The Contractor's Compass - November 2022

Networking for Success

A GC, a Sub, and a Supplier... All at the Same Table

Hear Real Conversations

on the Industry

Today from its Biggest Stakeholders

Construction is a relationship game, but players often work against each other instead of side-by-side. And good businesses suffer.

It’s time to have an honest conversation with everyone at the table. For the first time, three representatives of the industry’s biggest stakeholders confront the issues that make construction so challenging, but also rewarding—and, more importantly, how we can secure the future of the industry in the face of mounting obstacles.

EDITORIAL PURPOSE

The Contractor’s Compass is the monthly educational journal of the Foundation of the American Subcontractors Association, Inc. (FASA) and part of FASA’s Contractors’ Knowledge Network. FASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness.

Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. The journal is designed to equip construction subcontractors with the ideas, tools and tactics they need to thrive.

The views expressed by contributors to The Contractor’s Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association, Inc. (ASA).

MISSION

To educate and equip subcontractors and suppliers with the education and resources they need to thrive in the construction industry. Additionally, FASA raises awareness about issues critical to and about construction in the United States.

SUBSCRIPTIONS

The Contractor’s Compass is a free monthly publication for ASA members and nonmembers. For questions about subscribing, please contact communications@asa-hq. com.

ADVERTISING

Interested in advertising? Contact Richard Bright at (703) 684-3450 or rbright@ASA-hq.com or advertising@ASA-hq.com

EDITORIAL SUBMISSIONS

Contributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article. Feature articles should be no longer than 1,500 words and comply with The Associated Press style guidelines. Article submissions become the property of ASA and FASA. The editor reserves the right to edit all accepted editorial submissions for length, style, clarity, spelling and punctuation. Send abstracts and submissions for The Contractor’s Compass to communications@ASA-hq.com.

ABOUT ASA

ASA is a nonprofit trade association of union and non-union subcontractors and suppliers. Through a nationwide network of local and state ASA associations, members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team. For more information about becoming an ASA member, contact ASA at 1004 Duke St., Alexandria, VA 22314-3588, (703) 684-3450, membership@ASA-hq.com, or visit the ASA Web site, www. asaonline.com.

LAYOUT

© 2022 Foundation of the American Subcontractors Association, Inc.

Angela M Roe angelamroe@gmail.com

PRESIDENT'S LETTER

Dear Readers—

If I never see another political ad again…it will be too soon! But election day is finally behind us. Some people are happier than others, but there’s always another election. In any case - I hope you voted. It’s your chance to make your voice heard.

We are gearing up for SUBExcel, March 8-11, 2023 in Ft. Worth, Texas. While it still seems so far away, the planning starts more than a year ahead, and we’re lining up speakers and events to make the time you spend with us valuable in every way. Registration is now open, so check out the website for details. I look forward to seeing all of you there and hopefully getting to network with lots of new folks!

As November wraps up and we prepare to gather for Thanksgiving celebrations and football, I’m thankful for the wonderful people that I work with, who have made so many adjustments to keep us thriving. Thank you for your faith in my direction, heaven knows sometimes it’s just a gut feeling. Also I truly appreciate my wife, Cindy, my sons Kyle and Cody, and my beautiful daughters, Kaylee and Carly, who are all responsible and wonderful adults now. I am also blessed to have two granddaughters, Austyn and Elana, who keep me grounded and let me know my priorities. God blesses my life on a daily basis and I love this time of year to reflect on all the wonderful relationships and associations I get to take part in everyday!

I hope all of you get to spend time with your families and friends, and remember those wonderful souls who can’t be with us. Enjoy a blessed Thanksgiving!

Rusty Plowman ASA President 2022-2023

CONTRACTOR COMMUNITY

In Memoriam

Lance Ross

Executive VP, Kent Companies

With deep sadness, we share the loss of Executive Vice President Lance Ross, who passed away on November 1, 2022. Lance was a friend, mentor, and incredible leader to many. We hold his wife, Mona, and their three children, Emma, Nathan, and Lane, in our prayers.

A funeral service was held on Tuesday, November 8, at Lakepointe Church in Rockwall, Texas. The family would like to thank all of the colleagues from across the industry who joined them that day. They are truly grateful for the outpouring of support from our colleagues across the industry.

An opportunity fund has been established to honor Lance and the countless opportunities he created for others. For more information, please click here or contact Kent Companies.

Tips to Attract and Retain Great Subcontractors

Subcontractors are critical to the success of construction projects, providing specialized expertise in a wide range of trades, from concrete and drywall to site prep and utilities; from carpentry and flooring to masonry and steel work. “Our members are effectively funding the construction project,” says Richard Bright, CEO of the American Subcontractors Association (ASA). “In many cases, they are buying the supplies and providing the labor, but not getting paid until the job is completed. Additionally, they often must wait for payment.”

With a shortage of labor and a robust construction market, subcontractors can afford to be more selective about who they work with. If you are struggling to secure bids from qualified subcontractors,

there could be several root causes.

According to Bright, the subcontractor may simply not have the capacity to take on the work. In other cases, a previous bad experience with billing or hearing about a bad experience from a colleague may deter them. Personnel issues could be another issue. After bidding multiple times without securing a job, subcontractors will often move on to another general contractor (GC) bids they have a better chance of winning.

Click here to read the full article from CONEXPO-CON/AGG.

selection” or “QBS” process is codified for Federal agencies in title 40 of the United States Code, section 1101 and implemented in the Federal Acquisition Regulation (FAR) at 48 CFR 36.6. Passed on a bipartisan basis and supported by lawmakers in both parties over the ensuing 50 years, the process is also recommended by the American Bar Association in its Model Procurement Code for State and Local Government, and has subsequently been adopted by almost every state in a “mini-Brooks Act”.

fair price cannot be negotiated, the government is free to terminate the negotiation and begin discussions with the second ranked firm.

