Builder Safe In
BUILDING YOUR BUSINESS
VOLUME 11 ISSUE 3 JULY 2007
In This Issue... Project Spotlight p2 AGC p3 Guest Article p4 CCOP p5 Financial p6 Milestones p7 Marketplace p7 Safety p8 Spring Meeting p10
Safety-Conscious Companies Have Ways Of Breaking Language Barrier BY KATIE SELLS The growing number of Hispanic trade workers has caused contractors to focus on ensuring the safety of those workers. Communicating with Hispanic workers can be an extremely challenging issue, particularly regarding safety. Currently, Hispanic trade workers have the highest number of jobsite fatalities, making
it imperative that contractors find ways to effectively communicate and train them to ensure their safety. While the language barrier is a leading concern there are several cultural differences that affect the way Hispanic tradespeople work. â€œUnderstanding their cultural beliefs is going to get you far,â€? Brian Tibbetts, Safety Director of Illinois Masonry said. The Hispanic culture is strongly influenced by a devotion to family, which affects the way that they work, according to Pepper Construction Company Safety Director Paul Flentge.
please see Language, page 14
Aug. 1 Builders Foundation Golf Outing Makray Memorial Country Club, Barrington Aug. 9 Contractor Safety Forum Chicagoland Construction Safety Council, Hillside
builders association BUILDING YOUR BUSINESS
Hispanic workers help put up Loyola Heart Hospital in Maywood for Pepper Construction Company. The number of Spanishspeaking construction workers has taken a dramatic upturn, posing new challenges to safety professionals.
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Back On The Block Dormant Since 1989, Block 37 Beginning To Take Shape BY ANDY COLE To put the time it took to come up with a successful development at Block 37 into proper prospective, Richard Marx, Milli Vanilli and the New Kids On The Block had number one songs the last year that parcel of valuable land was home to any building. For General Contractor W.E. O’Neil Construction Company and Specialty Contractor Case Foundation Company, it was necessary to dig through the past before building part of downtown Chicago’s future. When the project is finished, both contractors hope Chicagoans will believe it was worth the wait. In the shadow of the Mayor’s office, Block 37 has been dormant since being razed in 1989 and has been through a soap opera regarding ownerships and funding for different parts of the project. With work well underway, things are going along at a brisk pace towards a mixeduse facility that will eventually include everything from television to transit. The initial office tower phase, which will be located at the corner of Dearborn and Washington, will include the new home for CBS 2 television studios and CBS corporate headquarters. The Morningstar Financial Group will be located on the upper floors. The “go live” date of the CBS studio will be in April 2008 and the office tower is slated for completion that summer. The balance of the project is home to 360,000-square foot of retail on the first four floors, three levels of parking below grade, and at the deepest level a cross connect CTA subway station, linking the Blue Line on Dearborn Street with the Red Line on State Street. Above the retail portion of the project are plans for a future residential component with either apartments or condominiums. In the many attempts to redevelop Block 37 since its razing, this is the first to go beyond the pre-construction stage,
Block 37 as it appeared in late April. After years of talk and failed attempts at developing the downtown parcel, W.E. O’Neil Construction Company and Case Foundation are part of the first of those redevelopment plans to reach past the pre-construction phase. A television station, a corporate headquarters, a residential section, an express train station to the airports and other retail and dining options will be included in the project.
and W.E. O’Neil Construction Company is proud to be part of it. “The block has been vacant for so long,” said Project Executive Dennis Garlick. “That’s actually one of the things that’s most exciting about the project. The city has wanted and needed something there for a long time. Ultimately, it’s great to be part of the solution. “I have been involved in this project for many years with many possible development companies. Finally, we teamed up with Mills Corporation when they won the City’s approval for their mixed use project.” Case Foundation installed caissons, secant piles and slurry wall through the remnants of many old department stores
please see Spotlight, page 12
How Can We Help You? Have a construction-related problem or question? Call your professional trade association. While each BA staff member can assist you, you may often find it helpful to speak directly with the individual who has primary responsibility for a particular area. His or her name is provided for your convenience. Al Leitschuh………………BA Governance Industry Relations Strategic Planning AGC Liaison Mike Schultze.………....Industry Relations Government Relations Denise Capasso.................................Labor Safety Ryan Schoonover........................Marketing Membership Development Andy Cole....…........……Communications Media Relations Stacey Kelly....….........……Administration Education Programs Eric Nyberg....…...Communications Intern
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Docu-Drama: AGC Wants Input On A201 Organization Hasn’t Fully Endorsed Changes To Standard Contract Document A few words can make a big difference, especially when it comes to a contract. The American Institute of Architects (AIA) has submitted a revisal of its A201 contract to the AGC of America for its endorsement, and the AGC isn’t taking that responsibility lightly. The A201 is used more as a standard contract by owners than any other contract in the industry. The 2007 edition of the A201 has a number of language changes that are less favorable to contractors than the contract it proposes to replace, according to AGC Senior Counsel of Contract Documents and Construction Law Brian Perlberg. “AIA told us in late February that they wouldn’t be making any more changes to the contract,” Perlberg said, pointing out that the AIA itself has been quoted in some publications as saying the proposed version is less kind to contractors. “We’re working through it, and we’re also looking for input from our members and associations.” A number of drafts have been received by the AGC, each one with provisions that the organization sees as problematic for the construction industry as a whole. While the AGC’s Private Industry Advisory Committee (PIAC) has not yet had a chance to meet on the latest draft, the PIAC strongly advised against the endorsement of the previous draft. “The general feeling is that (the document changes) are more favorable to the owner,” Perlberg said. “In my opinion, the situations where there may be an adversarial relationship between the owner and the General Contractor, those situations are more likely to arise under this language.” That language includes a provision that says