Event Calendar

January 2010

Upcoming Events

February 11, 2010  7:30a.m. - 5:00p.m.
Construction Quality Management for Contractors
Burkshire Marriott Conference Hotel
10 West Burke Avenue Towson MD 21204
Cost $195 per attendee
Click here to register

February 23, 2010 8:30 a.m. - 11:00 a.m.
Federal Procurement Debriefings & Bid Protests:
Trends & Strategies

Four Point by Sheraton BWI Airport Hotel
7032 Elm Road Baltimore 21240
Cost $45 members  $75 Non members

Click here to register

February 25, 2010
FREE Webinar - One Mistake From Collapse:
The 5 Things Construction Executives Must Know to Survive 2010
Click here to register

March 2, 2010  1:30 p.m. - 3:00 p.m.
WEBINAR EPA's Construction Stormwater Program: What the New Mandated Discharge Limits, Monitoring Requirements and Prescriptive Controls Mean for Contractors.
Click here to register

March 3, 2010 11:30a.m. - 1:30p.m.
"Developing a Business Exit Strategy"
The Engineers Club
11 West Mount Vernon Place
Cost $15 members  $25 Non members
Click here to register

March 9, 2010 9:00a.m. - 3:00p.m.
How to Prepare a Successful Accident Prevention Plan
Maryland AGC
1301 York Road, Suite 202 Lutherville 21093
Cost $165 per attendee

Click here to register

March 17 - 20, 2009
AGC Annual Convention
The Orlando World Center Marriott
Orlando FL 32821
Click here for information on how to register

March 24, 2010  2:00p.m. - 3:30p.m.
Webinar: Comparing AIA & ConsensusDOCS
in a Real World Setting
Cost AGC members $20  Non-members $49
Click here to register

April 8, 2010  7:30a.m. - 5:00p.m.
Construction Quality Management for Contractors
Burkshire Marriott Conference Hotel
10 West Burke Avenue Towson MD 21204
Cost $195 per attendee
Click here to register

April 21, 2010
Annual Joint Association Network Hour
Baltimore Museum of Industry
more information to follow

Legistlative Report #1

 

2010 Maryland General Assembly − Legislative Report #1

 (new material is in bold italics)

 

Note: Hyperlinks will take you to the text of the bill, a biography of the prime sponsor, or the members of the Committee to which the bill is assigned.  You are encouraged to contact your legislators and members of the committee to which a bill is assigned to express your point of view on the bill.  We will be happy to provide you with talking points or assist you in doing so.  If you aren’t sure who represents you in

Annapolis, you can find out at http://mdelect.net.

 

2010 Session Overview

 

The 2010 Session began on January 13 and will end 90 days later on April 12.  All Senate bills must be filed by February 5 and House bills by February 12 to be sure of a hearing, or they are referred to the respective Rules Committees. 

 

Governor O’Malley submitted the $32.0 billion Budget Bill (SB140/HB150) for fiscal year 2011 to the General Assembly.  The Maryland Constitution requires that the budget be balanced and that the General Assembly pass the Budget Bill by the 83rd day, which is April 5 this year, or the Governor must proclaim an extended session if the Budget Bill does not pass by the 90th day.  During the extended portion of the session, the General Assembly may deal only with the Budget Bill and with the costs of the extended session.  Only in 1992 did the General Assembly not pass the bill by the 90th day, requiring an extended session.  The General Assembly may reduce the Governor’s proposed amounts for the Executive Branch, but may not increase them.  The House will move the Budget Bill this year. 

 

The fiscal 2011 budget decreases spending by $300 million versus the fiscal 2010 budget and includes a net reduction of 1,175 positions.  Proposed General Fund expenditures of $13.2 billion represent a 1.3% decrease over fiscal 2010.  No tax increases are proposed, and the Rainy Day Fund remains at 5% of revenues.  The Governor’s proposal meets the General Assembly’s Spending Affordability Committee recommendation of zero increase.  In the proposed capital program, there is $250 million for school construction, $260 million for higher education projects, $81 million for community colleges, and $250 million for

Chesapeake Bay restoration. There is $15 million reserved for legislative initiatives.