Just over 50 years ago on October 27, 1972, President Nixon signed into law legislation providing for qualifications-based selection (QBS) of architecture, engineering, (A&E) and related services, including surveying and mapping. At the time of its enactment, the Brooks Act was a radical departure from the norm of lowest bid in Federal procurement. It set a precedent that enabled qualitative factors to become commonplace in various contemporary acquisition procedures. In other words, A&E was for past performance and best value before it was cool.

Enacted by Public Law 92-582, the Brooks Act was named for its author, then-Representative Jack Brooks (D-TX). Although agencies had used qualifications as an evaluation and selection factor, followed by negotiation of a fee that is “fair and reasonable to the government” for A&E services for more than a century, the legislation was necessary to codify the practice. The “qualifications-based

The law emphasizes an investment in quality and competence in A&E services, so the integrity of buildings, facilities and other government activities dependent on designs, drawings, surveys, and other related services could be relied upon during construction, operation, and maintenance over the life of such structures and program activities.

The law requires an agency’s public announcement of its requirements for professional A/E-related services. Interested firms compete by submitting their qualifications, usually on a standard government form, SF 330, the agency evaluates the firms’ submittals and selects a short list of most qualified firms for an interview. Based on evaluations of the firms’ qualifications, experience, past performance and other factors, the agency determines which firm is the most qualified to meet the government’s requirements. The government prepares an independent estimate of the anticipated cost, and a negotiation is held between the government and the selected firm to arrive at a price that is fair and reasonable to the government. In the process, the government holds the cards. If a

The Brooks Act saves money. There is no evidence that selecting architects, engineers, surveyors, or mapping professionals on the basis of qualifications, competence, experience, and past performance results in higher costs. Indeed, given that such services amount to less than 1/10th of 1% of the total life cycle cost of a structure or facility, but affect the operation and maintenance costs over the life of the facility, the research and data show the investment in quality in design-related services saves money and human lives. A study conducted jointly by the University of Colorado and Georgia Institute of Technology drew from a database of approximately 200 public and private construction projects in 23 states, including transportation, water, commercial and industrial projects, ranging in size from relatively small projects to those costing hundreds of millions dollars. Its authors compared various procurement methods, including QBS, best value, and low-bid, with such factors as total project cost, projected life-cycle cost, construction schedule, and project quality outcome. Results showed that using QBS to procure the design component of a construction project “consistently meant lower overall construction costs, reduced change orders, better project results and more highly satisfied owners than in other procurement methods”.

The Brooks Act is a law that has worked for 50 years. It contributes to the public health, safety, and welfare, as well as is part of what makes the United States the envy of the world.

Celebrating the 50th Anniversary of the Brooks Act!

TM

From Barely Surviving to Thriving

by Mary Klett, ASA Communications Team

The Baltimore chapter of ASA is holding a three-part, in-person discussion about suicide prevention. The first session, held on November 9, involved a small panel of those in the construction industry discussing their experience in construction, their struggles with alcoholism and drug addiction, how attitudes of others changed once you become the “boss,” substance abuse in others, how suicide is sometimes taken “as a given” in the industry. The audience shared their stories. They also discussed the possible reasons for this dubious “number 1” distinction, including the “macho” image of the industry, the fact that working cash jobs is easier in this industry (easy come, easy go), more injuries (hence more likely to have access to pain meds), constant dangerous conditions (watch that back-hoe behind you!). Plus the pressure to build FASTER, yet be SAFER.

As far as “what to do”

• Support has to filter down from the top and be endorsed at each level. Unless there’s an organizational ethos of watching out for each other, people with problems will just withdraw even more.

• People struggling will talk to those they know and feel comfortable with - not necessarily their boss.

• During “wellness benefits” discussions, include mental health, warning signs, and where to go for help.

For those companies and chapters interested in learning more, here’s the format for these morning discussions. Please reach out to Warren Quinn at office@asaofbaltimore.org for more information.

PART

•

• How to identify employees at risk/screening tools

• Emotional approach – stories –get commitment from attendees to help employees

•

LEGALLY SPEAKING

Stayin’ Alive: How to Preserve a Project’s Profitability by Combatting Price Escalation

by Michael Metz-Topodas, Saul Ewing

Despite the pandemic’s wane, the construction industry is still facing price escalation volatility. Finding a path to negotiate contracts in this environment requires understanding how the problem emerged and knowing the full range of solutions and remedies to employ on current and future projects.

The Problem

COVID-19’s disruptive force continues to reverberate through all aspects of construction, with materials pricing

escalation a foremost concern. The pandemic wreaked havoc on supply chains worldwide, which, along with rising tariffs and production costs, led to shortages that created volatility across all markets, but especially for construction materials where prices have spiked to historic levels. Since 2020, the industry has endured up to doubling and tripling of pricing across certain periods for lumber, steel, copper, plastic, and other products. In an industry where contractors traditionally

absorb material price changes as part of business risk, unpredictable pricing can impact a project’s bottom line or, worse, drive companies out of business.

Trying to cope with such a treacherous market has given severe heartburn to even the most seasoned estimators and project managers. At the more granular level, material price fluctuations have caused suppliers to reduce or limit the time they will guarantee pricing. Unable to lock in pricing, estimators now need to

prepare bids that try to accommodate potential future price spikes and delivery delays, all of which threaten to erode or eliminate a project’s profit margin. With this volatility persisting, contractors can address these extreme price fluctuations by relying on their contracts, both existing and future.

Existing Contracts

Where price escalations threaten projects after a subcontractor and a general contractor (“GC”) have already executed an agreement, subcontractors will have more constrained options. So, the situation demands creative thinking and persuasion with arguments having a more business, than legal, tone.

Strategies include:

• Change Order. Just about every construction contract provides a mechanism and process for a subcontractor to request a change order for an increase in the contract sum due to changes in the work performed. When a GC fails to timely return submittals or otherwise delays a subcontractor in ordering materials, the subcontractor often is permitted to attribute associated price escalations to the GC, and thereby justify a change order request for increased payment. Absent GC delay, construction subcontracts seldom provide relief to a subcontractor for price escalation.

