Product & Efficency Survey
AIRBUS comes to Alabama
ABC touts Federal wins
ALABAMA
CONSTRUCTION N EWS
Growth in the Southeast PAGE 28
2012 Alabama Legal/Financial Digest
University of Alabama Construction Engineering Program on the Rise PAGE 35
AUG/SEP 2012
PAGE 45
ACP | Auto | General Liability | Property | BOP
DoesYour Business Insurance BUILD Dividends? Ours does. We’ve returned more than $2.5 million to our member policyholders over the first four program years alone. You too can enjoy preferred pricing and coverage exclusively designed for the contracting industry — plus the opportunity to earn dividends. Call Todd Walker at ABC-AL at 205-870-9768, ext. 104.
www.abc-alabama.org
www.pennnationalinsurance.com
TOGETHER WE
protect your company’s profitability. S.S. Nesbitt’s broad expertise in the complexities of doing business today helps us tailor comprehensive insurance solutions to address your most difficult issues and make sure you have the right coverage in place to ensure your company stays safe. S.S. Nesbitt can meet your specific insurance needs through our participation in the ABC/Penn National Property & Casualty Insurance Program. It’s a team approach to insurance, offering competitive pricing and large group buying power, along with services aimed at helping you reduce losses. Visit www.ssnconstruction.com to learn more about our special offers just for ABC members.
3500 Blue Lake Drive, #120 Birmingham, Alabama 35243 Main: (205) 262-2700 Toll Free: (800) 422-3223
ssnconstruction.com
What I know: I know more about manufacturing OSB structural panels than you might imagine. I know that my outside counsel must know more about manufacturing OSB structural panels than you might imagine. I know I physically can’t practice law in every state where we conduct business, or I would. I know SEC football. I know my two dogs own my house; I simply pay the mortgage. I know I have to have confidence my outside counsel will represent my company’s interests as aggressively as I would. I know that I can count on Bradley Arant Boult Cummings to do just that. That’s what I know. LAURA E. PROCTOR ASSOCIATE GENERAL COUNSEL OVER LITIGATION LOUISIANA-PACIFIC CORPORATION
AMONG THE NATION’S BEST LAWYERS
babc.com | ALABAMA | DISTRICT OF COLUMBIA | MISSISSIPPI | NORTH CAROLINA | TENNESSEE
No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. Contact: John B. Grenier, Esq., 1819 Fifth Avenue North, Birmingham, Alabama 35203
FEATURES
28
Tracking Growth in the Southeast Economic Prospects for the Southeast Buoy Construction Hopes
35
University of Alabama Construction Engineering Degree Program Continues its Growth
45
Legal/Financial Digest
Take a look at Alabama’s leaders in Law & Finance
photograph by STEVEN DEVRIES
AUG/SEP 2012
AL CONSTRUCTION NEWS
03
6
DEPARTMENTS
10
06 From the President
ABC’s path for 2013
BUILDING ALABAMA 09 Projects Updates & Reports
Children’s of Alabama Benjamin Russell Hospital opens. Ram Tool expands. BL Harbert Builds at Fort Knox and South Carolina. Hoar completes Arkansas project. UA’s Rose Towers implodes to make way for new buildings. Brasfield and Gorrie LED signs New York.
22 Outlook & Trends
56
ABC NEWS & NOTES 56 A Perfect Storm
62
04
AL CONSTRUCTION NEWS
What is the latest news on industry outlooks and trends? See the information that predicts a shift in the construction trade.
Congressman Robert Aderholt believes new regulations and threats of increased taxation are weighing on the creation of new jobs and investments by entrepreneurs.
62 Airbus
AUG/SEP 2012
Airbus is coming to Alabama. Unions are expected to make a pitch to represent Airbus workers. ABC’s letter regarding the state’s Rightto-Laws gets attention throughout Alabama.Description goes here.
MORE JOBS. MORE TOOLS. MORE HELP.
MORE OF WHY YOU JOINED THE ABC NORTH ALABAMA CHAPTER
It’s tough out there. And that’s why we’re here for you. We’ve teamed up with Dodge to give you access to business development and bidding efficiency tools, at a special ABC rate. Call 615.298.7744, or email ron_osteen@mcgraw-hill.com and together, we can build your business.
From the President ALABAMA
CONSTRUCTION
Jay Reed President, ABC of Alabama
N EWS
Publisher
Jay Reed Associate Publisher/ Managing Editor
Todd Walker Publishing Coordinator/Circulation
Charles Hall Accounting
Jenny Wilson Advertising Sales
George Pierce Editor
Hugh J. Rushing
A
SSOCIATED BUILDERS AND CONTRACTORS OF ALABAMA CONTINUES to center our leadership and management philosophy around the “Race for Relevance” book we mentioned in a prior edition of Alabama Construction News. Over the next two years I will actually be a part of a national class that will dissect the book in every way possible. The goal I have set for myself in taking the class is: “The members that belong to ABC are investing in us to better the industry. Everyday our business should be to increase productivity, drive down costs and spur economic development. This is what we are driven to build for you.” How do we plan to do that? Simply by listening to the industry. After a recent “road show” across the state, your Executive Committee and Board of Directors are embracing a plan to support that goal.
ABC’S PATH FOR 2012-2013 • To encourage a change in current Sales & Use • To close the door on potential Project Labor AgreeTax Exemption procedures. Reinstate the 2004 ments (PLA) in Alabama in public works projects. process regarding sales and use tax exemptions • To take an in-depth look at various construction on tax exempt State projects. ABC has met with delivery methods on public works in Alabama and the Attorney General and the Revenue Commis- explore legislation that encourages construction sioner, and we feel confident this will pass in 2013. projects in the most efficient way possible. House and Senate sponsor are confirmed. • To revisit workforce development. As Alabama’s • To revise the antiquated mechanics lien process. construction industry innovates “Go Build AlaABC of Alabama has researched 14 States bama,” ABC of Alabama has embraced a new Mechanics Lien bills and we are now looking at era in workforce development. ABC of Alabama Florida’s as our model. We will have a task force pledges to be innovators in writing the next chapworking on this subject and hope to have a bill ter of workforce development. ready by November.
I ask you to join us in this endeavor. ABC of Alabama is a sound investment for the betterment of the future, and we need your help.
Jay Reed,
Publisher/ President - Associated Builders and Contractors 06
AL CONSTRUCTION NEWS
AUG/SEP 2012
Print Production
Alliance Publishing Group Art Direction
Ideogram, LLC Copy Editor
Megan Beavers Alabama Construction News is published by Associated Builders & Contractors, Inc. Copyright © 2012 ABC-Alabama All rights reserved. Reproduction in whole or part without written permission is prohibited.
Address all correspondence to: Alabama Construction News 1830 28th Avenue So. Birmingham, AL 35209
For advertising information: contact George Pierce at 205.870.9768 x100 or email george@abc-alabama.org.
For editorial information: contact Hugh J. Rushing at 205.592.0389 or email hrushing@usit.net.
Illustration by Name Here
photograph by NAMEGOES HERE
AUG/SEP 2012
AL CONSTRUCTION NEWS
07
• Foundation Repair • MacLean Helical Piers • Helical Tiebacks • Pressure Grouting • Soil Stabilization • Titan / IBO Anchors & Piers • GeoStone Retaining Walls • Epoxy & Urethane Injection
BUILDING
ALABAMA Compelling Projects, Updates & Reports For and By Alabama Firms
photograph by STEVEN DEVRIES
AUG/SEP 2012
AL CONSTRUCTION NEWS
09
BUILDING
ALABAMA P R O J E CT
Hoar Construction Benjamin Russell Hospital for Children, Birmingham, AL First and Trim The famous hedges of Sanford Stadium get a cut. Pute min exeriureet dolor se em irilisci tat nibh et nos eugait adt, quam iust
Children’s of Alabama Benjamin Russell Hospital for Children Opens
B
IRMINGHAM, AL– THE BENJAMIN Russell Hospital for Children (BRHFC) opened for patient move-in on August 4. The opening marked the highly anticipated completion of construction on the 12-story, 760,000-square-foot, $400 million expansion at Children’s of Alabama, the state’s only freestanding pediatric hospital.
HKS, Inc., in partnership with Giattina Aycock Studio, served as architect. KLMK Group was project manager; Hoar Construction, in partnership with KBR, served as construction manager. Located one block north of the existing facility, BRHFC will accommodate projected growth in patient volume, anticipated medical technology needs and the planned consolidation of pediatric services including cardiovascular surgery and comprehensive solid organ transplant care. The hospital is licensed for 332 beds plus 48 neonatal intensive care unit (NICU) bassinets. Mike Warren, president and CEO of Children’s of Alabama, said, “We are delighted to open the doors of this magnificent facility to
10
AL CONSTRUCTION NEWS
AUG/SEP 2012
serve the children and families of Alabama. The beauty of the Benjamin Russell Hospital for Children, its advanced technology, its environmental aspects and its family-focused design all serve as a wonderful backdrop for the skill, knowledge and commitment of the healthcare professionals who work here to provide care every day. Our team is focused on one mighty mission: to provide the very best healthcare available to every child who walks through our doors. That is the true importance of this expansion.” It is the largest single medical facility expansion project in the history of Alabama, and will make Children’s the thirdlargest pediatric hospital in the United States, as measured by square footage. The total of 380 beds and bassinets ranks Children’s in the top 10 pediatric
medical centers, based on bed count. The building is also the first and largest building project in Alabama history to gain certification in Leadership in Energy and Environmental Design (LEED). The building is named in honor of legendary Alabama entrepreneur Benjamin Russell (1876-1941) and to recognize the $25 million gift from his grandson, Ben Russell and Ben’s wife Luanne, both longtime hospital supporters. An Iconic Campus Building According to Doug Compton, AIA, principal/senior designer with HKS, the BRHFC building stands as an iconic presence representing a new standard of pediatric healthcare offered in Alabama. “The hospital’s curvilinear design combines vision, gradate and opaque glass types that are punctuated with colors
photograph by BLAKE MARVIN
BUILDING
ALABAMA
winds through the public areas, directing foot traffic to and from entrances, elevators and patient care areas. All patient floors and rooms are identified not only by number, but also by color and a special theme unique to each floor.”
interspersed throughout the building – inside and out – for visual interest. The bed tower’s orientation promotes views to the central business district and Red Mountain, an important Birmingham landmark,” continued Compton. “The lobby and plaza form a visual tie to the 17th Street corridor, an urban link to the Railroad Park and, ultimately, downtown Birmingham.”
Ahead of Schedule, Under Budget, Working with the Community The project was completed ahead of schedule and under budget. On a project of this size, coordination and collaboration were critical to the successful delivery of the BRHFC. “From the onset, the project team had a laser focus on achieving our primary objective, which was to fulfill our commitment to the owner – finish on schedule and within their required budget. After three challenging years, we were able to actually over-deliver. The project completed on schedule and under budget. We absolutely credit this achievement to the collaboration of the entire project team,” stated Bill McMahon, president & COO of KLMK Group. Doug Eckert, executive vice president of Hoar Construction said, “The Joint Venture
responsible materials. BRHFC requires less maintenance and will last longer so that cost savings will enable Children’s to provide excellent healthcare to the children of Alabama. A highlight of the effort to gain LEED certification is the rooftop gardens that are planted with native sedum to provide insulation and oxygenation. Up to 30,000 gallons of condensate is collected from the air conditioning system and used for irrigation and also to cool equipment. Designated green spaces on campus, 140 bicycle racks, and the orientation of the building all contribute to the hospital’s Earth-friendly profile. “It has been a pleasure to work with such a talented and devoted team on this project,” said Mike McDevitt, executive vice president, facilities and technology, Children’s of Alabama. “All of the players involved at every level with the construction of this facility have given 100 percent. To each of them, it was more than just another job. It was personal and meaningful, and that showed in their work and in the finished facility. I can’t wait to see it used to
Family-Centered Care BRHFC offers private, acute care rooms that are 30 percent larger than the largest rooms in the present building and, for the first time, We are delighted to open the doors of this magnificent facility to serve the children all-private rooms in critiand families of Alabama. The beauty of the Benjamin Russell Hospital for Children, cal care units. Each feaits advanced technology, its environmental aspects and its family-focused design tures a sleeper sofa, large wardrobe and small safe all serve as a wonderful backdrop for the skill, knowledge and commitment of the for valuables, along with a healthcare professionals who work here to provide care every day. special patient education/ entertainment system. For more family convenience, each construction team was committed to makprovide care and healing for children today patient floor offers a laundry room and a ing the project an example for local particiand well into the future.” kitchen equipped with a full-size refrigerapation and development of minority-owned tor, microwave and ice machine. Waiting and disadvantaged businesses. A partnerAbout Children’s of Alabama areas at the end of the hallways are awash ship with the Birmingham Construction Children’s of Alabama has provided spewith natural light and provide sweeping Industry Authority helped us do just that. cialized medical care for ill and injured views of the city, while 120 original works More than 100 local minority-owned and children across the state and throughout by Alabama artists decorate the public areas, disadvantaged businesses helped construct the southeastern U.S. since 1911. The Benadding to the family-friendly environment. this wonderful facility, and thousands of lojamin Russell Hospital for Children is the “Patients, families and visitors will find cal workers were employed, making a huge only hospital in Alabama dedicated solely their way through the building using any impact on families in this community.” to the care and treatment of children and of several visual cues that have been incoris recognized by the American Nurses Creporated into the hospital’s interior design,” Environmentally Friendly dentialing Center as a Magnet-designated said Iris Dates, IIDA, EDAC, LEED AP, vice BRHFC gained the Leadership in Energy hospital for excellence in nursing care. president/director of design for healthcare and Environmental Design (LEED) certifiIn 2010, 2011 and 2012, Children’s was interiors for HKS. “A blue patient journey cation due to its design and use of sustainranked among the best children’s hospicurving pattern within the terrazzo floors able, energy-efficient and environmentally tal programs in the nation by U.S. News &
AUG/SEP 2012
AL CONSTRUCTION NEWS
11
STOP HERE
FOR MORE THAN JUST CAT EQUIPMENT. ®
your ComPlete eQuiPment sourCe. Whether you’re looking to purchase or rent, turn to The Thompson Cat Rental Store for the equipment and tools you need to get the job done. Along with a full line of Caterpillar equipment, we carry several top brands of other high quality equipment. To meet all of your job site
needs our fleet includes a large variety of Work Tool Attachments, Light Towers, Trenchers, Dump Trucks, Water Trucks, Generators and Air Compressors… just to name a few. stop by the thompson Cat rental store to purchase or rent the equipment you need today.
scan the QrC code to the left, visit our website or stop by the store nearest you to learn more. Birmingham (205) 326-0334
huntsville (256) 532-3001
montgomery (334) 262-1101
Panama City (850) 235-9624
shelBy County (205) 664-9489
Dothan (334) 673-3300
moBile (251) 452-1180
oxforD/anniston (256) 835-5737
PensaCola (850) 471-6710
tusCaloosa (205) 247-3402
www.thompsontractor.com
© 2012 Caterpillar All rights reserved. CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. www.cat.com www.caterpillar.com
BUILDING
ALABAMA
World Report. It is a private, not-for-profit hospital that serves as the primary site of the University of Alabama at Birmingham pediatric medicine, surgery, research and residency programs. Last year, patients made more than 634,000 outpatient – and nearly 14,000 inpatient – visits to Children’s from every county in Alabama and from 47 other states. About HKS HKS, ranked among the top healthcarespecialized architectural firms by Modern Healthcare and BD World Architecture, understands and embraces holistic healthcare. Operating from 29 offices on four continents, the firm focuses on innovative design, process and delivery. HKS collaborates with each client to evaluate transformational concepts that support and improve the patient and family experience and operational efficiency.
