By Chad Wenzel

In construction, dozens of trucks, generators, compressors and specific machinery are often needed to get the job done well. Virtually all of that mechanical infrastructure requires fuel every three to four hours, so it’s no surprise that fuel is among the highest recurring costs for the majority of construction operations. Unfortunately, fuel costs are largely out of any company's control. In today's global economy, fluctuating fuel pricing is unavoidable, but there are methods and techniques for construction professionals to understand, assess and mitigate these risks and effectively manage fuel costs.

  • Evaluate specific site needs. For example, some sites may require on-site fueling for individual pieces of equipment, and others jobs may need a fuel tank and pumps delivered (complete with special shields to protect against theft and pilferage) to facilitate a more flexible fueling structure.
  • Set up a contract with an on-site fuel delivery provider. This reduces employee time wasted on gas station trips. The best fuel suppliers will offer delivery day or night—even on weekends—and will have tanks that can accommodate more than one product (a critical consideration for sites that may require both standard gasoline and off-road diesel for heavy equipment).
  • Monitor fuel use to more accurately project future needs. Track usage closely and look for patterns daily. If you contract with a fuel supplier they may implement a technology like SMARTank™ Remote Tank Monitoring Systems, which use automatic tank gauges (ATGs) to notify you when levels are low. This type of truck-to-office technology can also provide fuel reports that assist with accounting, data management and fuel efficiencies.

Chad Wenzel is vice president of sales for Taylor, Mich.-based Atlas Oil Company, a premier fuel supply, logistics and services company delivering comprehensive solutions to customers throughout the distribution lifecycle, from crude oil E & P companies to refineries to retail gas stations and commercial end users nationwide, 24/7/365. For more information, call 800-878-2000 or visit

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By Barbara Anne (“B.A.”) Spignardo

The recent uptick in hotel development is a result of unusual, intricate pieces put together behind the scenes to create a healthy capital stack required to finance such projects. In order to narrow the current loan-to-cost ratio gaps in hotel development finance, it may be necessary to fit together several financing arrangements, such as the use of new market tax credits, EB-5 immigrant investor financing and historic tax credits.

New market tax credits (NMTC) target investment and development in low-income communities. The basic structure of a NMTC transaction involves the formation of a community development entity (CDE), capitalized by Investors with cash. The CDE uses the cash to invest in a qualified active low-income community business. Use of NMTC reduces investors' tax liability, thereby increasing economic return. Congress enacted the EB-5 program to use capital contributed by foreign investors. The EB-5 program provides investors with a visa, possibly maturing into a permanent green card, provided the investor satisfies EB-5 requirements. There is a minimum investment depending on the unemployment rate in the targeted location. EB-5 investors must create or preserve at least ten full-time jobs that meet specific requirements for U.S. workers within two years of the investor's admission to the United States.

Historic tax credits (HTC) provide an opportunity to generate equity to finance development of hospitality properties, for historic buildings located in downtown, low-income areas. HTC permit a dollar for dollar reduction in federal income tax obligations equal to 20 percent of the cost of rehabilitating a certified historic structure, or 10 percent for the rehabilitation of a non-historic and nonresidential building constructed before 1936. To qualify for HTC, both the project and the developer must meet requirements of the National Parks Service, as well as local regulations for the rehabilitation of historic structures.

Each of these pieces that may increase available capital pose certain risks for investors. One prominent risk associated with a NMTC transaction is of recapture of the NMTC by the IRS if the CDE no longer meets the requirements of an eligible CDE, the investments are not "substantially" used for low-income community investments, or the CDE redeems any equity investment. Challenges faced by EB-5 immigrant investors include delayed capital return and job creation requirements. In order to qualify for HTC, there are project and developer requirements that must be satisfied, as well as the possible risk of recapture of tax credits. H

otel development is re-emerging in reliable locations, however, with creative capital collaborations pieced together to minimize the difference between traditional lender-financing and project costs for such developments. Utilizing alternative financing arrangements such as new market tax credits, EB-5 immigrant investor financing and historical tax credits, each have their own challenges to overcome. However, if a developer is able to overcome the challenges posed by use of such financing arrangements, and piece these financing opportunities together, the rate of new development will accelerate. NOTE: For more information on the matters discussed in this post, please contact the author.