• Force Majeure Clause. Most construction contracts, including the AIA A201, include a provision giving subcontractors an extension of time to perform their work in the event of unexpected events beyond their control. Before COVID-19, such clauses rarely listed pandemics as an event that would trigger this right to a time extension, making it challenging to apply a force majeure clause to pandemic-related delays and costs. And now, over two years after the onset of the pandemic, it hardly qualifies as unpredictable. Finally, such clauses usually afford only a time extension, so they may not apply to price escalation. In

short, the force majeure clause does not offer a “magic bullet” for resolving price changes.

• Impracticability or Impossibility. Some states’ laws permit a subcontractor to be excused from performing a contract as originally drafted when doing so becomes impracticable or impossible. This can occur when dramatic price escalation creates a change in circumstances beyond what the subcontractor and GC intended when making their agreement. Such a change could justify canceling and revising the agreement, but only for extreme pricing changes that threaten to subject the subcontractor to huge losses, possibly bankruptcy, because typical price increases fall under the accepted assumed risk in contracting. Further, pursuing this argument could require bringing litigation, often not a cost-effective path where small amounts are at stake.

• Breach of Good Faith and Fair Dealing. Typically, contracts have an implicit requirement that the parties perform the agreement in good faith to accomplish the agreement’s purposes. Where a GC insists a subcontractor honor the contract sum in the original agreement despite the subcontractor facing massive downstream price escalations, the GC potentially risks breaching its good faith obligations. A breach of good faith claim in this context would make a for a novel approach and likely require litigation, making it cost effective for only large amount disputes.

Ultimately, unless an existing contract has a price escalation clause, subcontractors usually have limited contractual bases to obtain relief from price escalations. Nonetheless, they can still ask the GC for an equitable adjustment to the contract— essentially a revision based on a shared recognition of fairness. Such a request should: (1) describe the type and degree of price escalation; (2) propose any

possible substitutions, alternates, or value engineering; (3) offer to share all available industry and vendor pricing information (confidentially, of course); and (4) outline how the subcontractor and GC can fairly share such costs. Should the GC reject such a request, a subcontractor could seek a termination for convenience in which it receives full payment for work performed and a release from any further obligations. Failing that, a subcontractor could abandon the project, especially where continued performance would incur costs greater than any liability to pay the replacement contractor’s premium price. Finally, the subcontractor could accept the losses from price escalations and perform the contract to preserve the relationship with the GC, which the subcontractor could leverage to recover the loss on the next project through a higher price, and thus greater margin. In short, even without a price escalation clause, a subcontractor likely has several levers it can use to resolve price escalation costs.

Prospective Contracts

Given the current volatile pricing environment, subcontractors should seek to include in their future contracts several key terms addressing price escalation. If, however, they cannot obtain such protection from extreme price escalation, the unavoidable risk should be reflected in a higher contract price. With extreme price increases broadly impacting most subcontractors, GCs will unlikely refuse reasonable price adjustments because they probably cannot switch to another subcontractor who is also likely affected by these industry-wide price instability.

• Price Escalation Clause. Such nowfamous clauses seek to distribute the risks from ongoing dramatic price changes to both the subcontractor and GC and come in almost endless varieties. Typically they establish triggering criteria under which the GC agrees to pay an increased contract price due to a demonstrated rise in materials costs. For example, some clauses require that for

any material price increase over 10%, the GC will compensate the subcontractor half of that increase. Other provisions tie escalations for a specific product to an identified price index or other publicly recognized industry metric. Some contracts even allow escalation for any price increase regardless of amount, but subject to approval under the change order process.

• GC Delays. Because the submittal process and other scheduled events drive when a subcontractor can purchase certain materials, subcontractors should negotiate for provisions that require the GC to compensate the subcontractor for any price increase that occurs between the scheduled and actual dates for a submittal return or other event.

• Substitution, Alternates, and Value Engineering. Often price escalations and even materials delays can be addressed by using a different product or otherwise modifying the project design. Nonetheless, typically fixed price contracts impose no obligations on owners or GCs to accept such adjustments. Therefore, the contract should include language that requires the GC to use its “best efforts” to accept substitute materials, alternate materials, and any value engineering or compensate the subcontractor for increased material costs incurred in sticking with the original design and materials requirements.

• Line Item Contingency. Subcontractors can negotiate a fixed contingency amount to cover materials costs increases and have that added to the schedule of values. Doing so affords the subcontractor a certain amount of coverage for price escalations, but caps the GC’s obligations.

• Advance Purchase of Materials. To eliminate price escalations entirely,

the parties could agree to purchase all or some materials far in advance of their scheduled installation or use in the project. Such provisions, however, need to account for storage costs and risk of loss for insurance and other liability purposes.

• Cost Plus. To the extent a subcontractor is comfortable disclosing price information a costplus contract could eliminate any risk from price escalation. In such an agreement, the GC agrees to pay the subcontractor’s materials and labor costs to perform the work, plus an agreed upon percentage mark-up to cover overhead and profit. As a result, any materials price escalation gets passed up to the GC. Obtaining such an agreement with a GC may depend on what contract the GC has with the owner.

• No Damages for Delay. Some subcontracts expressly prohibit a subcontractor from recovering monetary damages from any delay, limiting the remedy to only a time extension. Subcontractors should insist upon language expressly exempting price escalation payments from a no damages for delay clause’s reach to prevent GCs from trying to skip out on such payments by calling them impermissible delay damages.

In addition to these key contract terms, subcontractors can also protect themselves from losses due to price escalations by taking certain deliberate measures in carrying out their work. Subcontractors should perform all contract obligations in strict accordance with contractual deadlines, especially those regarding submittals, and document any GC delays in that process. Because prices can fluctuate while waiting for submittals to come back, subcontractors have a right to recover any increased costs that result from a GC’s delays in approving submittals. To support price escalation claims properly, subcontractors

will need robust documentation demonstrating increases in pricing for which they seek compensation. Subcontractors should also propose in writing any substitutions, alternates, or value engineering and demand GCs do the same for their reasons for rejecting such proposals.