 

Unfortunately, the FY2011 budget meets the requirement that the budget be balanced through a series of fund transfers, substitution of borrowing for current tax revenues, reliance on federal stimulus funds (ARRA), and a continuation of budget reductions put in place by the Board of Public Works.  With the assumed unavailability of $1.3 billion of federal stimulus funds in future years, the Administration’s forecast shows a funding gap of $1.5 billion in fiscal 2012 growing to over $2 billion in fiscal 2013.

 

Our Legislative Committee, under the leadership of Chris Smith of C. C. Smith Contracting, meets by conference call every Tuesday at 11:00 a.m. to review legislation and determine our position on bills.  If you are interested in joining the Committee, please call me.  During the Session, I’ll be in

Annapolis on a regular basis to make sure our views are heard.  Barbara Wilkins, our lobbyist and an attorney with Holland+Knight, will continue to work with us as well.  Look for my report every Tuesday, and please feel free to call me with any insights, concerns, or ideas to help make Maryland a better place for constructors.

 

Champe McCulloch

President


MARYLAND AGC PRIORITY LEGISLATION

(For the full description of the bill, see the write up under Senate Bills or House Bills, as appropriate)

 

 


None yet

 
 
 

 


 

 

 

SENATE BILLS

 

 

SB 19 Senator Lenett PROHIBITION ON USING CELL PHONES WHILE DRIVING UNLESS HANDS FREE

WATCH

Prohibiting a driver of a motor vehicle that is in motion from using the driver’s hands to use a wireless telephone.

EFFECTIVE OCTOBER 1, 2010

Assigned to: Judicial Proceedings

 

 

SB 71Chair, EHE Committee (By Request – DGS) SMALL BUSINESS RESERVE PROGRAM – SUNSET EXTENSION

SUPPORT

Extending the termination date for the Small Business Reserve Program from 9/30/2010 to 9/30/2016 (10% set aside for small firms – in the case of construction fewer than 50 employees and less than $7 million in gross sales on average over the last 3 years).

EFFECTIVE JULY 1, 2010

Assigned to: Education, Health, and Environmental Affairs

Hearing 1/26, 1:00 p.m.

 

 

SB 106 (HB 92) The President (By Request – Administration), et al, JOB CREATION AND RECOVERY TAX CREDIT

WATCH

Providing a MD income tax credit of up to $3,000 per employee up to a maximum of $250,000 for Maryland employers hiring new employees (MD residents who are receiving UI or have exhausted benefits) during calendar 2010 in qualified positions (full time, expected to last 12 months); providing for certification and regulation by DLLR; limiting the aggregate credit that may be approved by the Secretary to $20,000,000, to be allocated on a first–come, first–served basis.  Note that the credit is pro-ratable at $250 per month if the job is vacated before 12 months.

EMERGENCY BILL (requires 60% vote in both Houses to pass; takes effect immediately upon signature by the Governor)

Assigned to: Budget and Taxation

Hearing 2/2, 1:00 pm

 

 

SB 107 (HB 91) The President (By Request – Administration) UNEMPLOYMENT INSURANCE MODERNIZATION AND TAX RELIEF ACT

OPPOSE

This bill would reduce the interest rate on certain late payments, and alter the imposition and calculation of tax rates.  However, to allow MD to qualify for a one-time infusion of $127 million of federal funds, it also alters provisions for UI benefit eligibility in the areas of alternate base period, part-time workers, and training that would result in higher UI expenditures in 2011 and beyond:

1.       Interest rate provisions would reduce the interest rate on late payments from 1.5%/month to 1.0%/month.

2.       Changes in the imposition of UI taxes would apply the Schedule E table instead of the required Schedule F table, reducing UI taxes by about 4% for top rate payers (22% for bottom rate payers).

3.       Alternate base period provisions would allow an individual to collect if he/she qualified based on his/her wages during the most recent four quarters rather than the first four of the five most recent quarters (intended to let more workers qualify).  Effective 03/01/2011.

4.       Part-time work provisions would allow a part-time worker to qualify if he/she worked 20 hours part-time for a majority of the base period rather than all of the base period.

5.       Training provisions create an new eligibility for up to 26 weeks of additional benefits for training in a “demand occupation” for workers who were laid off in a “declining occupation” and have exhausted their UI benefits; the cost of these training benefits are not charged to the individual’s base period employer.  Effective 03/01/2011.

