primarily using recycled materials. Donations of walls, studs, insulation, and other materials made from metal, timber and recycled masonry, that would otherwise find their way into local landfills, are donated and stored at the warehouse. Builders participating by donating construction waste reduce disposal volume and encourage community involvement.

Conserving Energy and Water Techniques

One of the foundational elements in a green home is incorporating design features and appliances that save water and energy after occupation. Installing geothermal heating and cooling systems, solar panels, energy saving lighting, and A-rated or air-cooled appliances provides excellent conservation tools for new homeowners. Other features include rainfall collection systems, tankless water heaters, dual-flush toilets, water-saving faucets and fixtures, and low-maintenance, drought-resistant landscaping.

Harnessing Wind Power

According to Energysavings.com, people are consciously making home-buying decisions that promote sustainable living through innovative solutions. Residential wind turbines are becoming more popular, as environmentally-conscious homeowners attempt to reduce their carbon footprint while saving money. While not every residential development is appropriate for turbine installation, some communities embrace forward-thinking neighborhood designs. Small wind turbine systems lower electric power bills by 50-90 percent and provide uninterrupted power supply during outages, Energy.gov reports. Residents in the Lexington Farms subdivision in Jersey Hills, Ill., are reaping the benefits of individual home turbines, which played an integral part in the development of this low-income community.

According to residents, monthly savings range from $50 to $100 per month compared to traditional utility services. As the market continues to improve, construction companies and home builders who replace harsh adhesives with less toxic glues and binders, and recycle construction waste to promote community awareness, are better poised to draw the attention of conservation-minded buyers.

Jonathan Squires is a former contractor turned consultant and writer. He likes to write about the latest news and trends in construction and developments.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.  

By Geoffrey Hall

Fostering a successful safety culture within a construction firm is a company-wide effort that extends to the subcontractors brought on for specialized projects. These subcontractors should embrace a strong safety ethic that is in accordance with the company that hired them. Subcontractors and field superintendents inherently have a close relationship. Both must be able to effectively communicate with each other in order to prevent safety concerns from becoming reality. As a subcontractor manages his or her workers with his or her own safety policies, it is the role of the superintendent to make sure these policies coincide with the company’s guidelines.

In order to prevent a potentially hazardous situation, subcontractors and superintendents must maintain an open dialogue to ensure any changes or concerns with the project plan are addressed, if necessary. Safety begins with the planning process. Subcontractors should submit their own project-specific safety plan to identify the scope of their work, how the perceived hazards will be mitigated and what measures they will take to provide a safe work environment. This plan must include a list of local emergency responders and medical facilities; emergency procedures and evacuation plans; substance abuse testing and new employee orientation.

Planning for safety does not end with the planning phase. Subcontractors should follow a procedure for safety task analysis, similar to that of the general contractor. This analysis should include the specific aspects of the work at hand, identification of potential exposures, controls to eliminate the exposures and the necessary safety equipment to perform the work properly. As a project progresses, the safety task analysis will make sure that the appropriate work and safety equipment is on hand so workers aren’t tempted to make do with what may be inadequate or dangerous equipment. A proactive safety culture helps to save lives, retain workers, reduce claims and delays, and enhance productivity and profitability while strengthening the company’s reputation. Building a safer workplace requires constant effort and continual improvement, but the result is well worth the investment of time, resources and money. Safety is a job that never ends.

Geoffrey Hall is senior vice president of ACE USA’s primary construction casualty group. He manages a countrywide team of more than 150 construction professionals dedicated to addressing the unique insurance needs of builders and contractors.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Penny Olmos

Accidents are quite common on construction sites and while some of them are not very serious, there are others that result in serious injuries and at times, fatalities. It’s quite surprising really that even after tightening safety regulations at construction sites, the number of accidents hasn’t gone down, but up. According to the Bureau of Labor Statistics (U.S Department of Labor), fatal work injuries in the private construction sector went up from 738 in 2011 to 775 in 2012, a 5 percent increase. News like this story out of New York City, gives us some idea of why we are lagging behind on construction site safety. A union official admitting that he’s helped unqualified people get into his union and get licenses to operate small cranes at construction sites is a sign of the deeper malaise that’s compromising the safety of the construction industry. Let’s take a look at the problems assailing the safety of construction sites:

  • Falls

According to Occupational Safety and Health Administration (OSHA), falls are the leading cause of fatalities on construction sites. If you want to reduce the number of deaths on construction sites, reduce falls. There are two major components of fall prevention – "fall protection equipment" and "knowing the importance of using this equipment." The latter is something that we are failing to get across.