Conclusion

All of these proposed measures arise out of the tried and true business adage—“Failing to prepare means preparing to fail” (paraphrasing Benjamin Franklin). Subcontractors should address in advance problems from increased materials costs by both negotiating contract terms and developing action plans to address price escalation. As the above examples illustrate, however, such contract provisions often require detailed and precise language to establish the exact conditions and terms for adjusting the subcontract price to account for materials escalation costs. Preparing such agreements requires experienced and competent counsel to achieve this end and thus protect subcontractors from excess risk.

About the Author Michael Metz-Topodas is a partner in the Construction Group at Saul Ewing. His practice includes construction litigation, day-to-day project and claims counseling, and OSHA compliance and citation defense. Mr. Metz-Topodas represents general contractors, subcontractors, owners, designers, and suppliers on private, public, and federal projects. He counsels clients and handles construction disputes involving delay and inefficiency claims, design and construction defects, unforeseen site conditions, project scope disputes, bid protests, and payment claims, including mechanics liens, bond claims, and Miller Act claims. He can be reached at michael.metz-topodas@ saul.com.

FEATURE Networking for Success

by Dan Doyon, Maxim Consulting Group

Meeting new individuals who share a career, industry, or interest is a typical strategy for networking. It really is simply people exchanging concepts, knowledge, and connections.

Why is networking so important?

Networking might be tedious and frustrating, but you ultimately need other people to get where you want to go. Making connections with relevant individuals at the opportune moment might be the right springboard to advancing your business or career.

Having 500+ social media friends is not networking. Building relationships with people who can assist you is all that is required, whether that assistance is in the shape of a mentorship, a sounding board, someone to give you

unbiased advice, or a connection who can help you progress in your career. Networking is one of the best strategies to maintain and increase your success by broadening your knowledge, taking inspiration from others’ achievements, drawing in new customers, and developing your business and career.

To increase your circle of influence, networking means actively meeting new people, establishing relationships with others who have common interests, connecting with people, and generating camaraderie. A successful networking strategy is essential for job advancement. You will be able to benefit from it both professionally and personally by developing long-lasting connections for mutual advantage and

leaving a lasting impact on other people.

One thing is for sure: Networking is essential and not optional for employees and construction business leaders in today’s world.

Many people would rather go to the dentist than attend a business networking event. But to build and maintain a powerful network, you do not have to be pumping handshakes and gritting through a fake smile. In reality, you are far better off being genuine and interacting with people with who you have something in common.

This article will give you the knowledge and self-assurance you need to tap into others’ knowledge, look for business prospects, and get

that promotion or new position you have been looking for. Whether you are new in your career or an experienced professional, the goals for networking should be:

• Establish and maintain the appropriate connections in a manner that feels genuine.

• Build relationships through give and take.

• Recover long-lost connections.

• Exchange ideas with peers.

• Manage your social media profiles.

• Use existing social media tools to network.

Making oneself known requires networking, whether seeking work or being a business leader. Think about the following to develop a strong network:

• Discover shared areas with both work-related and personal interests –Sports, leisure time activities, or the same conference attended can be a good starting point.

• Ask questions to learn about professional experiences – People love to talk about themselves.

• Consider your capabilities; discover something worthwhile to offer by looking widely at your background –Think about things you have to offer someone in terms of ideas or experience; sometimes, it could be a connection to another person. Especially since the advent of COVID, we are not keeping up with our personal networks, so it is essential to understand how they operate, reorganize your priorities, and maintain communications with your contacts.

Start now by generating new network connections and reestablishing old ones. To do this, here are some brief activities to work into your weekly schedule:

• Star t calling or emailing business contacts and friends you have not spoken to in a long time. When you do this, make sure to mention the lack of staying in touch. Consider it from a different angle; no one wants to be seen as the person who only contacts others when they need something from them.

• Make sure to keep the communication light. If you make a request that comes off as urgent, it might damage the other person’s perception of you and cause your request to be declined or disregarded.

• Offer your assistance or contacts to return the favor. This can be as simple as letting them know, “If there is anything I can ever do to help you with something, please reach out to me.”

• When contacting someone, give the other person an option not to assist you or follow up. This will help you and your contact save face if they cannot help you by acknowledging that they could be pressed for time.

• Make sure you express thanks for taking the time to consider your request. What is the best advice for people new to the workforce? Ask to meet for coffee, breakfast, or lunch. Then you can connect on Facebook and LinkedIn. From there, you can keep building your network. If you do not know the person at all, here are some key steps to remember when you email or call them:

• Briefly introduce yourself and explain your motivation for wanting to connect with them. This could be as simple as just wanting to make connections in the business.

• See if you can be recommended by one of their contacts

• Make sure to do your research: demonstrate your knowledge about them. Drop a couple of facts about them or their company that you admire.

• Make sure to thank them for their time. This is the most important part –many people will be asking them for something and rarely offer their thanks.

Talk to individuals at networking events about your area of expertise if you want to increase your sales. If you are a project manager, ask if they have a team of project managers or if they have multiple foremen running projects. Ask about the most significant issues they are dealing with now - Do they have an issue recruiting talent? You might

be able to provide them with helpful advice even if they are not looking for a project manager, and you never know who they might recommend you to. If the conversation is not leading to a meeting or a sale before you leave, you may say, “Do you know somebody I might be able to assist with project management?” As a result, people start to consider who they know who could be seeking what you have to give.

Requesting the assistance of experienced construction industry peers makes it possible to gain important coaching and connections through business networking. You will gain insightful advice and recommendations, making networking with connections the perfect place to discuss issues and concerns. Additionally, by giving your contacts feedback and recommendations, you will strengthen the basis of your connection even further. Many recognize the importance of networking to professional success but find it difficult and frequently unpleasant. These methods can assist you in moving forward with growing or strengthening your network. You will become more enthusiastic and successful at forming connections that benefit everyone by adopting a focused approach, recognizing and exploring similar interests, broadening your perspective of what you can offer, and motivating yourself with a greater purpose.

