Weathering the Storm: Economic Forecast 2022
The Supply Chain Ripple Effect The Cost of Doing Business The Retirement Gap Creative steps to fill the shoes of retiring workers
The Magazine of the Keystone Contractors Association January 2022
The Magazine of the
Tracy Sturla Keystone Contractors Association
Marketing and Social Media Writer Advertising Director
Jon@KeystoneContractors.com (717) 731-6272
Denise Dolgos Beth Martin
Susan Matson Tracy Sturla Tracy@AtlasStories.com (412) 749-9299
Click on links below to learn more or visit the KCA Events webpage for up-to-date information.
KCA Scholarship applications due February 1
GCAP & Carpenters Legislative Reception February 8
Improving Project Outcome Session with partnering AEC organizations March
PAK Awards reception hosted by PA Builders Exchange, ASA of Central PA, & KCA Tuesday, March 1, 5-7 p.m. at Liquid Noise
KCA Spring Clay Shoot May 2-6
Construction Safety Week May 2-6
Improving Project Outcome Session with partnering AEC organizations May
National Safety Month Sponsored by National Safety Council June
Construction Opioid Awareness Week July 25-29
KCA Safety Award applications due September 1
Events are subject to change and exact dates will be applied in future issues.
Construction Suicide Prevention Week September 5-9
Governor’s Occupational Safety & Health Conference October 24-25 - Hershey, PA
KCA Annual Clay Shoot to benefit College Scholarships November
Improving Project Outcome Session with partnering AEC organizations December
KCA Top Young Leader Award and Tom George Community Service Award applications due December 31
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KCA Launches Scholarship Program
Established in 1940, the Keystone Contractors Association addresses the needs of contractors engaged in commercial, institutional, and industrial construction.
Workforce development and recruitment is a major need of the construction industry. To do our small part to encourage and promote construction careers, the KCA is launching a scholarship program.
John Panzitta President, Keystone Contractors Association
The KCA is committed to providing and supporting quality educational programs designed to enhance the success of the construction industry. Because of that commitment, the KCA established an annual scholarship program to assist in attracting outstanding people to the construction sectors. Our goal is to award one annual scholarship of up to $10,000 to a deserving student and, over time, to provide the Pennsylvania construction industry with a diverse pool of highly qualified candidates to fulfill its employment needs in areas such as project managers, project engineers, estimators, and field supervisors. Assuming the recipient maintains career ambitions and excels in school, this scholarship is renewable for up to three years. Within a short time, we will have four scholarship recipients receiving annual tuition assistance.
Interested in sharing a message, opinion or letter? Members can submit ideas to Tracy Sturla at Tracy@AtlasStories.com
The deadline to apply for the inaugural scholarship is February 1, 2022. For more information on the program, and to view the application, please click here: KCA Scholarship Program.
KCA members are highly encouraged to distribute this scholarship information to their employees, clients, and industry contacts.
THE KEYSTONE CONTRACTOR 3
4 THE KEYSTONE CONTRACTOR TABLE OF CONTENTS 10 6 FEATURE The Retirement Gap Creative steps to fill the shoes of retiring workers WEATHERING THE STORM: Economic Forecast 2022 by Dr. Anirban Basu 18 22 EMERGING LEADERS Q & A 26 THE COST OF DOING BUSINESS THE SUPPLY CHAIN RIPPLE EFFECT How businesses of all sizes are feeling the impact
from the Executive Director
Jon O’Brien, Keystone Contractors Association
Recommending Strategies for Today and Tomorrow
It thrills me to announce that the Keystone Contractors Association has launched a new planning process that will result in the development of an advanced strategic plan that will steer our organization through 2025. It is nearing completion, and we can’t wait to make it available to the membership and our industry stakeholder partners. The strategic planning process provides an opportunity for the KCA to:
• Strategically and proactively address changes in the construction industry. Heading into 2020, the industry was trending in the right direction concerning collaboration. But then, we were confronted with a pandemic, and everyone started walking back towards their silos. So much has changed since March of 2020. As an industry, let’s get back on the right track to work on issues impacting all of us.