This post does not intend to dispense tax advice, and the author disclaims any such tax advice purported to be obtained from this article. For tax advice regarding the matters discussed in this article, a tax attorney professional should be consulted.

Barbara Anne (“B.A.”) Spignardo is a member of Shapiro, Lifschitz & Schram’s Real Estate and Business groups in Washington, D.C. She can be reached at [email protected]

Have an idea for a guest blog for Construction Today? Contact [email protected] or [email protected].

By Desislava Nikolova

The growth of Asia’s economic standing in the world is hardly news to anyone; however, as any investor can tell you, past results are no guarantee of future growth. While Asian growth has, to date, been impressive, it does face one looming problem that could limit future growth: an infrastructural bottleneck. Simply put, without improvements to infrastructure in the form of transportation networks (rail networks, airports, roads), updated electric grids, and sanitation, Asian economies cannot continue to grow, much less retain their rapid pace of growth.

Meeting this need and reach their individual development goals, though, will not be cheap. According to the Asian Development Bank, the current decade will see the entirely of Asia needing approximately $8 trillion in infrastructural work. Understandably, the lion’s share of this work will need to be directed towards India and China, but what few realize is that the cumulative need for Southeast Asia (i.e. Indonesia, Vietnam, Thailand, etc.) reaches over $2.5 trillion.

Though these are staggering sums of money, when considering that the World Bank estimates that spending a mere 10 percent more on infrastructure can add 1 percent more to long-term growth, the potential return could be equally amazing. Aside from more generalized and abstract financial terms, here are some examples of how this translates into real, relatable terms as well as some examples of projects that are already underway.

  • China has an estimated need for 400 airports, with India expected to need at least 100.
  • Southeast Asia alone has a population of more than 600 million, which is larger than the EU or North America, and most of these people will be “middle class” within the next decade; however, infrastructurally, only 71 percent currently have access to electricity and only 25 percent have access to piped water.
  • A pan-Asian railroad which stretches from China to Burma, Singapore, and Cambodia is already under construction.
  • Access to Burma’s offshore oil and gas assets are driving construction in gas pipelines and access ports.
  • To ease traffic in Bangkok, Thailand is spending $67 billion to upgrade and add to its rail system, including the addition of high-speed rail lines.

Not only does this monumental undertaking present a benefit to Asia, but it could be just as beneficial to any companies who are willing to offer their expertise. Clearly, with the multitude of individual projects being discussed as well as the scale of the entire infrastructural project, planning firms, engineering firms, construction firms, and even management system firms will be in high demand. Simply being in demand, though, is not enough: a company needs to be able to handle the logistics, certification/licensing requirements, and logistics of working effectively in a foreign country.

Desislava Nikolova is a blogger and social media and online marketing coordinator for EVS Translations

Have an idea for a guest blog for Construction Today? Contact [email protected] or [email protected].  

By Joe Eull

The next time you’re on a job site, take a look around and you’ll undoubtedly see concrete. It’s not surprising, of course, because concrete is the one of the most-used – if not the most-used – construction materials. It forms all or part of some buildings. It’s on our roadways and driveways and sidewalks. In addition to all the concrete that you can see, there’s probably at least as much that you can’t see. It’s on the inside of buildings, for example, and under the surface of roadways. That’s because concrete makes up the vast majority of underground water and sewer infrastructure. With all of the concrete in use today – and the knowledge that it’s been a key construction component for thousands of years – you might think that today’s concrete construction techniques have remained unchanged. But like most building materials, concrete today is stronger than ever before.

Here are a few of the most prominent advantages of precast concrete construction materials:

Strength –The tensile strength of concrete gradually increases over time, while other materials can deteriorate, experience creep and stress relaxation, lose strength and deflect over time.

Longevity – Studies have shown that concrete products can provide a service life in excess of 100 years. Many concrete structures, including the famous ancient buildings of Rome, are still standing after thousands of years.

Lower lifetime costs – Concrete’s superior strength means that installation is often easier, quicker and less costly, requiring less ongoing maintenance and a reduced likelihood of future problems.