a contractor must provide a written submittal schedule to the architect. Failure to do so can prevent the contractor from obtaining cost or time adjustments for submittals at a later date. Another language change would prevent a contractor from disputing a decision outside of a 60-day period. Perlberg views this as an insufficient length of time to evaluate decisions early in a project, which could cause contractors to dispute all decisions and make relationships with owners more likely to be adversarial. Traditionally, Perlberg says, the contract is rewritten every 10 years. “The number of changes are not atypical,” he stated. “The issue is the general tenor of the changes. It’s not a major rewrite, but there are some issues we’d like to see revisited. “We’re going to continue to collect information and we want to hear from our members. In the end, what we want is to endorse a contract that shows a fair and balanced risk allocution for everyone involved.” Another issue with the contract language involves the liability of a contractor when performing duties imposed by the architect or owner. Liability is limited to gross negligence in the current
please see Documents, page 13 3
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Ladies And Gentlemen, Place Your Bets Finding The Right Customers Makes Doing Business Less Of A Gamble BY CYNTHIA PAUL FMI The excitement is building, the night is young, and you are feeling lucky! Your hand is straining to hold all the cash you have brought along, and it is decision time. You think: What is the worst that can happen? You have played this game before and know all the rules. You walk up to a table with an expanse of green felt decorated with a series of numbers on crisp red and black blocks. Do you bet on a specific number and hope the odds are with you? Or, do you bet on red or black, knowing you have at least a 50/50 chance of increasing your cash? You are feeling lucky. The man behind the wheel is eyeing you with mild frustration as he waits for you to put down your money. Gambling in Las Vegas, Atlantic City, Reno, or any of the gaming towns sprouting up across the country is a fast and fun way to invest discretionary funds. This is something we do for fun. Yet, when it comes to your business, you do not want to spin the roulette wheel or roll the dice until you have really considered the odds. Every day, contractors across the country let the roulette wheel spin and hope for the best. Winning work today is a bit of a gamble. Picking customers and projects represent major risks for any contractor’s business. Assumptions made in putting together the project bid will affect the whole life of a project. Contractors feeling the pinch of a small backlog willingly take on more risk in bidding to fill holes and keep their people busy. When work is plentiful, contractors are inclined to assume less risk. This is part of the game called construction. Winning in contracting means managing risk by making good decisions. Picking which customers and projects to pursue are key elements in your risk management strategy. Contractors today are using sophisticated systems, too. Picking The Right Customers Customers value the services you deliver. Some value your services more than others do, but all customers see some
basic level of economic gain by using you —or they would not hire you. The key to customer selection is twofold. First, you need to find a group of customers who value what you bring to the project more than simply building it. Most contractors can build a project. However, what do you bring in addition to technical capabilities? Do you have a different way to manage the project? Are your people trained in unique aspects of building or project management? Do you offer “after project” services (or warranties) different from those of your competitors? What are they? Answering this question of what unique skills you bring to a project is the focus of most project strategy planning sessions. These points of differentiation are what make your services valuable to your customers —valuable enough that they are willing to pay a little more for them. But to differentiate yourself in the market, you first need to know what your customers value and what they are willing to pay for. Without this information and any unique skills, you will be forced to align your business to compete solely on price. The second question you must answer is: How do we find more customers who value what we do? This is the same question that keeps business developers up at night. It is great when customers are willing to pay for the special services you offer. If you want to keep growing your business, you need to find more customers with those same values, or find creative ways to gain more work from the customer base you have already developed. First Steps You will need two basic pieces of information —one found internally, the other externally. Let’s start from the inside. Perform an analysis of your past projects. Look at what characteristics were common in those projects where you made money. Did you make money on projects built by a single superintendent or estimated by your chief estimator? What was the average size of the project? What type of work was it? What delivery
KEY CHARACTERISTICS OF SUCCESSFUL CUSTOMERS Discovering the key characteristics of successful customers for your business allows you to spend more time finding the right opportunities. Here are a few areas to investigate as you look back into your files to see commonalities of your most successful customers: Company size Type of business (i.e., general contractor, end-project owner, etc.) Delivery method used - in the case of a General Contractor Project controls systems used Ability to schedule projects Decision-making process Construction experience Payment terms or practices Geographic location Public vs. private Number of existing contractor relationships Growing business High capital investment plans
methods seem to be the most successful for you? What did the customers of these projects have in common? Do a “deep dive” when it comes to customers. See if you can determine those characteristics that make up the most successful customers. The sidebar above shows the areas to investigate. You need to know this information in order to manage risk in your business. Finding the right customers is the key to positive growth both top and bottom line. The most expensive business development resource you have is faceto-face time with a customer or prospect. Face-time with customers is more costly than marketing brochures, proposals, advertisements, etc. because it is a limited resource. You need to put that time
please see Bets, page 9
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Pepper Construction Company’’s Shahara Byford (left) talks with Dana Hudson, a student in Dawson Technical Institute’s carpentry program, during the Construction Career Opportunity Program Interview Day at Dawson April 11. Pepper was one of 11 companies represented and Byford was one of many company representatives to comment on the excellent qualifications of the interviewees.
