By Calin Riley

When beginning a construction project, controlling costs is always a top priority. Too often, however, project owners limit their ability to manage costs by separating the design process from construction. Design/build projects, on the other hand, link the two together at the start.

This process ensures that the contractor is able to provide input to the architect on critical decisions that will determine a project’s efficiency. Including the contractor in this process ensures that the plumbing, mechanical and electrical systems meet and do not exceed the owner’s requirements, which can cause unnecessary additional fees. Integrating the contractor into the team early on can also ensure that the latest energy efficient products are installed, which will contribute to the overall lifespan of the building and control recurring costs far past project completion. By determining these specifics up-front and investing in the proper equipment and technology, project owners are decreasing the possibility of having to make these changes later – which will likely be much more expensive further down the road.

When the designer and the contractor form a team early on, they are also able to foster a relationship that maximizes both trust and communication. Effective communication leads to long-term success in almost everything, so why would a project delivery system be any different?

Establishing these communication channels from the beginning also saves the owner time and money in the long run because they allow for open dialogue, thoughts and ideas to flow between teams. In addition, when a project owner is comfortable with the team as a whole, they can avoid potential for shoddy workmanship that could result from a lowest bidder platform. While the bid may be low up front, the hidden costs and time delays that can result from lack of teamwork between the designer and builder will likely skyrocket. Implementing this project delivery system will also reduce change orders on an owner’s next project. It is best to consider and select these two professionals as a team rather than as separate providers.

The concept of design/build is not only related to money. It is related to the overall efficiency of a project from design through construction completion. By enabling the designer and contractor to join forces from day one, the project owner is creating a stronger opportunity for long-term success.

Calin Riley is the director of business development and a project manager for Riley Contracting Group, Inc., a team-oriented general contractor building relationships throughout central North Carolina for more than 25 years.

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

By Brian Binke and Katie Dragicevic

The project-based, cyclical nature of the construction industry presents unique challenges in presenting your firm as a “Best Place to Work” to both current and future employees. In a recent survey conducted by the AGC (Associated General Contractors of America), 87 percent of construction firms looking to hire reported having difficulty filling professional and craft worker positions.

With 51 percent of firms reporting they had to increase base pay to retain employees, it’s essential that companies create enjoyable cultures and environments that keep staff looking forward to coming in to work. Large and frequent pay raises are not a sustainable retention and growth strategy, therefore companies must identify areas in which they can grow and set themselves apart from the competition. The following are the top qualities that construction professionals value in a company:

  1. Family Atmosphere – The No. 1 reason employees consider making a change is because they do not feel they are appreciated. They feel like they are just a number or a profit center. Not all firms can be family businesses, but being treated like family can go a long way toward keeping workers happy and invested in the success of a company. Open-door policies and engaging with workers and their families makes them much less likely to leave a company.
  2. Professional Growth Opportunities – Employees want to know there is room for growth and will consider leaving a firm if they feel they have reached the ceiling in their current position. Developing a plan for an employee’s future and ensuring they are aware of opportunities available to them can help keep them invested in their work and the future of the company. A defined career track with a progression of titles and responsibilities is an attractive element to both current and potential employees.
  3. Stability – With so many factors affecting a firm’s ability to keep their employees working (project load, seasonal slowdowns, weather, etc.) workers value a company’s ability to keep them consistently busy. An absence of work can make employees feel uncertain about the stability of the company, and ultimately their role. Try to get ahead of work by anticipating slow periods and coming up with assignments and even training opportunities that can be accomplished during this time.
  4. Large and/or Interesting Projects – New and challenging work is a great way to keep employees engaged and growing within a company. It not only exposes them to other aspects of the business, but also provides them with experience and expanded skillsets that they will see as valuable to their long-term career growth.
  5. Promises, Promises – Broken promises are one of the fastest ways to sour a relationship with an employee. It additionally sends the message that if company leadership isn’t expected to keep their word, employees shouldn’t be expected to either, among themselves or with clients. Workers value a company with follow-through as this sets the tone for the organization’s expectations around integrity and commitment to customers.