About KLMK Group KLMK Group, Inc. is a leading provider of innovative solutions focused on the continuous improvement of the healthcare facility development process. The firm provides independent, objective and professional advice to owners involved in all aspects of constructing new facilities and capital projects. With offices in Richmond, Atlanta, Birmingham, St. Louis, Houston and Dallas, KLMK challenges clients to embrace new models of care delivery that provide efficient and flexible alternatives for future growth.
attention to detail, the firm is changing the industry in its delivery of construction management, general construction, preconstruction, and program management services. Hoar Construction operates from offices in Birmingham, Mobile, Houston, Austin, Orlando, and Nashville serving healthcare, retail, commercial, institutional and industrial clients throughout the U.S.
About Hoar Construction: Hoar Construction, recognized annually by Engineering News Record as a top U.S. general contractor and construction manager, works to maximize value and quality on every project. Combining leading-edge technology with progressive thinking and
Ram Tool and Supply Expands Footprint with Acquisition
IVAN LEONARD The #1 GM Business Central Dealer in Central Alabama.
We carry a full Line of upfitted vehicles ready for the workplace, with special pricing for ABC-Alabama Active Members.
Ivan Leonard Chevrolet
Highway 31 South in Hoover, AL (1.5 Miles North of the Galleria) t. 205-823-5120 f. 205-823-9311 www.commercialtruckssoutheast.com
800-240-5100
Ask for the Commercial Department Bill, Hunter, Richard, Johnny & Brent
We Recommend: www.childrensal.org
BIRMINGHAM BASED RAM TOOL and Supply Company announces the acquisition of Marco Supply, headquartered in Roanoke, Virginia. The acquisition adds 12 branches to Ram Tool’s existing group of 18 and expands the company’s reach up the Atlantic Coast. “With this growth, we will be able to bring Ram Tool service to existing customers and new relationships. These are great markets for us,” said Ram Tool CEO Hillery Head. Ram Tool distributes tools and supplies to commercial contractors. Its 30 branches stretch from San Antonio, Texas to Washington D.C. Ram Tool’s focus is on excellent customer service, reflected by the company motto of One Call Gets It All. Said Head, “ We welcome the Marco employees into the Ram Tool Family and Culture. Together we can do great things for our customers,” said Head. Ram Tool now has branches in Alabama, Texas, Louisiana, Tennessee, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia, and Washington D.C. Head is optimistic for the future, saying “We are in for the long haul, and we see a great future for the construction industry.”
AUG/SEP 2012
AL CONSTRUCTION NEWS
13
BUILDING
ALABAMA U P D ATPPERRSOOJ&JEERCT CT E SP O RT S
BL Harbert International Engineer Battalion Complex at Fort Knox, Kentucky
BL Harbert to Build at Fort Knox and in South Carolina BL HARBERT INTERNATIONAL, WITH CDFL AS ITS DESIGN partner, has been selected by the U.S. Army Corps of Engineers to provide design-build services for the Engineer Battalion Complex at Fort Knox, Kentucky. This facility will be used for the 19th Engineer Battalion that recently served in Afghanistan in support of Operation Enduring Freedom. The $41 million project includes a 94,077-square-foot Barracks that will house 252 personnel; a 22,600-square-foot Battalion Headquarters accommodating command functions; and 70,198 square feet of office/warehouse space for the Company Operations Facility. The facility is being designed to meet LEED Silver standards and will include the use of a geothermal ground-coupled heat pump system. Construction is set to start by the end of September. Harbert has also been selected by the State of South Carolina to provide construction services for the Darla Moore School of Business at the University of South Carolina. The $65 million, 250,000 square feet project is to be built to LEED Platinum standards with a goal of being the largest Net-Zero building in the world.
14
AL CONSTRUCTION NEWS
AUG/SEP 2012
The facility’s innovative design will feature: Energy performance targeted to be 50 percent more efficient than code Solar panels for electricity production Lighting systems that will be 30 percent more efficient than standard buildings Air conditioning and heating systems targeted to be 40 percent more efficient than code Advanced technologies including cloud computing to reduce electrical consumption An energy management system that monitors and shuts down areas and rooms not in use
Hoar Winds Up Arkansas Hospital HOAR CONSTRUCTION recently completed work on a 95,000 square foot replacement hospital in Siloam Springs, AR. According to the hospital’s news release, the project had a cost of $40-million and was begun in early 2011. The new Siloam Springs Regional Hospital replacement facility contains 42 private inpatient beds to serve medical, surgical and ICU patients. The building will accommodate key units and all support spaces including Medical Surgical Nursing Units, Intensive Care Units, Women’s Services, Emergency
BUILDING
ALABAMA P R O J E CT
Hoar Construction Siloam Springs Regional Hospital
Department, Surgery, PACU/ Same Day Surgery, Endoscopy and Imaging Departments. The hospital is owned by Franklin, Tennessee-based Community Health Systems and was designed by Thomas Miller and Partners of Brentwood, Tennessee.
The Montgomery Chapter of the NAWIC The Montgomery Chapter of the National Association of Women in Construction (NAWIC) held its second MAGIC Camp (Mentoring A Girl In Construction) in June. Fourteen young women attended. During the week campers built dog houses, learned about electricity by constructing an electrical board and lamp, made stepping stones from concrete and cut garden decorations using a plasma cutter and then welded them to rebar. The dog houses were donated by the girls to the Elmore County Humane Shelter, while the campers kept all their other projects. Birmingham’s chapter of NAWIC saw its president, Stephanie Crane, of M. J. Harris Construction Services, elected as region 2 director of the national NAWIC earlier in the year. She is slated to begin her term at the national convention in Denver, Colorado in October.
NAWIC Montgomery Chapter builds dog houses for the Elmore County Humane Shelter
AUG/SEP 2012
AL CONSTRUCTION NEWS
15
P R O J E CT S
Making Way UA’s Rose Towers Imploaded to make way for a New Residental Community
16
AL CONSTRUCTION NEWS
AUG/SEP 2012
photography by THE UNIVERSITY OF ALABAMA
I University of Alabama Rose Towers
T WAS A GIGANTIC display of fireworks on July 4 as the University of Alabama’s 43- year old Rose Towers was imploded into a 2,500 truckload pile of debris. The destruction of the 13-story building will make way for the second phase of the Presidential Village residential community. The 864 bed development will open in August of 2014 in time for the school’s fall term. Part of the Rose Towers site will also be used for building a student activity center. The first phase of the Presidential Village, which will house 971 students, has just opened. The construction contract for the second phase of construction has not yet been awarded, but site work is already underway. Rose Towers was completed in 1969 and housed from 750 to 900 students annually. University officials estimated that more than 30,000 students lived there during the building’s history. Rose Towers also housed a day care center for many years. In addition to the residential community replacing Rose Towers, the Alabama Board of Trustees has approved the immediate construction of a new 35,000 square foot strength and conditioning facility. The building will be sited between the Hank Crisp Indoor Practice Facility and the Mal M. Moore Athletic Facility. The project will cost about $9 million and will be funded by revenue bonds and by a provision by the Crimson Tide Foundation of $965,000. The building will house a weight room, cardio/rehab area, offices and workrooms, a nutrition bar and medical office suite. Expedited construction plans calls for the facility to be completed by January, 2013. Birmingham-based Davis Architects is in charge of the design.
First and Trim The famous hedges of Sanford Stadium get a cut. Pute min exeriureet dolor se em irilisci tat nibh et nos eugait adt, quam iust
Brasfield & Gorrie Gets LED Signage Project in New York BIRMINGHAM’S BRASFIELD & GORRIE WAS RECENTLY awarded the U.S. Customs and Border Protection Light Emitting Diode (LED) Signage project in Buffalo and Lewiston, New York. The $2-million project contract will include the installation of high-visibility, energy-efficient LED signs at the Lewiston Land Port of Entry, which is the northernmost border crossing in the Buffalo area. Additionally, new high-visibility, energy-efficient signs will be installed at the Peace Bridge facility that connects downtown Buffalo to Fort Erie in Ontario, Canada. The LED signage upgrades offer easy-to-see-and-read bilingual signage that can be changed instantly as traffic dictates. The signage provides instructions and information to travelers as they approach the primary inspection stations, saving up to 20 seconds per vehicle transitioning through the port. This state-of-the-art technology is increasingly popular among Customs and Border Protection officials since the technology increases the functionality, energy efficiency and overall safety of port operations. Many of the nation’s busiest land ports of entry are installing LED signage because of its added value. This is the second land port of entry LED signage contract awarded to Brasfield & Gorrie. The first contract added LED signs at four land ports of entry located between McAllen and Brownsville, Texas. That work was completed in July 2011. Brasfield & Gorrie is partnering with the U.S. General Services Administration and U.S. Customs and Border Protection to complete the project. The work is expected to be completed in October.
AUG/SEP 2012
AL CONSTRUCTION NEWS
17
BUILDING
ALABAMA P R O J E CT
Northern Beltline Project Letting Possible Before End of 2012 ALABAMA’S DEPARTMENT OF Transportation could let the first phase of the Northern Beltline project be up for bid late this year or in early 2013. However, this is dependent upon how fast the U.S. Army Corps of Engineers acts on an environmental permit. The initial work will be a 3.4 mile six-lane link between Alabama 79 and Alabama 75 in Palmerdale, northeast of Birmingham. The entire project will be 52.5 miles and connect I-20/59 in Bessemer to I-59, north of Trussville. The project was estimated to cost some $3 billion when priced in 2010 and will be funded through an 80 percent grant from the Appalachian Regional Commission.
18
AL CONSTRUCTION NEWS
AUG/SEP 2012
The project is not without its controversies. Some local residents have opposed the plan claiming threats to water sources such as the Cahaba River and Turkey and Five Mile Creeks as well as fundamentally changing the rural character of northern Jefferson County. In June, the Southern Environmental Law Center claimed that a study of the project’s benefits done by the Alabama Center for Business and Economic Research (CBER) grossly exaggerated the economic impact of the plan. Where CBER projected as many as 70,000 direct and indirect jobs during the 21-year projected construction of the project with a $7 billion impact, the Law Center said that project would cre-
ate about 2,800 additional jobs during the years of construction paying less than $35,000 annually. The Ochs Center for Metropolitan Studies in Chattanooga claimed that the CBER used Federal Highway Administration numbers which are applicable only for national studies. CBER Director Samuel Addy said that the Ochs center was incorrect in that claim. The Birmingham Business Alliance has supported the project as a priority in its Blueprint Birmingham strategic economic plan. Additionally the northern route would reduce through traffic on the often clogged downtown sector of I-20/59.
Supreme Court Rules Against SEIU Political Fees NEARLY UNNOTICED IN the recently announced Supreme Court rulings on the Affordable Healthcare Act and Arizona’s immigration act, was a 7-2 decision in which the court ruled against the Service Employees International Union. The Court decided that SEIU could not mandate that employees pay a special union fee that would be spent on political activities without providing information about the fee and an opportunity to object to it. The union collected an extra $6.45 a month from state employees in California in the fall of 2005. A group of dissenting employees sued, claiming their rights had been violated. California is not a right-
This aggressive use of power by the SEIU to collect fees from nonmembers is indefensible. Even a full refund would not undo the violation of First Amendment rights. to-work state, so even nonmembers of unions are forced to pay dues if they work in an area represented by unions. Most of SEIU’s members work in the health care, public service/ government and property services. SEIU spent $28 million on support for the election of President Obama in 2008, and proclaimed “it was the organization that spent the most to help Barack Obama get elected president.” The original suit grew out of efforts to oppose two ballot measures, which were seen as targeting public unions. The union raised almost $10 million. The court ruled in favor of the complaint made by Dianne Knox and other members who wanted to opt out of the $12 million assessment the union said it required. Justice Samuel Alito Jr. wrote, “This aggressive use of power by the SEIU to collect fees from nonmembers is indefensible. Even a full refund would not undo the violation of First Amendment rights. A public-sector union…may not exact any funds from nonmembers without their affirmative consent.” Two generally liberal justices, Sotomayor and Ginsburg, wrote their own opinion with Sotomayor saying “When a public-sector union imposes a special assessment intended to fund solely political lobbying efforts, the First Amendment requires that the union provide non-members an opportunity to opt out of the contribution of funds.” Previous courts decisions have held that unions are permitted to bill nonmembers for “chargeable expenses:, but may not require nonmembers to fund its political and ideological projects.