EMERGENCY BILL (requires 60% vote in both Houses to pass; takes effect immediately upon signature by the Governor)

VARIOUS EFFECTIVE DATES

Assigned to: Finance

Hearing 1/26, 3:00pm


 

 

SB 124 Senator Brochin, et al REQUIRING WORKERS TO BE PRESENT FOR WORK ZONE SPEED CONTROL SYSTEMS

WATCH

Providing that a work zone speed control system may be used only when a worker is present on the roadway, median divider, or shoulder within or adjacent to the work zone.

EFFECTIVE OCTOBER 1, 2010

Assigned to: Judicial Proceedings

 

 

SB 130 Senator Pugh, et al MINORITY BUSINESS ENTERPRISES – RECIPROCAL CERTIFICATION

WATCH

Requiring the Board of Public Works to adopt regulations to recognize and accommodate, for purposes of the State minority business enterprise program, minority business enterprises that receive certification from a specified federal agency or from a county government in the State.

EFFECTIVE OCTOBER 1, 2010

Assigned to: Education, Health, and Environmental Affairs

Hearing 2/2, 2:00 pm

 

 

SB 133 Senator Pugh, et al COMMISSION TO STUDY STREAMLINING AND INCREASING THE EFFICIENCY OF THE PROCUREMENT PROCESS

SUPPORT

Establishing a Commission to Study Streamlining and Increasing the Efficiency of the Procurement Process; membership included one representative of the construction industry, purposes, and staffing of the Commission; requiring the Commission to study specified matters; requiring the Commission to report by December 31, 2010

EFFECTIVE JUNE 1, 2010

Assigned to: Education, Health, and Environmental Affairs

Hearing 2/2, 2:00 pm

 

 

SB 140 (HB 150) The President (By Request – Administration) BUDGET BILL (FISCAL YEAR 2011)

WATCH

(NOTE: The Senate moves the budget first this session.)  Making the proposed appropriations contained in the State Budget for the fiscal year ending June 30, 2011.  Appropriates $225,000 as a deficiency appropriation for the

Maryland Center for Construction Education and Innovation (GWIB initiative); $10.7 million for the Aging Schools Program (capital improvements, repairs, and deferred maintenance of school buildings or building components that are 16 years old or older) vs. $17.7 million for FY2010); SHA $702.2 million for state & $102.1 million for county facility construction & equipment, $202.6 for state & facility maintenance (vs. $723.6 million, $208.3 million, and $48.9 million for FY 2010, respectively);

EFFECTIVE OCTOBER 1, 2010

Assigned to: Budget and Taxation

 

 

SB 142 (HB 152) The President (By Request – Administration) STATE BOND BILL

WATCH

Authorizing the creation of a State Debt in the amount of $1,017,575,000.  Projects over $1 million are:

 

PROJECT

AMOUNT

DEPARTMENT

Public School Construction Program

$196,703,000

 

Pocomoke

RiverState Park – Shad Landing Sewer Upgrade

3,729,000

DNR

Fort FrederickState Park – Officers Quarters

1,800,000

DNR

Dan’s Mountain Wildlife Management Area – Access Road and StorageBuilding

1,561,000

DNR

Baltimore City – New Youth Detention Facility

17,520,000

Public Safety

UMCP Physical Sciences Complex (complete design & construct)

41,100,000

UMS

Bowie State – campus-wide site improvements (design)

200,000

UMS

Frostburg StateNewCenter for Communications and Information Technology (design)

2,681,000

UMS

Coppin StateNewCenter for Communications





Kimball Construction is Celebrating!

 40 Years and Counting…Thank You.        

 

The year was 1970.  Construction of the New York CityWorldTradeCenter was completed.  The first Monday Night Football game was played.  Richard Nixon was inaugurated the 37th President of the United States. The Dow Jones Industrial Average was 824 points and Kimball Construction Company filed Articles of Incorporation.   40 years later, our venerable construction company, founded by the late Lewis S. Kimball, Sr. is celebrating four decades of construction excellence.