• Discuss current efforts and design new strategies in the area of workforce development. Our industry offers great career opportunities, and many organizations excel in recruitment, but are not truly tapping into our resources. From the vocational and technical schools to the higher educational institutions to the veterans’ organizations to the urban communities, the workforce shortage crisis solutions may be right in front of us. But now we must add communication vehicles to reach the workforce of tomorrow.
• Identify and address strengths and opportunities that can improve our industry. The construction industry is a learning culture that’s adaptable to changing times such as new building codes, evolving means, and methods, and innovative technologies. Technology plays a huge role — the industry is advancing at tremendous speeds (and at times it may seem like we are making daily advancements). Those entering the workforce have developed more skills than ever as they’ve grown up with technology. Let’s welcome this opportunity and win with our strength.
When completed, the plan will provide the framework for guiding the KCA through 2025 and tackle threats facing our industry today. Started in the summer of 2021, this plan incorporates valuable input from the KCA membership, potential members, the design community, suppliers, service providers, and end users.
The KCA cannot wait to roll out Recommending Strategies for Today and Tomorrow. We welcome accountability, and we expect the construction industry stakeholders to gauge our progress in achieving our goals and objectives. Please stay tuned for upcoming events to introduce our strategic plan.
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Weathering the Storm
ECONOMIC FORECAST 2022
by Dr. Anirban Basu
What is the outlook for 2022 for the commercial construction industry in Pennsylvania?
I think it is a fair-to-middling forecast. There are some significant challenges that face us currently and will persist into 2022. Among the most significant challenges is an ongoing skills shortage within the construction industry. This has been one of the factors that has continued to drive construction costs higher and rendered it more difficult for contractors to meet project timelines and to deliver projects on budget. There does not seem to be any near-term end to these skills shortages. America is simply not producing enough skilled craftspeople, and that problem is one present in Pennsylvania as well.
On top of that, material prices continue to be high. Over a recent 12-month period, construction input prices rose nearly 20%. In some cases, material prices have risen more than 100%, including steel mill products and natural gas. This growth further elevates the cost of delivering construction services and, therefore, makes it more likely that certain projects will be postponed or canceled outright.
One thing we hear from contractors and project owners is bids are coming in so high because of these cost pressures that some
projects are being put on hold. In fact, some organizations that measure construction backlog have recently seen backlog in decline precisely for this reason. The demand for construction services remains elevated...However, the issue is really a supply side issue, and given all of the supply side challenges (even though there is demand for construction services), the economics of the supply side do not always allow these projects to move forward. And unfortunately, it would appear that many of the global supply chain issues that currently face America will continue in 2022. It is going to take some time for these supply side issues to abate, including, of course, those that relate to the labor market.
Are certain types of construction being affected more than others?
I think new building construction. Prior to the pandemic, America built a lot of new office space and hotels. But, we also saw during the pandemic a spate of large-scale bankruptcies …and what that has done, of course, is it has put more available retail space on the market. So, if we think about retail construction, that will be subdued because of this excess space. In certain segments, demand for construction is not
particularly high, and this is mainly true for the hotel construction segment.
In other segments like fulfillment center and data center construction, demand is hot, heavy, and furious. I have no doubt that many contractors are finding gainful work in those segments. The American Rescue Plan Act…also provided direct federal relief to state and local governments. And many state and local governments now have more funds to spend, including on infrastructure. One of the big winners here is school construction, which will undoubtedly be another source of opportunity for many contractors in 2022.
How does the looming retirement gap play into the economic forecast for 2022, and what is the solution?
We know that a lot of baby boomers retired earlier than they expected during the pandemic. A lot of those Baby Boomers have been our best craft workers. These are the people who specialize in HVAC, electrical work, plumbing, pipe fitting, and other types of work, such as roofing and glazing. And so, they probably will not come back in many cases. As a result, we are left with younger generations having to deliver construction services including in
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While the economy rebounded in 2021, new challenges put new pressures on the construction industry. Supply chain problems, rising materials prices and worker shortages were chief among them. To get an outlook for 2022, The Keystone Contractor Magazine interviewed Anirban Basu, chairman and CEO of Sage Policy Group in Baltimore.
the form of the skilled trades.