About the Author

Dan Doyon is Director at Maxim Consulting Group (www.maximconsulting. com) and is based in Dallas, Texas. He works with construction-related companies to solve complex business challenges to increase revenue and profitability. With his guidance, companies have driven over $160 billion in top-line sales growth and hundreds of millions in operational savings through improved processes. Dan specializes in business transformation and turnarounds, published research papers and trade articles, and is an acknowledged industry speaker. Dan received his MBA from Georgetown University. He can be reached at dan.doyon@ maximconsulting.com.

FEATURE

Are You Losing Contact with Sales Humanity?

by Tom Woodcock, Seal the Deal

The pressure to give in is immense! Do everything electronically and save time. You’ll also cut costs. Sounds great doesn’t it? Communicating by social media, email or text. Getting plans off FTP sites. Researching suppliers through their websites. Electronic deposits for payment (though for some reason few “modernize” to this particular technique). All making the need to get face to face, or even voice to voice, obsolete. Nobody comes by the plan room anymore, iPads manage project information on site and appointments are held via Zoom. Attendance begins to drop at construction events and association meetings. Pretty soon everything in construction will have an app!

Now I’m not an old Fuddy Duddy but I just don’t quite buy into the totality of complete, non-human communication. I’m the farthest thing from a computer geek, and I still enjoy face to face contact with customers. I regularly speak to general contractors, subcontractors and their suppliers in regards to getting personal again. They communicate a longing for the old days when you looked into someone’s eyes in a live situation, NOT through a computer screen. The need for networking events and association gatherings has never been stronger. Especially coming out of a time when it was discouraged. People are hungry to get back to personal attention. I find it interesting that purchasing products online during the holiday season has flatlined a bit. Isn’t it remarkable so many people waited in line for a ridiculous amount of time to be first for Black Friday? Hmmm, it seems people still like to physically go out and shop.

This really doesn’t surprise me in the least. It may sound simplistic but people still prefer to do business with other people. Yes, face to face, in meetings, working together. When you reduce your customer interaction to solely electronic sources, you lessen your own personal role in securing a project. It’s easy to simply work through electronic communication and sit comfortably in our posture-supporting desk chair.

This techno generation finds avoiding personal contact preferable, plus doing all of our social interaction on Facebook or LinkedIn. Sheesh, soon we will just order our food online and have it delivered to our desk! Oh, you already do that? At least you won’t have to worry about sun poisoning!

The last time I looked, construction took place outside or around people. It amazes me how many contractors skip walkthroughs, client meetings or follow-up meetings on project completion. The more you eliminate customer contact, the more you make yourself exactly like your competitors. Why would anyone choose you or your firm over another if all the data came from each company electronically? You may think, “Well, that’s what my customers want!” Well my son wants cake for dinner every night, but I know it’s not the best thing for his health. How can you educate your customer on innovations, competitive differences or negative market practices if you’re not getting in front of them?

Accepting every electronic innovation that comes along is a bit irresponsible. Evaluate how effective the innovation is and does it move you closer to the customer or further away? The closer you are to the customer, the more you’ll learn their needs, tendencies or preferences. Tweeting, posting or friending does not count as developing customer relationships. Tried and true sales tools such as the handshake, the smile and the thank you are still alive and well. You cannot do any of these without being with the client. I know you’re busy and having all of this technology at your fingertips buys you more time. That time is worthless if it comes at the cost of a lesser connection to your customer base. If no one visits plan rooms anymore then I want to be the only one that does! If nobody delivers bids personally anymore, call me FTD! If you live by the price, you’ll die by the price. If electrician A looks just like electrician B, my choice will be via dollars. If GC A looks like GC B, who can build my building cheaper? Not very

complex. For those of you who feel all of this is a waste of time and 100% electronic communication is the wave of the future, please compete against my clients!

Once again, I’m not anti-technology. You should be getting email and project information on your phone, be active on business social networks, and use electronic marketing vehicles. These are simply no brainers. BUT, they are support mechanisms not primary communication tools. You are your primary communication tool. It’s much tougher for anyone to tell you “no” when looking in your eyes. The one thing that this all takes is courage. So many hide behind their keyboards and attack from cyberspace. I challenge you to buck the trends and keep the tradition of personal contact in your repertoire. It will truly make a significant difference if you stick with it. There are no quick fixes to a slow, fast or highly competitive economy. But I have to think that by combining effective electronic tools with traditional human contact, you’ll have a greater level of success. As a matter of fact, I don’t just think it, I know it!

About the Author

Author, and critically acclaimed speaker, Tom Woodcock is known as one of the most dynamic sales trainers and consultants in the sales industry. Each year he speaks to thousands of people about how best to use his techniques and skills to compete in today’s intensely competitive economic climate. In addition to speaking, Tom also writes for multiple publications through his corporation, Seal the Deal, and partners with the marketing firm, Seal the Deal Too to manage marketing initiatives and educate his clients on the follow through on his effective sales system. Follow Tom on Twitter @tomwoodcockstd, or email Tom at: admin@tomwoodcocksealthedeal. com.

BUILD

FEATURE

Effective Networking to Find New Clients

by Robert Graves, Dale Carnegie Training

When you go to a networking event, the power of your interpersonal skills can make the difference between it being a wonderful success or a timewaster. Engaging others quickly and keeping them engaged throughout your conversation is the key to success.

Let’s set some goals and outcomes for networking success that will find new clients.

What would success look like to you? Maybe your desire is to increase your personal effectiveness in engagement techniques, which will make your networking efforts more worthwhile. An outcome would be to set client meetings from your time networking at events.

We will use some principles found in Dale Carnegie’s Golden Book that will guide us in being more successful. (Email Robert.Graves@DaleCarnegie.com for a pdf copy of the Golden Book.)

Two reasons to network are:

(1) Networking to Build Your Personal Brand

(2) Networking to Promote Your Organization.

When your networking is highly focused, you should achieve both easily.