While concrete as a building material is a quality product that can handle the stresses of traffic, the rigors of freezing and thawing, and the intrusion of water better than any alternative, contractors know that product durability is one part science and one part smarts. Even the highest quality concrete products can fail when improper storage, transport and installation come into play.

There are several resources – including the National Precast Concrete Association and the American Society of Concrete Contractors – that can share best practices and answer any questions about concrete construction techniques. As you consider building materials for upcoming projects, it’s easy to become enamored with the “next big thing” – whether it’s fiberglass, high-density polyethylene or engineered stone. But there’s simply no questioning the durability and lasting impact of concrete construction. There’s a good reason why concrete has been a tried-and-true material for thousands of years, so don’t trust your important projects to anything less.

Joe Eull is president of Eull’s Manufacturing, which produces precast concrete products in St. Michael, Minn. For more information, visit

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By Gary L. Rubin

Most construction professionals are aware that non-binding mediation has become a critical tool for seeking to resolve construction disputes.  Mediation is a cost-effective procedure which allows parties to vent their positions and communicate with each other “off the record” while avoiding the delay and expense so common in litigation and, increasingly, arbitration.  However, in order to achieve the potential benefits of mediation, it is important that the timing of the mediation be “just right”—i.e., not too early and not too late.

Timing is key because mediation often fails when the parties have not yet exchanged enough information to understand each other’s positions, or when they have already incurred so much legal cost that it is no longer possible to negotiate an amicable settlement.  Clients and their counsel should reflect carefully on the timing required in each case to reach an optimal result in mediation. At the outset, construction disputes normally arise in a context established by contract.  The parties’ contract may include detailed provisions concerning claim preservation, notice requirements, document submissions and the like.  The contract also determines (expressly or impliedly) whether unresolved disputes will be decided by a court, in arbitration, or otherwise.  Sometimes the contract imposes conditions precedent which must be satisfied in order for the initiating party to proceed with a dispute. 

In virtually all cases, there is an information exchange of some kind triggered by the initiating party’s request for relief. The responding party usually reacts, at some level, by trying to decide whether the claim has merit or whether there is any basis for an outright denial of the claim.  Unless the claim is resolved at an early stage, the initiating party must continue to press his case in whatever forum is established by the underlying contract (e.g., court or arbitration proceeding).  Subsequent steps are then determined by the rules of the underlying forum, and by the actions of the parties and their counsel within such forum.

At the outset of every construction dispute (and at frequent intervals thereafter), the timing of potential mediation should be the subject of thoughtful review.  What steps are required in order to reach “critical mass” and make the matter ripe for settlement?  Among other things, counsel should consider the nature and extent of electronic discovery and deposition discovery (if any) which are genuinely needed to enable the parties to evaluate their respective positions.  Needless to say, the scope and cost of electronic discovery have become major factors in managing construction disputes, and parties should attempt to negotiate reasonable stipulations concerning these factors. Similarly, depositions often drive up the cost of adjudicating construction disputes, and counsel should evaluate whether depositions must be completed before mediation begins. In short, the “Goldilocks” principle is an important strategy for planning the mediation of construction disputes.  Mediation should not be conducted too early, and should not be conducted too late.  When the timing is “just right,” mediation can be a recipe for success.

Gary L. Rubin has practiced construction law in New York City since 1975. He handles a variety of matters including litigation in state and federal courts, arbitration, mediation, contract negotiation and claim preservation. Mr. Rubin is frequently appointed as an arbitrator in construction disputes.

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By Colin Evran

The concept of “shared economy” is nothing new but has now become a growing trend in multiple industries. It has aided small and large companies in creating new revenue streams along with saving money on expenses and losses.

Examples of Peer-to-Peer Economy Models

  • Airbnb, founded in 2008, helps owners of houses and apartments earn money on their real estate by booking rooms to fellow travelers. It currently lists more than 600,000 private apartments and houses that are available to rent to more than 11 million users.
  • Uber and other ride sharing companies like Relay Rides are enabling people to share cars and allow for cheaper taxi rides. In a matter of a few years, Uber is now worth more than Avis or Hertz.