What does America need to do? We need to get more young people engaged in the skilled trades, whether it is young men or young women — although the industry has not done a particularly great job involving women generally. But, we also see relatively less engagement among young men in construction as opposed to previous generations. This decline may have to do with the lack of shop class in high schools. Shop class was often where many young people learned their love of working with heavy machinery…In any case we do not have that in the curriculum anymore and as a result, fewer people are exposed to the possibility of entering the American middle class via the skilled trades.
One of the other issues here is immigration. America seems to have lost its way in terms of immigration policy. Now I’m speaking about legal immigration. But of course, many of the world’s great carpenters, pipe fitters, plumbers, electricians, roofers, glazers, and superintendents are not necessarily part of this country right now. They could be. But America needs to think long and
hard about its legal immigration policies because we are desperate for skilled workers.
Will the supply chain issue linger through all of 2022?
I think that you will see supply chain issues gradually dissipate over the course of the year. But one has to contextualize this. You might remember that…early in 2021, the notion was these supply chain issues would be gone by now, that supply would have risen to meet demand and these pressures we are experiencing would be merely transitory. Instead, what I see is that many of these supply chain issues will persist into 2023. Yes, there will be a gradual dissipation of these challenges as the world strives to move toward normalcy, but it may not be until 2023 that we can finally talk about the world operating closer to normal.
Which trades are being hit hardest by the worker shortage?
There are certain occupational categories which seem to have particularly profound difficulties. Among them are categories that are most associated with older workers. So, contractors continue to complain about a lack of electricians. We know we
have a lack of glazers; we know we have a lack of carpenters; in fact, many companies have commented we do not even have enough superintendents. So, it is difficult to say which ones have the worst shortages, but we know these shortages are pervasive across the construction trades. I think it is relatively universal because the same factors that have created these worker shortages in one segment also affect other segments. Take the lack of shop class or the mantra among many American parents that they view the only pathway into the middle class is through a four-year college degree. All these types of cultural phenomena have produced these shortages, and they affect every construction trade.
Dr. Anirban Basu is chairman and CEO of Sage Policy Group, Inc., an economic and policy consulting firm headquartered in Baltimore, Maryland with an office in Indonesia. The firm provides strategic analytical services to energy suppliers, law firms, medical systems, government agencies, and real estate developers among others.
Listen to Dr. Basu’s forecast for 2022
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Appointed by Governor Wolf to Serve on Apprenticeship and Training Council
In November 2021, KCA executive director Jon O’Brien was appointed by Governor Wolf to serve on the Pennsylvania Apprenticeship & Training Council. The Council operates under the Pennsylvania Department of Labor & Industry and acts as the approving agency for apprenticeship programs in our state. O’Brien also serves on Pennsylvania’s Prevailing Wage Appeals Board.
Barry Isett & Associates Named #17 Best Places to Work in PA Among Mid-Size Employers
Barry Isett & Associates has been named to the 2021 list of 100 Best Places to Work in PA for the third consecutive year, earning the #17 spot in the medium employer category (100-249 employees). The employee-owned firm in Allentown, PA, provides engineering and related consulting across eastern and central Pennsylvania.
“We truly believe our people are our greatest asset, so for them to share their pride in Isett to help us achieve this status for the third year in a row is tremendously rewarding,” said Kevin Campbell, Isett’s President and CEO. Awards are presented in coordination with the Best Companies Group and by Team Pennsylvania, Central Penn Business Journal, Society for Resource Management, their affiliate the PA SHRM State Council, and The PA Department of Community and Economic Development.
Barry Isett & Associates provides service to clients across eastern and central Pennsylvania in 14 engineering and consulting disciplines in design, field, and public divisions.
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Leibold Inc. Adds to Their Team and Names Albrecht as Project Manager
Susan Albrecht has joined the Leibold Inc. HVAC team as a project manager. As a project manager, Albrecht will create construction schedules, coordinate all sub-contractors, track equipment deliveries, and organize all weekly job progress and foreman meetings. Albrecht is spearheading one of its high profile and fast-tracked jobs: Hamburg Middle School HVAC renovation.
The Hamburg Middle School project was broken down into nine phases and has been completed with very little disturbance to the educational facility. Albrecht has worked closely with the architect (AEM Architects) and project owner to ensure a safe and professional installation of all HVAC, ductwork, and piping materials.