Networking to Build Your Personal Brand

A recent poll by Inc.com found that 48% of their readers believed that personal connections are the primary factor that most often leads to getting ahead in an organization. Developing your personal brand is critical to building your network. Personal branding gives you an edge to make an outstanding impression.

Personal branding is the message you send and the message that others

receive about you. Take a moment to answer the following questions:

• How do you want to stand out from the crowd and have people remember you?

• Do you want to be known as a problem solver, an outstanding team member, a diplomatic change agent?

• Do you want to be perceived as polished, professional, and friendly?

For others to receive your intended message, it must be genuine and authentic. Dale Carnegie said it this way, “Become genuinely interested in other people.”

A personal network is an excellent source of information and ideas about events, trends, opportunities, and industry news. Consider how you can strengthen your first impression, develop a Personal Branding Statement, and

build your relationship skills to add to your personal and business network.

Here is a list of objectives for you to work on when you go networking to build your personal brand:

• Make a stronger first impression when building your professional network

• Develop a flexible and authentic Personal Branding Statement

• Make the most of professional connections

• Use the relationship linking technique to add to your network

Networking to Promote Your Organization

In a time when organizations are running leaner, individuals from all ranks must maximize their value, create mutually beneficial partnerships, sell their organization’s benefits, and increase business connections.

Although networking is often equated with the sales profession, the ability to network has been identified as an essential skill for business success, regardless of occupation. Every employee is a face of the organization for others to see.

Networking is defined as discovering connections between people in formal or informal settings and utilizing these connections for mutually beneficial career advancement. Work on acquiring the tools for building networking skills and maximizing networking events.

These tools include learning how to make memorable introductions and using pre-approach to prepare for networking events. Before you go to your next event, consider how you can:

• create an effective introduction,

• learn conversation tips for starting conversations,

• moving on to other people,

• keeping conversations going, and

• asking for referrals.

You should walk into the event with a networking plan of action. Let’s consider some key steps to create a networking plan of action that could lead you to

more business from your efforts:

• Star ting the Conversation

• Building the Relationship

• Setting the Appointment Capturing the Information

Starting the Conversation

When someone asks you, “what do you do” at a networking event, how do you typically answer? Do you rattle off a job description or list a bunch of facts about your company? Neither one will elicit much of a positive response because you are making statements about yourself or your company. You have left out the most important person in this conversation, the potential client, right from the start.

An easy way to include them is to change your statements into questions which will give them a chance to reply in the affirmative. What is a professional way to start your introduction of yourself and your company? Consider starting your introductory remarks with the following question:

“Do you know when a company is looking for (one thing your company does well)? That’s what we do!”

This will get their head nodding in agreement, since they will understand what you do for a living. Now that you have them in an agreeable mood, work on deepening the budding business relationship.

Building the Relationship

Now is not the time to tell them all about yourself; that comes later. Instead, engage them with questions that encourage them to tell their story. Dale Carnegie admonishes us to “be a good listener. Encourage others to talk about themselves.”

Your goal is to decide if this person is a prospect or not. If you determine that they are not a prospect for business, then converse with them politely before moving on to another person. If you decide that there is a potential for business with this person, then set a future appointment to talk business.

Setting the Appointment

Appointment setting is the real reason for showing up. The more meetings you set, the higher the likelihood you will do more business from these chance encounters.

Many ask, “when do I set the appointment?” One answer is when you have asked enough questions about them to determine there is potential for business. Networking becomes you finding new business for your company by talking “in terms of the other person’s interests,” according to Dale Carnegie.

A quick way to set a meeting is to say, “It sounds like we have a lot in common. Let’s set up a meeting next week.” Because the whole conversation has been about them and what they do, they should agree to a further meeting.

Capturing the Information

Now that you have your meeting set, you can graciously finish your conversation to be able to move on to the next person. Before you talk to the next person, though, take a minute to jot down some notes about what you found out and when you will meet. That way you do not have to rely on your memory.

Consider making notes on the back of their business card. Or even carrying a very small note pad just for this purpose.

Going into a networking event with an action plan and goal in mind will increase your business opportunities quickly. This feeling of success will boost your selfconfidence, also.

NOTE: If you would like further information on the “Networking for Success” online workshop, reach out to Robert.Graves@DaleCarnegie.com for details.

About the Author

Robert Graves, MBA, is a Dale Carnegie Certified Trainer for Dale Carnegie Tampa Bay. His focus is Relationship Selling. He is the author of “Making More Money with Technology.” He often speaks on the evolution of Marketing, Sales, and Service. Robert can be reached at robert. graves@dalecarnegie.com or call/text 813-966-3058.

Set SMARTERGoals for the New Year—FREE

Start the new year with your goals and intentions in place. By setting SMARTER objectives with a clear plan of action and holding yourself accountable by tracking them, you can accomplish your goals. Sign up for this goal setting and time management workshop ready to hit the ground running and get inspired!

30 minute Session, Thurs., January 12, 2023 from 1 to 1:30 PM

Read More ASA Members: FREE Non Members: $99

Executive Coaching Strategies in the Office and Field—FREE

You know that in your industry, accountability starts with clearly defined performance objectives. This 30-minute Live-Online, Instructor-Led Workshop provides effective coaching techniques and other tools to help close the gap between expected performance and actual results !

30 minute Session, Thurs., March 15, 2023 from 1 to 1:30 PM

Read More ASA Members: FREE Non Members: $99

FEATURE

Five Benefits of Networking in the Construction Industry

by Patrick Hogan, handle.com

Construction is a high-touch industry. Success in this arena is more than having the skills and practical know-how to deliver on customer expectations. Projects involve working with a multitude of businesses and professionals from varying backgrounds and experiences–making networking imperative for any professional and business involved in construction.

Networking doesn’t only happen during networking events –opportunities to build relationships with others in the industry are everpresent. And, yes, it’s worth making an effort to engage and be present

in these conversations. In this article, we’ll go over the benefits of getting involved with professional networking in the construction industry.