Construction Industry P2P Examples 

The construction industry is certainly starting to benefit from the same trends. Companies are now being more transparent around sharing resources, equipment and even dirt.

  • Dirt Market was conceived as an online marketplace where large developers and contractors could meet to trade dirt, rock, sand and other basic construction materials.
  •  Contractors already rent equipment to each other bare or operated, but there was not a larger network where it can be done in a transparent way until now.

Idle Equipment Can Be a Money-Pit for Contractors

In a project based industry like construction, companies can be hot and cold in a matter of months. When things are cold, assets like equipment continue to accumulate depreciation and interest expenses which can be financially damaging to contractors; particularly on larger equipment which can cost upwards of a million dollars. Missed revenue opportunities from idle equipment can be very costly.

Why P2P Online Equipment Rental Services Can Help

An online service helps make rentals among contractors easy.  It standardizes contracts and insurance, makes scheduling transparent, and takes on some of the more administrative tasks like payment collections. It also allows renters to gain transparency by viewing real pictures of equipment and user ratings on quality or performance.  Lastly, it minimizes the fixed costs of traditional rental companies which can be passed onto both the renter as savings and the owner as income.

The Impact on Contractors

Keeping equipment utilizations levels high and operators working can have a huge impact on contractors.  This allows companies to retain their people and continue to generate revenue when equipment would otherwise be sitting in their yards.

  • On larger equipment including larger dozers, scrapers and excavators (greater than $100,000), contractors can earn up to $20,000 per month per piece of idle equipment, which certainly adds up when you have larger fleets.
  • On mid-sized pieces of equipment, equipment managers can keep their operators working and generate additional income in between projects. Examples include mid-sized excavators, compaction equipment, wheel loaders, motor graders and skip loaders.

How This Business Model Will Evolve

As long as the community of contractors continue to treat each other with respect and honesty, contractors could rent all sorts of things: from heavy equipment to supplies and materials like K-Rail, steel plates, concrete forms, traffic control equipment, etc.  P2P could even help contractors help share transport trucks, mechanics or specialized operators.

Colin Evran is founder of San Francisco-based Yard Club. The company’s platform enables heavy equipment owners to maximize utilization by renting to other trusted members of the construction community.  Colin grew up in the industry with his family owning a construction company for more than 40 years.  He received an MBA from the Stanford Graduate School of Business and a BA from the University of Western Ontario.  Contact Colin at [email protected].

Have an idea for a guest blog for Construction Today? Contact [email protected] or [email protected].  

By Jessica Drake

Most companies re-roof or renovate sections of their office block in accordance with their annual maintenance plan. One of the most important things to consider when planning maintenance of this sort is to determine how to prevent the disruption of office work. The best way to minimize disruption that might be caused is to employ an interior protection contractor whose sole responsibility is to plan and implement a system that prevents the debris and dust of the construction-related project from contaminating an area that the customer wants kept clean. My motive in writing this article is to shed light on exactly how an interior protection system works. I hope to do this by explaining the various components involved in an efficient system.

How to Contain the Contamination

Interior protection installs various pieces of equipment to act as a temporary barrier between the construction area and the clean room. The barrier blocks dust, debris, unwanted odors and separates the construction workers and the employees thereby creating a work area that is both safe and free from distractions for the parties involved.

There are a total of four main components that form an ideal interior protection install:

a. Suspended ceilings: It consists of hanging tough plastic sheets that hang below the ceiling, can be referred to as a temporary ceiling and forms the foundation of most installs. They are usually put up before the remodeling/reroofing. It protects the machinery, employees and processes taking place in the area from all sorts of contamination.

b. Wall barriers: They play an important role in separating a construction project that produces dust, debris and/or odor from the working area. Construction wall barriers further create a dust and debris containment area. Temporary construction wall barriers involve installing the poly engineered film floor to ceiling creating a frameless wall – a protective envelope separating the workplace from the work zone – limiting the infiltration of dust and debris.

c. Custom applications: Every re-roofing or remodeling project has distinct challenges. Equally, no two temporary interior protection installs are alike. In the course of interior protection, numerous situations may arise which require custom applications such as zipper doors, curtain walls and suspended netting.

d. High-structure cleaning: This is the process during which all the dust and debris is cleared away. High-structure cleaning is performed during takedown of the suspended ceiling by using hand brooms, brushes, HEPA vacuums and other tools to clean and remove non-adhered dust and debris. If it weren’t carried out, the debris would rain down from all the nooks and crannies when the temporary ceiling is removed. It is important to hire a contractor who understands your need and is willing to design and install a system around those needs. Remember, safety comes first.