Albrecht has already taken on additional jobs and responsibilities including coordinating the HVAC work for a new elementary school, Blue Mountain West and the Schuylkill Haven School District (Sports Complex). Working closely with her husband, Shawn Albrecht, one of the company’s sheet-metal project managers, they are doing a great job managing and scheduling multi-trade projects.
We look forward to Albrecht’s future at Leibold Inc., assisting in the growth of Leibold’s customer base.
McClure Company Sells Majority Interest Position to Sojitz Corporation of America — Retains Ownership Stake
President Chip Brown announced that McClure Company, one of Pennsylvania’s largest mechanical contracting and energy services firms, headquartered in Harrisburg, has sold an ownership interest to Sojitz Corporation of America (SCA), a global trading company headquartered in New York and Tokyo, effective November 30, 2021. “This is a momentous time in the growth of McClure Company. Our 68-year reputation for performance and innovation in mechanical construction and energy services has attracted the attention of a highly respected global partner — Sojitz Corporation of America,” says Brown. “Their 100-year legacy of investing in groundbreaking companies, supporting teams within their network, and creating new business value is in perfect alignment with McClure’s mission.”
McClure Company will continue operating as a private company under the new ownership agreement with no business changes from the employee or customer perspectives. “We are the same company, with the same management team, offices, and president,” says Brown. McClure Company is retaining its entire workforce, which ensures zero disruption in workflow.
“The future of energy is ours to build and SCA provides McClure with significant additional resources for new acquisitions, geographic growth, and financial solutions. As the need for transformative and complex energy solutions evolves, we are now uniquely prepared to develop, finance, and deliver them,” says Brown.
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Gap FEATURE Creative steps to fill the shoes of retiring workers
Baby boomer retirements will hit many industries hard, with the building trades in the eye of the storm.
The construction industry has been preparing for that crisis for a long time, but it’s not an easy problem to solve. And it has become an even greater priority because the COVID-19 pandemic prompted some older workers to put their tools down sooner.
“I truly believe we are seeing exactly what the future looks like today with the workforce shortages throughout the country,” said Rob Smith, supervisor of instruction at the Northeast Carpenters Apprenticeship Fund of the Eastern Atlantic States Regional Council of Carpenters.
In 2017, the National Center for Construction Education & Research estimated that 29% of workers in the construction industry would retire by 2026. That number likely is higher now.
“We’ve got about three and a half million baby boomers who are leaving the workforce every year. And that’s about a million to a million and a half more than the trend was before COVID,” said Jesse McCree, CEO of South Central PA Works (SCPa), a workforce development organization serving eight counties.
“Generally speaking, construction has more of an aging workforce than other sectors. So, it’s going to hit the construction industry particularly hard.”
Recruiting talent long has been a challenge, especially with the education system largely focused on preparing students for college, not the trades.
“We stopped talking to our kids about going into skilled labor and the trades back in the ‘80s. Now we’re kind of realizing those negative benefits in our workforce,” said Bill Lucas, executive vice president of Junior Achievement of Western Pennsylvania, which later this year hopes to unveil a new Careers in Skilled Trades program.
Today’s labor market is even more competitive. Every industry is desperate for workers. Shortages of truck drivers and workers in manufacturing and other fields are driving up wages.
Progress is being made, though. The construction industry and its partners are collaborating with schools, technical colleges, and workforce development organizations. They are beefing up opportunities such as pre-apprenticeships, apprenticeships, and internships.
They are working harder to sell construction as a stable field providing high-paying, quality, interesting jobs.
The message needs to be that “construction jobs are not just working outside with a hard hat and a jackhammer, that there’s many other opportunities both in residential and commercial, but also increasingly growing in sort of a technical skill set that needs a lot of training and needs a lot of education,” McCree said.
Here’s a look at some of the initiatives that are underway to address the retirement gap.
JUNIOR ACHIEVEMENT OF WESTERN PENNSYLVANIA
Several years ago, members of the business community who sit on Junior Achievement’s board of directors said the organization wasn’t doing enough to address the need for workers in their fields.
That launched a plan, the Careers in Skilled Trades Program, which is nearing completion. It has the potential to reach 50,000 students in western Pennsylvania and northern West Virginia.