Mr. Kimball, or “Lew Sr.” as he’s fondly remembered today, worked more than 20 years in the Baltimore construction industry prior to the founding of our company.  While the catalysts for pursuit of company ownership were many, his extensive knowledge of local industry construction as well as a passion for leadership inspired Lew Sr. to venture out on his own. Established as a general contractor, Mr. Kimball’s vision for his start-up venture was quickly realized with the successful acquisition of profitable projects from industry giant C&P Telephone as well as recognized local mechanical and electrical prime contractors such as Heat & Power, Inc. and Blumenthal-Kahn Electric.  Many of the company’s first customers were a product of relationships Lew Sr. had fostered prior to the founding of our company. We’re pleased to acknowledge that while some of their names have changed, we continue to serve many of the same clients today that Lew Sr. worked tirelessly to satisfy nearly 40 years ago.  And, while there are many factors that contribute to our enduring customer relationships, continuity of leadership may be the most significant.

 In 1989, after nearly forty years of industry service, the last nineteen as owner of Kimball Construction Co., Inc., Lew Sr. asked his son, Lewis S. Kimball, Jr. to lead the company. Lewis accepted the position and, along with Stephen T. Kimball, a cousin, purchased the company from Lew Sr. soon thereafter.   Following the same sound business philosophy and practices instilled by Lew Sr., Lewis and Steve soon realized corporate growth that resulted in the need for additional human resources as well as a new company headquarters.  In 1998, construction was completed on our new office building and the company relocated from Towson, Maryland to its present location in Rosedale. Today, both Lewis and Steve continue to champion the same corporate culture and values instilled by Lew Sr. That is, an unsurpassed level of commitment to customer relationships founded upon a valued level of quality craftsmanship. We are pleased that the continuity of leadership excellence will be assured for many years to come due to the recent promotion of Brad Kimball, Steve’s son, to the position of Vice President, Operations.

Since 1970, Kimball Construction Co., Inc., has successfully completed nearly 3,300 construction projects for the most well recognized names in U.S. business.  At the same time, we have formed and nurtured countless professional relationships along the way.  We never forget that it is these relationships that have allowed for the success that Kimball Construction Co., Inc. enjoys today.   As we celebrate 40 years of industry service and organizational excellence, we are planning events this year that are focused upon you, our loyal clients and partners.  We look forward to seeing you at these events and to another 40 years of prosperous partnering.

 

Congratulations Stella, Stella May Contracting, Inc.

Celebrates 15th Anniversary

                     January 6, 1995 – January 6, 2010

 

Stella May Contracting celebrated its 15th Anniversary on Saturday, January 30th at the Top of the Bay restaurant at APG.  Those who were daring enough to attend due to the unpredictable snow storm enjoyed an evening of good food, music and of course great company.  Stella presented Brad Hank and Rick Phillips (they are the first two employees Stella hired back in 1995) an award for their fifteen years of services; Stella also received one.  Even though many were unable to be there for this celebration, the employees, family, friend, clients and vendors who were present had a fun evening and Stella appreciated being able to mark this mile stone with them.  Congratulations Stella and the Stella May Contracting Team.

 

Employer I-9 compliance Audits

 

Counselors at Law

Telephone: (410) 321-7310

Telecopier: (410) 821-7918

Email: info@kruchkoandfries.com

Internet: www.kruchkoandfries.com

 

 

 


                                 CLIENT ALERT BULLETIN

                                                     January 15, 2010

                                                                                                       

GOVERNMENT AUDITS TO DETERMINE EMPLOYER

I-9 COMPLIANCE ARE DRAMATICALLY INCREASING

 

The United States Immigration and Customs Enforcement (“ICE”) agency, which is within the Department of Homeland Security, is ratcheting its I-9 audit initiative, which began in April, 2009.  As of November, 2009, over 1,600 Notices of Inspection (“NOIs”) were issued by the ICE to employers throughout the United States, advising the employers of an on-site inspection to determine whether they are in compliance with the employment eligibility verification laws and regulations.  The significance of the ICE’s increased audit activity is pronounced when compared with the number of NOIs that were issued in fiscal year 2008.  During that period, the ICE only issued 503 NOIs.   

