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Five ways small, minority-owned construction firms can build success

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To spread the economic benefits that construction projects generate more fairly across communities, government agencies reserve some public work for contractors owned or operated by traditionally disadvantaged groups.

Federal, state and even city and county agencies have special programs that give qualified minority and woman-owned business enterprises (MWBEs) and other disadvantaged business enterprises (DBEs), such as service-disabled veterans, a chance to bid on and win certain construction projects ranging from small to mega.  That is, if they are certified.

The Small Business Administration, for example, runs the 8(a) certification program, which is probably the most well-known among government contractors, but other agencies have renditions as well.  Most certifying agencies require that a qualified business be owned by at least 51% minority or disadvantaged owners.

African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans and women are presumed to be socially and economically disadvantaged, according to the federal government.  Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.

But while certification provides some opportunities, it doesn’t mean that MWBEs and DBEs get to skip over all the hard work that goes into building a business.  “That’s not the way it works,” said Dan Moncrief III, CEO and chairman of certified minority commercial contractor McDaniel’s Construction Corp. in Columbus, Ohio, and president of the National Association of Minority Contractors.

“You have to work harder than you’ve ever worked and stay up later than you’ve ever stayed up to get your first job,” he said.  “And once you get a first job, it may be a long time before you get the second one.  So, it’s a constant grind.  If you don’t have the fortitude for it, you might want to do something else.”

Continue reading at:  Construction Dive

The top OSHA fines of Q2 2019

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Once again, fall-related violations were behind most of the biggest fines OSHA issued to construction companies in the second quarter of this year, but burn and asbestos hazards made a showing as well. 

However, what stands out most about this group of contractors is that one of them, Shawn D. Purvis, has been charged criminally in relation to a death that occurred on one of his company’s jobsites.  Once unheard of, prosecutors have been more willing to file criminal charges against construction companies, their executives and supervisors after a workplace accident, usually when serious injury or death results. 

Continue reading at:  Construction Dive

Supplier diversity: untapped resource for construction companies

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An effective supplier diversity program can provide multiple benefits for construction companies, including enhanced innovation, profitability, and the ability to attract and retain qualified minority and female employees.

The federal government, state government agencies, and even local governments require companies that do business with them to adopt and implement supplier diversity programs.  Many government contracts impose specific levels of contracting with diverse businesses as a contract requirement.

The definitions of “diverse business” vary from jurisdiction to jurisdiction, and many of the acronyms and names commonly used (e.g., Disadvantaged Business Enterprise or DBE) can have different meanings, depending on the laws and regulations applicable to the specific contracts.  Therefore, contractors must perform due diligence on the supplier diversity requirements whenever they submit a bid or proposal for a government contract.

A growing number of non-governmental owners mandate diverse supplier participation in their projects.  The “Billion Dollar Roundtable” is a group of major U.S. companies that have pledged to spend a minimum of $1 billion a year with diverse suppliers.  Due to their large dollar value, construction projects are a key component of these efforts.  As of May 31, 2019, the Roundtable has 27 members, including some of the biggest companies:  Apple, Boeing, Exelon, and Walmart.  Other companies are following this example.

Continue reading at:  National Law Review

7 tips to maximize construction project profitability

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Many business leaders in construction worry about winning jobs, but sometimes a lost bid is a bullet dodged.  How do you know which projects will generate profits and which ones are better avoided?  According to Hal Macomber, Executive Vice President at Touchplan and expert Lean consultant, asking a few simple questions before taking on a project can make a big difference on your balance sheet.  The key is to take a project’s profit rate into account, in addition to its duration and size.  Read on for seven tips for more profitable projects.