Companies Find Future At Dawson Qualified Students Take Part In March, June Interview Days Planned BY ANDY COLE For Jamine Burrell, the idea hit her while she was riding down a Chicago street. “I started to notice some things about buildings,” said Burrell, who plans to graduate from Dawson Technical Institute’s Cement Masonry program in May. “There were places where a building would be on a little bit of a slant or there was something different about the way it was put together. “I got into the program here, and started to notice those things more after I got some hands-on experience. The instructors here are real demanding and dedicated. After awhile I thought ‘I can see myself doing this.’” What started with a trip down the street culminated with chances for her and around 30 of her classmates to see who else could picture them working in the trades.
A Construction Career Opportunity Program Interview Day was held April 11 at Dawson Tech, with 11 companies on hand to interview attendees. Those students had the opportunity to interview with representatives from 11 companies, who sponsored some participants into union apprenticeships. Three hires were made out of the second Interview Day of 2007, which took place June 12, bringing the total number of hires in the program to 43. Twenty-nine of those hires are still employed by participating companies, giving the program a retention rate of 67 percent. The Construction Career Opportunity Program (CCOP) is a collective effort by the Builders Association, the City Colleges of Chicago and three community groups, with goals including the diversification of Chicagoland’s construction workforce and the reinforcement of a workforce that will soon lose a high percentage of workers to retirement. Dawson Technical
Institute offers programs in carpentry, cement masonry, bricklaying, welding and plumbing and fire protection. The program was started in November of 2005 and had produced 31 hires by the end of 2006. As of January of this year, 19 of those hires were still with their original companies. Another cement masonry student, Terrence Doss, had work experience before coming to Dawson Tech, but believes that the experience he’s gained at Dawson will pave the way to long-term employment. “I see myself making a career out of this,” Doss said. “I’m working as hard as I can and giving people every reason I can to hire me, because I want to make a living out of this. “(Construction) was something you’d see around the neighborhood, and I just want to be a part of building that
please see CCOP, page 8 5
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Preparing For The Worst Provided by Rabjohns Financial Group
owner and upper-most key executive. What would happen to your business and your family should you become disabled or die unexpectedly? Do you have key employees or family members who could step in and run the company in your absence?
When it comes to your business, hoping for the best wonâ€™t ensure its future. Take Jack Stanton for example. Jack spent thirty years building a manufacturing giant, Stanton Solutions Corporation. However, due to the rigors of maintaining his company, he had little time for any personal financial and estate planning. Then, Jack died unexpectedly in a boating accident. All of a sudden, Stanton Solutions, a multi-million dollar manufacturing empire was facing an uncertain future caused by the loss of its
Business Continuation Basics It is essential to the future of your business and your family to have a succession strategy in place. In order for your business to maintain continuity, you need to implement a succession strategy that coincides with your goals and objectives. Your strategy should be flexible enough to handle changes within the company and its related industry(ies). However, one of the keys to a succession strategy is determining who or whom your successor(s) will be.
Setting Up Financial Safeguards To Secure The Future Of Your Business
Deciding on, and preparing a successor may require years to familiarize him or her with the finer points of the business. Thus, it is important to select a replacement as soon as possible in order to maximize the possibility of a successful transition. In smaller businesses, it is not uncommon for one or more family members to be at the top of the list of potential successors. If you wish to pass your business on to future generations, you will need to make an honest assessment of the respective needs of your family and business, the qualifications of any interested family members, and whether the family and business would be best served by a continued relationship. Communication with family members is extremely important in order to better ascertain
please see Financial, page 16
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Member Milestones In April, Custom Contracting, Ltd. of Lake Zurich celebrated 20 years in business. President Leon LaJeunesse founded the company in 1987 and joined the Builders Association in 1997. The company specializes in healthcare-related construction and strives to help deliver energy-efficient and environmentally responsible construction projects.
Joseph J. Duffy Company created an eternal flame monument in front of St. Leo’s Residence For Homeless Veterans on the south side of Chicago. The granitebased monument sits in front of the 141-apartment complex and is meant to
signify America’s gratitude to those who have served our country. His Eminence Francis Cardinal George took part in the dedication of the monument April 11. McShane Construction Corporation has announced the establishment of its Southern California Regional Office and appointed Edward J. Pitula as Regional Director. Pitula has 11 years of experience in the construction industry. The California office will be centered in Newport Beach. W.E. O’Neil Construction Company completed the Gary Comer Youth Center, located on the south side of Chicago which was funded by Comer, a philanthropist and billionaire founder of Lands’ End. The Center consists of a gymnasium with retractable seating and a green roof that provides fruits and vegetables for the youth and doubles as a teaching ground for gardening and harvesting. Bulley & Andrews, LLC, provided general contracting services for the renovation of Kiekhofer Hall which
included renovating the historic Koten Chapel on the campus of North Central College. This project involved creating additional seats, a community room and a new entrance. They also renovated the pews and altar and refurbished and replaced the stain glass windows and light fixtures. James McHugh Construction Company has broken ground on the expansion of Riverside Brookfield High School, a $64 million project. A music center and an educational facility will be among the first additions, and plans for the second phase of the project include a swimming pool, an administrative and academic wing, a student commons area and a field house. The George Sollitt Construction Company and W.E. O’Neil Construction Company received Merit Awards from the Chicago Building Congress. More information on the projects that won them the awards will be in another edition of The Builder.
Member Marketplace The Builders Association’s Affiliate members are respectable and responsible companies. The products and services are among the best in the area in their fields. By virtue of their association membership, these companies support the Chicagoland construction industry. The Builders Association encourages its contractors to use A f f i l i a t e m e m b e r s w h e n l o o k i n g f o r p r o d u c t s o r s e r v i c e s.