Making an effort to improve in just one or two of these categories can have a positive effect on your firm’s ability to retain existing employees and attract new ones.

Brian Binke is president and CEO and Katie Dragicevic is a marketing specialist for the Birmingham Group (TBG). As an affiliate of MRINetwork since 1967, TBG has been one of the leading national executive search firms that serves the construction industry. Brian Binke has been globally recognized as the top revenue producing executive recruiter out of MRINetwork’s more than 3000 recruiters. For more information, contact Brian Binke at bbinke@thebirmgroup.com.

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

By David Nour

Drones are surveying building sites. Fleet managers are relying on GPS. With technology dramatically impacting the construction industry, what is the role of the human relationship? I submit that as technology removes the personal touch from how we interact with each other and how we accomplish our work, our business relationships become more important than ever. But let me go one step further and say: To get the most out of your business relationships, you need to make them personal.

Most of the world builds relationships first, from which they do business, not the other way around. But in the United States, it's very typical for executives to keep a distinct separation between the two spheres. It is driven into us early in our careers that we are somehow more objective if we keep our distance. I've even heard people say, “It's going to be hard for me to fire somebody if we are friends.” Our fundamental American need for efficiency tells us “focus on the business part. If and only if that part works, you may bring in a personal relationship component.” I believe these are flawed assumptions. I believe that my relationships with my clients have become stronger and more productive as a result of our becoming friends. Because we are friends, we accept a healthy dose of pushback, of candor, leading to mutual respect. I learned early on that “meals make memories.”

Every time I work closely with a client, we make time for a meal together. We laugh, we talk about great experiences, and we show our vulnerabilities. We build trust. Whether you are building relationships with your staff, your supply chain partners, or your clients, make time for a meal. Put the devices down and strike up a conversation. Past experience shows us that people prioritize work for people they know, like and trust. We all hold ourselves more accountable to the people who reward us for our contributions to their desired outcomes. I'm not referring to mere financial rewards, but the more motivating knowledge that we are truly invested in each other's success. To get the most out of your business relationships, invest in the personal side as much as you invest in the professional. That’s about as far from technology as you can get—and it’s a welcome reprieve from the demands of dealing with technology’s disruptive effects, day in and day out, up, down, and across the construction industry.

Takeaways

  1. As technology removes the personal touch from the construction industry, building business relationships become more important.
  1. Business relationships become stronger and more productive when they become personal as well.
  1. Socializing over a meal is a great way to deepen relationships—and take a break from the disruptive effects of technology.

David Nour is an enterprise growth strategist and the thought leader on Relationship Economics® — the quantifiable value of business relationships. He is the author of nine books translated in eight languages, including the best selling "Relationship Economics - Revised" (Wiley), "ConnectAbility" (McGraw-Hill), "The Entrepreneur’s Guide to Raising Capital" (Praeger), "Return on Impact" (ASAE), and the 2016 forthcoming "PULL: Co-Create Value by Listening Louder" (St. Martin's Press), an essential guide showing C-level leaders how to optimize relationships, create market gravity, and greatly increase revenue.Learn more at www.NourGroup.com. David may be reached at dnour@nourgroup.com.

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

By Jill R. Johnson

This is the third in a three-part series. The first part is here and the second here.

Construction companies that routinely protect themselves from expensive, protracted litigation by including in contracts mandatory arbitration of disputes may be puzzled over whether to include a new, optional clause in contracts that allows for appeal of an arbitrator's decision. After all, isn't the point of arbitration to achieve a quick and final resolution? In November 2013, the American Arbitration Association and International Centre for Dispute Resolution adopted new rules that allow appeals of awards, provided that both sides agree to this provision in advance. The Federal Arbitration Act allows appeals of arbitration decisions to the courts in only limited circumstances related to fraud or misconduct, but the AAA rules provide for appeals to a three-member tribunal of neutrals on the much broader grounds of errors in applying the law or determining facts. The question, then, is what are the benefits and drawbacks to agreeing to be bound by optional AAA rules that allow appeal?

