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Showing posts from 2017

Court Gives A Boost to Builders in Construction Defects Battle

Industry now could begin to meet pent-up demand

In a ruling that could stir near-dormant condo construction in Colorado, the state Supreme Court on Monday ruled that a homeowners association was wrong to sue a builder after disregarding bylaws that require binding arbitration to settle claims of construction defects.

The association's key misstep, the court said in a 5-2 ruling, involved its bid to change the rules to allow litigation without getting the consent of the development's builder.

"Because the unit owners did not obtain the Declarant's written consent to remove the declaration's arbitration provision, the attempted amendment was ineffective," the court majority ruled. "Consequently, the Association remains bound by the arbitration agreement..."

The ruling in the case Vallagio at Iverness Residential Condo Association vs. Metropolitan Homes Inc. has potentially far-reachinf implications for both homeowners and builders. Advocates of homeow…

High Demand and Limited Supply Drive Construction Labor Costs Up

The law of supply and demand is one of the basic drivers of construction economics. It is integral to cost and profit for any construction business from materials suppliers to on site labor and contractors. Labor supply is closely tied to the demand side of the curve and the supply of skilled craftsman is fast becoming an issue that will drive the cost of labor up until a solution can be found.

Today we are witnessing the long-term results from those programs that encouraged more students to go to college and discouraged students from taking those courses that lead to the building trades.

A recent article in one of the Houston area community newspapers pointed out just how difficult the labor supply issue is becoming in Katy located on the west side of Houston and one of the fastest growing suburbs in the region.

As the article titled, "Katy's cost of construction" reports, "Fewer technical students, undocumented labor play role in ongoing labor shortage."

The …

Catching 'Storm Chasers': How Roofing Oversight Rules are Reshaping the Industry

Colorado, Texas, Missouri, and other Midwest and Southern states are known for their heavy storms, bringing wind, tornadoes and hail. Increasingly, they're also becoming known for fraudulent roofing contractors, a phenomenon in which companies prey on homeowners following major storm events and take off with their insurance money.

In Missouri, "it's changed the landscape entirely," said Jason Shupp, president of St. Louis-based Ferguson Roofing and past president of the Roofing and Siding Contractors Alliance (RSCA), a regional association serving Missouri and parts of Illinois. "How any contractor goes to market has changed quite a bit."

Fraudulent storm chasers also generate a sense of urgency among homeowners that isn't always necessary. "They have a sense that they have to move really quickly, which isn't always the case," Shupp said. That's because this kind of "storm chase" knows they must close the deal quickly before …

Immigrants Represent a Growing Share of the U.S. Workforce

Immigrants represent a steadily growing share of the U.S. workforce, a trend that could be affected by efforts to overhaul immigration policy in the U.S., according to Bloomberg BNA.

An annual report released May 18 from the Bureau of Labor Statistics shows the number of foreign-born workers in the U.S. increased to nearly 27 million in 2016—up about 700,000 from the previous year and representing 16.9 percent of the U.S. labor force. That is the highest proportion in records going back to 1996, when immigrants accounted for just 10.8 percent of the workforce.

The report defines foreign-born workers as individuals who reside in the U.S. but were born outside the country to parents who were not U.S. citizens. It doesn't distinguish between legally admitted immigrants, refugees, temporary residents and undocumented immigrants.

The share of immigrants in the U.S. workforce has grown steadily during the past six years after a slight dip during the last recession when foreign-born work…

Automating the Construction Industry

Jonathan Wilkins explains how technologies such as drones and robots are being used to allow for off-site manufacturing and faster builds

The Great Wall of China is regarded as the longest running construction project of all time.

The wall took more than 2000 years and millions of workers to complete. At the time, labourers used only simple machinery to build the wall - a vast difference from the equipment used in construction today.

Automation has already been used by a number of construction companies to make the building process more efficient.

Though house building is an extremely complex and time consuming activity, Swiss prototype robot bricklayer, In-situ Fabricator, can build a house in just two days.

In-situ Fabricator isn't the only example of developments in rapid house building - Chinese 3D printing pioneer, WinSun, claims to be able to print ten houses in just one day using its innovating technology. These developments, however, are yet to become mainstream.