Gateway to new opportunities/projects

Networking is a great way to gain new opportunities in construction. Maintaining good relationships with everyone you encounter is essential. This includes former clients and prospects, subcontractors and GCs you’ve worked with, different vendors and providers you’ve dealt with within projects or even on the inquiry

stage–these relationships are worth nurturing if only for the fact that you’ll never know who works with who and you’d always want to leave a good impression.

It’s not unusual even for those considered competitors to maintain some friendly professional relationship that could result in volleying overflow work between each other. There’s always enough work for everyone if connections are kept healthy. Just the same, helping others is a big part of networking. Making meaningful introductions between people and businesses that benefit from each other will pay off, especially for those

who view working in construction strategically and not just as a moneymaking gig.

Gaining new insights and ideas

Networking is also an excellent avenue for discussing new ideas with like-minded individuals in the industry. Most people are keen on putting their best foot forward during networking events and any professional setting where conversations are encouraged. Gatekeeping information is rarely the smart move. People who have been in business long enough know that raising the quality of work industrywide benefits everybody and is good for business. This is why sharing information about new technologies, new methods of approaching projects, and fresh techniques in managing jobs are commonplace in professional settings, even among businesses and professionals who could be considered competitors.

Sharper people skills

One of the most valuable skills to succeed in construction, no matter what portion of the big machine you’re working on, is knowing how to deal with people. Networking events and any setting where you could engage with others in the industry are great opportunities to practice having meaningful conversations and sharpening your people skills. Especially in this age where a lot of conversations happen virtually, both in-person and online networking opportunities where the emphasis is engagement and building professional relationships are welcoming spaces for you to flex your conversation muscles around people looking to do the same.

The returns of constantly sharpening your people skills cannot be

overstated. Vendors with the same certifications, experience, and track records compete for the same jobs. What spells the difference between landing a project and not is often reliant on the relationship you’ve established with the prospect and how easy or difficult it is to discuss and transact with you. Learning how to navigate this portion of business is valuable for anybody looking to get ahead in the industry.

Better understanding of the immediate market

Putting faces on names you only see in emails and marketing materials is one of the most significant benefits of directly engaging with people in the industry during networking events and other social functions. In-person functions are especially helpful in getting to know people and businesses in your local market–from different vendors to clients and other stakeholders in commercial and residential construction.

Forging relationships and getting some facetime with them is valuable in getting intimate knowledge beyond what you find out from business news and even trade association meetings. The cumulative knowledge of the community is often shared during these face-to-face events–local trends, market projections, new opportunities on the horizon, feedback on specific vendors and providers, and even costsaving strategies that could be local in the market you’re operating in.

Networking can also give you more insight into what not to do and what to avoid. These bits of information may not be presented in a straightforward manner in that they’re often not in the form of hard numbers or enumerated facts as reported in newsletters. You get a better sense of the people

operating in your locality and their views on how different aspects of construction are faring, allowing you to make better decisions in your business.

Establishing your profile

Whether you’re part of a business operating for decades or a new player in construction, consistent networking is helpful in regularly establishing and reintroducing your profile in the industry. Anybody in the construction business knows that reputation is a big deal, and being visible and present as a reliable resource or source of expertise, even in more casual events and conversations, will pay off for you in the long run.

Networking is worth the effort

Building relationships is one of the cornerstones of a successful construction business. It’s a mistake to overlook and neglect being visible in the community and getting involved in conversations that may seem mundane or unneeded. Taking the time to build bridges with potential clients, existing customers, vendors and providers, and other industry stakeholders is a worthy investment-the returns may be difficult to quantify in concrete numbers but can be measured in the continued success and growth of your business.

About the Author

Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors and material suppliers with lien management and payment compliance. The biggest names in construction use Handle on a daily basis to save time and money while improving efficiency.

FEATURE

Outreach, Dedication and a Deep Understanding of the Marketplace Are Key to the Success of Any Business

by Zachary L Green, Warrior Enterprises LLC

Great ideas, leadership, service and products are the essential ingredients of every successful business.

However, none of it matters if your core audience doesn’t know who you are, what you do and why they should choose your business over the services of others.

Working in a vacuum or small silo without a constant array of new referrals, contacts and endorsements will never produce long-term gains no matter how well your website is written or how often you tweet your latest accomplishments. They’re a nice add-on, but not enough to continually

stay in the minds and thoughts of new and existing customers. Never forget that the next guy is usually only a phone call or text away.

That’s why the unrelenting commitment to messaging and outreach in every form is fundamental for the ongoing expansion of existing enterprises or the launch of new companies. The stats don’t lie. According to the Bureau of Labor, “approximately 20 percent of small businesses fail within the first year.

By the end of the second year, 30 percent of businesses will have failed. By the end of the fifth year, about half

will have failed. And by the end of the decade, only 30 percent of businesses will remain — a 70 percent failure rate.”1

As for the most reasons, business failures are most commonly related to everything from cash flow and income problems to staffing issues and the poor marketing of products and services. And please remember, that this reality existed before the pandemic, which not only shuttered thousands of businesses, but delayed the completion of projects for months or even years.

Yet, the strong and well prepared generally survive throughout the most

trying of times. Nearly every sector of the building and construction industry is looking for trained, skilled and experienced tradesmen. Plumbers, masons, electricians, carpenters and even handymen are continually in demand. In fact, “the construction spending on buildings is projected to increase just over 9 percent this year and another 6 percent in 2023, according to the mid-year update of the American Institute of Architect’s “AIA Consensus Construction Forecast.”2 And one of the industry’s leading complaints – the lack of skilled workers.

So, the opportunities are there for the hardworking, diligent and responsible contractors and subcontractors who embody the “Warrior Spirit” with an unwavering dedication to loyalty, dignity and teamwork. For instance, U.S. Army recruits are expected to live by the Soldier's Creed and Warrior Ethos. This includes serving the people of the United States, always placing the mission first, never accepting defeat, never leaving a fallen comrade, never quitting and always being “disciplined, physically and mentally tough” as “a guardian of freedom and the American way of life.”3

To those who value and honor the Warrior’s Creed, this means:

• Going forward with purpose. Every successful venture starts with a purpose that is most often defined by the individual’s experiences. Without a purpose rooted in experience, most behaviors are just robotic. So, it’s essential to find a purpose worthy of the energy it deserves. Being a warrior in this environment means never deviating from the mission, no matter the obstacles, and remembering that failures and disappointment are facts of life that are often accompanied by valuable learning experiences.