Profit at the Project Level

The first step is to identify the rate at which a project will make money (also called the profit velocity).  Macomber illustrates the concept with an example scenario.  “If you have a ten-month project that is going to make $200,000, your profit velocity per month is $20,000.  And if you’re looking at two projects you might realize that you only have the staff to do one of them.  One of them is a $200,000 job and the other is a $250,000 job.  You might immediately think that you should take the $250,000 job.  But wait a minute. What’s the profit velocity?  The first project is ten months, so that profit velocity is $20,000/month.  The second project is twenty months, so that profit velocity is $12,500/month.  In this case, it’s actually a worse deal to take the job with the higher profit.”

In addition to profit velocity, there is another key factor to consider: the resources required to deliver a project.  Larger and more complex projects will require more senior staff, whereas junior staff can gain experience on smaller, more straightforward projects.  While the smaller project may have a lower total profit, it might end up costing the company less to execute, depending on the resources available.

Continue reading at:  ConstructionDive

SBA to host surety bond workshop June 27th

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On Thursday, June 27, 2019, the U.S. Small Business Administration (“SBA”) and the National Association of Surety Bond Producers (“NASBP”) will be holding a half-day surety bond workshop.  Topics covered will include:

  • Contract Bonding and Insurance
  • Banking and Finance
  • Risk Management and Legal Concerns
  • Federal Assistance Programs
  • Local Procurement Opportunities
  • Business Development Resources

This event will be held at the Cleveland L. Dennard Conference Center, Atlanta Technical College, 1560 Metropolitan Parkway, SW from 8 a.m. – 1 p.m. ET.

Here is the official SBA event flyer:  SBA Surety Bond Workshop Flyer

Registration is required, because seats are limited:

Click Here To Register or go to www.sba.gov/ga

Contract appeals board recognizes that discovery may uncover new claims

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In Amec Foster Wheeler Environment & Infrastructure, Inc. v. Department of the Interior, CBCA 5168 et al. (Feb. 27, 2019), the Civilian Board of Contract Appeals (CBCA or Board) recently reiterated that a contractor need not assert every conceivable legal theory of relief as soon as it encounters an unforeseen condition on a construction project.

Rather, a contractor may later be able timely to assert additional claims under distinct theories based on operative facts learned during discovery. Apropos of recently celebrated St. Patrick’s Day, this case indicates that discovery may be the rainbow that leads a contractor to a bigger pot of gold, i.e., operative facts that permit assertion of more valuable claims based on alternative legal theories.

The Case

In 2011, the National Park Service awarded Amec a contract to repair parts of the Alcatraz Cellhouse in the historic prison on Alcatraz Island. In January 2016, Amec appealed a contracting officer’s decision denying an equitable adjustment and schedule extension under theories of constructive change and breach of the duty of good faith and fair dealing. The Board docketed that appeal as CBCA 5168.

During discovery, Amec decided to allege alternative grounds for relief. Indeed, in August 2018, Amec submitted a new claim for more money than it sought in the already docketed appeal — based on different operative facts and under the distinct theories of superior knowledge and negligent estimates. Amec appealed the denial of that second claim to the Board, which was docketed as CBCA 6298 and consolidated with CBCA 5168.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/03/cbca-recognizes-that-discovery-may-uncover-new-claims/

Preparing to bid in a new state

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If you’re expanding your business, you’ve got to put together a game plan — especially if you’re expending into other jurisdictions.

When a client is so pleased with your work on one project that they offer up more business, sometimes the invitation is sweeping, with the potential to dramatically expand your company’s footprint. No one wants to turn away work, particularly from a valued client.

But, if those projects are in jurisdictions that are new to the company, there will be some regulatory homework to do before making a commitment.

What licenses, paperwork, agreements, etc. will you need to do the work? Are exams required? Depending on the answers to these questions, and the processing times of the various jurisdictions, the licensing process can take anywhere from 1 to 6 months. So, how can you answer a client’s request confidently when opportunity comes knocking?

Consider using a business licensing provider with experience dealing with architecture, engineering and construction (AEC) firms. They can provide accurate time estimates for specific licenses and jurisdictions and have the knowledge to ensure timely file preparation, review and approval. Another option is to hit the books and research licensing requirements within the project’s jurisdiction(s).