Potential benefits

In complex cases, there is a greater likelihood of a single arbitrator making a mistake in applying the law or overlooking key facts. An appeal not only provides the opportunity to review these mistakes, but also places the matter into the hands of three neutrals with significant appellate experience. (The AAA rules require the tribunal to be comprised of judges or other neutrals with substantial appellate experience.) In effect, the appeals option creates a middle ground between the potentially enormous costs and time involved in a court system appeal versus the near-absolute finality of a non-appealable arbitration decision.

Potential drawbacks

The drawbacks are the additional investments of time and money, which run counter to one of the basic reasons that parties opt for arbitration. Even if a decision is not appealed, including it as an option makes it necessary to create a record of the initial arbitration. That usually will involve retaining a court reporter, and perhaps additional investments in presentation technology. If there is an appeal, parties essentially are paying for a second arbitration. Although there won't be oral arguments, there is the cost of paying three neutrals, administration, compiling the record and attorney time. It also should be noted that cases are not remanded. The tribunal will confirm the original award or modify it up or down. Thus, the outcome of an appeal will not be the opportunity to "retry" the case. Given these considerations, construction professionals should carefully assess whether the complexity and financial magnitude of their dispute merits the "insurance" of an appeals option.

Jill R. Johnson is a commercial litigator with Chamberlain Hrdlicka (Atlanta), who counsels clients with construction and related disputes. She may be reached at (404) 588-3574 or jill.johnson@chamberlainlaw.com. Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.  

By Jill R. Johnson

This is the second in a three-part series.Find part one here.

Businesses in construction continue to review how game-changing rules in arbitration will affect them. In November 2013, the American Arbitration Association (AAA) and the International Centre for Dispute Resolution adopted new rules that potentially remove the finality of initial arbitration decisions. Called the Optional Appellate Arbitration Rules, decisions reached under contracts that include this clause can be overturned on review by an AAA appellate panel of three neutrals. Grounds for overturning a decision include situations involving alleged “material and prejudicial” errors of law and/or “clearly erroneous” determinations of fact. The application of the new rules is optional, and must be agreed to by all parties (typically in a contract). Parties should, therefore, carefully review any arbitration provisions in their contracts to determine whether they contain an agreement to permit the appeal of an award. The new rules also make keeping a record of arbitration proceedings almost essential in order to properly document an appeal.

While this might seem like it makes arbitration more like a conventional appellate court process, there are important differences and the process is extremely efficient compared to the courts. To initiate an appeal, the appellant must file a Notice of Appeal within 30 days from the date the underlying award is submitted to the parties. One of the next steps is to select an appellate tribunal of three neutrals from an AAA-approved list of former judges or other neutrals with substantial appellate experience. There also are certain filing requirements, including payment of a non-refundable $6,000 deposit required by the appellant. Within one week of selecting the tribunal, the parties, case manager and tribunal must schedule a preliminary conference “to review and formalize the briefing schedule, set a deadline for the submission of the record on appeal and address any other procedural issues consistent with these rules and the objectives for an expedited, cost effective and just appellate process,” according to the AAA rules. There usually is no oral argument or hearing, meaning that the appeal will be determined by the documents presented to the tribunal.

The entire appeal, from the Notice of Appeal to the issuance of a decision, is designed to be completed within approximately three months, with the tribunal’s decision due within 30 days of the parties’ last written submission. This abbreviated schedule makes an arbitration inexpensive compared to a court appeal, but it is not without costs. In addition to the filing costs, the client will still have to pay additional fees for the neutrals, AAA administration and attorneys. There also is the cost of keeping a record of the original arbitration. Once the appellate tribunal renders its decision, that decision becomes the final award for purposes of judicial enforcement proceedings. Unlike a court appeal, the arbitration tribunal cannot remand a case to the original neutral. The tribunal can only confirm the original award or substitute a new, final award. The decision is final, with no appeal to a higher tribunal or any entity outside the arbitration process. Thus, it is a one-step appeal process with the certainty of being resolved by the appellate tribunal.