 

In an I-9 audit, the employer is requested to produce for inspection Form I-9s, payroll records, payroll tax filings, W-2s and 1099s, and Social Security no-match letters so that the ICE can determine whether the employer is in compliance with federal employment eligibility laws.  The focus of the audits is to determine whether the employer has properly verified the employee’s identity and work authorization, and re-verification authorization, as needed for temporary authorizations.  Even if there is no finding that the employer is employing illegal aliens, employers who make errors when

 

The ICE reports that, to date, the audits have resulted in the issuance of 142 Notices of Intent to Fine totaling in excess of $16,000,000, as well as other actions.   In contrast, in fiscal year 2008, the agency’s enforcement efforts only resulted in 32 Notices of Intent to Fine that amounted to approximately $2,000,000.

completing the I-9 Forms, e.g., failing to complete all parts of Section 2 of the I-9 Form, over-looking blanks in other sections, can be subject to monetary fines.

 


Fines for I-9 violations range from $110 for a single or minor technical violation on each I-9 Form up to $3,200 per violation for serious violations, even for an employer’s first offense.  While a $110.00 fine may appear minor, if that sum is multiplied by the total number of I-9 Forms that contain violations, the sum can become staggering.  For subsequent instances of non-compliance, the civil penalties increase incrementally and substantially.  Criminal penalties can also be imposed.

 

 

 


 

The ICE enforcement activities show a determined commitment on the part of the administration to ensure that only persons lawfully authorized to work in the

U.S. are employed.  Because the ICE is only required to provide employers with a three-day notice of an intended on-site visit, an employer is left with little time to ensure that its records are correct after a NOI is received.

 

What should an employer do in the face of this increased audit activity by the ICE?   It is critical that every employer promptly undertake an internal audit of all its I-9 Forms to ensure that all employees are lawfully authorized to work in the

United States, that the Forms were correctly and properly completed and that the documents submitted by the employees to establish identity and work authorization are valid documents.  In cases where errors are discovered, employers should take lawful measures to correct the identified deficiencies. 

 

Kruchko & Fries is available to provide legal advice and guidance to employers in conducting the internal I-9 audit.

Safety Corner

Pandemic Planning & Preparation

According to U.S. Government statistics, the flu results in the death of approximately 38,000 Americans each year.  And, the flu hospitalizes more than 200,000 Americans and costs U.S. businesses over $10 billion in lost productivity and direct medical costs.  Health expert’s estimate that a pandemic flu incident could kill over 500,000 Americans, hospitalize an additional 2 million more, and cost U.S. businesses an estimated $70-$160 billion.

These statistics are both staggering and concerning.  But, despite the warnings of Health experts, most companies are completely unprepared to effectively handle the onset of a pandemic incident.  And it’s highly unlikely that any company would be completely insulated from the increased workload and negative economic effects that would result from employee absenteeism due to a pandemic event.  That’s why it’s vitally important for every company, no matter how large or small, to have a well-conceived plan to continue business operations in the event of a pandemic event.

Following are some recommendations you can implement to protect the on-going interests of your company.  This is certainly not an all-inclusive list and you may obtain additional information about pandemic preparedness and response by visiting www.pandemicflu.gov or www.osha.gov.

  1. The first step to implementing an appropriate pandemic preparedness and response plan is to ensure that your employees are aware that you have one.  Consider implementing a specific pandemic incident sick leave policy to augment your existing sick leave and absenteeism policies.  This should also take into consideration that an employee may be healthy but that a family member may be sick.  Allow the employee time to stay home to care for the sick family member and to prevent the spread of illness into your workplace.  Make sure that employees are aware that you want them to take time off if they are sick so as not to bring their illness into the workplace.
  1. Identify a Pandemic Team within your employee workforce and the roles and responsibilities of each Team member.  Determine the criteria that will activate your pandemic plan; who will notify the employees that the pandemic response has been activated; how will the employees be notified; is a workplace quarantine warranted; is workplace travel to be suspended; etc.
  1. Maintain a healthy work environment.  Make sure that your air circulation system is properly maintained and inspected at regular intervals.  Post signs outlining the importance of proper hygiene in the workplace and provide tips on how to maintain workplace cleanliness and personal hygiene.  Ensure that your company provides easy access to a number of hand sanitation products.  Consider having a health expert visit your workplace to speak to your employees about sanitation and hygiene and the steps your employees can take to protect themselves from illness.
  1. Consider offering seasonal flu vaccines provided by a health professional at your workplace.
  1. Determine if critical business operations can be sustained for several weeks with only a minimal workforce in place.  If they cannot, do you have a pool of temporary human resources available to you that can be implemented with very little lead time?  If you do not, consider contacting a local job placement agency and formulate an action plan with them to have temporary employees available with short notice.
  1. Cross-train existing employees so that they are capable of performing a number of different essential job functions such as Accounting; Payroll; and Information Technology trouble-shooting.  This will ensure that no single employee’s absenteeism will jeopardize the complete shut-down of an essential job function for your company.
  1. Determine which external job functions are essential to the continuation of your operations and develop a contingency plan to maintain those operations.  Consider using multiple vendors for various external job functions rather than using a single vendor.  Establish or expand work capabilities that enable employees to work from home with all of the appropriate network security and access to applications made available.