Assurance Agency, Ltd. is a leading provider of full-service insurance, bonding, safety consulting and other risk management products servicing the construction industry. Celebrating over 40 years in business, Assurance Agency remains privately held and committed to be customer focused through technological advances, steady growth and an exceptional reputation.
Assurance Agency, Ltd. 1750 E. Golf Road Schaumburg, IL 60173 847-797-5700 www.assuranceagency.com Troy Stanton, Account Executive email@example.com
Wiedner & McAuliffe has provided clients with solutions to litigation defense needs for more than 30 years. They serve business and corporate clients across the country in a civil litigation practice, with traditional strengths in workers’ compensation, employment law and insurance litigation.
Wiedner & McAuliffe, Ltd. 1 N. Franklin Street Chicago, IL 60606 312-855-1105 www.wmlaw.com Robert L. Smith, Partner firstname.lastname@example.org 7
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CCOP, from page 5
Fifteen Companies Honored With Safety Awards A commitment to safety has brought recognition to a number of Builders Association member companies. Fifteen companies were honored Builders Association Safety Awards during the Spring Meeting May 17 at the Hyatt Rosemont, and six were among National AGC Safety Award winners. In addition, Herlihy Mid-Continent Company was honored with an AGC/Willis Construction Safety Award at the AGC’s 88th Annual Convention, which took place in March in San Antonio. Builders Association Best of Class Awards for 2006 were awarded to: • McShane Construction Company (Best Performance Improvement) • Monson Nicholas, Inc. (Best of Class for Under 75,000 Employee Hours) • Glenn H. Johnson Construction Company (Best of Class for 75,000-250,000 Employee Hours) • Airtite Contractors, Inc. (Best of Class for over 250,000 Employee Hours) At the national level, Herlihy Mid-Continent Company was second in the Highway Division of the AGC Safety Excellence Award campaign for companies with 100,001-300,000 hours. The application was turned in through the Builders Association, and the process included a written narrative on safety activities and Herlihy’s overall safety program. “It kind of validates what we’re trying to do from a safety standpoint,” said Herlihy Safety Officer Doug Schultz. “We’re making the right efforts and everyone’s going home safe at the end of the day, which is a good feeling. “In the past few years, we’ve tried to make sure guys were on newer equipment. Our training has really stepped up and we’re working on improving our communications, which helps with safety. With the new technology, I think we’ve made some innovations in the past few years that have helped us achieve our goals.” The AGC Safety Awards recognized six other BA members with Certificates of Commendation. They included: • BABCO Construction, Inc. • Interior Alterations, Inc. • Lawdensky Construction Company • McShane Construction Corporation • The Lombard Company • Valenti Builders, Inc. Each of the Best of Class winners and AGC Safety Award winners were also winners of Safety Recognition Awards from the Builders Association. Other companies recognized by the Builders Association for their commitment to safety were:
please see Safety, page 11 8
neighborhood up. I felt like I had a basic knowledge of (cement masonry) before I got here. I’ve learned a lot at Dawson and I feel like I know it all now.” While benefiting the students in obvious ways, the Interview Day was also beneficial for the companies involved, allowing them to talk to the best students in the trade programs in one place. “This year in particular, the candidates have been great,” said Shahara Byford, Pepper Construction Company Human Resource Manager. “The people I talked to were very qualified, well spoken candidates. “We find great people here, which is why we’ve been a long time supporter of Dawson Tech.” Bulley & Andrews, LLC General Superintendent of Field Operations Joe Koppers made two job offers at the Interview Day, and had plans for more. “We come here because we always find qualified people,” Koppers said. “The quality of the candidates here is what we need. I was able to talk to a lot of students who are both qualified and eager to work.” Dawson Technical Institute helped make the candidates qualified, and many of those students see construction as an industry where they can make a permanent mark. Agustin Sanchez, who went to Dawson to receive his certification in advanced carpentry, was grateful for the chance to display what he’d learned. His training paid off, as he was hired by Thorne Associates soon after the Interview Day. “I love to build new things,” Sanchez said. “New porches or anything else … I love seeing nothing turn to something. Things have started well. (Carpentry) is something I want to do for the rest of my life.” In addition to Thorne Associates, Bulley & Andrews and Pepper Construction, participating companies at the March Interview Day included: Anthony Roofing; Ceco Concrete Construction; Kenny Construction Company; McShane Construction Corporation; Meade Electric Company; Power Construction Company; The George Sollitt Construction Company; and W.B. Olson, Inc. Bulley & Andrews, Pepper Construction, Anthony Roofing, Kenny Construction, McShane Construction and George Sollitt were back for June’s Interview Day, and were joined by Ryan Companies US, Inc., Just-Rite Acoustics and Leopardo Construction Company.
Tom Bitto of Ceco Concrete Construction (left) interviewed six candidates at the Interview Day, including cement mason Terrence Doss.
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Bets, from page 4 into the most productive and profitable customers and prospects. Performing an analysis to determine which customers are the “best” for your business will enable you to target those customers and customer groups with your most valuable business development resource - face-time. The second piece of information you will need involves getting into the mind of the customer. You know which customers and customer groups are the most profitable for your business; now you need to find additional sources of customers who share those same characteristics. This is where market research is needed. Using your list of what makes a successful customer, investigate what other types of prospective customers would also value what you bring to a typical project. Commercial general contractors (or light manufacturing facilities, sports arenas, etc.) are too many in numbers to target. If you target this size category of customer, you will find yourself competing solely on price. It is improbable that everyone in a
category this large will find your points of differentiation valuable and be willing to pay for them. The key here is to figure out which commercial general contractors, for example, would find what you do interesting and valuable. You need to find the subgroups of customers to build your business on. Managing your get-work portfolio is about balancing a series of customer subgroups effectively. Gather marketsizing information on the customer subgroups that you discover. It is valuable to know roughly how big the market is, along with who are the current successful competitors. Knowing both size and competitive landscape allows you to craft the get-work strategy that delivers success.