AUG/SEP 2012
AL CONSTRUCTION NEWS
19
BUILDING
ALABAMA U P D AT E S & R E P O RT S
Mobile-based White-Spunner Construction Ranked 4th among winners in “Best Company to Work for in Alabama 2012” by Business Alabama White-Spunner Construction, Inc. was recently named as one of the Best Companies to Work for in Alabama 2012. This third annual program was created by Business Alabama publication and Best Companies Group. Business Alabama and partner Best Companies Group announced the 2012 winners at an award event on August 1 at the Birmingham Museum of Art. At the event, White-Spunner Construction was ranked 4th among the winners in the medium-size company category. This survey and awards program was designed to identify, recognize and honor the best employers in Alabama, benefiting the state’s economy, workforce and businesses.
The list is made up of 18 companies split into three categories: 6 small-sized companies (15-49 U.S. employees), 6 medium-sized companies (50-249 U.S. Employees) and 6 large-sized companies (250 and more U.S. Employees). From those employee-survey responses, 18 companies were recognized for providing exceptional working environments in the state. White-Spunner Construction has been named one of this year’s Best Companies to work for in Alabama in the medium category. “We are honored to be recognized as a top employer in Alabama. Our employees are the lifeline of this company, and their commitment to excellence is visible at all levels. So,
Our Name Says It All... Birmingham Location:
3420 Richard Arrington Jr. Blvd. N. Birmingham, AL 35234
Florida Location:
630 Kissimmee Avenue Ocoee, FL 34761
20
AL CONSTRUCTION NEWS
(205) 326-1409
AUG/SEP 2012
creating a positive work environment and giving them the support they need is a pleasure,” says John White-Spunner, CEO. Companies from across the state entered the two-part survey process to determine the Best Companies to work for in Alabama. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics. The second part consisted of an employee survey to measure the employee experience. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration and survey process in Alabama, analyzed the data and determined the final rankings.
BUILDING
ALABAMA
Michigan Bans Government Mandate PLAs To be considered for participation, companies have to fulfill the following eligibility requirements: Be for profit, not-for-profit business or government entity Be a publicly or privately held business Have a facility in Alabama Have at least 15 employees in Alabama Be in business a minimum of 1 year We Recommend: www.bestcompaniesal.com
In late June, Michigan’s governor signed an act which makes PLAs that discriminate on the basis of labor affiliation illegal. The act originally was passed in 2011, but a federal judge suspended the act earlier this year. The new law addresses the technical concerns of the judge’s ruling. Contractors may enter into a pre-hire agreement with labor unions, only if doing so is voluntary and not mandated by a public entity. In addition to barring prohibitions or requirements for PLAs, the act requires “the neutral, economical, nondiscriminatory and efficient procurement of construction services by the state.” Michigan joins thirteen states that have banned PLA mandates to some degree on publicly funded projects. Ten of those actions have occurred in the past eighteen months.
BL HARBERT
BL HARBERT
BUILDING
ALABAMA O UTLO O K & TREN DS
ABC of Alabama presents
Industry Outlook & Trends • F O R A L A BA M A •
2012 Alabama Forecast Lowered by UA Economists
W
ITH GROWTH IN THE STATE’S ECONOMY IN THE first half of 2012 looking weaker than expected, economists at The University of Alabama’s Center for Business and Economic Research (CBER) have lowered their expectations for 2012 as a whole. CBER now anticipates real GDP growth of about 2.0 percent for the year, down from a forecast of 2.5 percent last quarter. About 10,000 jobs could be created across the state this year, a gain of about 0.5 percent. Job growth is expected to strengthen in 2013 when a 1.5 percent increase in nonfarm employment is forecasted. Job gains have been tepid thus far with 4,500 nonfarm jobs added across the state between May 2011 and May 2012. Businesses in transportation equipment manufacturing, leisure and hospitality, professional and business services, retail trade and healthcare services have been the major sources of job creation so far this year. Unemployment has fallen from 9.3 to 7.4 percent over the past year, with some of the decline due to a shrinking labor force or discouraged job seekers in most of the state. The government sector has been hit hardest by job losses. State government shed 7,200 workers over the past year and local government employment dropped by 2,100. A total of 4,700 education positions were among the jobs cut by state and local governments. However, the jobs picture appears to be stabilizing in most Alabama metro areas in recent months. But during the past 12 months, only Florence-Muscle Shoals saw an increase in nonfarm employment coupled with labor force growth. Exports continue to be a source of strength for the state’s economy; shipments were up 14 percent to $4.8 billion during the first three months of 2012 compared to the first quarter of 2011. Transportation equipment exports, in particular, continue to rise. But exports could be dampened by the financial and debt crises in Europe as well as the weaknesses found elsewhere. Alabama’s tax receipts are continuing to grow in the fiscal year 2012, with total revenues up almost 4.0 percent through June. Appropriations to the Alabama Education Trust Fund have risen 6.8 percent during the first nine months of this fiscal year, while appro-
22
AL CONSTRUCTION NEWS
AUG/SEP 2012
priations to the General Fund are up 21.9 percent. CBER expects tax collections to continue at about the same pace through the remainder of the fiscal year. Business sentiment among executives statewide, measured by the Center’s Alabama Business Confidence Index™ (ABCI), fell 6.6 points to 50.2 on the third quarter 2012 survey. The CBER said that generally firms are not expecting growth to pick up this quarter and are likely to be cautious about hiring and capital investment. The complete outlook is available at http://cber.cba.ua.edu/pdf/ ab2012q3.pdf
THIRD QUARTER HIGHLIGHTS Alabama GAINED 4,500 jobs from May 2011 to May 2012, while the seasonally adjusted unemployment rate dropped from 9.3 to 7.4%. Nonfarm payrolls totaled 1,881,100 in May 2012, up from 1,876,600 a year ago. The seasonally adjusted number of unemployed workers DECLINED significantly, from 203,806 in May 2011 to 159,218 in May 2012. However, a 2.5% drop in the state’s civilian labor force, which shrank from 2,197,336 to 2,143,105 during this time, also contributed to the improvement in unemployment. Total nonfarm employment is forecasted to INCREASE about 0.5% in 2012, with most gains in transportation equipment manufacturing, professional & business services, educational & health services, & food services & drinking places. The state’s economy is estimated to EXPAND by approximately 2.0% in 2012, following an estimated 1.0 to 1.5% gain in 2011. After increasing 5.0% in fiscal year 2010-2011, state tax revenues are expected to GROW by 3.0 to 4.0% in FY2012, depending on the pace of economic & payroll growth.
BUILDING
ALABAMA
Economic Lookout: 3rd Quarter
FMI Construction Outlook
IN MAY 2012 ALABAMA NONFARM EMPLOYMENT TOTALED 1,881,100 still 145,600 below its December 2007 peak of 2,026,700. Over the 12-month period ending in May 2012, the state gained a total of 4,500 jobs. Goods producing businesses lost 4,200 workers while the services provided sector gained 8,700. Among goods producers, manufacturing added 2,900 jobs and construction had a net loss of 7,200. Construction sector payroll losses were pretty much across the board, including building construction (2,200), heavy and civil engineering construction (1,500), and specialty trade contractors (3,500). Within manufacturing, only three industrial registered job gains during the past 12 months: transportation equipment manufacturing (3,200), mostly in motor vehicle parts manufacturing (2,000); primary and fabricated metals (800); and paper manufacturing (100). Several manufacturing industries posted sizable job losses, including textiles and apparel (1,400); wood products (600), furniture (600); and food manufacturing (300). However, most other manufacturers saw only modest job declines over the past year, with employment stabilizing in recent months.
FMI, THE LARGEST PROVIDER OF MANAGEMENT consulting and investment banking to the engineering and construction industry, releases the second quarter 2012 Construction Outlook Report. FMI’s forecast calls for 3% growth for construction put in place (CPIP) by the end of 2012 and another 7% in 2013 for a total of $882.4 billion. This is $92.6 billion more than the lows of 2011. Despite the constant confusion of news from Europe and uncertainty and inaction in the U.S. Congress, there are some positive signs in the economy. As one might expect, improving housing construction is helping to lead the way, especially multi-family housing. However, power construction is another strong point, and even commercial construction will show signs of rising from its slumber. Nonetheless, slow growth may be even more challenging than large market drops or boom times, because it requires improved management, precision market research and creative business development.
Alabama Nonfarm Employment and Unemployment Rate Employment (Thousands), Unemployment (Percent) Source: cber.cba.ua.edu
2,100
12 Employment Unemployment Rate
10
1,900
8
1,800
6
1,700
4
1,600
Unemployment Rate
Nonfarm Employment
2,000
2
1,500
0 1990 1993 1996 1999 2002 2005 2008 2011
Alabama Forcast (Annual Percent Change)
Source: cber.cba.ua.edu
Probability: Forcast (60%) Range (90%)
2010 2011 2012 2013
Real GDP range
2.3 1.5 2.0 2.1 0.5 to 2.5 1.5 to 3.0 1.8 to 3.5
Employment range
-0.8 -0.2 0.5 1.5 0.1 to 1.5 0.7 to 2.3
Total Tax Receipts, FY range
-2.5 5.0 3.9 4.1 2.5 to 6.0 3.0 to 7.0
Residential Construction is coming back leading by 32% growth in multi-family housing.
Amusement & Recreation Construction will climb 8% to $17.4B in 2013.
In Nonresidential Construction the forecast is mixed with healthcare and manufacÂturing showing the most positive signs of growth.
Transportation Construction will grow 3% in 2012 & to 5% through 2015.
Lodging CPIP is expected to grow 4% & rebound somewhat to 7% & 8% in 2013 & 2014.
Communications Construction will experience steady growth of 4% to 6% through 2015 with 2012 ending up around $18.5B.
Office Construction should be 4% by the end of 2012 & improve to around 6% for 2013 through 2014.
Manufacturing Construction is expected to rise 3% in 2012 & show steady increases to 2015.
Commercial Construction is beginning to grow again. FMI expects 5% growth in CPIP this year, followed by 8% growth in 2013 to around $49 B.
Power-Related Construction is forecasted to have a 10% rise for 2012 & another 10% in 2013 to $108B.
Healthcare Construction is expected to only rise 3% in 2012, that will strengthen to double digits by 2015, achieving record highs around $52.6 B.
Highway CPIP will drop 2% in 2012 & grow just 1% in 2013 to reach $77.7B or back near 2007 levels.
Education Construction will have only a 1% increase in CPIP in 2012 & a slight rise of 2% in 2013.
Water Supply is beginning to grow, but will gain only 2% in 2012 and 3% in 2013 to reach $14.7B.
Religious Construction will be flat in 2012, with some revival in 2013 to 6% growth at $4.3B.
Conservation and Development growth is expected at 2% in 2012 and demonstrate slow, steady progress through 2015.
Public Safety Construction will be flat in 2012, but will the grow 6% in 2013 to $4.3B.
Sewage & Waste Disposal CPIP is expected to be around $23.9B.
Construction Put in Place is predicted to grow 3% by the end of 2012.
AUG/SEP 2012
AL CONSTRUCTION NEWS
23
BUILDING
ALABAMA O UTLO O K & TREN DS
Productivity and Efficiency – FMI FMI RECENTLY RELEASED AN ARTICLE titled “The Science of Efficiency and Productivity.” The primary objective of this article centers on the current perception of the marketplace and how it is affecting the construction industry. Recent observations have suggested that construction companies are being contracted based on low-priced services,
that fail to recognize this trend are putting themselves at risk. Efficiency is quickly becoming more and more important across construction organizations. Whether one examines its foundation in Total Quality Management (TQM) or its younger relative Lean Six Sigma, firms recognize the reduction of waste as an essential strategic imperative.
will immediately provide a return. There is obviously value in implementing these methods, but it is very hard for companies to make this innovative switch. Adapting to lean and BIM will definitely seem a tedious task at first, but it’s positive results are unyielding. From a strategic perspective, firms must make a serious commitment to the long-term use of BIM. Many firms view the costs associated with rework, inefficiency and poor coordination as enough motivation to consider integration of such a system. The opposing view is the considerable investment and operational costs associated with BIM, which have a tendency to scare many contractors away from adoption. A strategic look allows firms to see that a serious commitment to BIM is needed. BIM is not a short-term system. Both Lean construction and BIM have great significance when dealing with prefabrication. Prefab limits external factors that impact construction. The list of modularized and prefabricated systems is continually growing with: mechanical, electrical and plumbing systems; bathroom pods; hospital headwalls; pipe racks; load-bearing wall systems; internal and exterior wall systems; and sectional bridges. The competition is steep. With such low costs, innovation is the best option for success. Construction companies can help lower their costs by introducing these methods that are here to stay. By becoming more efficient, companies can make lower bids that will increase business and success.
Lean construction, prefabrication/modularization and building information modeling (BIM) represent not only the current concepts available to contractors but also a glimpse of the future of construction. leaving little room for value propositions. There has been a large increase in lower priced construction. This implies that customers are placing more emphasis on bids rather than the quality of work being done. Those in the construction industry who continually lower their prices because of the competitive landscape are reinforcing this behavior. As long as there is one bidder willing to work for cost, or even less in some cases, the paradigm of low cost providers will win. The work being done is suffering because of this. This has been causing chaos throughout the contractor bid war rooms. Because there are so many different ways for contractors to track direct and indirect costs, we can easily see how so much variability could exist. Costs across firms are never going to be equivalent. And this is eliminating some companies from the playing field. Firms
24
AL CONSTRUCTION NEWS
AUG/SEP 2012
Being on a level playing field with fellow competitors is no longer good enough. Production assets include those advancements in technology with a seamless integration and a consistent, standardized approach. These gains are helping companies not only for short-term purposes but also for longterm sustainability. Lean construction, prefabrication/ modularization and building information modeling (BIM) represent not only the current concepts available to contractors but also a glimpse of the future of construction. These leanings are imperative for any companies that want to stay at the head of the race. Construction companies are becoming more and more like manufacturing firms and are every day turning away from that traditional construction firm way of doing things. One common misconception, however, is that the adoption of these trending systems
We Recommend: www.FMInet.com
BUILDING
ALABAMA
Primary Utilization Tactics of BIM Perceptions of Lean:
Shop prefabrication management
Lean is really just good management practices that have been relabeled and branded.