 

  1.  Make sure that Managers and Human Resources personnel are up-to-date with health compliance information and regulations as established by OSHA; the CDC; and any other government agencies.  Do not allow absence of information to cause your company to incur fines or unfavorable publicity.

Once again, the aforementioned are just a few recommendations for helping your company to prepare for a pandemic incident.  There are many other issues you may wish to consider depending upon your specific needs.  But, the most important consideration is that you formulate an action plan as soon as possible and disseminate the action plan information to all of your employees.  You must be prepared to deal with a pandemic incident before it occurs to ensure that your business operations will continue uninterrupted.

The preceding article was written for informational purposes only and does not constitute medical or health-related advice.  Before taking any action related to the issues addressed above, you should consult with medical and health experts.

Tim Carnevale

ARM, AIM, AIC, AIS, CLCS

Commercial Account Executive

Engle-Hambright & Davies, Inc. www.ehd-ins.com

Risk Management; Insurance; Surety; Benefits

 

AGC of America News

Planning to Mark Stimulus Anniversary with Contractor Success Stories
 

As the one-year anniversary of the February 17, 2009, signing of the stimulus approaches, there is likely to be considerable media interest in hearing from contractors that have received stimulus-funded work over the past year.  If your company has or is currently doing stimulus-funded work, please let us know. 

We want to know whether the stimulus has helped your company, your employees and/or your business partners.  And we want to know whether you’d be willing to share your story with reporters as the one-year anniversary draws near.

Please contact Brian Turmail at (703) 837-5310 or turmailb@agc.org

 

AGC Planning to Mark Stimulus Anniversary with Contractor Success Stories
 

As the one-year anniversary of the February 17, 2009, signing of the stimulus approaches, there is likely to be considerable media interest in hearing from contractors that have received stimulus-funded work over the past year.  If your company has or is currently doing stimulus-funded work, please let us know. 

We want to know whether the stimulus has helped your company, your employees and/or your business partners.  And we want to know whether you’d be willing to share your story with reporters as the one-year anniversary draws near.

Please contact Brian Turmail at (703) 837-5310 or

turmailb@agc.org

 

 

Registration Relays

Robyn Frankel, Frankel Public Relations

Toll free: 877-863-3373, rfrankel@frankelpr.com

OR Lisa Martini, Enterprise Fleet Management

314-512-2352, lisa.martini@erac.com

 

FOR IMMEDIATE RELEASE

 

Let the Games Begin:  Registration Relays

By Mark Powell, Enterprise Fleet Management

 

For businesses that manage their own fleets, registering vehicles can be a complicated and exasperating process, especially for companies whose drivers are scattered across multiple states and counties. 

 

The excitement begins with different states having different names for their regulatory agencies, which may be known as DMV (Department of Motor Vehicles), BMV (Bureau of Motor Vehicles), MVA (Motor Vehicle Administrators), DOT (Department of Transportation), and many others. The confusion continues with requirements and terminology that vary state-by-state or county-by-county for emissions, license plates, taxes and insurance.

 

The following examples highlight some of the most common variations:

 

 

 

 

 

The consequences of not keeping vehicles properly registered can be significant, from paying extra charges because of penalties to reducing drivers’ productivity if their vehicle is impounded for being improperly registered.