Adopting a…

How Millennials Have Shaped the Construction Industry—for Better and for Worse

Last year marked a milestone for the country's youngest generation of workers, commonly known as millennials: They overtook baby boomers as the largest workforce segment in America. Employers should be ecstatic that elevated rates of retirement are positioned to be offset by an influx of younger, energetic, tech-savvy workers ready to stimulate productivity

But in the construction industry, firms continue to wrestle with skills shortages as older workers in occupational categories such as welding and carpentry retire in large numbers with their potential successors disproportionately pursuing jobs in industries such as finance, professional services and health care. In 2002, 11 percent of construction workers were aged 55 or older, according to data from the Bureau of Labor Statistics. By 2015, this share exceeded 20 percent, per the Current Population Survey.

What's more, despite massive growth in the population of twenty-somethings in recent years, by 2015 the fraction of co…

How The Defend Trade Secrets Act Affects Roofers

Safeguarding trade secrets can help put roofers in a better position to secure and retain skilled workers. The lack of skilled labor is the number one threat to the roofing industry. To hire skilled supervisors, sales staff and management, roofers often have to look to competitors rather than hire employees new to the market. Given the competitive nature and demand for skilled labor, roofers have employed a variety of tactics to not only secure “loyalty,” but protect trade secrets and proprietary information. The primary tool to enforce confidentiality is a detailed employment agreement. However, most roofing contractors have had access to The Uniform Trade Secrets Act (UTSA). Adopted by 48 states, the USTA provides states with remedies for the misappropriation of trade secrets for companies operating in multiple states. The Defend Trade Secrets Act of 2016 (DTSA), effective May 12, now provides federal jurisdiction for trade secret misappropration. The DTSA doesn’t preempt state laws…

Contractors Need to be Prepared for OSHA Inspections

Navigating the OSHA inspection and citation process can be a difficult task. However, if you are prepared prior to receiving an inspection, you are less likely to receive a citation and more likely to enforce applicable safety standards on your projects. This article will focus on a few of the more significant safety tips that contractors should consider implementing on their construction projects.

First and foremost, every contractor should have a written safety and health manual that adequately addresses work place safety and is updated frequently. If you have Spanish-speaking workers, your safety manual should be in Spanish as well as English. Each employee should sign and indicate that they have received a copy of the safety manual. The safety manual should be in each truck used by the contractor so that if OSHA requests a copy of the safety manual, the person in charge of the job will have access to the manual upon request.

In addition to having an effective safety manual, the co…

Avoiding the Big Spend: Tracking and Caring for Rental Equipment

Sometimes, renting equipment makes perfect sense. In this still-tight credit environment, some lenders aren't willing to finance a large piece of equipment, or an outright purchase might not add up financially if the equipment is only needed for a short duration. For contractors on a budget, rental companies usually have the latest models in their inventories, a luxury that is out of reach for many smaller firms. Plus, renting equipment  is convenient, with the duty of maintenance, set up and transportation being someone else's problem.

Nevertheless, there are still ways contractors can end up paying more than they planned for that rented backhoe or core driller. The good new is that there are strategies to prevent that extra spend.

Take Out an Insurance Policy

Hands down, the first line of defense against serious out-of-pocket expense is insurance coverage. Rental outlets offer insurance as part of their services, but the more cost-effective route for contractors is adding a r…

Are Injuries Still the 'Cost of Doing Business' at Some Companies?

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The struggle between safety and production continues: A new study finds that managers, struggling to meet earnings projections, are willing to sacrifice worker safety and health.

New research conducted by Professors Judson Caskey of the UCLA Anderson School of Management and Naim Bugra Ozel from the Naveen Jindal School of Management at UT Dallas and published in the Journal of Accounting and Economics finds that managers of U.S. companies facing market pressures to meet earning expectations may risk the health and safety of workers to please investors.

Ozel and Caskey found the cause of the increase in injuries to be related to efforts to increase production and profits by increasing employee workloads and spending less on training or preventative maintenance. Companies that comfortably beat or completely missed analysts' projections had lower injury and illness rates than those companies which appeared to be scrambling to meet or slight exceed analysts' projections.