21%
42% 19%
Shop drawing review
I understand Lean very well and see it as a practical way to improve productivity and/or operational performance.
27%
Lean is something that I hear a lot of people talking about, but I do not know much about it or the potential to help us.
16%
I have not heard about Lean or how is applies to contractors. Lean is a bunch of “smoke and mirrors� that some contractors are using in their marketing materials.
31%
Clash detection and interference management
14%
1%
Total Response
Marketing/Sales presentation
17%
Cost estimation Safety analysis or management Other
6% 2%
3%
Total Response
BUILDING
ALABAMA O UTLO O K & TREN DS
Equipment Leasing and Finance Association’s Survey of Economic Activity Monthly Leasing & Finance Index June New Business Volume Up by 10 Percent Year-over-year, Up 29 Percent Monthto-month, Up 14 Percent Year-to-date The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $628 billion equipment finance sector, showed overall new business volume for June was $8 billion, up 9.5 percent from volume of $7.3 billion in the same period in 2011. Volume was up 29 percent from the previous month. Year-to-date cumulative new business volume increased 14.5 percent. Receivables over 30 days were 2.4 percent, down from 2.7 percent in May, and down slightly when compared to the same period in 2011. Charge-offs increased to 0.6 percent in June, up from 0.5 percent the previous month, and down by 45.4 percent compared to the same period last year. Credit approvals increased to 78.7 percent in June from 78.3 percent in May. Sixty-five percent of participating organizations reported submitting more transactions for approval during June, down from 75
percent in May. Finally, total headcount for equipment finance companies increased slightly from the previous month, but declined 2.6 percent year over year. Supplemental data show that trucking and construction led the underperforming sectors, followed by small and medium-sized enterprises. Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for July is 51.5, up from the June index of 48.5, and reflects continuing concern over external economic factors and regulatory and political uncertainty. ELFA President and CEO William G. Sutton, CAE, said: “Despite recent reports of a softening economy, the level of capital investment by U.S. businesses—both large and small—continues to accelerate. In fact, the volume of equipment financed in June, as illustrated by the MLFI-25, surpasses that of any single month except for year-end December activity since the beginning of the Great Recession in 2008. We hope that, in spite of the factors adversely affecting economies overseas, our businesses here at home will be able to continue to invest in productive assets.”
We know a business by more than its account number.
Corporate Office 850 Shades Creek Parkway, Ste. 200 Birmingham, AL 35209 866.317.0810 205.949.0302 www
www.servisfirstbank.com • Member FDIC | Equal Housing Lender
BIRMINGHAM • DOTHAN • HUNTSVILLE • MOBILE • MONTGOMERY• PENSACOLA
BUILDING
ALABAMA
Unemployment Numbers Stagnate in July
KEY TAKEAWAYS FROM TODAY’S JOBS REPORT:
The Department of Labor, Bureau of Labor Statistics recently released the latest unemployment numbers for the country. Overall the unemployment rate increased to 8.3% despite an uptick in private sector hiring to 163,000 (which was partially off-set by a downward revision to June hiring totals from 80,000 to only 64,000). Again, the construction sector leads all other segments with an unemployment figure of 12.3% (some 994,000 jobless).
The unemployment rate has increased to 8.3%
2012 Construction Employment/Unemployment vs. Overall Unemployment Statistics
The real unemployment rate increased from 14.9% to 15.0%
Jan ‘12
Feb ‘12
Mar ‘12
Apr ‘12
May ‘12
Jun ‘12
Jul ‘12
Construction Unemployment
1,479
1,404
1,431
1,156
1,150
1,039
994
Percentage
17.7% 17.1% 17.2% 14.5% 14.2% 12.8% 12.3%
Overall Unemployment 8.3% 8.3% 8.2% 8.1% 8.2% 8.2% 8.3% by Percentage Data Source: Table A-14, BLS, (figures are in 000s)
42 straight months of unemployment above 8%
150,000 people dropped out of the labor force while 163,000 entered June’s job number was revised down from 80K to 64K The number of unemployed people increased by 45,000 to 12.8 million
You probably didn’t dream of growing up to be an accountant… So let us handle the numbers and help you reach the sky.
CRIcpa.com
blog.cricpa.com
Dreams already realized for 500+ construction clients. Be next. CARR, RIGGS & INGRAM | BIRMINGHAM (205) 933-7822 | ENTERPRISE (334) 347-0088 | MONTGOMERY (334) 271-6678
Growth T R A C K I N G
Southeast in the
ECONOM IC PROSPECTS FOR TH E SOUTH EAST B UOY CONSTR UCTOR’S HOPES
by HUGH J. RUSHING
C
ONSTRUCTION FIRMS IN ALABAMA DON’T just do work within the confines of the state. Tracking and monitoring economic growth in states surrounding Alabama is a potential key to building business. Different states have differing requirements, different economic development strategies and different emphases. Tracking the growth presents challenges. In the long construction boom years up until 2008, much outof-state work for Alabama contractors was centered on highrise residential structures along the Florida panhandle coast. Work was plentiful. Developers had no end of grandiose plans. Banks were happily lending money, adding to the bubble. With the Great Recession, the collapse of real estate markets and the uncertainties of the speed and depth of the recovery, construction firms began looking to adjacent states and a more diverse model of work projects. There is much political talk about “job growth”. Job growth, absent from direct government stimulus in infrastructure building, occurs with economic growth. Only when firms feel like they have potential for growth and the financing to support
it, will they create jobs and hire to fill those positions. The Southeast has seen phenomenal levels of manufacturing growth, now producing as many cars as the upper Midwest, which was long thought of as the “car capital” of America. Alabama and Kentucky together produce nearly as many cars as Michigan. In recent years, auto plant expansion plans have been announced for every brand in the Southeast. In aerospace, the Gulf Coast corridor – with everything from the NASA’s Stennis Space Center and American Eurocopter in Mississippi to Boeing in Huntsville and Airbus engineering
The Southeast has seen phenomenal levels of manufacturing growth, now producing as many cars as the upper Midwest, which was long thought of as the “car capital” of America. in Mobile – shows potential to become an even larger aviation hotspot in future years. The Southeast has right to work laws, meaning workers can’t be forced to support or join a union. Most states offer reasonable tax rates and the possibility of incentives, as well as tax credits. But on the negative side is the fact that much of the
AUG/SEP 2012
AL CONSTRUCTION NEWS
29
Southeast doesn’t prepare its citizens for semi-skilled positions. High school graduation rates are an embarrassment. However, states are stepping up with specific training needed to attract qualified applicants. Economic growth often crosses or ignores state boundaries. Kia’s plant in West Point, Georgia shares suppliers with Hyundai in Montgomery. Volkswagon in Tennessee draws parts and workers from Georgia and Alabama as well as Tennessee. An expanded plant in Pulaski, Tennessee called Magneti Marelli, draws workers from two states and supplies auto manufacturers in four. Most of the Southeast’s industrial jobs lost over the last decades were in low skill or, at most, semiskilled trades. Cut and sew assembly and weaving of textiles were the mainstays of smaller Southeastern towns. Newer industrial expansion pays more. Typically hourly vs. cut and sew’s piece rate comes with more benefits and security but also requires higher skills and training. Functional illiteracy and the absence of a high school diploma are predictors of who won’t receive job offers. The past decade has produced direct foreign investment in U.S. as the fourth highest level in history, according to government statistics. In 2010 alone, foreign investment in the U.S. rose 49%, while falling in Europe and other developed nations. The biggest investors are from Europe, Japan and Canada. U.S. demographics contrast strongly with Korea, Japan and Germany, all countries aging more rapidly than the US. Experts say that investors are loath to invest within China due to the government’s authoritarian nature. Rising wage demands in China threaten its position as the low-cost producer of many consumer goods. Some economists predict that Mexico-based labor will soon be
more economical than China’s. There’s even, particularly in resort areas, a real estate boom with foreign buyers seeking to buy in at the bottom of the market. Offshore interests are also investing in energy sector as oil prices remain high enough to make prospective drilling for oil and gas produce a positive return. European regulations make shale gas drilling a suspect proposition, whereas in the U.S. prospects are much easier to turn into producing fields.
expansion of the Chevron plant in Pascagoula. Severstal, a Russian steel maker spent $550-million in Columbus on an expansion of its mini mill which supplies flat rolled products to automotive stampers. A similar amount went for a pipe operation for Schulz Extruded at Tunica, which supplies the oil and gas industry. The state is putting in a $570-million upgrade of its Gulfport port facilities. Perhaps surprisingly, Mississippi’s major export in 2011 was oil, accounting for almost a quarter of its exports. An economic outlook published this spring by the Mississippi Institution of Higher Education System predicts Mississippi won’t reach the level of its payroll employment prior to the recession until 2016.
A National Chamber of Commerce study has found that states that boost exports, foster innovation, provide business with certainty and reasonable taxes, insist on educational excellence and prioritize infrastructure are leading in job creation and economic growth.
30
AL CONSTRUCTION NEWS
AUG/SEP 2012
A National Chamber of Commerce study has found that states that boost exports, foster innovation, provide business with certainty and reasonable taxes, insist on educational excellence and prioritize infrastructure are leading in job creation and economic growth. “The federal government has something to learn from these enterprising states,” said U.S. Chamber President and CEO Thomas J. Donohue. “If you want jobs and growth, you need to create an environment where private-sector businesses, entrepreneurs and capital are welcome and can grow and thrive.” Here’s a look at some of the states surrounding Alabama and their economic growth prospects: MISSISSIPPI A state that has often trailed Alabama, Mississippi, is enjoying a run of industrial expansion in recent years. Over $377 million in new investment since the beginning of 2012 is adding to the $3.1 billion in new projects announced last year. The largest is a $1.4 billion
GEORGIA Dean Robert Sumichrast of the Terry College of Business at the University of Georgia, in a speech earlier this year, reported that Georgia lost 360,000 jobs during the recession. “We must replace real estate development with other job generating economic activities. Too much of Georgia’s growth came to depend on a never-ending cycle of inmigration and real estate development which, after forty years, appears to have run its course,” said Sumichrast. “The population growth driver stopped working during the Great Recession, and we should not make major investments to reinvigorate it.” Baxter International recently decided to build its largest U.S. plasma processing plant east of Atlanta at Social Circle with a cost of $1-billion. Like the recently announced Caterpillar plant near Athens, Baxter’s announcement promises thousands of more skilled, higher paying jobs, according to Rajeev Dhawan of the Georgia Economic Fore-
Caption Goes Here Growth in the Southeatern States.
casting Center. “This is what I call hightech manufacturing, which is even better than the durable goods kind. Caterpillar’s future will be determined by world grain prices and China’s health, and the Baxter plant will be immune to that.” Georgia is pumping nearly $200-million into the modernization of its Port of Savannah, recognition that Georgia has identified access to water as a challenge for future economic growth. The state has recently enacted a broad array of tax cuts to promote a better business climate. Elimination of taxes on energy for manufacturing, sales tax holidays to support retailers and reformation of tax incentives for agriculture have been approved.
TENNESSEE The Southern state which started the automotive assembly move to the area, with Saturn’s Spring Hill facility and Nissan at Smyrna, has seen the reopening of the Spring Hill plant after major modifications at a cost of $61 million which turned it into a flexible manufacturing facility employing 700. Tennessee is also the site of the Volkswagen Assembly plant which has opening labor costs of some $27 an hour, comparable with those of Kia in Georgia and Hyundai in Montgomery, and roughly half that of Midwest auto firms. It’s the firm’s second foray into the U.S., following the closure in 1988 of a plant in New Stanton, Pennsylvania. For the third straight year, the state has
been named number one for automotive manufacturing strength by Business Facilities magazine, an economic development publication. The above-mentioned Magneti Marelli’s expansion at Pulaski will create some 800 news jobs for its $53.7-million investment for automotive lighting systems. LOUISIANA Louisiana has led the way in export growth for the U.S., mainly on its strength in the oil and gas field. Additionally, the state was ranked number 2 in income growth by the National Chamber Foundation. Chief Executive’s best/worst states for business has ranked Louisiana at 13th, up 32 spots in the past four years. Youthful Republican
AUG/SEP 2012
AL CONSTRUCTION NEWS
31
Governor Bobby Jindal has pushed for more business friendly policies in the state. With a foundation in the extractive industries, Louisiana has profited from high oil prices for its exports. Additionally, Dyno Nobel is studying an $800 million ammonia plant expansion in Jefferson Parish, adjacent to New Orleans, which could produce as many as 500 direct and indirect jobs, the Louisiana Economic Development office reports. A $120-million plant was announced in April, which will produce an additive for latex paints and will create more jobs for Plaquemine Parish, south of New Orleans A Coast Guard order for up to 500 boats has seen an expansion of Metal Shark Boats in Jeanerette. The seven year project and a nearly $2 million capital investment will create more than 100 new jobs. International Paper is putting $44 million in capital investment with upgrades for its Bogalusa mill, which will help the plant keep 411 jobs. All of Louisiana’s new plants and expansions aren’t in manufacturing, however. Earlier this year, Sutherland Global Services, which provides business process outsourcing, cranked up its ninth facility in the U.S. at Alexandria, which will produce 600 new positions.
Links to Economic Development News for Southeastern States: GEORGIA: www.georgia.org TENNESSEE: www.tn.gov/ecd MISSISSIPPI: www.mississippi.org LOUISIANA: http://tinyurl.com/79mrr5h FLORIDA: http://tinyurl.com/c6omzym (Note Florida has a decentralized approach to economic development. The above site links to various local economic offices for various parts of the state).