Jessica Drake has been in the sales team @Cleanwrap office for more than 3 years and has more than 35 years of experience. They work with clients to find a solution that will reduce risks from dust and debris contamination. Specialties include suspended ceilings, construction wall barriers, high-structure cleaning and various other types of custom applications.

Have an idea for a guest blog for Construction Today? Contact [email protected] or [email protected].

By Kent Goetjen

Mergers and acquisitions (M&A) in the engineering and construction (E&C) sector were robust, in terms of deal value, during the first quarter of 2014. However, the economy remains uncertain, and month-to-month growth in the E&C sector has been inconsistent. Four mega deals — $1billion-plus transactions — were announced during the quarter, and average deal size was among the highest in five years. At the same time, the number of transactions decreased, compared with the previous three quarters. These findings, along with our expectations for deal activity in the coming year, are explored in Engineering growth, PwC’s quarterly analysis of M&A in the E&C sector.

Extreme weather in some regions and decreasing GDP growth rates in emerging markets have taken a toll on sector deals. Additionally, construction growth in the United States has stalled, with residential and private sector spending driving only incremental growth. On a positive note, the recovery should accelerate during the second half of 2014, following a period of extremely low GDP growth rates in Europe. Against this backdrop, companies are seeking to align with faster-growing segments such as oil, gas, and petrochemicals.

Several other key trends affected deal activity in E&C during the quarter: Strategic and financial investors have been active in everything from energy-related engineering services to pumps and valves that improve shale gas drilling yields.

  • Consolidation among construction materials companies has continued. Acquirers’ aversion to risk has slowed deals, particularly in emerging markets. The share of deal activity in emerging markets dropped in the first quarter amid concerns about the rate of economic deceleration in China. In Asia, there was a slight increase in the number of local, as opposed to cross-border, deals.
  • Divestitures of non-core businesses, which can favorably affect financials and operations, have continued. Share buybacks and dividend payouts have become a priority use of cash — in a period of slow growth, investors often favor yield and prudent capital use over aggressive M&A. Debt reductions and restructurings also increased.

In the coming quarters, the full-service integration among engineering and construction firms and the increasing popularity of mega projects are expected to significantly affect the sector. Multinational clients of E&C companies are “rationalizing” their vendors, seeking full-service providers with large geographic footprints and the ability to execute on all phases of increasingly large projects. While these trends could create significant revenue opportunities and the likelihood of M&A for the quarter, they could also drive complexity and uncertainty. Transaction activity in the sector, however, is expected to remain robust as E&C firms work to achieve full line of service integration and broad geographic reach. For more information, see Engineering growth, PwC’s quarterly analysis of M&A in the E&C sector.

About the Author: Kent Goetjen ([email protected]) is PwC’s U.S. engineering & construction industry sector leader. He has more than 30 years of experience providing service to clients in the engineering and construction industry.  

By Craig Cottongim

Jobsite conflict is too costly to ignore. Qualified workers will leave when the stress gets too thick. Other workers will lose their jobs by turning to physical force to resolve their problems. The contractor that doesn’t foster an environment where their crews learn how to deal with conflict soon finds his team either fighting or walking off. Perhaps most importantly, your company’s reputation is jeopardized whenever you are known for having jobsite drama. If you are ready to reduce the hassle of losing good workers, eliminate the liability of hotheads and gain more productivity out of your crews, then start to train your team to deal with conflict. Here are five core values to instill in every crew member to eliminate unneeded conflict and to help with the typical jobsite conflicts:

  1. Clearly communicate all expectations. The quickest way to generate conflict is to confront someone for not following confusing directions. Draw a picture, spell it out and do whatever you have to do to be crystal clear in all of your communication.
  2. Establish the same standard of excellence for everyone. Favoritism and perceived laziness among your crew will derail your momentum in a flash. Expect the same work ethic from everyone on your crew, and hold everyone to same level of accountability. If you don’t require every member on your team to carry their weight, you can be sure you will kill morale and you will cause conflict with the workers who are doing their part.
  3. Excel in truth and transparency. What can you do when there’s tension but no one wants to address it? As soon as you realize conflict is interfering, lead by example and calmly call out the problem. Clearing the air ASAP needs to be a priority; otherwise, these problems will fester and manifest themselves in ways that are toxic to your crew. This also means you and your leaders are all open to hearing the problems your crews have with your leadership.
  4. Endorse teamwork. Your crews generate synergy from people that work well together. The truth is, the longer your crew is together, the more dependable and more productive they are for you. Do what you can to encourage friendships. Your crews will work harder and pull their weight when they don’t want to disappoint a friend. Friends also overlook problems quicker than strangers.
  5. Create a safe environment to address problems as a team. Let your crews know they will not be penalized for bringing up problems. Don’t let feisty jerks hijack your crew either. You can’t afford the setbacks from the drama, and your people don’t deserve the added hassle. Equipping your crews to resolve conflict builds unity and develops more teamwork. You handle conflict best by talking through the problem without using shame or blame, and by remaining objective. When your leaders do this part well, it trickles down throughout your crew.

Craig Cottongim is a second generation cement finisher. He’s a writer, speaker, and he is trained in conflict resolution. Craig can be contacted at [email protected]

Have an idea for a guest blog for Construction Today? Contact [email protected] or [email protected].

By Chris Nomis

Stolen equipment is an issue for contractors with estimated losses in the $300 million to $1 billion dollar price range annually. The reason for the massive gap in numbers is because not all thefts are reported to insurance or the police. Thieves are targeting construction sites and are going after heavy equipment, tools, lumber and even scrap metal. Copper theft has been on the rise and has caused some police forces to create special task forces to combat this. Fortunately, there are simple strategies you can implement on a job site to prevent the loss of time and money from theft.

Put it Away

Follow this mantra everyday; “end of the day, put it away.” All tools, equipment and supplies need to be locked up and stored at the end of the day. Spending an extra five minutes on this can save you money in the long run. A well-designed lock will make it difficult for thieves to break into storage and can also save you money by preventing your inventory from being lost or broken.

Make it Difficult

Another great strategy I would recommend is to have a strong system of deterrents in place to keep would be criminals from becoming interested in your property. A strong fence with a single entrance and exit will easily secure your perimeter. Chain link seems to be the most cost effective fencing to build as a security device with barbed wire running across the top, but that is not your only option. Larger construction sites in this area have gone as far as building sturdy wooden fences with razor wire to help keep the job site secure. Make certain that all storage units and offices have functioning and difficult to break locks attached to them.

Light up the Night

A well-lit job site is a strong deterrent to criminals. The first area of concern is any on-site storage or office facilities; make certain these are well let lit as they are the obvious targets containing the most high value items. For added protection, install lights in remote areas equipped with motion sensors to scare off any trespassers. Use lights that are energy efficient and do not require a battery, generator or to be plugged in. Sudden loss of power may make it appear that your job site is not maintained causing it to be an alluring target for would be thieves.

I Always Feel Like Somebody is Watching Me

Through the power of the Internet, video surveillance technology has improved dramatically. Now you have the ability to install solar-powered cameras on a job site with full Wi-Fi access. These cameras can stream to a central security command center that can monitor a job site for suspicious activity. If anything looks questionable, these units can fire off strobe lights and alarms or the command center can choose to immediately inform the proper authorities. With these advanced systems, you can cover an entire job site more efficiently than by having an on-site security guard. The construction industry is losing money and time every time criminals hit a job site. The above simple steps can help deter most criminals from trespassing and save you the needed resources to get the job done under budget.

Chris Nomis is a security consultant with many years of experience working with video surveillance systems and their integration into a successful security work flow. He writes on behalf of  Pro-Vigil. He can be emailed at [email protected]

Have an idea for a guest blog for Construction Today? Contact [email protected] or [email protected].

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