  • OSHA Aims to Do Something About It

OSHA, in partnership with the National Institute for Occupational Safety and Health (NIOSH) and National Occupational Research Agenda (NORA), has started a nationwide outreach campaign that seeks to raise awareness amongst construction workers and their employers about fall hazards and their prevention. This is one campaign that can set the stage for "fall free" construction sites!

  •  Rigging Equipment

The use of rigging equipment and their safety is of crucial importance on construction sites. Some terrible accidents have happened because of damage to rigging equipment like wire ropes and the fact that wire ropes that needed to be discarded were still used. Again, such accidents can be avoided if construction workers are well aware of the dangers posed by working with defective wire ropes. More importantly, they must be made to realize the importance of inspection and maintenance of such equipment. Also, it’s of prime importance that the right people and the most qualified for the job are asked to handle rigging equipment.

Getting Workers into the Act

One problem that seems to be cropping up time and again is that construction workers are reluctant to apprise the authorities about a safety violation at their work place. The reasons for this are many; these include a fear of retaliation, plain ignorance, or knowledge that the management will not act on their complaints, or unawareness about the proper procedure for making a complaint. These are reasons that need to be addressed and workers must be able to place a complaint with the appropriate authorities, without fear, if and when they feel a safety violation is taking place on their construction site.

Bringing Down the Accidents What is increasingly evident is that we need to work towards a more holistic approach if we are to improve worker safety at construction sites. We will need to get all the stakeholders into the act if we are to improve safety. We need to educate the workers, educate the employers and enforce stringent safety policies. Hopefully, if we do all that and more, 2013 will be a better year as far as construction site safety is concerned.

Penny Olmos is associated with Holloway Houston, Inc. a leading industrial lifting equipment manufacturing company. She is a writer for Holloway Houston, Inc. and loves to write on stainless wire rope. Her writing is backed by knowledge gained by her many years of experience partnering with clients to build their business through development and implementation of track-proven Internet marketing strategies.  

By John Doherty

Shale gas could soon have a significant impact on energy markets across the globe. Enabled through horizontal drilling and hydraulic fracturing, the production of shale gas already has had a major impact on the energy landscape in North America. Shale accounts for more than one-fourth of domestic gas production, and by the next decade will reach the 50 percent mark, according to PwC and Rice University researchers. In 2011, shale gas was produced at a rate of 553,000 barrels per day. As a result, tens of thousands of new well sites are being developed by oil and gas companies. When it comes to shale production, thousands of repetitive activities and handoffs between functions resemble manufacturing operations as much as they do traditional methods of oil drilling and production. Which enablers can have a significant impact on decision making? Which will drive productivity? For starters, in the new environment, information technology and enterprise systems have been identified as enablers that significantly enhance decision making and drive productivity.

How can oil and gas companies, in partnership with engineering and construction (E&C) firms, determine what is and is not working across the gas value chain? To meet these new challenges, old, reliable business models and traditional approaches to project management may not be the most effective strategies. E&C companies can support their oil and gas clients by helping them navigate through three key developmental steps on the path to successfully bringing shale oil and gas to market. First, organizations can reduce the “drag” by developing a project management model that helps achieve speed and efficiency in shale well development, planning, and execution. The goal is to reduce the organizational and administrative burdens on all of the activities required to efficiently produce shale oil and gas and get the products to market.

With an integrated operating/project management model in place, a company can optimize the “play” by delivering optimal returns through aligning operating expenses, capital investment, and resources across the full portfolio of development and production. Finally, with optimized resources and greater insight into the full portfolio, a company can apply sophisticated analytics to enable better decision making and increase the speed and flexibility in the field and in the market.

So how can E&C firms and oil and gas companies achieve these goals?

1) Listen to the “silent” business, those longstanding projects that may have become de-prioritized in favor of new work. Integrated planning lets development activities be meshed with ongoing work.

2) Consider the context, the factors – whether local climate, geology or regulatory requirements – that can significantly vary by well location.

3) Model the change, ensuring that all stakeholders buy into the geographically distributed, integrated planning approach. E&C firms can model and reinforce the behaviors they expect from stakeholders, clearly articulating the approach and project priorities. PwC's New conventions for unconventional development for the engineering and construction industry discusses shale gas implications for engineering and construction (E&C) companies. The three-part series is a companion to PwC's New conventions for unconventional oil and gas series, which addresses the rapidly evolving management practices within the energy landscape.