IT’S A WASTE TO WASTE MONEY ON WASTE. No business can afford to waste money on waste. Sadly, many businesses don’t know what they’re actually paying, or who is even in charge of it. Someone signed a contract long ago, the bills keep coming and nobody worries about it. But most companies’ contracts have built in rate increases. So you may be paying a lot more than you should. At Alabama Dumpster Service, we have the dumpster or roll-off container that’s right for your business and your budget. Our customer service is unsurpassed and you can trust us for timely delivery and pick-up. So take a second look at your trash removal costs and call us. We’ll make sure you’re not wasting money on waste.
FRONT LOADS | ROLL-OFFS | COMPACTORS | PORTABLE RESTROOMS AlabamaDumpster.com | 334-288-1500 follow us on facebook
Top Ten Potential Construction Projects for Southeast Location
Stage
Project Value
Sasol GTL Facility
Westlake, LA
Proposal
$4 billion
Resort World Miami
Miami, FL
Masterplanning
$3 billion
Washington Coal Fired Power Plant
Sandersville, GA
Proposal
$2.1 billion
Fruitville Road Mixed Use
Sarasota, FL
Proposal
$1 billion
Baxter International Mfg
Social Circle, GA
Proposal
$1 billion
Norcross Entertainment District
Norcross, GA
Proposal
$1 billion
VA Medical Center
New Orleans, LA
Drawings
$845 million
National Jazz Center
New Orleans, LA
Masterplanning
$716 million
Atlanta Falcons Open Air Stadium
Atlanta, GA
Proposal
$700 million
Palm Beach County Solid Waste Energy Facility
West Palm Beach, FL
Design Development
$700 million
Project Title
Source: Reed Construction Data
YM C A | HO O VE R
EN GI N E ER I N G
P ARKS IDE STAD I UM
P R O CU R EMENT
BROOK WOOD WOMEN’ S MED I C AL C ENTER
C ONST RU C T I ON
www.robinsmorton.com
O LIN CH LO R A LKA LI M E M B R A N E CO N V E R S IO N
DESIG N-BUILD
ED BACK & KEN FRIDLEY Dr. Ed Back, director of construction engineering program and Dr. Ken Fridley, head of civil, construction and environmental engineering at the site of the fourth building on the Engineering and Science Quad.
ON THE MOVE
U A of
T H E UN I V E R S I T Y OF AL A B A M A ’ S Construction Engineering Degree Program Continues Its Growth written by HUGH J. RUSHING | photography by STEVEN DEVRIES
Despite the recessionary times in which the construction industry finds itself, the six-year-old University of Alabama’s Construction Engineering program has thrived. Enrollment is growing, new buildings to support research and lab work are opening, graduates are finding meaningful jobs and interest in the degree-granting program that merges construction management and engineering is expanding.
AUG/SEP 2012
AL CONSTRUCTION NEWS
35
S
INCE THE PROGRAM’S BEGINNING IN 2006 neers with cross training in both construction management as it has grown from an enrollment of 25 to 122 at the well as the engineering design element of the construction probeginning of the 2011-2012 school year. It’s the third cess. Historically, the combining of the design and execution dislargest program of its kind and the ciplines hearkens back to the “master builder” largest in the southeast. “Incoming engineering concept that presided over the building of the students have a genuine Dr. Ken Fridley who heads the department great cathedrals of Europe. of civil, construction and environmental engi- interest in the construction Dr. Ed Back, director of the Construction neering says he likes to think of the Univer- industry because they can Engineering and Management program, says see the physical product in students “get it” when it comes to construction sity of Alabama College of Engineering as a the built environment all “brain magnet.” engineering. “Incoming engineering students around them. Freshman “I attribute the success of our construction have a genuine interest in the construction surveys have indicated that industry because they can see the physical engineering program to our partnership with some two-thirds have an the construction industry. We, very early on, sat product in the built environment all around interest in construction.” down with contractors and listened to what they them. Freshman surveys have indicated that needed as we designed the program to produce some two-thirds have an interest in constructhose skills in students that will be in demand,” Fridley says. With tion.” Another reason for the program’s success is that word of the confidence gained from that close collaboration, the construcemployment success spreads quickly. “Students talk to each other, tion engineering program can produce opportunities for graduates and construction management is a field with many opportunities.” in finding real-world employment when they graduate. Thirdly, Back says graduates of the UA Construction Engineering Industry told university officials that there was a need for engiprogram can take their Professional Engineer licenses after four
36
AL CONSTRUCTION NEWS
AUG/SEP 2012
photography by STEVEN DEVRIES
PREPARING STUDENTS Dr. Derek Williamson (center) and Dr. Paul Ray (right)
years of progressively more responsible work experience. “The construction industry needs registered professional engineers, and our students come to those employers with their degree and with their passage of the Fundamentals of Engineering exam prior to graduation.”
A PART OF ENGINEERING SCHOOL GROWTH Dr. Charles Karr, dean of the College of Engineering in Tuscaloosa, points out that the entire college of engineering has been in a growth spurt. “We’ve doubled our enrollment in the past seven years by expanding our recruitment beyond the best and brightest students from Alabama to going after students from outside the state. The best way to reverse a brain drain is get kids acquainted with the advantages of Alabama when they are 18 and just starting their college careers.” Along with enrollment growth has come new facilities. The South Engineering Research Center (SERC) opened its doors earlier this year. It is the first building dedicated solely to engineering since 1960 when H.M. Comer Hall was completed. The SERC’s focus is on engineered systems, and features some of the nation’s most
photography by STEVEN DEVRIES
UA Construction Engineering Graduates Talk of Their Experience One of the most helpful classes that I took in college was Construction Scheduling. Working in an Assistant Project Manager’s role, I see the importance of the schedule on a daily basis. I was able to come into work and understand the different aspects of the schedule and how to implement a successful schedule. Our class at UA was taught by Dr. Ed Back, who with real world experience, was able to effectively relay the role of the schedule in the industry and understanding that the schedule is one of the main driving forces to projects in today’s economy.
Nick Woychak, Civil Engineer, Brasfield & Gorrie, LLC
AUG/SEP 2012
AL CONSTRUCTION NEWS
37
ON THE SCENE Dr. Ken Fridley in front of wall specimen prepared for testing. (Right) Dr. Ed Back inside large scale structures lab.
photography by STEVEN DEVRIES
Construction Engineering is about gaining the ability to manage both engineering and construction. There’s a thick red line between the two in the “real world” and for someone to understand the two is admired. After taking courses like Construction Safety, Construction Estimating and Scheduling, Engineering Economics, Legal Aspects of Engineering, Project Management and many base courses from the Civil Engineering side of things, I can confidently interact on all levels with the engineers, project controls personnel, upper management and craft in the field. And even though some courses came easier to me than others, all Construction Engineering professors seemed to bend over backwards to embed the leanings of each course to allow me to achieve the end product, the degree and ultimately the goal, a career in the degree of which I studied, Construction Engineering. Another thing this department stands out from among the rest is the mandated Summer Internship course. With this course, I was able to get my foot in the door with a company I never plan to leave.
Austin C. Williamson, Field Engineer/Area Superintendent, Jacobs Engineering
I really like the project controls aspect of the Construction Engineering Program at UA. I ended up landing a job with Jacobs Engineering as part of the program management team for the GSA in Washington. I use my coursework in scheduling, construction finance, and construction management in my work every day.
Jennifer Hetherington, Project Engineer, Jacobs Engineering
AT A GLANCE
UA’s Bachelor of Science in Construction Engineering Program Fully accredited since 2007. One of 12 construction engineering programs in the United States with as many as 8 more currently seeking accreditation. Third largest construction engineering program in the United States. advanced labs in terms of structural, engine, energy and electromechanical engineering. Designed by Davis Architects and built by Gary C. Wyatt General Contractor, LLC, the 175,000 square foot structure cost some $70 million, according to Dr. John M. Wiest, associate dean for research and graduate studies. “It’s the sort of structure where we can build and break things, so that when they are built in the real world they won’t break,” Wiest laughs “…One of the three of the largest research labs is the Large Scale Structures, which supports the building’s theme of ‘engineering on display’,” Wiest says. “We’ve made it so people can look in,” he said. “There are windows with ballistic glass which allow even casual passersbys to see what we are up to.” Wiest adds that the lab is intentionally designed to be as flexible as possible. “It requires looking at crystal balls to envision what the next fifty years might bring. We’ve made much of the testing equipment as movable as possible so that it can be reconfigured when necessary.” “This lab is going to have a huge impact,” said Dr. Ken Fridley, professor and Department Head of Civil, Construction and Environmental Engineering. “Few labs with this capacity are right on a campus.” The lab features an innovative hybrid testing system working in sync with the new 17-feet-by-17-feet uni-axial seismic simulator, or shake table. It will test up to two-story buildings with a full capacity of approximately 50,000 pounds. Installed on a 32-inch concrete slab, which exceeds one million pounds, the shake table will move in one direction to replicate many of the world’s largest recorded earthquakes. The hybrid testing system is unique in providing real-time theoretical modeling coupled with physical seismic lab simulation as it is operating, and the feedback adjusts the simulation immediately. With the largest shake table in the Southeast, Fridley and others
Largest of just three construction engineering programs in the Southeast. Enrollment has grown from 25 in 2006 to 122 in last year’s entering class. Graduates over the past three years have a 95% placement rate. 75% are employed in the construction industry; 18% are attending graduate school.
are excited to debut this distinctive system that will dramatically improve earthquakesimulation research for buildings and structural engineering as a whole.
The Large Scale Structures Lab features two 15-ton cranes, large hydraulic actuators for testing and reconfigurable reaction blocks into the million-pound-strong floor.
PREPARING STUDENTS FOR REAL WORLD CHALLENGES Construction engineering education is not carried on in a vacuum. Dr. Back says that there are significant interactions between faculty and industry as well as students and industry. “We have guest speakers to our classes, a high number of internships, employment co-op programs and we encourage our students to take advantage of these opportunities. It makes them better prepared when they do graduate and enter the work force.” Back says that every student wanting an internship or a co-op position has been able to find one. Students are actually living and learning within a construction zone, Fridley reports. “We use the construction going on right here on campus as a connect between our student’s academic learning and real world experience.” UA’s faculty is required to make research an important part of their academic life. “We have many contracts which provide opportunities to interact with practitioners, both for the faculty and students,” Back observes. “We have a funded project with the Construction Industry Institute, which has a research advisory board with some 18 major corporations represented which enables our students to gain valuable realworld experience.”
PARTNERING WITH CONSTRUCTORS AND THEIR ASSOCIATIONS Without the involvement of industry in their programs, neither Fridley nor Back believes the program could have achieved the success it has in the short time it has been up and running. A founding partners group was instrumental in focusing on what specific skill sets should be taught to undergraduates. Senior design projects are often judged by industry representatives, bringing a real world flavor to an important part of the student’s final year of school. Ken Fridley points to side-by-side contact that students often have, which helps integrate their engineering education into a larger picture of the world outside the
40
AL CONSTRUCTION NEWS
AUG/SEP 2012
photography by STEVEN DEVRIES
I believe that the Senior Design course I took really prepared me for the real world and was the most beneficial class that I took while at UA. It took everything that I learned from all of my classes and combined it. My team was given the task of designing an apartment complex. Our deliverables included demolition, grading, drainage and utility plans along with a baseline construction schedule and a preliminary cost estimate. That class was as real world as it gets because we had deadlines, had to make sure the deliverables where what was asked for and also made sure we delivered a quality product to our client, the professors.
Cody Moore, Construction Engineer, URS Corporation Everyone who graduates from this program learns to look at problems as potential opportunities to further gain knowledge and experience. To name a few specifics, I have designed footings for mock ups that would normally have to be designed by an engineer. The project I am on is 100% BIM coordinated, and I manage the model as well as the coordination meetings with the subcontractors. I track all of our equipment rental costs and create projections for future costs. I perform quality control inspections on site and highlight any unwanted risks. I contribute to new LEAN construction ideas on ways we can perform the work more efficiently.
William Weeks, Project Engineer, Hoar Construction
Dr. Ed Back demonstrating UA research into innovate repair techniques for concrete rehabilitation.
DEAN CHARLES KARR welcomes increasing numbers of incoming students to the construction engineering program each year.
From the Dean To our partners in construction engineering, Ever since trustees instructed the faculty to teach engineering to help the expanding railroad industry 175 years ago, the University of Alabama has strived to meet the needs of industry. With that same spirit, the College of Engineering began a construction engineering program in 2006 in response to the needs of the construction industry, and our success would not be possible without your support. We set out to provide the construction industry professionals with a background of engineering design paired with construction management and business to provide more effective, efficient, safe and sustainable solutions to projects. We hope you have found our graduates bridge the gap between design and construction on your companies’ job sites. UA’s Construction Engineering Founding Partners Program was formed when the program was established through dedicated financial support of nearly $1.5 million by more than 16 individuals and corporations. The support has continued not just financially, but also in partnering with our faculty and students to help shape our teaching and research. Also, your companies and your peers around the country are hiring our construction engineering graduates, finding they are more than capable for the challenges given to them. The College of Engineering fully supports construction engineering, and we look forward to working with your firms in the years ahead. Thank you for your support, advice and encouragement. Sincerely, Charles L. Karr, Ph.D., Dean
University. “We want our students to have a wide-world view of how engineering interacts with manufacturing for instance. Students need to know if they work on the design of an automotive assembly plant that the purpose of the plant is to assemble autos in the most efficient manner possible. It goes beyond simple designing and constructing buildings.” Dr. Back also reports that the program has received support from industry associations such as ABC (the school has a student chapter of ABC), has garnered significant research grants from industries and has had its research published and publicized by major journals and publications. “All of this helps us get the word out about what we are doing to prepare the next generation of great construction engineers here at the university,” said Dr. Back.