The program aims to introduce young people to career pathways in skilled trades and help them discover what professions align with their skills and interests.
The hope is to hold a pilot program in a few continued
We’ve got about three and a half million baby boomers who are leaving the workforce every year. And that’s about a million to a million and a half more than the trend was before COVID.
Jesse McCree, CEO South Central PA Works
Matamoros, president Junior Achievement of Western PA
schools in spring 2022 and expand it to all schools in the fall. It’s targeted to be duplicated by other Junior Achievement programs nationally.
The plan extends beyond the building trades to careers in manufacturing, health care, automotive repair, and other fields.
“There’s all these careers out there that we don’t talk to our kids about,” Lucas said.
Junior Achievement is taking care not to duplicate pre-apprentice programs that already exist. Instead, it wants its program to be a source to connect students and families with the existing programs.
Careers in Skilled Trades will use a video game along with visits by area professionals to explain career paths to students.
“Kids can’t be what they can’t see,” Lucas said.
Partners include labor unions, trade schools and area employers including Columbia Gas, MSA Safety, PPG, Rosedale Technical College, Equitrans Midstream Corp. and the National Electrical Contractors Association.
The Pennsylvania Department of Labor &
Industry has approved the initiative as a registered pre-apprenticeship program.
Junior Achievement officials have met with regional employers to understand what types of programs schools should offer to prepare future workers. Officials also meet with schools, surveying students and faculty to determine how to make its program attractive.
“If we’re building a digital curriculum that will help fill the gap and help funnel kids into these programs, we want to make sure that the program itself is something that’s fun, engaging for the kids, easy to use, intuitive, as well as for the teachers, making sure the ease of use is our primary objective,” said Patrice Matamoros, Junior Achievement’s regional president.
EASTERN ATLANTIC STATES REGIONAL COUNCIL OF CARPENTERS
The Eastern Atlantic States Regional Council of Carpenters is ramping up efforts to recruit the next generation of carpenters.
The council is looking to expand its already robust Registered Apprenticeship & Training program through a multifaceted approach to educate more people about the benefits of a career in the carpentry trades.
“The goal is to attract more apprentices to its four-year program,” states, Rob Smith, supervisor of instruction for the Eastern Atlantic States Training Fund. The first approach fully utilizes the United Brotherhood of Carpenters (UBC) Career Connection pre-apprenticeship programs, marketed to school districts to be part of their career and technical education programs.
Students learn basic and intermediate carpentry, advanced skills in commercial and residential construction, and the essentials of site safety. Participants have trained in skills that employers desire, such as goal setting, positive attitude, punctuality, teamwork, and initiative.
Teachers are provided with books that include class notes, project rubrics, and evaluations, a tool safety operation checklist and a skills matrix. Teachers and students can see projects built step-by-step using the program’s Virtual Shop software. Trained
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“If we’re building a digital curriculum that will help fill the gap and help funnel kids into these programs, we want to make sure that the program itself is something that’s fun, engaging for the kids, easy to use, intuitive, as well as for the teachers...”
“ The Retirement Gap continued
and certified outreach specialists—all experienced carpenters—support teachers through mentoring while ensuring safe shop practices. Tours of UBC Training Centers and professional speakers such as contractors or manufacturers also are available.
Another recruiting tool is the Carpenters Apprentice Ready Program. It seeks to identify and train motivated females, minorities, and other Philadelphia residents with barriers to employment in the building trades.
The program was launched in 2016 by the Carpenters Joint Apprentice Committee of Philadelphia, the Eastern Atlantic States Regional Council of Carpenters, and the General Building Contractors Association.
Training includes hands-on lessons in using tools and materials, construction math, and safety. Participants meet with contractors and get an overview of the trade, including general carpentry, millwright, floor laying, and cabinet making.
The Eastern Atlantic States Regional Council of Carpenters’ five training funds are also working on getting their apprenticeship training programs accredited by the Council on Occupational Education to confer a two-year associate degree on graduates.
“So even if parents want their kids to go through college, we can now meet that expectation and
goal as well, having the apprentices earn while they learn at the apprenticeship school, rather than incur college debt,” Smith said.