 

Because there may never be a uniform way to register vehicles across the nation, working with a fleet management company that has the knowledge and expertise to handle vehicle licenses and titles for each state can make the process go much more smoothly for drivers and their companies.  In addition to taking full responsibility for the time-consuming, labor-intensive process of renewing vehicle registrations, turning over the responsibility to a fleet management company frees up drivers, relieving them from spending time standing in line at the department of motor vehicles when they could be servicing customers. It also eliminates driver out-of-pocket expenses and the related costs of processing reimbursements.

 

 

 

Mark Powell is Group Sales Manager for Enterprise Fleet Management in

Baltimore and can be reached at 410-412-4620.  He is supported by an experienced team of veteran mechanics and accredited Automotive Service Excellence (ASE) technicians to serve the fleet maintenance needs of businesses with mid-size fleets.  In addition to maintenance management programs, Enterprise’s services include vehicle acquisition, fuel management and insurance programs, as well as vehicle registration, reporting and remarketing.  Visit the company’s web site at www.enterprisefleet.com or call toll free 1-877-23-FLEET.

 

Increased Construction Risks Caused by Sustainability Requirements

Construction contractor’s are facing a new and rapidly expanding risk to their stability and profitability. Public demand, reinforced by politicians and government agencies, for projects that emphasize sustainability may lead to increased exposure for all those involved in design and construction. While most of the disputes associated with green projects have involved architects and engineers and design deficiencies or project miscommunications, the construction process may soon come under increased scrutiny. With that scrutiny comes increased liability.

It is unusual for any current construction project to be designed without some goals to reduce operational energy use, conserve water resources, and provide a comfortable environment. Now, more pressure will be put on contractors and subcontractors to reduce fossil fuels use, minimize construction waste, increase construction quality, and document procedures and compliance with green design features. Victor O. Schinnerer & Company, Inc, which provides design liability coverage for construction firms, has been tracking green claims since 2005 and is concerned that contractors will be facing growing claims related to the failure of projects to meet sustainability goals or requirements.

Regulations and Certification Programs Ratchet Up the Risk

There are divergent expectations and multiple definitions of sustainability and green design. The emphasis on “going green” for the benefit of the Earth’s flora and fauna is transitioning to green for the benefit of the client’s marketing and operations. Often, a client’s definition of green is focused on a reduction in energy use or the “seal of approval” on a project certified by a national or international certification program. In either case, the client expects a significant return on an investment. There are plenty of examples of how this narrow focus on any one aspect of sustainability, such as long-term cost savings or a marketable rating by a third-party evaluator, has resulted in disputes and claims. Now, however, the increased involvement of government agencies brings a “high-stakes” aspect to sustainability as green becomes more specifically quantified in tax breaks, zoning variances, project approvals, and other significant financial incentives offered to project owners. Green then becomes focused on “greenbacks.”

With any increased interest in achieving measurable green construction standards comes the increased risk that results will not meet simulations or requirements.

 

 

 

 

A more inclusive definition of sustainability in design and construction does not simply center on marketing and cost reduction. The primary definition of a green construction project is a result that has minimal impact on the environment, minimized energy and water usage, and a built environment—both within and related to the project—that provides enhanced occupant comfort at both psychological and physical levels. Even with a definition of sustainability that does not focus solely on a client’s anticipated financial benefits, the likelihood of disputes and litigation is high on all projects because of the increased concern over sustainability. On projects where sustainability is paramount, all in the construction process should be concerned about heading off lawsuits and losses through good contract language and sound internal procedures.

Recognize Concerns During the Construction Process

Building a project to meet specific sustainability requirements generates challenges and risks that are not present in conventional projects. Clients, the design team, and contractors must recognize the differences and adjust practices, schedules, and procedures. Green projects involve numerous contractual issues that are not specifically addressed by most form contracts or standard clauses. Below are a few examples:

Determination of Green Target: Whether building to meet a specific requirement in order to comply with laws that require obtaining third-party certification, or simply to meet a client’s demands, construction responsibility differs from a traditional project. The ConsensusDOCS coalition has developed a green building addendum that clarifies goals and obligations. It is the first and only standard industry contract document specifically designed to address the green building process. 