A BRIGHT FUTURE FOR CONSTRUCTION ENGINEERING GRADUATES The University has a good track record in placing its Construction Engineering graduates in a number of fields. Dr. Back
photography by STEVEN DEVRIES
points out that UA graduates are currently working in oil and gas, power generation, manufacturing, infrastructure, transportation and the commercial construction fields. “There’s a wide range of sizes of firms our graduates are working in—from small to large.” Back explains that even within a tough economic environment there are still plenty of opportunities. “We have to focus on our nation’s infrastructure, sustainable solutions for our built environment, power generation, water delivery, safe and affordable housing and many others. Whether we argue that these should be funded by government or public/private partnerships, there are still issues which we must address. I see the glass half-full rather than half empty.” Ken Fridley points out that some students may not have as many offers as they might have had before the Great Recession. “It makes our students more determined to be problem solvers and be serious about their efforts. They recognize that you have to be on top of your game in times like
these, and we are encouraging them in this.” As an example, Back points out that the University joined a group of ten programs in Construction Engineering when its program received its accreditation. “Now there are 12 programs in place and five more in development. Obviously, this is a field in which there’s a demand for skilled and talented young people.” In the past engineering was seen as a particularly technical vocational field, Fridley points out. “That’s not what the profession is calling for now. Engineers in the future are going to need broad exposure to other business, legal and communication education. The foundation is technical, of course, but there are many more features which are required and which we bring into our program to make our students better engineers and employees and citizens.”
AUG/SEP 2012
AL CONSTRUCTION NEWS
43
ABC of Alabama & Lean Business Network present:
“I am truly confident that the only way that we can thrive in the future is to find ways to eliminate waste of labor, time and materials.” – Richard Drennen For years manufacturing and service industries have increased their levels of productivity, quality, and profitability by applying LEAN principles. Currently, the construction industry is going through a revolution due to the economic climate. Profit margins for all companies are being reduced to the point that the risk/ reward ratio has no relationship to the project cost. In order to make this kind of progress, organizations have to start understanding the Lean Principles and apply them to their businesses. The mechanics of lean systems (kaizen, pull systems, flexible cells, and so on) are simple in concept and thus appear easy to implement. Yet, few organizations are able to implement “lean” the first time they try.
Single Class Session (intro course):
10-course package:
20-course package:
Single Class Session (intro course): Single session, 2 hours, offered multiple times Offered at scheduled times statewide $75 per person Max of 60 attendees – Min 20 attendees
10-course package: 10 courses over one-year period – 2 hour sessions 2 employees per company – shared experience $1500 per company Max of 25 companies – Min 15 companies
20-course package: 20 courses over one-year period – 2 hour sessions 2 employees per company – shared experience $2500 per company Max of 25 companies – Min 15 companies
visit www.abc-alabama.org/lean.aspx to learn more, and sign up your team to join us.
LEGAL &
FINANCIAL • DIGEST •
p. 46
p. 47
Huie, Fernambucq & Stewart LLP
Sellers, Richardson Holman & West LLP
p. 50
Ogletree Deakins PC
p. 48
p. 49
Wallace Jordan, Ratliff & Brandt LLC
p. 51
Porterfield, Harper, Mills Motlow & Ireland, P.A.
Burr & Forman LLP p. 51-52
Boult Cummings LLP
AUG/SEP 2012
AL CONSTRUCTION NEWS
45
Reduction of Liability Under New Road Builder Statute
T
HIS YEAR THE ALABAMA legislature enacted Act 2012-225 to address liability concerns of contractors and road builders that contract with the state or other public entities for road construction. The law makes great jgaddy@huielaw.com jduncan@huielaw.com strides to ensure road builders will not be held responsible for the state’s engineering Joe Duncan is a partner with Huie, Fernambucq and design decisions. The law codifies the Jeremy Gaddy is an associate with Huie, Fer& Stewart, in Birmingham. His litigation practice contractor’s responsibility to follow plans nambucq & Stewart, in Birmingham. His practice includes general liability, coverage and liability and specifications developed by engineers includes cases involving construction issues issues associated with all phases of construction unless doing so will result in an obviously as well as other areas of general civil litigation at both the trial and appellate court levels. He dangerous condition. If the contractor fails and product liability. He holds a B.S. degree in holds a B.A. degree from Auburn University and a to follow the plans and specifications, or if it Industrial Engineering from Georgia Tech and a J.D. degree from the University of Alabama. Joe creates a latent defect, then the contractor J.D. degree from the University of Alabama. is AV rated by Martindale-Hubbell. can be responsible for damages resulting from those conditions. Importantly, the law removes contractors’ liability for conditions that Importantly, the law removes contractors’ liability for conditions that arise from deciarise from decisions within the engineering discretion of the sions within the engineering discretion of the state and for issues that lie outside of state and for issues that lie outthe scope of the project. For example, the law addresses allegations that a contractor side of the scope of the project. should have made improvements to the shoulder of a roadway even though the project For example, the law addresses did not include work related to the shoulder. allegations that a contractor should have made improvements to the shoulder of a roadway even that are proximately caused by the state or though the project did not include work county’s failure to maintain the roadway related to the shoulder. following construction. The law removes The new law may require changes to concontractors’ liability for claims that are tractors’ business practices as they relate proximately caused by the county or state’s to situations in which a contractor discovfailure to fulfill their own statutory and comers a dangerous condition or issues that are mon law responsibilities. not specifically addressed by the plans. The Along with the revised statute of repose, statute permits a contractor to request, in passed in 2011, the contracting community writing, direction as to the proper response hopes these new laws will help limit claims Birmingham Office or approach to these situations from the against road builders for issues in which 2801 Highway 280 South, Suite 200 head engineer. The contractor is then not they are not responsible. Birmingham, Alabama 35223 responsible for the state’s decision as to how If you have any questions about how the to respond to the situation. new law affects your company’s potential Phone: 205.251.1193 Finally, a number of contractors have liability, please feel free to contact us with Fax: 205.251.1256 expressed frustration in defending claims any questions.
46
AL CONSTRUCTION NEWS
AUG/SEP 2012
Alabama Makes Significant Progress in Simplifying Filing of Sales Tax Returns ON MAY 3, 2012 ALABAMA SENATE Bill 459 was signed into law by Governor Bentley with hopes of improving the administrative burden for filing sales, use and rental taxes in the state of Alabama. In addition to creating filing efficiencies for taxpayers, the state, cities, and counties could see increased compliance making this bill a win/win for taxing authorities and the business community.
EXISTING FILING REQUIREMENTS Alabama’s existing filing requirements require businesses with nexus in multiple cities and counties to file separate sales, use, and rental tax returns for each individual location, with exception for those municipalities which elected to be administered by the ADOR or by a contract auditing firm. Alabama is currently the only state which allows each city and county to elect to administer and collect its own sales, use or rental tax. Note, although the new legislation will allow for streamlined filing of sales, use, and rental taxes; taxpayers may continue filing these returns under the existing requirements.
STREAMLINED SALES TAX (SST) Under the new law the Alabama Department of Revenue must develop and make available a system that allows any taxpayer to file and make payments for all of its Alabama state, city, or municipal sales, use, or rental tax returns through an electronic single point of filing program. The system will be known as the Optional Network Election for Single Point Online Transactions
│john.west@srhwcpa.com
matt.griffith@srhwcpa.com Matt serves as a Senior Tax Manager at the firm. He received his Bachelor’s degree from the University of Tennessee-Chattanooga and Master of Accountancy from Auburn University. Matt has worked extensively with contractors, including performing technical reviews of many of the firm’s construction clients’ tax returns and is responsible for internal training programs related to taxation of construction contractors. He is a licensed CPA in Alabama and is a member of the American Institute of CPAs and the Alabama Society of CPAs, Associated Builders and Contractors, and is also a board member of the Construction Financial Management Association.
also known as the “ONE SPOT” system. The ONE SPOT system shall allow for sales and use tax, or lease and rental tax return filing and tax remittance only, and may not provide for the administration or enforcement of local sales and use taxes. The electronic tax returns must contain all information included in the standard multiple jurisdictional tax returns developed pursuant to Section 11-51-210, Code of Alabama 1975. According to the new legislation the ONE SPOT system must be made available for use by any taxpayer for tax periods after September 30, 2013, provided the taxpayer complies with this act and any rules promulgated by the department for the administration of the system.
John is a Tax Partner at the firm and serves as the relationship partner on many of the firm’s construction contractor audit and tax engagements. John is a graduate of Birmingham Southern College with a degree in Business Administration and of the University of Alabama with a Master’s Degree in Accounting. He is a licensed CPA in Alabama and is a member of the American Institute of CPAs, the Alabama Society of CPAs, The American Subcontractors Association of Alabama, and Associated Builders and Contractors.
We Recommend: http://tinyurl.com/bom7epa
Birmingham Office
216 Summit Boulevard, Suite 300 Birmingham, AL 35243 Phone: (205) 278-0001 Fax: (205) 278-0003
AUG/SEP 2012
AL CONSTRUCTION NEWS
47
Alabama Legislature Amends Law Requiring Timely Payment of Public-Works Contracts ALABAMA’S LEGISLATURE AMENDED Ala. Code § 39-2-12 concerning publicworks contracts to (a) prohibit awarding authorities from increasing the time for payment for completed work beyond 45 days; (b) add interest to amounts approved and unpaid; (c) require certification of availabilLeft to Right: Michael L. Jackson, Thomas A. McKnight Jr., Cecil H. “Coy” McCoy, Jr., ity of funds by authorities; and (d) provide Oscar M. Price III, R.Dale Wallace, Jr., Larry S. Logsdon recovery of attorneys’ fees and expenses associated with nonpayment. Previously, partial payments The amendment halves the time for contractors to return overpayments to were required as work progressed the Alabama Department of Transportation (“DOT”) or an associated county “at the end of each calendar awarding authority. month, or as soon thereafter as practicable, on the estimates made and approved by the awarding authority.” they are now subject to the same interest is a source that won’t be available until afThis allowed indefinite delay for payments requirements as partial payments. ter the execution of the contract (such as not determined “practicable.” The amendThe amendment also allows recovery of a grant, award, or reimbursement from a ment deleted the “practicable” language and costs of collection of nonpayment. Congovernmental entity). requires partial payments within 45 days after tractors may sue the party obligated for the authority accepts that the estimate and the payment claimed and seek amounts the terms providing for partial payments have due, interest, attorneys’ fees, court costs, been fulfilled. If authorities don’t pay within and expenses. 45 days, contractors may collect interest at The amendment halves the time for the rate for taxes underpayments, currently contractors to return overpayments to about 3%. The amendment prohibits conthe Alabama Department of Transportractually extending the 45-day window. This tation (“DOT”) or an associated county doesn’t apply to contracts administered by the awarding authority. Previously, a contracAlabama Building Commission. tor had 120 days after notice to remit the The amendment still requires presentoverpayment. The amendment cuts this Birmingham Office ing authorities with proof of advertisement to 60 days. Failure to remit overpayments First Commercial Bank Building before the final payment becomes due, but within 60 days results in disqualification 800 Shades Creek Parkway, Suite 400 now provides that after presentment, the from bidding on DOT contracts and interBirmingham, AL 35209 terms of payment may not be amended. est on overpayments. Payments after completion must be made Finally, the amendment requires conPhone: (205) 870-0555 within 45 days (previously 40 days), but tracts to state whether the source of funds Fax: (205) 871-7534
48
AL CONSTRUCTION NEWS
AUG/SEP 2012
Health Care Reform Update NOW THAT THE SUPREME COURT has upheld the constitutionality of the Patient Protection and Affordable Care Act (often referred to as “Health Care Reform” or “Obamacare”), employers offering group health plan coverage to their employees must take affirmative steps to ensure compliance with the Act.
NOW IN EFFECT
Just Around the Corner: Several components of the Act will become effective later this year or in early 2013. A Summary of Benefits and Coverage must be provided to each plan participant, and those eligible to enroll, for open enrollment periods beginning on or after September 23, 2012.
Many provisions of the Act are already in effect, including: the extension coverage to adult children under age 26, the elimination of lifetime limits, the restriction on annual limits, the elimination of pre-existing condition exclusions for children under age 19, and the external appeals process. Nothing in the Supreme Court’s decision affects these provisions and they continue to apply.
All non-grandfathered group health plans must cover comprehensive women’s preventive services with no cost sharing for plan years beginning on or after August 1, 2012.
2014 AND BEYOND
Contributions to flexible spending accounts must be capped at $2,500 per year beginning January 1, 2013).
Many of the most discussed and controversial aspects of Health Care Reform come into effect in 2014. Much attention has focused on the “pay or play” tax, will become effective January 1, 2014. This generally requires employers with 50 or more employees (or “full time equivalents”) to provided specified minimum levels of health plan coverage within certain cost parameters to their employees or pay an excise tax. Other new provisions include elimination of the pre-existing condition exclusion for all participants and maximum waiting period for new enrollees of 90 days. In 2018, “Cadillac” plans (plans deemed to provide excess value) will be subject to a 40% excise tax on the excess value of the coverage. During the next few months, employers will want to review existing plans to confirm they are complying with the rules now in effect, and focus on what needs to be done to prepare for the future.
All group health plans must pay a per participant fee for plan years ending on or after October 1, 2012. The fee starts at $1 per participant for the first year and increases in subsequent years.
│lhinkle@burr.com Logan Hinkle is a partner in Burr & Forman LLP’s Business section with a concentration in employee benefits, executive compensation, ERISA, Health Care Reform, tax exempt entities, and general tax matters. His clients include numerous construction and manufacturing clients in Alabama and throughout the United States.
The value of group health insurance must be reported on Form W-2. This applies for W-2 covering 2012, which are issued to employees in 2013. Employers must provide notices regarding the availability of insurance exchanges in March of 2013.