Being able to pick the “right customers” to grow on is a business decision that will either add to or subtract from your bottom line. Using the steps above, you will be able to find the right customers to target and grow your business on. Invest your most valuable business development tool - facetime – with only those customers who have the potential to grow your business in the right ways. Get creative about ways to service other customers that do not consume large amounts of face-time. You will still do business with customers who only see you as just another contractor. However, using the techniques discussed above, you will be able to slowly grow the amount of work you are doing with the “right” customers and reduce your overall dependence on the customers who give you work at rock-bottom prices.
Managing Risk And The Bottom Line Customers are a key element to the long-term success of any contractor.
Cynthia Paul is a director located in FMI’s Denver office. She may be reached at 303.398.7206 or via e-mail at cpaul@ fminet.com.
New Members Just Rite Acoustics www.justriteacoustics.com 1501 Estes Avenue Elk Grove Village, IL 60007 Since 1989, Just Rite has grown each year based on our commitment to customer satisfaction. In addition to acoustical ceilings, we offer pre-manufactured acoustical wall panels, site—built acoustical wall systems, access floors and a specialty division that concentrates on difficult and unusual projects. Nuveau Designs www.nuveaudesigns.com 1801 Winnetka Circle Rolling Meadows, IL 60008 Nuveau Designs is a leading full-service custom millwork shop specializing in quality cabinetry that meets or exceeds AWI standards. We build service counters, reception areas, shelving, bars, wall panels, kiosks, case work and countertops in all materials. SiteWorks Construction, Inc. www.siteworksconstruction.com 276 Sunset Avenue Glen Ellyn, IL 60137 SiteWorks Construction works with the landscape construction of commercial buildings. The typical scope of work includes landscaping, retaining walls, brick paving and green roof installations.
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Risky Business Risk Management Presentation Draws 140 To Spring Meeting At Hyatt Rosemont A number of times during his presentation at the Builders Association Spring Meeting, AGC of America General Counsel Mike Kennedy referred to himself as just “a guy looking out a window.” He pointed out his observations on risk management and surety issues, but also encouraged those with questions to seek out a true expert on the issue. Judging by the attendance at the Spring Meeting, there are more than a few people interested in what he sees out that window. Kennedy breezed through a 40-minute presentation at the Hyatt Rosemont on May 17 in front of over 120 construction, insurance and law industry professionals. He highlighted the ways in which companies could improve their risk management practices and noted the importance of safety to AGC companies after the Builders Association handed out its Safety Awards at the meeting (see separate story). The 47 pages of documents handed out – The AGC’s Insurance Checklist and Risk Profiler – underscored how complicated risk management and surety issues are, but Kennedy hit the broad points for the professionals. One of his first points was that the room at the Hyatt wasn’t the only place interest in the issue was picking up. Attendance at this year’s AGC Surety Bonding and Risk Management Annual Meeting took a big jump, and a significant portion of the risk management professionals attending the meeting for the first time were in newly created positions at their companies. The guest speaker made it a point to emphasize the importance of companies implementing programs for ethics and compliance. Many lawsuits companies face from former employees, owners and other
Builders Association President Al Leitschuh, AGC of America General Counsel Mike Kennedy and Builders Association Chairman Paul Hellermann of Bulley & Andrews pose for a picture after the Spring Meeting at the Hyatt Rosemont. The Builders Association also handed out its safety awards at the meeting (below).
contractors could be averted or softened with solid planning and a working ethics program in place. Characteristics of an effective compliance program, according to the presentation, include: • Standards and procedures to
detect and prevent criminal conduct. Reasonable efforts not to hire managers who have engaged in such conduct. A hotline or other mechanism by
please see Risk Management, page 11
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Risk Management, from page 10
which employees could report problems anonymously. Appropriate incentives to perform.
A series of responses set up if criminal conduct is detected. The idea of a hotline for employees to report activity anonymously is one •
Thanks To Our Spring Meeting Sponsors: James, Schaeffer & Schimming Holland & Knight, LLC LaSalle Bank
Headline Sponsor Breakfast Sponsor Program Sponsor
of the most important parts of a great risk management program, according to Kennedy. He encouraged every company in attendance to set up a line – if it had not already – where employees could seek guidance and tell superiors what they saw without fear of retaliation. At the conclusion of the presentation, Kennedy opened the floor to questions, but there were none. He encouraged those with questions in regard to a specific issue to contact their insurance professional. According to feedback received from attendees, the presentation helped companies better understand the positives and shortcomings in regard to their own risk management and surety processes. Before Kennedy’s speech and the Safety Award presentation, members were able to network with each other over breakfast. Kennedy has been with AGC of America since 1981 and became its General Counsel in 1995. He is the AGC’s primary contact with the members of the Risk Management Committee, including the many insurance professionals and lawyers who serve on that committee. He also oversees all of the association’s work on labor, employment and environmental issues. The Builders Association is in the process of planning a number of other events this year, including the Builders Foundation Golf Outing (Aug. 1), two more Contractor Safety Forums (the first on Aug. 9) and a Building Information Modeling seminar (July 18).