John Doherty is advisory lead director of the U.S. engineering and construction sector for PwC and has more than 30 years of management consulting experience. He can be contacted at john.doherty@us.pwc.com.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 

 

By Tony Inglese

Concrete is a huge part of homes these days. The good news is that most concrete will continue to harden as it ages. The bad news is that without the proper precautions, the concrete around your home can deteriorate quickly. Many think that this rough material is carefree and durable from everything, but while it is low maintenance, there are certain things that homeowners should do to protect their concrete and increase its longevity.

Clean and Apply Sealer Regularly You need to protect the integrity of the concrete to make it last a lot longer. To do this, apply a sealer to the concrete to protect it from salt, oil spots, and gasoline residue. The harshness of the weather and the amount of vehicle traffic will determine how often this needs to be done. A good rule of thumb is to reseal your driveway, patio, or sidewalk every two years, or whenever it begins to show wear.  If you have concrete inside your home that has a lot of foot traffic, it is especially important to maintain it to prevent wear patterns. You can do this by using sealer, as well as floor wax or polish. Good sealers can be found in hardware stores, or from a concrete material supplier. Power wash the driveway to remove all stains and spots, then apply the sealer. It’s not complicated and has easy to follow directions on the container.

Don’t Wait to Remove Stains or Snow While the sealer does protect the concrete from stains absorbing, it is still smart to remove oil, gasoline, and grease as soon as possible. Pressure wash regularly to help with stain removal and keep your concrete looking sharp. Be careful not to get too close to your driveway when digging in the yard. This can compromise the supporting structure of the concrete. When winter arrives shovel regularly and use a plastic shovel. The key is to prevent the water from seeping into the concrete, freeze and then crack.

Use Alternative Materials to De-ice The winter is especially harmful for concrete. Water can seep into the concrete and freeze and expand inside it, which will weaken it within. Concrete can be very porous, and chemicals can penetrate and attack the paste, thus affecting the structure of the concrete. Avoid products that contain ammonium nitrates and ammonium sulphates. Rock salt (sodium chloride) will be less harmful but if not washed away can affect grass as well as corrode metal. This is especially significant if your concrete has a metal rebar to support the structure. The first winter after the laying of concrete is the most important. Since the concrete is still young, it is important to avoid de-icers and, if possible, salt as well. Sand is a good alternative to give traction. If you have a steep driveway, take safety precautions and park at the bottom of the hill, or use chains on your tires.

Tony Inglese is the general manager at Enviro-Systems, where he assists with marketing, project management, human resources and company policy.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.
 

By Pauline W. Markey

In recent years, the IRS has increasingly focused on the compliance and enforcement of the misclassification of workers in industries such as construction, where the use of independent contractors is common. The determination of whether a worker is an “employee” or an “independent contractor” has significant financial implications for both the business and its workers. Independent contractors are generally not eligible for unemployment benefits, workers’ compensation benefits or employer contributions to Social Security tax, Medicare tax and federal unemployment tax.

Form SS-8 is a form that may be filed by either a business or its workers to request that the IRS determine the status of the worker as either an employee or an independent contractor for federal employment tax and income tax withholding purposes. In most cases, the form is filed by a former worker seeking unemployment benefits, and businesses tend not to file because the perception is that the IRS will lean towards a conclusion that most workers are employees. If a former worker does file an SS-8, the IRS will offer an opportunity for the business to respond with information relating to the work relationship at hand. After reviewing the information given by both parties, the IRS will issue a determination letter stating whether the worker should be classified as an employee or an independent contractor.

It is important to note that the IRS’s determination will then apply to all workers in that business performing the same or similar services as the worker who filed the SS-8, even though only one worker filed. The SS-8 determination letter, with certain deletions, will also be made public. Because of the broad impact of the IRS’s determination, the receipt of an information request relating to an SS-8 should not be taken lightly, and a business should respond to the IRS’ request with care, deliberation and, if possible, with the guidance of an experienced tax advisor.

A business that receives an adverse SS-8 determination may request that the IRS reconsider its determination, but a court cannot review the determination because it is not considered an IRS audit. Similarly, the business is not entitled to raise certain defenses (such as Section 530 Relief), which may in some instances protect it from retroactive application of employee status for its workers. The Treasury Inspector General for Tax Administration (TIGTA) recently found that a significant number of businesses (from a sample of more than 5,000) that received SS-8 determinations requiring changes to the treatment of workers failed to comply with the IRS’s determination. Based on the recommendations from TIGTA, the IRS is now moving to improve business compliance with SS-8 determination letters, likely through additional business audits. When this does happen, it is important for construction business owners to understand its implications and be as prepared as possible. With one unfortunate response, a business can find itself in the midst of a much larger tax problem.