Jill R. Johnson is a commercial litigator with Chamberlain Hrdlicka (Atlanta), who counsels clients with construction and related disputes. She may be reached at (404) 588-3574 or jill.johnson@chamberlainlaw.com.

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

By Jill R. Johnson

This is the first of a three-part series.

Arbitration is a popular form of dispute resolution in the construction industry and many standard contracts require its use in lieu of litigation. However, in November 2013, the American Arbitration Association (AAA) and the International Centre for Dispute Resolution adopted the Optional Appellate Arbitration Rules, which permit parties – by advance mutual agreement, usually in a contract – to obtain appellate review of arbitration awards. Simply put, these new rules dilute the finality of arbitration, which is what makes the process so appealing. An arbitration award typically can only be set aside under extremely narrow circumstances involving corruption, fraud or misconduct, or where the arbitrators exceeded their powers. But now, under the new rules, review of arbitration awards is permitted by an AAA appellate panel in situations involving alleged “material and prejudicial” errors of law and/or “clearly erroneous” determinations of fact. In other words, the door swings open wider when it comes to questioning the outcome of the arbitration. In the construction setting, this is particularly concerning.

Arbitrators in construction disputes are not necessarily judges or legal professionals (although they can be), and they sometimes get the law wrong, misapply the law to the facts or commit any other number of errors that impact the outcome of the proceeding. For example, if an arbitrator mistakenly upheld a “pay if paid” clause in violation of a state law that says that these types of conditional payment clauses are unenforceable, until the enactment of these new rules a party negatively affected by this mistake had no recourse other than to ask a court to vacate the award. With the new rules, however, the ability to appeal these types of issues is more clearly defined. To one extent, then, the new rules can be viewed favorably, because they provide an additional avenue of review outside of the extremely narrow grounds previously available under the law. The new rules certainly will be helpful to a party who has been the victim of a mistake of law or fact by an arbitrator.

The right to seek appellate review of both questions of law and issues of fact also could make arbitration more appealing to parties who may have sought to avoid the process in the past because of the complexity of their disputes or wariness of relying on a single arbitrator. On the other hand, an appeal adds an element of uncertainty into the arbitration process. With the availability of appellate review, there will be also be potential additional costs and time that have to be factored into resolving disputes. Everyone who enters into a construction contract should be aware of the option to include these new rules and should consult with counsel on whether to include them.

Jill R. Johnson is a commercial litigator with Chamberlain Hrdlicka (Atlanta), who counsels clients with construction and related disputes. She may be reached at (404) 588-3574 or jill.johnson@chamberlainlaw.com.

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

By Ray Rodriguez

Building a new home is as American as the American dream itself. And despite the floundering economy, demand for new home construction remains higher than ever. Now is the time for builders to capitalize on the recovery of the housing market and forge strong relationships with industry experts. Here are a few key reasons why you should establish a relationship with your local mortgage loan officer (MLO):

  1. Diverse Financing Options – Financing is a critical part of the home-buying process, and MLOs can provide a wealth of knowledge on loan options. Most regional MLOs offer robust product suites to meet a variety of financial situations.
  2. Educational Resource – MLOs provide expertise through every step of the mortgage process – from obtaining a pre-qualification letter to "live loan" status updates and submitting loan paperwork to the final sale. They understand the many moving parts of a loan and can calculate the options. Find an MLO that will determine the best option for your buyer.
  3. Discounts and Benefits for Banking Customers Chances are, if your buyers are banking at a local institution, they will qualify for an added discount or incentive applied over the life of the mortgage loan. While incentives add value to the ordinary banking relationship, the ability to enter a familiar neighborhood store and begin the mortgage process is invaluable. It makes the buyer feel more comfortable with the process.
  4. Ongoing Communication – A good working relationship between an MLO and builder is built on trust, reliability and communication. The best MLOs notify you and the buyer immediately when they require additional clarification or documentation. Experienced MLOs understand that timely communication keeps the process moving forward. All of these factors help build a stronger reputation for the builder and improve a client's home-buying experience.