Safety, from page 8 Russell Kula of Knudsen Construction (above) asks about the legality of “Daily Sheets” to record jobsite injuries and background checks for workers compensation injuries. The question was one of several posed to assembled safety professionals at the May 9 Contractor Safety Forum at the Chicagoland Construction Safety Council in Hillside. At left, Steve Eaton of Mine Safety Appliances (left) and Doug Schultz of Herlihy Mid-Continent Company listen to an answer by Builders Association Safety Committee Chairman Bob Smith of The Levy Company. Other questions involved 6-foot-fall rules, audiometric testing and company policies involving alcohol and driving company vehicles. Safety Forums are held four times each year to help safety professionals get answers to their questions and talk about important issues confronting them on the jobsite. The next Safety Forum will be held Thursday, August 9 at the Chicagoland Construction Safety Council.
• • • •
Case Foundation Company Pepper Construction Company Ryan Companies US, Inc. Scurto Cement Construction, Ltd. • Sigalos & Associates, Ltd. • Tyler Lane Construction, Inc. In addition to the Safety Awards, the Spring Meeting included a presentation on risk management and surety issues by Mike Kennedy, General Counsel for the AGC (see related article). The Builders Association is proud of the commitment all of its members make to the safety of Chicagoland’s construction workforce.
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Spotlight, from page 2 to create the earth retention and foundation support for the retail building. Beneath the retail area will be the CTA subway cross connect train platform. Mills Corp., the original developer on the project, came together with the City of Chicago and the Chicago Transit Authority to plan an express train to both O’Hare and Midway airports that will link the Red Line and the Blue Line. While the project offered a number of advantages for the companies involved, it also showed a fair amount of challenges, not the least of which was the logistical nightmare that working in the downtown area presented. Surrounded by car and pedestrian traffic on the constantly busy streets. W.E. O’Neil was able to work with the City and OEMC to obtain limited street closures around the block. Acquisition of a third lane would have been helpful, according to W.E. O’Neil Senior Vice President Lou Reiter, but the City rejected that plan. Logistics on the site have become more congested due to CTA’s tunnel contractor working on the site with the same street closure plan that W.E. O’Neil secured for its own work. “Getting the trucks in and out of the site is a project in itself,” O’Neil Vice President of Operations Lou Reiner said in March. “We’ve got different types of vehicles to bring in at different times, and none of it’s easy, so it’s real easy to go crazy with the logistical portion of it. W.E. O’Neil has truck staging areas in various areas of downtown and calls in the truck when there is room on the site. The excavation portion of the project requires semi-dump trucks to be loaded on site every five minutes in addition to concrete and steel deliveries, along with the various other deliveries. “The on-site logistics are something we knew would be a challenge, but it’s one we’re happy to take on. Just seeing everything come together so far has been very rewarding. It’s great to be part of something like this and I think everyone involved is going to be very pleased with the finished product.” Reiner also stated that the project’s below grade portion is built in a way that is unique to the Chicago area: “Up/Down” or “Top Down” construction. “We have installed the perimeter earth retention slurry wall and the caissons from and up to grade level with connection plates and bolts for the first level structural steel,” he stated. “Once the first level structural steel and concrete concrete on metal deck is installed, it braces the top of the perimeter slurry wall. We are then allowed to excavate using mining techniques
under the first floor slab to the next level. “We then place the concrete slab at the next level below grade. That level then again, supports the slurry wall at the perimeter, and then we ‘mine’ under that level to the next. While this “mining” is ongoing below grade, the retail structural steel component above grade continues upward. What this type of construction allowed was a reduction in the requirement of conventional perimeter earth retention work of sheeting , rakers,and braces. This method also reduced the schedule time required to construct the project”. Dan Bien, Project Manager for Case Foundation, echoed those sentiments. “This has allowed us to get involved with a project from the front end and to have some say in how it develops,” said Bien, whose team worked on the underground portion of the project. “It’s an honor to be a part of it. I was fortunate enough to be involved with the Trump Tower project last year, and that was the same kind of feeling.” Slurry walls were used to build the underground floors of the building from the top down. Plans call for the train platform below the retail section to include check-in areas for all airlines. It wasn’t an easy task building the, but Case has a long history of executing difficult and high-profile projects. “What we were doing on the project was putting the caissons in,” Bien said. “We’re having to drill over 100 feet deep, so it’s taking some time to do. We’re drilling through existing foundations, it’s a complicated process. W.E. O’Neil cleared the way for the caissons but not all the obstructions were found.” Reiner was quick to praise Case and everyone else working to make the long-awaited development a reality. “The Roy Storm Excavation Company had to dig through a lot to clear a path for the slurry wall earth retention system,” Reiner said. “There was more than 2,000 cubic yards of debris, foundations and concrete obstructions that to be excavated out before they could even think about slurry wall installation. There was a lot left there from the previous demolition. “There are city restrictions on how early we can work and how late we can work because of the residential building around where the site is, and we’ve been working with the City on those issues and the logistical issues. It’s a job where there are plenty of challenges, but everyone working on it knows how great of an area this is to build in, and how great it’s going to be when we’re finished.” The retail and below grade portions of the project are scheduled to open in fall of 2008.
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President George W. Bush is introduced by AGC of America President Steve Massie before speaking to AGC executives at the AGC Leadership Conference in Washington, D.C. on May 2. Bush spoke to members - including Builders Association President Al Leitschuh and Pepper Construction Company CEO J. David Pepper - about infrastructure, the economy and the war on terror before taking questions.
