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Congratulations. You’re bidding or negotiating your largest construction contract to date.  You’re confident in your estimate, you’ve assembled your A-team, and you’ve got a good lineup of dependable subs and suppliers for the buyout. But before you ink the contract that elevates your company to the next level, there is work to do and bonds to post. 

In the world of publicly funded construction, and frequently in the private sector, surety bonds are contractually required, and failure to provide them is a deal breaker. Your company’s growth may depend on posting bonds at the seminal moment when work availability, pricing, and award of the contract come together. Neglect to build your bond program in advance and your company could lose the opportunity. 

Liability tends to go hand-in-hand with construction sites. Most construction firm owners and general contractors understand this, and work to minimize their liability issues as much as possible. Subcontractors, too, realize that they need to be properly insured to be considered for a job. Yet too often, the insurance requirements for subcontractors are often unclear or misunderstood. Without a firm grasp of what the insurance requirements are, subcontractors are at greater financial and professional risk.

Either knowingly or unknowingly, some general contractors make the insurance requirements for their subcontractors one-sided in favor of them. In the height of the recent recession, when construction jobs were incredibly hard to come by, it was not uncommon for subcontractors to sign off on an agreement without carefully reading the insurance requirements. Even today, as the construction industry picks up its building pace, some subcontractors continue to sign contracts for services without realizing they may be agreeing to terms that they currently do not carry.  

Although verbal agreements are generally as enforceable as written agreements – with some limited exceptions – parties are better served if their agreements are in writing. Here is a common scenario: A subcontractor receives a call from the project manager of a general contractor asking him to start a new project right away.  

The subcontractor bid the job, but the work was awarded to another subcontractor, who was the lower bidder, but is now unavailable. The project manager agreed to the subcontractor’s pricing and indicated that the work will last three weeks. With such a tight deadline, there is no time to get a written contract signed and the subcontractor starts work immediately.  

The headlines say it: Construction is on its way back, and in some areas of the country, it is completely back. According to the Bureau of Labor Statistics, 290,000 construction jobs were added in 2014 – the best industry performance since 2005. Over the next decade, the U.S. Department of Labor projects the industry will add another 1.6 million jobs. Good news, right? Then why is there still concern in sectors of the construction industry and those that support it?

Ask any construction union or labor group and they will tell you the devastating loss of jobs, which occurred in the Great Recession, has left the industry with a huge void to fill. This void is even more problematic since a good portion of the workers that left are not coming back. The industry is faced with a dual dilemma – how does it entice younger workers to construction, a topic for another time, and how does it train them? Yes, there are apprenticeship programs, but are these programs addressing the impact new employees will have on a company’s total cost of risk?

Whether you are a construction contractor with several proposals in the works or an independent electrician thinking of starting your own business, understanding the necessary licenses and permits needed is vital. There are several general business licenses as well as construction-specific documents that must be obtained and renewed. Having the proper licenses will protect your business, employees and clients. Failure to file can lead to not only to missed opportunities, but also put you in a risky situation. 

Licenses are required by most businesses. The number and types of required licenses varies, depending on several factors, including where your business is located, how many employees you have and what type of business you operate. Two general licenses that will most likely apply to your company are the general business license and the workers’ compensation registration license. There are three key areas every business owner should keep in mind. 

The single biggest issue facing the construction industry is the development of its future workforce. That workforce will, by necessity, need to look very different from the workforce of the past. The construction industry has provided many people, including myself, with a fulfilling, dynamic and economically satisfying career. As a young girl, I learned about construction from my grandfather, a homebuilder, and my father, a concrete contractor and developer. Building was in my blood from a very early stage. It is imperative that those of us from the Baby Boomer generation do everything we can to reach out to young people and introduce them to the great careers in the construction industry. 

With the economy on the rebound, construction spending is picking up around the country and more construction-related businesses are taking on new projects because of increases in government spending contracts and real estate demand.

All of this signals good news for the construction industry, but immediately after a new project is awarded, a contractor must come out of pocket for materials, equipment, fuel, travel and labor – sometimes long before being paid. With most payment terms averaging between net 30 to net 90 (and government contracts upwards of net 120), managing cash flow can be tricky. 

The topic of protecting temporary workers, while not new, is one OSHA recently brought back to the forefront. The agency is taking the topic to an open forum in an attempt to underscore the importance to both staffing agencies and host employers that every worker has the right to a safe workplace. 

“An employer’s commitment to the safety of temporary workers should not mirror this worker’s temporary status, whether temporary or permanent, all workers always have a right to a safe and healthy workplace,” Assistant Secretary of Labor for Occupational Safety and Health David Michaels said during the Voluntary Protection Program Participants Association conference in August. “Staffing agencies and host employers are joint employers of temporary workers and both are responsible for providing and maintaining safe working conditions.”

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