Birmingham Office
420 North 20th Street, Suite 3400 Birminghman, AL 35203 800-GET-BURR Mobile Office
RSA Tower, 11 North Water Street, Suite 22200 Mobile, AL 36602 800-346-5106 Montgomery Office
RSA Tower, 201 Monroe Street, Suite 1950 Montgomery, AL 36104 877-636-0422
AUG/SEP 2012
AL CONSTRUCTION NEWS
49
Alabama Immigration Act THE BEASON-HAMMON ALABAMA Taxpayer and Citizen Protection Act, or the Alabama Immigration Act, went into effect on January 1, 2012. The future of much of the Act is uncertain due to ongoing judicial review, but the law’s prohibition on hiring or employing unauthorized workers, as well as its E-Verify requirements, remain intact. While the Act still requires businesses to use E-Verify, the state legislature recently timothy.palmer@ogletreedeakins.com alysonne.hatfield@ogletreedeakins.com amended the Act to ease the burden on state contractors and subcontractors. Ms. Hatfield graduated cum laude from the Originally, the Act required that state Mr. Palmer is an experienced litigator speUniversity of Alabama School of Law in May contractors must provide a sworn affidavit cializing in both employment litigation and 2002. While at the University of Alabama, she of compliance and confirmation that the general civil litigation in state and federal was a senior editor of the Alabama Law Review, contractor uses E-Verify, and that state courts. His interest in litigation began early and was an oralist for the Phillip C. Jessup contractors give notice of Alabama’s imin his legal career when as a law student at migration requirements to its subcontracVanderbilt University, Mr. Palmer won the Har- International Moot Court team. Ms. Hatfield joined Ogletree Deakins in August 2003, and her tors. Subcontractors of any state contract lan Dodson Moot Court Competition and was practice focuses on general labor and employtier were required to prepare and submit appointed to the position of Associate Justice ment litigation. upon request similar compliance affidavits of Vanderbilt’s Moot Court Board. (and likewise inform their subcontractors of the law’s requirements). While this seemed straight-forward enough, the Act failed to define what constituted …the Act failed to define what constituted a “contract.” This quickly led to absurd a “contract.” This quickly led to results, and businesses never previously considered “state contractors” were treated absurd results, and businesses as such due to the most minute business dealings with state funded organizations. never previously considered “state contractors” were treated as such due to the most minute business person or business must actually have been dealings with state funded organizations. awarded a portion of an existing contract The recent amendments, signed into law with a state-funded entity, and that “colon May 18, 2012, eliminate the affidavit relateral persons or business entities hired quirement. Instead, state contractors and by the subcontractor” are not considered subcontractors are not to knowingly hire subcontractors under the Act. Penalties or employ unauthorized aliens, and state include a wide array of business license recontractors must provide documentation of vocation, but businesses will not be liable E-Verify registration to the applicable state for the hiring of any unauthorized worker or state-funded agency. To qualify, a “conif the business has enrolled in E-Verify and tract” must have been awarded by a state or used it to verify the work authorization of state-funded agency through a competitive that employee. Birmingham Office bidding process, and must include language One Federal Place confirming that contracting parties comply 1819 5th Avenue North, Suite 1000 with federal immigration law and the Act. Birmingham, AL 35203 The amendments also specify that, to be Office: 205-328-1900 considered a subcontractor under the Act, a Fax: 205-328-6000
50
AL CONSTRUCTION NEWS
AUG/SEP 2012
Promt Payment Act - The Basics. A Tool For Contractors OVERVIEW Alabama’s Prompt Pay Act provides a mechanism by which contractors should be paid promptly for work that is performed and if they are not paid promptly, allows for the possible recovery of attorneys’ fees and interest.
PROMPT PAY ACT Ala. Code § 8-29-3 provides that when a contractor performed pursuant to a contract and submits a pay request or an invoice for materials to the owner, the owner shall pay the contractor within 30 days after receipt of the pay request or invoice unless otherwise agreement to in the contract. If the owner does not make payment in compliance with this chapter, the owner shall be obligated to pay the contractor interest at the rate of one percent per month (12% per annum) on the unpaid balance due. The Prompt Pay Act also provides retainage from an owner is due no later than 60 days after completion of the contractor’s work, or substantial completion, whichever comes first. In turn, a contractor is obligated to also promptly pay the sub-contractor within seven days from payment by the owner, unless the parties have negotiated otherwise. An owner does have the right to dispute the payment request; however it must be in writing within 15 days from the disputed pay request. A contractor, sub-contractor, and sub-subcontractor are required to provide written notice within five days from a disputed pay request.
rwh@phm-law.com Heath graduated Cum Laude from the University of Alabama with a B.A. in Criminal Justice. He received his Masters at UA as well. Heath graduated from Cumberland School of Law, Samford University with a certificate of merit. Heath as a partner is fully devoted to the practice of litigation. His practice areas include: automobile, collections, employment law, insurance defense litigation, premises liability and workers’ compensation.
INTEREST AND ATTORNEYS’ FEES One of the most powerful and effective tools in the Prompt Pay Act is the ability for the party owed money to collect interest and attorneys’ fees if a civil action is filed to collect money owed.
CONCLUSION Alabama’s Prompt Pay Act was written to assure that all parties to the construction contract are treated fairly and can provide for possible attorneys’ fees and interest against those who do not comply.
ireland@phm-law.com Ireland attended undergraduate school at Auburn University. Later, he received his Law degree from Cumberland School of Law, Samford University. Ireland was an active student at both universities. He graduated Cum Laude from Auburn and Magna Cum Laude from Samford. Ireland’s practice areas include: class action defense, construction defect litigation, environmental law, legal malpractice, prison healthcare and products liability. As a partner of Porterfield, Harper, Mills & Motlow, Ireland works entirely with litigation and has achieved great success. He has received the AV rating, which is a significant rating accomplishment and a testament to the fact that a lawyer’s peers rank him or her at the highest level of professional excellence.
PORTERFIELD
HARPER MILLS MOTLOW & IRELAND PA Birmingham Office
22 Inverness Center Parkway, Suite 600 Birmingham, Alabama 35242 Phone: 205-980-5000 Fax: 205-980-5001
AUG/SEP 2012
AL CONSTRUCTION NEWS
51
Alternative Project Delivery Methods: What’s Next for Alabama?
the trend that started in the private sector and in federal contracting and have passed enabling legislation to allow state, county and local public owners to use a variety of the alternative project delivery methods. In particular, design/build and construction manager at risk methods are being used on public projects in what is now a majority of the states. Because of the limited availability of public funds brought on by the recession, other states have begun to use alternative project delivery methods to obtain private sector financing for public projects through the use of design/build/finance methods or various types of public/private partnerships sometimes referred to as “P3” or “PPP” projects. To date, with only very narrow exceptions, Alabama has yet to join the trend. Owners, contractors, subcontractors and other construction industry groups in Alabama, including the Associated Builders and Contractors, have been watching the trends in other states carefully and have begun to investigate and consider whether Alabama could benefit from having alternative project delivery methods available on public projects. Many believe that the availability of alternative methods will lead
Private owners have a wide variety of methods of contracting for design and engineering services. Depending upon the amount and timing of available funding, the dpugh@babc.com uniqueness of the project, the schedule demands for the project and a number of other David Pugh is a partner in Bradey Arant’s factors, private owners can use a number of construction and procurement practice group. different “project delivery methods”. In adHe is also a member of the firm’s litigation dition to the traditional “design-bid-build” practice group and the patents, trademarks and method, projects may be delivered using decopyrights practice group. David has represented sign/build or construction manager at risk owners, general contractors, subcontractors, methods or even more esoteric methods engineers, architects, insurance companies and such as design/build/operate, design/build/ sureties throughout Alabama and throughout The lease or design/build/finance. Recently, United States. there has been an accelerating use of the collaborative method known as integrated project delivery or “IPD”. Traditionally, delivery methods for public projects were limThe perception was that competitive sealed bidding on a design/bid/build basis was ited by law exclusively to design/ the only “fair” way to allocate limited public funding for construction services. Many bid/build. See, e.g., Ala. Code public owners became increasingly dissatisfied with this restriction and lawmakers saw § 39-2-1, et seq. (Alabama’s Pubpotential benefits to the public being lost because of the unavailability of alternative lic Works Competitive Bid Law). The perception was that competproject delivery methods on public projects. itive sealed bidding on a design/ bid/build basis was the only “fair” way to to more public projects and investment allocate limited public funding for construcin infrastructure all of which should lead tion services. Many public owners became to increased economic development. The increasingly dissatisfied with this restrictrend shows no signs of weakening, so do tion and lawmakers saw potential benefits not be surprised if future legislative sesto the public being lost because of the unsions include legislation proposing alternaavailability of alternative project delivery tive project delivery methods on Alabama methods on public projects. Consequently public projects. in the 1990’s, the federal government began experimenting with alternative project deBirmingham Office livery methods primarily on a design/build One Federal Place basis. Today, the federal government per1819 Fifth Avenue North forms a substantial percentage of construcBirmingham, AL 35203 tion projects on a design/build basis. P: 205.521.8000 A majority of the states have followed F: 205.521.8800
52
AL CONSTRUCTION NEWS
AUG/SEP 2012
A HISTORY OF MOVING ALABAMA FORWARD. The Dunn companies have proudly served Alabama and the Southeast since 1878. Our dedication to growth and progress spans five generations of family leadership. From road building to construction to real estate, we continue to enhance our services. And we approach each project with a commitment not only to our client, but also to the generations to come. dunn-companies.com
A S S O C I ATE D B U I L D E R S & C O NTR A CTO R S
News & Notes
AUG/SEP 2012
AL CONSTRUCTION NEWS
55
News & Notes Rep. Robert Aderholt (R-Ala.) represents Alabama’s Fourth Congressional District and serves as chairman of the Subcommittee on Homeland Security on the House Appropriations Committee.
A Perfect Storm One Industry’s Struggle to Create Jobs by CONGRESSMAN ROBERT ADERHOLT THERE IS LITTLE QUESTION that our nation’s economy continues to struggle, the question remains, why? Unemployment has been above eight percent for 41 consecutive months, the longest stretch of unemployment since the Great Depression. Since 2009 this Administration has heaped on more bureaucratic red tape, more burdensome regulations, more complex and overreaching laws and provided more uncertainty regarding the tax code. Together these factors have created a perfect storm. A storm that’s drowning job creators and keeping them from hiring at a time when we need jobs more than ever before. This economic downtown has hurt nearly every sector and industry doing business in
56
AL CONSTRUCTION NEWS
AUG/SEP 2012
the United States. However, few industries have felt the effects and few industries want to provide sustainable, well-paying jobs for American workers more than the construction contractors that build the American economy one job at a time. Today’s economic storm continues to rain down on job creators. While these small businesses are eager to help America’s economy grow jobs and once again prosper, another storm front is moving in and there is no relief in sight, which means there are no new jobs in sight for an industry that has lost over 1.9 million jobs in just four years. After the rain, the thunder rolls in. Like thunder, the current Administration is unpredictable and does things with a bang. In 2011 alone, 32 major regulations were imple-
mented, several of which have a direct impact on the construction industry and come with a price tag of $10 billion annually. Bureaucratic red tape and ever-changing complex regulatory environment in other industries are indirectly impacting job creators. With passage of the Dodd-Frank law the banking and financial services industries faces uncertainty that has locked credit markets and access to capital. Many ABC member firms have viable, low-risk projects or contracts that simply need funding in order to work. However overregulation in the banking sector has made qualified businesses with a great borrowing track record, a risk banks aren’t willing to take. For the construction industry, the thunder that is unjustified and unnecessary bureaucratic red tape that translates to increased costs, which if a project can get off the ground, are inevitably passed to the consumer and ultimately impact their ability to hire and expand. With thunder, comes lightening. In a flash the passage of ObamaCare ensured the storm continued for these companies. The law’s 2,000 plus pages of new taxes and complex regulations, mean small businesses must devote limited dollars and time to compliance and paperwork rather than new jobs. Unequivocally, the federal government should not be making individuals or businesses health care decisions. Instead we need common sense, step-by-step reforms that include greater choice and affordability and allow private insurers to compete for business. Instead of helping employers provide quality, affordable health care coverage to employees the new taxes, federal mandates and confusing regulatory provisions associated with ObamaCare have become another burden affecting ABC member companies’ ability to hire. Like gale force winds, America’s tax code has the ability to blow
an industry in one direction or another. Since the last overhaul of the tax code in 1986, tens of thousands of pages of new regulations, loopholes and preferences have been added, amended or omitted creating great uncertainty and making it virtually impossible for ABC member firms to plan beyond the near-term. Further, the President recently announced his proposal to raise taxes on many of America’s job creators. According to the nonpartisan Congressional Budget Office (CBO), failure to extend current income tax rates will increase taxes on small businesses and hard working Americans by $4.6 trillion over ten years and by $232 billion in 2013 alone. Additionally, a recent study by Ernst and Young found that small business job creation would be hindered by President Obama’s proposal to raise taxes on about 900,000 small companies, costing more than 700,000 jobs. Raising taxes on individuals or small business that are already handicapped by the uncertain tax landscape is the wrong approach to economic recovery. We must extend the current tax rates for all families and job creators to stabilize and grow our economy, while ultimately seeking comprehensive reform to simplify our nation’s tax code in the next Congress. Until we do, small businesses will continue blowing in the wind and the storm will rage on. For nearly four years bureaucratic red tape, complex regulations, overreaching laws and uncertainty have waged the perfect storm against job creators. As the old saying goes, when it rains, it pours and it has been pouring long enough. It is time this Administration got out of the way so job creators can offer some sunshine to our nation’s struggling economy and get Americans back to work.