Pauline W. Markey is a senior tax associate at Fox Rothschild who represents clients in tax controversy and executive compensation issues. For more information concerning this and other worker classification issues, please contact her at (215) 299-5117 or pmarkey@foxrothschild.com. Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 

      

By Joanie Ogden

Today’s typical American family is in love with the backyard. It’s a green oasis, a place to play tag football, watch the flowers and the children grow, complain about mowing and enjoy the occasional outdoor barbecue. It can also be a gold mine for contractors who have imagination, eager crews and a little down time between projects.

Backyard Bonanza The urge to add “living space” to a home extends to outdoor spaces. Today, that can mean very elaborate outdoor kitchen installations, fireplaces, decks and pavilions. With the added costs of landscaping and maintenance, costs can add up very quickly, but they don’t have to. Many outdoor projects can be completed quickly, add value, increase outdoor enjoyment and, in effect, add a room to the home. As a contractor, if you offer such things as wooden decks, gazebos, serving counters, fire pits, hot tub enclosures, or potting sheds as options, you could boost your bottom line very easily and keep your crew busy between larger projects. These client-pleasing projects can often be completed in a single day or two, and at a cost that makes them appealing to the customer and profitable for you.

Style Considerations Leading the list of popular features for backyard improvements are hot tubs and spas. However, a spa can look a little lonely if it's not attached to a pool and surrounded by lush landscaping. One way to highlight the hot tub is to emphasize its presence. Any sort of structure to enclose the spa itself creates a focal point in a yard — whether the structure is roofed or not depends on personal preference. Part of the appeal of hot tubbing, after all, is to look up at the stars on a cold night. Building a simple hot tub enclosure of unfinished redwood that will weather to a smoky gray over time, with a beamed "roof" open to the sky and the elements, makes perfect sense. Allow ample clearance between the sides of the hot tub and the structure on all sides. Consider adding a bench or two for lounging, and perhaps create a brick or flagstone patio just outside the entrance. Your client can add potted plants, wind chimes and hanging baskets. The object is to keep the design simple, but still appropriate for the neighborhood. New England styles will be very different from New Mexico designs. But, neither requires more than a simple sketch in order to bring it into being.

The Bottom Line Looking at the backyard as an extra room, or even as a getaway destination, is a creative way to gain some space, add value to a home and create a kind of mini-retreat for a busy family. Exterior improvements do not have to be high-budget projects in order to add oodles of charm, and they can often be completed in a matter of days, allowing the family to move right in and enjoy the new addition. It’s your job to let your clients know that you can create an addition to their backyard oasis which will add lasting value and enjoyment. Tell your clients that the dollar to enjoyment ratio is always on the side of enjoyment. When do you start?

Joanie Ogden is a self-taught home decor specialist who enjoys blogging about her projects.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Megan Browning

For owners Leslie and Joel Frieman, transforming a vacant warehouse into a world class fencing facility suited for all ages and abilities required ingenuity and foresight. With tall ceilings and a blank slate, comfort for athletes was one of the Friemans’ key goals when building their school, The Woodlands Fencing Academy.

In order to achieve that comfort, the walls and ceiling were padded with R38 insulation and two 7-and-a-half-ton HVAC systems were installed. “We need to keep it cool because fencers wear so much protective gear,” Facility Manager Kathy Bone said. “When no one is in there, we keep it at 75F. For practice, we like it to be at 72 [to] 73F and for a tournament, I will turn it down to 69 [to] 70F.” To help maintain the necessary temperatures and provide quiet, gentle air movement, a high-volume, low-speed (HVLS) fan was added to complement the AC system. HVLS fans increase air velocity to create a more comfortable environment for occupants, regardless of the space.

In warmer months, these fans improve personal comfort with an evaporative cooling effect — although the fans do not lower the temperature in the space, they can make a person feel up to 10F cooler. As a result, facility managers are able to raise the thermostat setpoint without sacrificing comfort, reducing cooling costs. “We were afraid utility bills would be around $1,000, but with the help of the fan, we have found them to be significantly lower," Bone said. "We are very, very happy.” Not reminiscent of a typical gym, The Woodlands Fencing Academy prides itself on being a functional but sophisticated fencing facility. “The fan makes the building look like a piece of art," Bone adds. "The aesthetics are beautiful and it does its job moving the air to create a comfortable environment.”

Megan Browning is a public relations associate at Big Ass Fans, the preeminent designer and manufacturer of ceiling fans for industrial, agricultural, commercial and residential settings.

By Geoffrey Hall 

Construction is a high-hazard industry and field management is the first line of defense in mitigating the risks of on-site accidents. As on-site personnel oversee the day-to-day activities of a project, they monitor and regulate the implementation of safety precautions prior to building. Direct vision of many potential safety issues gives field managers the task of managing the workers they supervise as well as the subcontractors that are brought on for each project.