ACE MENTOR PROGRAM OF AMERICA
Another program working on getting high school students interested in construction jobs is the ACE (Architecture-Construction-Engineering) Mentor Program of America, which has four chapters in Pennsylvania — Philadelphia, Pittsburgh, Lehigh Valley, and Central Pennsylvania.
There are roughly 15 sessions spread through the school year, when students are exposed to the different career paths in the industry.
“We make sure that every student who participates gets an opportunity to really understand all the different paths. So, if they are college-bound, they learn the difference between a four-year degree versus two-year. If they’re trades-bound, what is an apprenticeship versus a trade school or an associate degree? Basically, we want to make sure they understand all of the opportunities within the industry,” said Diana Eidenshink, president of ACE, which is headquartered in Philadelphia.
For the first half of the program, industry professionals speak to participants about how they continued
THE KEYSTONE CONTRACTOR 13
got to where they currently are in their career.
ACE is always looking for volunteers. Those interested in helping to expose students to the trades and encourage them to pursue a career can find information at www.acementor.org
Listen for more on the Ace Mentor Program PLAY EPISODE
In the second half of the program, students work with professionals on a project.
They complete all aspects including budgeting, project management, scheduling, water runoff, and green design.
“We can sit and tell them everything we do, but unless we get them doing it, it doesn’t necessarily impact them to understand what real life would look like,” Eidenshink said.
Some projects have been built, including tiny homes. Often, projects are completed digitally. They’ve included a skate park, a museum, and an airport expansion. Having that software available is essential.
“The kids want to understand that the industry is technical, that it’s not just putting a hammer in your hand and banging on a nail,” Eidenshink said.
Software vendors benefit from donating their products because that gets the next generation of users exposed to it.
Because of the COVID-19 pandemic, the past two years of ACE programs have been virtual. Participation has slipped a bit — usually about 10,000 students participate nationwide and about 7,000 graduate — but students from more areas have been able to participate because of the virtual nature.
Berks County students, for example, were able to join Philadelphia’s program. That will continue, as the program plans to offer a virtual option when instruction resumes in-person.
About 70% of participants are minorities and about 40% are female, which has attracted more sponsors’ attention. Last year was one of ACE’s best years for sponsorships.
“I think a lot of it had to do with companies realizing that to truly be intentional about inclusion and diversity and equity, they needed to do
something and not just talk about it,” Eidenshink said. “A lot of firms said this is a great way for us to build a diverse future workforce.”
Sponsors include trade schools, large mechanical contractors, engineers, construction managers, vendors, and architects.
ACE provides financial support for students, including scholarships to college and trade school and assistance with union dues.
Even with lower enrollment, the organization gave out just as much in scholarships in 2021 as in previous years, meaning students received more money.
ACE also coordinates internships and is looking for paid internship options for high school students.
After students complete the program and begin their career training, they remain affiliated with ACE through its alumni database and can receive mentorship and additional guidance as needed.
“We will continue to mentor them until we ultimately get them into the workforce,” Eidenshink said.
THADDEUS STEVENS COLLEGE OF TECHNOLOGY
In addition to its 24 two-year associate degree programs, Thaddeus Stevens College of Technology (in Lancaster, PA) offers short-term “ramp up” and “skill up” programs taught over weeks or months, to meet the immediate needs of construction employers.
Training in plumbing, electrical and industrial maintenance is offered to give students broad skills that they then can hone on the jobsite.
The college’s Workforce and Economic Development Center programs are filled by both young adults and those who are mid-career and looking to change their field or improve their skills so they can advance, college President Pedro Rivera said.
Thaddeus Stevens partners with the Spanish American Civic Association (SACA) to help students find employment. Students learn English, practice interviewing, and are taught how to write resumes and job applications.
There is a demand for what the college offers, and the college wants to expand its capacity and its offerings to train more people in construction fields.
14 THE KEYSTONE CONTRACTOR
The Retirement Gap continued
Last year, it had more than 2,100 applications for about 800 spots in its associate degree programs. Thaddeus Stevens is seeking state permission to expand programs with waiting lists, so that it can accommodate another 100 or so students in the next few years and 200 to 250 more in five years.