AWDI’S Go Build Initiative Wins National Award U.S. Department of Labor recognizes Go Build at National Summit THE ALABAMA WORKFORCE Development Initiative received the “Registered Apprenticeship Innovator and Trailblazer” award yesterday from the U.S. Department of Labor for their Go Build initiative expansion efforts. The award was presented at the “Out Educate, Out Build, Out Innovate” National Education and Action Summit in Washington D.C. The Go Build initiative is a recruitment program aimed at enhancing the image of the skilled craft trades and recruiting the next gener-
ation of skilled workers. AWDI launched Go Build in Alabama in 2010 with much success and expanded into Georgia earlier this year with a partnership with the Governor’s Office of Workforce Development. Plans are being made to expand into other states. “We are proud to be recognized by the Department of Labor for efforts with the Go Build program. This initiative has proven to be successful in both states and we are excited to continue our efforts to expand into other states and potentially go national,” said AWDI executive director, Bob Woods. The Summit was a commemoration of the 75th Anniversary of the signing of the National
Apprenticeship Act. The Summit featured leaders and stakeholders from across the National Apprenticeship System and recognized national programs that represent dedication and excellence in their efforts. Woods also served as a panelist at the event. The Go Build program initiative is a labor neutral program and has been officially endorsed by the Construction Users Roundtable (CURT), an international organization founded by construction and engineering executives representing major corporations all across the globe, as their image enhancement and recruiting program. Both the Alabama and Georgia program
AUG/SEP 2012
AL CONSTRUCTION NEWS
57
News & Notes partnered with Mike Rowe, executive producer and host of Discovery Channel’s “Dirty Jobs,” and his mikeroweWORKS. com initiative. Rowe’s website and foundation call attention to the growing skills gap while providing a comprehensive resource for anyone looking to investigate a career in the skilled trades. The Alabama Workforce Development Initiative, a 501c3 which was created to develop a successful recruitment program for skilled craft trade labor, worked to establish the Go Build brand with the goal of expanding it across the South and beyond. Go Build aims to address current and forecasted needs in skilled labor. According to the Bureau of Labor and Statistics Current Population Study, more than one third of skilled tradesmen are over the age of 50. For every four tradesmen who retire, only one is in the education pipeline to replace them.
Left to Right: US Secretary of Labor Hilda Solis; Bob Woods of Southern Company; Libby Sexton-Romano of Big Communications; Mittie Cannon of Robins & Morton; Bo Lineberry of Balch & Bingham LLP; and John V. Ladd of Office of Apprenticeship
2012 Election Update: The Obama Economic Record
58
TODAY
Unemployed Americans
12.0 million
13.1 million
1.1 million
Unemployment Rate
7.8%
8.5%
9%
Gas Prices
$1.85
$3.38
83%
Federal Debt
$10.6 trillion
$15.2 trillion
43%
Debt per person
$34,731
$48,706
$13,975
Misery Index
7.8
11.9
53%
College Tuition
$6,591
$8,244
25%
Worker Health Insurance Costs
$3,354
$4,129
23%
Food Stamp Recipients
32 million
46 million
45%
American in Poverty
39.8 million
46.2 million
6.4 million
Home Values
$169,700
$147,800
13%
U.S. Global Competitiveness
1st
5th
4 places
AL CONSTRUCTION NEWS
AUG/SEP 2012
CHANGE
Source: Reed Construction Data
INAUGURATION DAY
ALABAMA
BIZCON GREENSBORO, GEORGIA
THE RITZ-CARLTON LODGE
REYNOLDS PL ANTATION
JULY 18-19, 2013
July 18 ABC Board of Directors Meeting (Beverages & Coffee)
3:30 pm
Welcome Reception and Dinner
6:00 pm
July 19 Continental Breakfast Education Session Education Session Break Education Session Lunch Golf Tournament Closing Reception at Golf Course (Heavy Hors d’oeuvres)
7:30 am 8–9 am 9–10 am 10–10:15 am 10:15–11:30 am 11:30 am 1:30 pm 5:30 pm
RETREAT. REGROUP. RELAX. Reload. SELWOOD FARM 706 Selwood Road Alpine, AL 35014 800.522.0403 selwoodfarm.com SELwOOD FARm 706 Selwood Road Alpine, AL 35014 800-522-0403
Letters to Federal House & Senate Members On Key Legislative Issues
ABC staff sent a letter to the Committee on Oversight and Government Reform in regard to the hearing titled, “Continuing Oversight of Regulatory Impediments to Job Creation: Job Creators Still Buried by Red Tape.” The letter expressed support for increased transparency in the regulatory process and expressed concern over unnecessary regulations in the construction industry. It should be noted that Representative Mike Kelly (R-PA) quoted our letter and mentioned ABC during the hearing on Thursday 7/19/2012. ABC staff sent a letter to the Subcommittee on Labor, Health and Human Services, Education and Related Agencies of House Committee on Appropriations in regards to the FY 2013 LaborHHS appropriations markup. The detailed letter expresses support for the inclusion of several provisions in the bill that would prohibit government-mandated project labor agreements, the NLRB’s proposed ambush elections procedures and the DOL “persuader” regulation. The bill was approved by the committee. ABC staff sent a “Key Vote” letter to the House of Representatives in support of the amendment offered by Rep. Steve King (RIowa) to the Department of Defense Appropriations Act, 2013 (H.R. 5856). The amendment would prohibit funds authorized by the bill to be used to implement, administer, or enforce requirements in the Davis-Bacon Act. ABC signed onto a business group letter regarding the Office of Federal Contract Compliance Programs Notice of Proposed Rulemaking (NPRM) revising non-discriminatory work practices from Section 503 of the Rehabilitation Act of 1973. The business coalition letter expresses concern over the proposed rules due to unachievable standards and burdensome requirements.
60
AL CONSTRUCTION NEWS
AUG/SEP 2012
ABC staff July 16 sent a “Key Vote” letter to the full Senate urging Senators to vote NO on the motion to proceed to the Democracy is Strengthened by Casting Light on Spending in Elections of 2012 (DISCLOSE) Act (S. 3369). In the letter, ABC expressed that the DISCLOSE Act of 2012 is a direct attack on businesses and trade associations, threatening to silence their voices in the nation’s political process. S.3369 did not receive the 60 votes necessary to invoke cloture by a vote of 53 to 45. ABC sent a “Key Vote” letter to the House of Representatives strongly urging Members to vote in favor of H.R. 6079, Repeal of Obamacare Act. ABC has long opposed Obamacare due to onerous provisions, tax increases and other harmful regulations. ABC sent a letter to the Committee on Oversight and Government Reform in regards to the hearing titled, “Continuing Oversight of Regulatory Impediments to Job Creation: Job Creators Still Buried by Red Tape.” To help companies plan for regulatory burdens, ABC supports H.R. 3862, Sunshine for Regulatory Decrees and Settlements Act of 2012, which would promote enhanced openness and transparency in the regulatory process. ABC sent a letter to the Subcommittee on Labor, Health and Human Services, Education and Related Agencies of House Committee on Appropriations in regard to the 2013 appropriations markup. ABC supports numerous provisions of the bill that covered anticompetitive government-mandated PLAs, ambush election procedures and the H-2B visa program. ABC sent a letter to the Technology, Information Policy, Intergovernmental Relations and Procurement Reform Subcommittee of House Oversight and Government Reform Committee regarding the June 28 hearing titled, “Mandate Madness: When Sue and Settle Just Isn’t Enough.” ABC supports increased transparency and opportunities for public feedback in situations where agencies promulgate rulemakings via consent decrees and settlement agreements. Representative James Lankford (R-OK), chairman of the subcommittee, discussed this letter during the hearing and submitted it for the official record. Illustration by Name Here
ABC sent a letter to the House Subcommittee on Health, Employment, Labor and Pensions in support of the Secret Ballot Protection Act (H.R. 972), which would guarantee workers the right to an anonymous, secret ballot election when deciding whether to be represented by a union. The bill prohibits undemocratic “card check” campaigns and protects the right to make this important decision without coercion. ABC’s letter pointed out that although existing procedures for fair elections call for secret ballots by default, these procedures must be secured against politically motivated attempts to curtail, circumvent and ultimately eliminate them.
photograph by NAMEGOES HERE
Lead by Example We believe in leading by example. At
Birmingham Crossplex Birmingham, AL Photo Credit: Mason Fischer Photography
Griffin Electric, we’ve been doing that for over 34 years. We strive to be among the best in the electrical contracting industry by listening to the needs of our customers, offering cost-effective solutions, and delivering superior results. You can rely on us to take the lead on your next project. Corporate Headquarters: 116 Hopping Brook Road Holliston, MA 01746 (508) 429-8830
www.waynejgriffinelectric.com
Regional Offices: Charlotte, NC Raleigh, NC Duluth, GA Pelham, AL
THURSDAY, SEPTEMBER 20TH, 2012 5:30 - 7:30 PM ( business casual )
RSVP: jenny@abc-alabama.org
Paid for by ABC Merit PAC, 1830 28th Avenue South | Birmingham, AL 35209
Airbus Comes to Alabama
T
by JAY REED
he recent announcement that an Airbus expansion plant plans to call Alabama home was met with excitement by our industry. The wet blanket came when a union announcement declared Airbus on their radar. Not so fast declared ABC in a letter to the editor published in the Mobile Press Register. The letter was actually picked up by the other leading newspapers in Alabama and was printed statewide over a week long period. The numbers just are not there for unions to feel they can organize such a plant. The very basis of “Right to Work” is why Airbus is coming here to begin with. “THE UNION CONTENTION THAT Airbus will be unionized is more a statement of union desire than anything else. The same statement was made when Mercedes, Honda and Hyundai announced they would open plants in Alabama. Those world class companies remain nonunion, as do the vast majority of companies in Alabama. You must understand that the jobs, pay and benefits provided by such employers are appreciated by those who are fortunate enough to be hired. Unions should be expected to make a sales pitch to the Airbus employees, but the
fact is that unions have nothing to offer in return for the dues they expect to collect from employees. Forced unionization has not worked well for those states that have legalized that practice. Those states continue to lose jobs while right to work states see faster job growth. Alabama is a right to work state because the citizens of Alabama and the representatives they elect to the legislature understand that no employee should be forced to join a union or pay union dues. This stance continues to serve the state well and is partly responsible for the addition of top notch companies like Airbus that compete in a worldwide economy.” – Rick Brown, Constangy, Brooks & Smith, LLP
62
AL CONSTRUCTION NEWS
AUG/SEP 2012
Alabama Construction News felt it important to share ABC of Alabama’s President Jay Reed’s letter to the editor.
Union can try at Airbus, but probably won’t succeed The International Association of Machinists recently announced it plans to unionize workers at the Airbus plant scheduled to open 2016. But with Alabama being a rightto-work state, labor bosses are likely to have little success here. Only 10 percent of workers in Alabama belong to a union, which means 90 percent prefer not to wear the union label. Alabamians are fiercely independent and not afraid to show union bosses the door. Living in a right-to-work state, Alabama workers have the freedom to choose whether or not to join a union, and cannot be forced to pay union dues as a condition of employment. However, the benefit of freedom is not the only reason workers are giving unions the cold shoulder; they also are reaping economic benefits. The Wall Street Journal reports that rightto-work states have higher job growth and enjoy more cost-of-living-adjusted disposable income than union workers, after adjusting for their relative purchasing power. So welcome to Alabama, Airbus, into our pro-business and right-to-work environment. JAY REED President, Associated Builders and Contractors of Alabama Not only did ABC staff receive accolades from our member base in the state but the public at large even weighed in. The internet became a “blog” hub for people excited about Airbus and excited about ABC’s stance on Merit Shop in Alabama. Even Captain John McElhaney joined in the debate and even took time to write Mobile Press Register and to write ABC. We thought we could conclude with his own words.
Bottom line: Unions will destroy companies Regarding the July 11 article, “Union targets Airbus plant,” on the International Association of Machinists’ efforts to organize the workers at the new Airbus factory in Mobile: I have first-hand knowledge of their representation tactics. I watched their destruction of a once-great and proud 62-year-old company over a period of 38 years at Eastern Air Lines. Eastern is now 21 years in the aviation graveyard. I ask Tom Buffenbarger, IAM president: If his representation is so wonderful, then why in recent years did the employees at Boeing in Charleston, S.C., and mechanics at United and Northwest Airlines disenfranchise the IAM? His union does not negotiate contracts by collective bargaining; they extort them (illegal slowdowns, sickouts, wildcat strikes, etc.) They shut down Boeing for two solid months a few years ago when Boeing was already three years behind with the production of the new B-787. Without the in-sourcing of jobs by foreign companies in Mobile (Degussa, Austal, ThyssenKrupp plus numerous chemical companies), Mobile would be destitute. Where have the American companies that were in Mobile — like International Paper, Alcoa, Alabama Dry Dock & Shipbuilding — gone? Could it be that their unions pushed them beyond the point of diminishing returns? Thank God we live in a right-to-work state. CAPT. JOHN McELHANEY Daphne
photograph by SHUTTERSTOCK.COM
AUG/SEP 2012
AL CONSTRUCTION NEWS
63
Official Notice To Alabama Contractors BP has reached a settlement with the court system that involves construction related companies NORTH and SOUTH of I-10 (Zones D & C). The details of the settlement are clearly defined and will certainly impact contractors licensed in Alabama. ABC has made arrangements for Bainbridge Mims Rogers & Smith, LLP and Cunningham Bounds, LLC law firms to assist our members and the construction industry with the logistics surrounding the settlement. The map below outlines the areas included in the settlement.
For details and to determine if you qualify, contact: Nick Gaede, Jr. (205) 868-4108
“No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.�
Steve Olen (251) 471-6191
Haul road to profit. Let’s Work. Being first doesn’t make us better – building superior equipment does. As the undisputed champ of articulated hauling, Volvo is ready to help you win on every job. Look to Cowin Equipment Company for the best in Volvo haulers. Deep mud, brutal terrain, rain – it’s not going to stop you in your Volvo hauler. Visit Cowin today and start hauling in profits.
www.cowin.com
Volvo Construction Equipment 67
AL CONSTRUCTION NEWS
AUG/SEP 2012
Mobile, AL (251) 633-4020
Pensacola, FL (850) 479-3004
Madison, AL (256) 350-0006
Montgomery, AL (334) 262-6642
Atlanta, GA (404) 696-7210
Oxford, AL (256) 832-5053
Illustration by Name Here
1-800-239-2694
Birmingham, AL (205) 841-6666
photograph by NAMEGOES HERE
You’re Invited 23 rd ANNUAL
Awards Dinner featuring the 19th Annual Alabama Construction News Cornerstone Award honoring
Mr. Jim Rein
of B.L. HARBERT INTERNATIONAL THURSDAY, OCTOBER 18, 2012 | SHERATON BIRMINGHAM HOTEL | 6PM FOR RESERVATIONS, CONTACT THE ABC OFFICE AT 205.870.9768
Ivey Mechanical Company,
LLC
7354 Cahaba Valley Road Birmingham, AL 35242 205.949.6000 phone 205.949.0063 fax www.iveymechanical.com