• Adapting to market changes. Few people recognized the overwhelming societal and business impacts of the pandemic. The ability to adapt to differing situations is crucial to entrepreneurialism and being a great warrior. In fact, sustainability is impossible without the drive to grow, learn and overcome new and unexpected problems. This includes anticipating and confronting the probable and improbable with backup plans filled with multiple contingencies. Disaster planning is a lot like insurance. You hope you’ll never need it, but you better make sure it’s in place when you do.

• Giving the public what it wants and needs. Contractors should always look to partner with customers and new business associates to creatively fill schedule voids and expand services to meet real market demands. One of the quickest ways to bankruptcy is the ongoing dedication to products that serve small or non-existing markets. It may be your passion. You may think it’s a good idea. But is it really, if no one is willing to pay for it? Always listen to the crowd. Stay attentive. Dedicate your efforts to serving a sizable market that truly needs what you’re selling.

• Always leverage your competitive advantages. This starts with knowing your competitors and doing what they do quicker and better. Always work to stand out from the pack, especially in a niche market. Service, manners and the quality of your work will be intensely evaluated each and every time you’re on the job. Loyalty will only go so far if the client is unhappy with the level of service or end product. You can also continually reaffirm customer relationships with exclusivity or service agreements that ensure

the availability of services when needed.

• Valuing feedback, even the negatives. There is always room for growth and improvement. Listen. Be attentive to the good and bad. Even the naysayers can provide valuable insights into the way you can improve or expand you business and services.

• Focus on the sales, marketing and distribution efforts that will best reach key target audiences. No one can buy your product or services if they don’t know you exist. Network. Join local clubs and associations. Follow up on referrals. Thank clients for their business. The truth is that great sales support, marketing and distribution networks can turn even the simplest concepts into mind boggling successes if the market is large enough and they’re willing to buy what you’re selling. And most importantly, expect the expected, which can and will likely occur during the best and worst of times. Don’t be afraid to seek the advice and counsel of trusted, knowledgeable colleagues and accredited organizations. Their input can be invaluable for helping to overcome hardships, reach new markets, enhance efficiencies and strengthen your presence in both overand underserved markets.

About the Author

Zachary Green is a former US Marine, firefighter and CEO of MN8 LumAware/Foxfire as well as the recent author of Warrior Entrepreneur, a book he wrote to help business owners turn hardship and adversity into growth tools. He can be reached at zacharylgreen@gmail.com

Featured Products and Services

Lenovo offers discounts on its entire line of reliable, highquality, secure and easy-touse technology products and services. Members save up to 30% off the everyday public web price of Lenovo laptops, tablets, desktops, all-in-ones, workstations, servers and accessories. lenovo.com/us/en/lsp

Enhanced discounts to include saving 50% on Domestic Next Day and 30% on Ground Commercial and Residential shipping. Savings start at at least 75% on LTL (less-than-truckload) shipments. Plus, receive transactional insurance for your small package shipments. savewithups.com/asamembers

Save up to 75% off the officedepot.com regular prices on our Best Value List of preferred products. Members get free next-business-day shipping on qualifying orders of $50 or more. Text ASASPC to 833.344.0228 and save your free store discount card on your phone. business.officedepot.com/ASA

UPS Capital offers association members unique insurance programs to protect against the financial impacts of loss or damage to goods in transit.

For more information, visit: xxxxxxxx.com/ilea or call xxx.xxx.xxxx, monday-Friday, 8am - 5pm, ET

For more information, visit: 1800members.com/asa or call 1.800.Members (800.636.2377), Monday-Friday, 8am - 5pm ET

Upcoming Webinars

U.S. Small Business Administration, Office of the National Ombudsman Overview

Wednesday, December 14, 2022 | 12:00 - 1:00pm (EST)

“SBA Office of the National Ombudsman: A small business ally for regulatory issues.” Created in 1996, the Office of the National Ombudsman works with each federal agency that has regulatory authority over small businesses to ensure regulatory issues are handled and enforced fairly. They are a voice for small businesses that have concerns about the implementation of federal regulations and can help you navigate the complex world of compliance. The Office of the National Ombudsman is a free and valuable resource, so this is a webinar you won’t want to miss. Guest Speaker: John Kelly, External Relations Manager, Office of the National Ombudsman, U.S. Small Business Administration

Presented by: John Kelly, External Relations Manager, U.S. Small Business Administration

John Kelly has been with the Small Business Administration now for thirteen years. First at the SBA’s Washington, DC Metropolitan Area District Office where he served as a Business Opportunity Specialist for the 8(a) Program where he supported small business owners with their business development needs. Then moving into his current role at SBA’s Headquarters, Office of the National Ombudsman, where he assists small business owners that feel they are being negatively affected by federal regulations, excessive audits, and unfair penalties and fines. Prior to that John spent 15 years as a Business Development and Finance Director for the Corporate Office of a national franchisor where he aided small business owners in the capitalization of their start up or expansion of their small businesses

Register for this webinar

Maximizing Your ASA Membership

Wednesday, January 11, 2023 | 12:00 - 1:00 pm (EST)

Learn about the benefits you may not know about in your ASA National Organization membership. Whether you just joined last month or ten years ago, this easy-going session will show you what is available to you and how to access it.

Register for this webinar.

Coming Up

in the December 2022 issue of FASA’s

THEME

Election Focus— What's the Impact?

• How the Election Impacts the Construction Industry

• Will anything get done with a split Congress?

Look for your issue in December.

To access past issues of The Contractor’s Compass, please click here.

For questions about subscribing, please contact: communications@asa-hq.com