Of course, finding the right MLO is critical. Not every bank or MLO will have what you or your buyers need. Get to know the MLOs in your area, so you can give your buyers more options. When speaking with MLOs, evaluate response time, follow-through and accessibility, since these factors are important to a successful partnership. In the end, you will discover knowledgeable, committed and dependable professionals who can become partners in building your business and helping your clients achieve the American dream of owning a new home.

Ray Rodriguez is vice president and regional mortgage sales manager for Metro New York at TD Bank, America's Most Convenient Bank®. He is responsible for training and developing the mortgage sales team and growing the market share within his region. Ray has more than 21 years of experience in the mortgage banking industry.

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

By Theresa Cangialosi

Do you have a shortage of working hands available to help with your project? Ever wonder if the automation of aircraft, bulldozers, and excavators to program the early foundational work on construction sites could benefit your organization? In a recent article, Business Insider discussed how experts believe one-third of our jobs will be taken over by robots by 2025. For those who fear that robots may be taking over the world, or at least taking over our jobs, you may not deem the solution suggested in this blog post acceptable. However, the answer to the shortage of construction workers, deemed an “epidemic” by Jerry Howard, CEO of the National Association of Home Builders, may just be the drone. This aerial robot is capable of both remotely controlled flight (like a regular RC aircraft) and fully autonomous flight, controlled by sensors, GPS, and onboard computers. How specifically can drones help us on a construction site, you might ask?

According to a recent article in MIT Technology Review, many construction-equipment makers have begun to incorporate drones on construction sites to improve productivity. As the article discusses, drones are managing the site of a lavish new downtown stadium for the Sacramento Kings in California, speeding up the process and automatically flag slow progress. Drones can work on the site, completing tasks previously performed by workers, leaving more human hands and minds to focus on other aspects of construction and manage machines from the office. With drones, human operators gain the ability to monitor progress from a desk and can jump in and take control of a machine if and when necessary.

Not only can drones help complete the typical tasks human construction workers would perform, but they can improve workplace productivity by leaving more hands for other jobs and often complete the tasks of construction workers more efficiently. Measuring large construction sites by air is much easier, for example, considering two people could measure an entire site in a week, or drones could complete the task in one to two hours. Not to mention the fact that drones can remain small and agile, flying around with onboard high-res cameras and relaying progress shorts and aerial surveys to construction teams on the ground and send images to team members’ mobile phones – while humans cannot. While the idea of a drone-powered world is still entirely new to the majority of construction sites, drone technology is undoubtedly providing a competitive edge to companies who have successfully adopted it.

Companies that have adopted drones at their workplace use their equipment and resources more efficiently, are able to communicate better through accurate maps and data, and are given a highly quantitative means of measuring their progress against their schedule. As the technology becomes increasingly more affordable and prevalent in the workplace, the benefits are becoming harder to ignore. Do you think drones will eventually take over the construction world? How can your organization benefit from utilizing drones on the construction site?

Theresa Cangialosi is general manager and vice president of North America for the Bullitt Group

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

By Susan Finch

According to data from the Bureau of Labor Statistics, only 23 percent of workers with foot-related injuries were wearing safety shoes or boots. You can greatly reduce your chance of an injury by selecting proper boots and protective wear. But it has only been in the last century that we have safety procedures and government oversight in place to protect from hazardous working conditions and injuries. As safety boots evolved, so did the evolution of other boots. From hiking boots to mountaineering boots, shoes are now made with comfort, durability and safety in mind. Such boots are usually made out of suede or light fabrics for flexible use and support. Mid-weight boots are made from more synthetic materials that hold up against great wear and tear and give your ankle and bridge plenty of support. While most shoes and recreational boots don’t have official safety standards, work boots and protective gear generally fall under oversight of the Occupational Safety & Health Act.

The History of Workplace Safety

After the Civil War, the United States saw factories and manufacturing spread to produce new goods and usher in a new economic era. But without any safety standards or protective wear mandates, dangerous machinery and hazardous chemicals were the norm. Local state labor bureaus in the late 1900s reported horrific deaths and injuries that ran rampant in the workplace. America’s laborers and workers needed more protection in the workplace to improve their long-term health and immediate safety.