Using i…

A Push for Prefab: Why Offsite Construction Methods are Moving to the Mainstream

Until recently, the words "modular construction" likely evoked images of boxy, utilitarian overflow classrooms, and "prefabricated" connoted an inevitable sacrifice in style. However, today's offsite construction industry is an entirely different proposition.

In the last few years, general contractors and owners have become more receptive to its use, and designers are learning that prefabrication provides flexibility without constraining creativity.

A big boost to the offsite construction industry was the announcement earlier this month from hotel giant Marriott International that it plans to pursue a program of modular construction for some of its brands - representing approximately 13% of its North American hotel deals this year. That translates to 50 hotels with prefabricated bathrooms or guest rooms.

To date, Marriott has opened one modular hotel in California, which was completed two months ahead of schedule, and has four additional modular projects in pro…

Missouri Bill Would Bar Construction Labor Agreements

Missouri lawmakers approved a bill April 27 that would bar project labor agreements that require non-union contractors to pay union wages, according to Bloomberg BNA.

Under S.B. 182, state and local governments would be prohibited from requiring bidders on public projects to use union labor or pay union wages. The bill would also prohibit preferential treatment for union contractors and cut state funding on local governments that violate the law. Gov. Eric Greitens (R-Mo.) is expected to sign the legislation; Greitens signed into law a right-to-work measure earlier this year.

Under current law, project labor agreements are banned in Missouri for projects funded 50 percent or more with state funds but are allowed for other projects.

According to the Missouri Chamber of Commerce and Industry, the bill could save "thousands of dollars" for the state.

"The bill would leave it in the hands of the contractor, and as a result, the contractor can choose the most cost-efficient …

Liquidated Damages Provisions in Construction Contracts

Even if it appears that the liquidated damages are proper, the prudent contractor will not accept the assessment at face value because there are many ways to defeat a liquidated damages clause.

Liquidated damages are a fact of life in modern construction contracting. However, even if your contract contains this provision and the owner has assessed liquidated damages that does not mean the assessment is valid or enforceable. There are a number of ways you might be able to prevent an owner from keeping contract proceeds that are rightfully yours. This article will provide the reader with an idea or two that will help keep hard-earned contract proceeds in the contractor’s pocket. In a breach of contract situation, liquidated damages are designed to provide a means to compensate the non-breaching party when the actual damages are not readily ascertainable. In other words, when the non-breaching party’s actual damages will be difficult to determine in the event of a breach, then the partie…

ABC Asks for Drug Testing in NYC Construction

The Empire State chapter of the Associated Builders and Contractors - a non-union organization - has asked the New York City Council to consider adding mandatory alcohol and drug testing to its slew of construction bills up for consideration.

In a letter penned to council speaker Melissa Mark-Viverito and council member Jumaane Williams, Brian Sampson, the group's chapter president, asked the legislators to consider adding the testing provision to Intro. 1447.

"As the City Council considers amendments to Int. 1477, we urge you to strengthen the legislation with a provision mandating drug and alcohol testing for all New York City construction workers," Sampson wrote. "This long-overdue mandate would play a crucial role in your efforts to increase construction safety and would undoubtedly save lives in one of the city's most dangerous industries."

The letter added that drug and alcohol testing in common in other industries, specifically naming baseball player…

Five Key Provisions in a Residential Roofing Contract

Contractors should routinely review their roofing contract to make sure that it contains the most current terms and that the terms are enforceable.

In these tough economic times, a contract can be a roofer’s best friend because it will contain terms that will assist the roofer in collecting money or defending claims. Although this article will not discuss all the provisions needed in a residential roofing contract, it will focus on five important provisions that every residential roofing contract should include.
1- Scope of Work Provisions – The majority of litigated disputes arise out of or relate to problems with the scope of work. Often, contractors are seeking payment for extras that were not originally contemplated in the contract. However, the homeowner may believe that the contract included all roofing work to be performed on the project.
For example, a roofing contractor that is providing a new roof for a homeowner may encounter rotted decking that needs to be replaced. The contr…