Contractor Costs: On a traditional project the costs of certain permits and tests are absorbed by the contractor. With a green project—especially one that has to prove it meets LEED certification requirements—such costs can be significantly higher than on a non-certifiable project. Many of these costs, such as the entire cost of the certification process, should be borne by the client. Others, such as equipment testing and green construction verification, can be built into the project cost if recognized early. It is critical that the construction contract recognize the source of payment for the increased costs of testing and certification.

Project Management: Constructing a green project alters how the process is managed. For LEED and other certification programs, an evaluation of the construction process accounts for a significant portion of the mandatory certification criteria. It is critical to schedule required procedures and tests, and contractors face increased risk because substitutions can derail the certification process if handled improperly. Obligations for material reuse and waste management can place an increased management burden and cost on the contractor that must be recognized.

Skills Sets: The greatest challenge during construction might be the use of properly skilled workers. Constructing a green project requires attention to both details and documentation. Even without contractual obligations to meet specific green construction, installation, and waste-reduction requirements, the demands of a third-party certification program must be met for the project to be in compliance with the contract documents. Even on projects where specific certification levels are not identified, the competitive construction environment, concerns over environmental sensitivity, and increased government regulations on energy use, water use, recycling, and waste disposal will mandate that worker skills have to evolve.

Project Completion and Warranties: On projects seeking certification by a third-party organization, the concept of final completion could be altered. LEED and other certification programs might take months or even years to complete their analyses. Contractors, and payments for their services, might be delayed by the length of the process. Obligations under correction or warranty periods could be significantly increased in scope and time. Projects may seem to never close out while certification is being considered. With this delay could come a delay in the determination of final payment. Any certification process needs to be recognized in the contract for construction, and specifics regarding continuing services or delayed payment need to be negotiated.

 

 

 

 

Limitation of Damages: On any project where energy efficiency, water conservation, and indoor air quality are emphasized, there exists an increased likelihood of disputes between the client and contractor due to the failure to meet expectations based on sustainable design. With the mandate of third-party certification for certain financial benefits, the possibility of litigation is intensified. Damages that might result if LEED or other certifications are not achieved could be massive, thus heightening the importance of a negotiated waiver of consequential damages to preclude claims for lost income or savings. In addition, the use of provisions clearly establishing a reasonable level of liquidated damages for delayed completion could prevent litigation for unattained benefits because of a delay in the third-party certification process.

Contractors Must Customize Contracts and Services

A green project can result in red ink from the contractor’s losses due to an obligation to meet sustainability requirements. Many of the increased risks associated with green projects need to be recognized early by all parties involved in design and construction. Specific tasks required to satisfy the green standard chosen or required for a particular project should be identified. The contract for construction can then assign the tasks to the party most capable of performing the task in a way that keeps the project sustainable and the bottom line green.

Victor O. Schinnerer & Company, Inc. has been an outspoken advocate of contractors recognizing, managing and insuring the increasing exposure they face because of the mandates of green project delivery.  For more information on options available to contractors, contact Schinnerer’s Gene Todaro at 301-961-9828 or at gene.a.todaro@schinnerer.com.

 

Did You Know.......

The world's first stone lighthouse was the Smeaton Eddystone, built just south of Plymouth, England in 1756 by John Smeaton, the "Father of Civil Engineering." It was lit with only 24 candles. The Eddystone lasted 47 years until it was floored by fire. It was then dismantled and built on a neighbouring rock.

Today, lighthouse lights are the equivalent of 20 million candles, lit by high pressure xenon lamps.

TIP is the acronym for "To Insure Promptness."

The world's largest coins, in size and standard value, were copper plates used in Alaska around 1850. They were about a metre (3 ft) long, half-a-metre (about 2 ft) wide, weighed 40 kg (90 lb), and were worth $2,500.

Near the fishing village of Loreto, Mexico, real estate developers are constructing a resort community using healthy, eco-friendly materials such as compressed earth blocks and lime plaster. This could bring a whole new meaning to the saying "cheap as dirt"!

Laughing lowers levels of stress hormones and strengthens the immune system. Six-year-olds laugh an average of 300 times a day. Adults only laugh 15 to 100 times a day! So we all need to laugh more often!