The Occupational Safety & Health Act

In 1970, Richard Nixon signed the Williams-Steiger Occupational Safety and Health (OSH) Act to give the Federal Government oversight to set safety and health standards for most U.S. workers. Without the Act, we might still be seeing record high accidents and deaths in the workplace. The Act brought consistent standards and mandatory inspection measures to keep employers accountable in providing a safe and healthful workplace. The Act also covers the requirement for personal protective equipment like helmets, hard-toed shoes, goggles and eye protection depending on the industry and workplace conditions.

Safety Boots 101

Steel-toed boots were first seen at the end of World War II. Invented in Germany, they are now required in some jobs and must undergo OSHA compliance and licensing before being sold. Some steel-toed boots are durable enough to protect against a chainsaw accident. Like the name implies, steel-toed boots are reinforced by steel but can also be made from composite materials. Such boots are also puncture resistant and can prevent injury from some electrical and chemical hazards. Safety wear has also expanded past boots into steel-enforced shoes and other footwear.

Selecting Safety Footwear

Preventing workplace injuries isn’t as simple as picking up a pair of work boots. In part, safety boots are designed with specific recommendations and standards from the Occupational Safety & Health Act. If foot protection is required at a job, the employer should set up a safety protection program to help determine the best selection and fit. For example, construction workers should select footwear that protects against their protective hazards like compression and cuts.

Susan Finch is a freelance writer with a passion for travel and helping small businesses find their online voice through content marketing, blogging and beyond. She is an eclectic writer with more than 10 years of experience contributing to guidebooks, magazines, iPhone apps, online publications and more. She can be found at BySusanFinch.com.

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

By Robert J. Hall

The construction industry is always changing and advancing. Think about how different construction looks today than it did 50, 20 or even 10 years ago. In fact, the only thing constant is change. The technological advances have made a big difference in how structures of all sizes are built. However, what can we expect over the next few years? Here are several ways that technology will continue to evolve the industry — in 2015 and for many years beyond.

  • Going Paperless: Reducing paper saves time and money. This trend is catching on in nearly every industry, but it is becoming very popular in the construction field. Reducing the use for paper clutter in the work environment can make it much easier for you as you are working on projects, small and large. The adaptation of tablets and smartphones has enabled nearly every task to be accomplished without the use of physical papers.
  • Drones: Drones are now used for surveying and other related tasks. This allows a crew to reach spots that may have otherwise been difficult or even impossible. While the upfront cost for a drone can be expensive, the money saved on surveying crews can be significant and make a big difference in a construction firm’s overall operations.
  • Additive Manufacturing:  Additive manufacturing, or 3-D printing, allows construction pieces to be “printed” on demand. This reduces the length of time to wait for factory creation by an enormous amount. 3-D printing is a very economical solution and eco-friendly, too — since there is often much less waste when products are created on demand than when products are created and sit in a warehouse until needed.
  • GPS Fleet Management: Large construction firms may have many trucks and other vehicles in the field. A GPS system can help you keep track of your fleet and know exactly what vehicle is at what jobsite. Today’s GPS management systems are easy to operate and provide data that helps you with all aspects of your business.
  • Additional Green Growth: Going green is trendy, there is no doubt about that. However, green technologies are influencing nearly every aspect of the construction industry. From fieldwork to deskwork, more and more green initiatives will come into play. If you can find ways to take advantage of the ecologically friendly initiatives today, you may save time and effort in the future.

The most exciting thing about construction is that this is only the tip of the iceberg when it comes to the technology changes that are occurring. Who knows what home or building construction will look like a few years down the road? What is certain is that the road to get there will be very exciting. Those in the business should keep an open mind and be ready to embrace these technologies as they move from the fringes to the norm. After all, everything we now know about construction was once thought of as “just a trend.”  

Robert J. Hall is president of Track Your Truck, a leader in GPS vehicle tracking systems and software for small and midsized companies.        

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

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