Keep reading this article at: https://www.constructionbusinessowner.com/law/regulations/preparing-bid-new-state

String of infrastructure investments underway hints at big 2019

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Infrastructure work may be heating up again with whisperings of President Donald Trump’s administration reinitiating the $1 trillion infrastructure plan promised during his 2016 presidential campaign. The administration claims to be willing to increase the federal share of the infrastructure program significantly from the 20% referenced in previous iterations — a move that may draw Democrats back into negotiations.

Whether federal legislation will come to fruition or not in 2019, investments nonetheless are being made in the space. A December Wall Street Journal analysis of state and local revenue collection and spending found that public agencies are increasing their infrastructure investments and making headway on long-delayed projects. Much of that money is tax revenue stemming from increased consumer spending.

Although it’s hard to predict what 2019 may bring, Construction Dive has rounded up some of the biggest infrastructure initiatives already underway across North America as the year begins.

Keep reading this article at: https://www.constructiondive.com/news/string-of-infrastructure-investments-underway-hints-at-big-2019/545131/

General contractor can be cited for subcontractor safety violations

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A U.S. Appeals Court judge for the 5th Circuit in New Orleans has ruled that OSHA can cite general contractors — even if their employees are not affected — for subcontractor safety violations.

The ruling came after Labor Secretary Alexander Acosta requested that the 5th Circuit review an OSHA administrative court decision that said a general contractor could only be cited for safety threats to its own employees.

In 2017, a Denver Occupational Safety and Health (OSH) Commission administrative judge ruled that Hensel Phelps could not be cited by the agency for safety hazards created by one of its subcontractors on a project in Austin, Texas. However, the 5th Circuit said more recent rulings have rendered the case law on which the administrative judge based his decision “obsolete” and said that Hensel Phelps could be held responsible for safety on the multi-employer site as a “controlling employer.”

According to court documents, Hensel Phelps hired subcontractor Haynes-Eaglin-Waters (HEW) for a library construction project, and HEW, in turn, hired CVI Development as a sub-subcontractor to perform demolition, excavation and other work. Hensel Phelps and HEW project staff allegedly directed CVI to work in an unsafe excavation area. An OSHA inspector cited both Hensel Phelps and CVI for safety violations. The OSH Commission will now review the matter again, taking the 5th Circuit’s decision into consideration.

Keep reading this article at: https://www.constructiondive.com/news/court-general-contractor-can-be-cited-for-subcontractor-violations/544678/

 

Miller Act applies even if contract does not contain a bonding requirement

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United States Court of Appeals for the Federal Circuit recently held, in K-Con, Inc. v. Secretary of Army, that the bonding requirements under the Miller Act apply to federal government construction contracts, even when the bonding provisions were not part of the contract.

The Miller Act, as implemented at FAR 28.102-1, requires that before any contract of more than $150,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government, performance and payment bonds, which become binding when the contract is awarded.  

The Appeals Court cited a doctrine first articulated in G. L. Christian & Assocs. v. United States, 312 F.2d 418 (popularly known as the Christian Doctrine) in arriving at this decision.

Under the Christian Doctrine, a court may insert a clause into a government contract by operation of law if:

  1. that clause is mandatory under applicable federal administrative regulations; and
  2. it expresses a significant or deeply ingrained strand of public procurement policy.

The court found that the Miller Act bonding requirements are mandatory, because FAR Sections 28.102-1 and 28.102-3 require the bonds and direct the insertion of the clauses into federal government construction contracts.  The court further found that Miller Act bonding requirements are “deeply ingrained” in public procurement policy.  The Miller Act bonding requirements were thus held to be incorporated into federal government construction contracts by operation of law, at the time the contracts were awarded, under the Christian Doctrine.

Keep reading this article at: https://www.jdsupra.com/legalnews/the-miller-act-applies-even-if-contract-34807

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