Documents, from page 3 contract, but the language shift would require that contractor to prove that damage came from those methods and techniques imposed by the owner. There are issues where the AIA changed language per suggestions from the AGC, including a section stipulating that a contractor must demonstrate that requests for an owner’s financial information are “reasonable.” The current A201 contract, which has been in use since 1997, did not require a prior showing from the contractor when questioning an owner’s ability to pay for the project. In addition, the AIA removed language that would require contractors to obtain insurance for defective construction. Language requiring “continuing operations” insurance coverage remains. While the AIA continues to refine an A201 document it hopes to have in effect by the end of this year, Perlberg and his colleagues at the AGC continue to work on updating many contracts on the AGC’s website. The contracts will be a collective effort by the AGC and a number of other construction organizations, including: • Associated Specialty Contractors, Inc. (ASC) • American Subcontractors Association, Inc. (ASA) • Construction Industry Round Table (CIRT) • Construction Owners Association of America (COAA) • Construction Users Round Table (CURT) • Design-Build Institute of America (DBIA) • National Association of State Facilities Administrators (NASFA) • National Association of Surety Bond Producers (NASBP) • Surety & Fidelity Association of America (SFAA) The end result, according to the AGC, will be a comprehensive catalog of construction contract documents, hopefully in place sometime this fall.
AGC Disappointed In Senate’s Guest Worker Manuevering The U.S. Senate’s recent move to cut the guest worker program of the Associated General Contractors of America (AGC) from 400,000 to 200,000 workers annually was seen by the association as an offset to their plan for immigration reform. The guest worker program would grant productive, lawabiding illegal immigrants a temporary stay in the U.S. before requiring them to return to their home countries to apply for guest worker status and re-entry into the country. “The guest worker program is a cornerstone of comprehensive immigration reform,” said Stephen E. Sandherr, chief executive officer of the AGC. “The Senate’s move … is short-sighted and chokes off legal means to meet employment shortages.” The AGC had hoped their guest worker program would help solve the national problems of illegal immigration and employment shortages because the end product of the program for foreign workers would be U.S. citizenship. Employment shortages would decline as more citizens would take jobs.
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Language, from page 1 “Pepper emphasizes the importance of returning home to our families each and every day,” Flentge said. “This is a commitment Pepper believes bridges all cultures.” To better communicate with these workers, contractors have also found it useful to hire a Spanish speaking liaison on the job site to help translate and teach contractors how to approach and treat Hispanic workers as well as help give directions and orders. “It is important to become their friend and develop a sense of trust because if they don’t trust you they won’t talk to you which potentially endangers their safety,” Tibbetts said, “It’s more than just a language barrier.” “We hired someone who was fluent in Spanish and trained him on a number of issues like fall protection, fork lift, scaffolding, first aid, CPR and an OSHA 10-hour information session.” Flentge says Pepper has developed a set of ‘safety flash cards’ to provide English and Spanish translations of commonly used safety phrases. “This provides a means of communication if bilingual skills are not an option,” he said. According to Ceco Concrete Construction Safety Director Tom Bitto, contractors are finding it important to ensure that crews are able to effectively communicate with one another without any language barrier. “For safety and quality reasons, we would not have a non-English speaking worker in a role where they would communicate with a non-Spanish speaking person,” Bitto said. “With a bilingual supervisor, the Spanish written procedures and policies, proper job assignments and working around the English speaking crews we believe that we can train Hispanic workers in a relatively short time.” With education and training through the resources of organizations like the Occupational Health and Safety Administration (OSHA) and the Hispanic American Construction Industry
The steady rise in Spanish speaking construction workers has prompted the Occupational Safety and Health Administration to hire five Spanish speaking compliance officers. Above, Pepper workers on the job at Loyola Heart Hospital.
Association (HACIA), contractors can feel confident in the safety of their workers while on a jobsite. LATINO WORKPLACE INJURIES AND FATALITIES In September of 2006, a panel gathered to discuss Latino Workplace Injuries and Fatalities within the state of Illinois. This panel included: Congressman Luis Gutierrez; LECET Executive Director Patrick Hosty; and President of The Illinois AFL-CIO, Margaret Blackshere. Numbers indicate that Latino workers are more likely than other workers to be killed or injured on the job. Nationally, fatalities for workers on the job have fallen 16 percent since 1994, but alarmingly Latino fatalities escalated 27 percent between 1994 and 2003. The opinion of the panel was that the rise in fatalities is related to the fact that Hispanic workers often work in more hazardous occupations, face cultural and language barriers on the jobsite and fear retaliation if they report unsafe conditions.