Safety isn’t simply common sense. Weekly meetings among field management personnel should be established to discuss production-related topics. These topics include a review of any accidents, near misses or safety lapses, as well as safety concerns related to the coming work. This message should then be relayed to the workers at weekly toolbox safety talks; this is a common way to remind workers about safety procedures and a useful method of addressing these concerns. It’s increasingly common for language barriers to exist on the job site.

Communicating to a diverse workforce, whose primary language may not be English, is a serious challenge for the industry. This is specifically true for the on-site field managers, charged with supervising these workers each and every day. Where English may not be the commonly understood language, construction firms must effectively communicate safety and operations expectations. Effective communication can directly help prevent lapses in safety protocol. For example, despite full compliance with OSHA regulations, falls still occur and remain a leading cause of on-site injuries. This reality requires more aggressive communication approaches between workers and their supervisors.

Companies should begin with the mindset that accidents are not inevitable. In the event that an accident occurs, field managers must review all of the facts and circumstances to identify root causes so that corrective action can be taken to prevent future incidents. The same attention should be paid to near misses that could have been serious accidents. Regular accident review meetings between field managers and executives send a clear message that safety should be paramount. Safety is a job that never ends. The construction industry is continually adopting new operational methods, training workers on new equipment and installing new machinery.

In a proactive safety culture, the field managers must continually adapt to the new ways that workers are performing their jobs. At the end of the day, every company wants every worker, planner and manager to go home safely at night. To achieve this important goal, construction companies must incorporate a culture of safety, from top to bottom.

Geoffrey Hall is senior vice president, ACE Construction. Based in New York City,  Hall is responsible for leading the domestic underwriting strategies of ACE USA’s Primary Construction Casualty Group of ACE’s Casualty Risk Division. Hall manages a countrywide team of more than 150 construction professionals dedicated to addressing the unique insurance needs of builders and contractors. He has more than 25 years of diverse experience in the insurance industry.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Harvey Katz

Many engineering and construction firm owners will be retiring in large numbers in the coming years. Those whose children don’t want the family business face a dilemma. With more “baby-boomer” sellers than buyers, buyers are likely to be highly selective and very parsimonious.

Employee Stock Ownership Plans (ESOPs) are a viable business succession alternative. In concept, sale to an ESOP is simple. Instead of selling to a third party, the owner sells to a trust established and operated by the firm for the benefit of its employees. To finance the purchase, the ESOP borrows from a bank or the business owner himself. The shares of the business are collateral for the loan. As the business operates, it makes contributions to the ESOP until the loan is repaid. Otherwise, the ESOP operates like a 401(k) or profit sharing plan, except that it invests in employer stock. While ESOPs cover all full-time, non-union employees, they never directly own company shares, have access to the company's finances or have a say in day-to-day decisions. Nevertheless, ESOPs are powerful productivity incentives, as employees view themselves as part owners. There are substantial tax incentives to owners who sell to ESOPs and companies that operate as ESOPs. Usually, the owner can avoid payment of capital gains tax otherwise payable upon the sale of the business. In addition, both principal and interest on the loan to purchase the company are repaid with pre-tax dollars. More importantly, once the ESOP acquires 100 percent of the firm, it can elect Subchapter S status, allowing it to pass through profits to its tax-exempt ESOP shareholder and operate as a tax-free company.  

Another more practical advantage is that unlike a third-party buyer, an ESOP will rarely back out at the eleventh hour. Sale to an ESOP also requires much less disruption of business and the owner can sell shares gradually, relinquishing control at a time of his or her choosing. Third parties usually demand complete control from day one. Additionally, any additional cost of structuring a sale to an ESOP is easily outstripped by the tax savings. ESOPs are also useful if only some of the owner’s children want to participate in the business. Giving stock to children who don’t participate in the business is likely to cause strife among siblings. The ESOP can purchase the stock of non-participating children for cash. Here's when to consider an ESOP:

  • Firm is worth $2 million, or with profits of $400,000 a year;
  • Firm has a recent history of profitability and/or strong prospects of future profitability;
  • There are two to three individuals capable of assuming a lead management role in the next five years;
  • Firm is a corporation or capable of being converted into one.

Other helpful, but not essential, factors:

  • Current owners want to gradually transition out;
  • Owners want to reward employees for their service;
  • Employees are likely to be incentivized by ownership in the company.

Harvey Katz is co-chair of Fox Rothschild’s Employee Benefits & Compensation Practice. For more information, please contact him at 212.878.7976 or hkatz@foxrothschild.com.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

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