With education and training through the resources of organizations like OSHA and HACIA, contractors can feel confident in the safety of their workers on a jobsite. 514
Illinois is among the top 10 states in Latino population, which makes it imperative that contractors make it a priority to increase the safety measures for Hispanic workers. An OSHA study has found that injuries and deaths on jobsites stem from language and cultural barriers. One-fourth of all fatalities investigated by OSHA were directly related to those causes. THE ROLE OF OSHA OSHA is going to great lengths to help improve the safety of Hispanic workers on jobsites and has implemented several tools and resources to help not only assist Hispanic workers but the contractors who work with them. “It depends on what generation they are,” said OSHA District 5 Executive Director Diane Turek. “If they are second or third generation they are more assimilated to American culture. However, if they are first generation they may hesitate to come forward in fear of losing their job.” To fill this cultural gap, OSHA Region 5 has recently hired five Spanish speaking Compliance Officers who assist the Hispanic workforce through a hotline. This hotline is designed to allow Hispanic workers to report safety issues, discrimination or other issues that the
please see Language, page 15
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Language, from page 14 compliance officers can help address. “When they are able to speak to someone in Spanish, it puts them at ease and they feel that they can confide in them,” Turek said. In addition to the hotline they have created E-Tools, interactive web based training which illustrates and contains graphical menus. They also have developed quick cards which contain basic safety guidelines and an e-dictionary which translates English to Spanish and vice versa. A 10-hour OSHA safety training course for Spanish workers was created through a joint effort with HACIA. However, the main issue of improving safety with Hispanic workers is opening the lines of communication and developing a sense of trust. “Through education and outreach, OSHA lets Hispanic workers know that they have someone to call,” Turek said. Hispanic workers currently have the highest number of fatalities, especially falls, which is a main issue that OSHA is addressing. Due to increase in awareness and education, the number of Hispanic worker fatalities from 2005-2006 has decreased by 2.3 percent according to Turek. However, the number of fall fatalities was up in 2006. THE ROLE OF HACIA HACIA recognizes that the issue of Hispanic trade workers’ safety is becoming an increasingly prevalent issue, and is quick to point out that the issue is much larger than a communication barrier. “It is a language barrier but it’s also an education barrier,” said Cesar Santoy, Executive Director of HACIA. “Many Hispanic workers can not read Spanish, let alone English.” In an effort to educate and increase the safety of Hispanic trade workers, HACIA has formed a strategic alliance with OSHA. Bilingual professionals were hired for the OSHA 10-hour safety course. Not only does HACIA provide training to its members but also to companies as a whole. The organization holds seminars with contractors that address the economic benefits of jobsite safety including the State of Illinois Work Safety Seminar in Spanish. Through seminars and training programs, HACIA hopes to encourage contractors to increase the safety measures for Hispanic workers. “We hope to instill a conscience on behalf of the employer to encourage them to foster an atmosphere of safety,” Santoy said. “Encouraging employers to increase safety will encourage employees to work.” Another main issue that HACIA faces is trying to reach what their organization refers to as small contractors who work in residential and commercial construction. They are often lucrative, but are not plugged into any large associations, according to Santoy. “Many of these ‘under the radar’ contractors are not aware of the resources out there and that there is a supportive network of associations that can help them.”
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Financial, from page 6 overall interest or concern. You can prepare yourself by honestly evaluating and reflecting on the necessary components of a well-thought-out succession strategy. Here are some points that may require further elaboration: • A thorough job description of each position, including details regarding areas of responsibility and delegation of duties management/organizational • A plan • Assuring the availability of cash to meet the demands of federal and/ or state estate taxes • A list of potential successors to your ownership, taking every candidate’s job experience and academic background into consideration, and mechanism to ensure • A extensive on-the-job training for the successor(s). Other Considerations A succession strategy may also include a buy-sell agreement funded by life insurance. More than likely, your successor may not have the cash, or the ability, to borrow at the time of successorship. Under such an agreement, the death benefit proceeds of the life insurance can be used to provide the cash necessary for a successor to purchase an owner’s share of stock in the event of his or her untimely death. In addition, it may be prudent to explore how your unexpected disability could affect not only your plans for successorship, but also your financial well-being. Under a disability buyout arrangement, a disability buyout policy provides a successor with cash to purchase shares in the event of the owner’s untimely disability. You should consult with your insurance, legal and tax professionals to devise a plan
of action that provides security for your business and your family. With proper planning, your objectives for business succession and securing your family’s future can be met. This article appears courtesy of Rabjohns Financial Group. Securities projects are offered through New England Securities Corporation, a broker-dealer (member NASD/SIPC). Rabjohns Financial Group focuses on meeting the individual insurance and financial services needs of business owners in the construction industry. You can reach Rabjohns Financial Group representatives at 8700 W. Bryn Mawr Avenue, Suite 600S, Chicago, IL 60631, (773) 380-9700. New England Financial is the service mark for New England Life Insurance Company and related companies, Boston, MA. Disability Insurance offered by Metropolitan Life Insurance Company, New York, NY, and unaffiliated insurers through New England Financial Boston, MA an affiliate of Metropolitan Life Insurance Company. This article is for general information only and is not intended to provide specific advice or recommendations for any individual. You should consult with your advisor, attorney or accountant with regard to your individual situation. The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance. You should seek advice based on your particular circumstances from an independent tax advisor. Most insurance policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your representative will be glad to provide you with costs and complete details.
Builder The Builder is published periodically by the Builders Association, a trade association of commercial, industrial and institutional contractors and affiliated industry firms dedicated to quality construction in the Chicagoland area. 2007 Board of Directors Chairman Paul Hellermann Bulley & Andrews Vice Chairman J. David Pepper Pepper Companies Treasurer John Russell W.E. O’Neil Construction Co. John Benz William J. Scown Building Company George Ferrell Henry Bros. Co. Leon LaJeunesse Custom Contracting, Ltd. John O’Malley Case Foundation Company Howard Strong George Sollitt Construction Co. Sheri Tantari McShane Construction Corp. Dana Thorne Thorne Associates Lynn Treat Ryan Companies US, Inc. The Builder Staff Andy Cole Editor, Advertising Sales Eric Nyberg Katie Sells Communications Interns Builders Association 9550 W. Higgins Rd., Suite 380 Rosemont, IL 60018 (847) 318-8585 www.bldrs.org
Representing the Associated General Contractors of America in the Chicagoland metropolitan area.