In 2022, Thaddeus Stevens is offering a civil construction and engineering program. It wants to build a new lab for its carpentry program to start teaching industrial carpentry. It also wants to expand its renovation program and add curriculum on entrepreneurial skills.
The school is turning out students with the skills that employers demand because it partners with industry officials. Teachers sit on councils that offer advice on everything from the curriculum to the equipment to the lab structure.
Thaddeus Stevens is always looking for more business and industry leaders to join its councils and partner in other ways, such as alumni giving back.
That helps the college, Rivera said, and it helps the companies of those who volunteer by putting them first in the minds of graduating students who are weighing multiple job offers.
“My students get 12 job offers on average, and they tend to want to work with the folks whom they know and the names that they’ve heard of,” Rivera said. “The more we can get industry engaged with us, the more opportunities our kids will have to build their future with them.”
Hear more of Pedro Rivera’s thoughts
SOUTH CENTRAL PA WORKS
South Central PA Works is building partnerships with organizations such as the Keystone Contractors Association to learn what employers desire to develop programs to meet those needs.
“The goal is to identify the ‘pain points’,” said Jesse McCree, chief executive officer for SCPa Works.
“I think for construction, it’s career awareness, developing a pipeline from previously untapped labor pools, and it’s continuing to show that these are good jobs, strong career pathways, and good wages.”
McCree noted the industry has been better at recruiting women and people of color, who may not previously considered a career in construction.
“It’s good business to start sourcing talent from new places,” McCree said.
And that’s going to be essential if the construction sector is going to be able to fill the millions of jobs projected to be created in coming years by the federal infrastructure spending legislation signed into law in November.
“If we don’t collectively get this question right for increased access to construction for women and people of color, for those demographics that have historically been underserved, I’m not entirely sure we’re going to get two million people per year in the construction sector,” McCree said.
South Central PA Works is working to build career awareness programs for students in 9th to 11th grades. It is working with other organizations that are providing career information to students in middle schools.
While it is building some programs, South Central PA Works is partnering with organizations such as Junior Achievement of South Central PA. They are hosting virtual job fairs where students can see videos and other marketing materials about what construction employers do and the potential careers they offer, as well as internship and summer employment opportunities.
South Central PA Works also promotes opportunities such as internships offered by Kinsley Construction of York.
““Mentoring is a critical component to success. If you have a mentor who’s in the industry the success rate is so much bigger and better when you have a direct connection,” McCree said. KC
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KCA Clay Shoot
— November 10, 2021, Central Penn Shooting Clays
TOP LEFT: KCA’s Seth Kohr is flanked by AJ Schwartz and Nick Bauer of Barry Isett & Associates, KCA’s newest member.
TOP MIDDLE: Ryan Miller from Miller Financial Strategies (left) stands with the top shooter from the KCA Clay Shoot - Ron Cross.
TOP RIGHT: (Left to right) Mark Nelson of BBEC, Ken Robinson of KB Robinson & Associates, KCA Clay Shoot Co-Chair William Brightbill of Modernfold, and Chad Houser of Morgan Stanley Wealth Management.
LEFT: Two of the four members from the winning team at the KCA Clay Shoot: Tad Hoffmaster from EnerFab and Dan Hoke from Ironworkers Local 404. Missing from the photo are team members George Zalar and Chris Hoover.
The KCA Board of Directors met this Fall at the Carpenters International Training Center.
At this working retreat, the board worked on finalizing the initiatives and objectives to be featured in the 2022-2024 KCA Strategic plan. This plan’s primary areas of concentration are education, workforce and expanding opportunities. The membership will soon receive this plan and will be invited to informational sessions to discuss how the membership can help achieve the proposed initiatives.
16 THE KEYSTONE CONTRACTOR
The fastest growing podcast in the construction industry Over 50 episodes planned for 2022! CHECK OUT NEW and PAST EPISODES We consult with construction companies to enable greater employee, project, and company performance. Improve Project Results Bob Dresser https://strategicexecconsult.com 401.430.9188 Fritz0129@gmail.com Change Management Claims Avoidance Practices Construction Expert Witness as recognized by the American Arbitration Association Construction Leadership Consulting Contract Strategies and Formation Employee Motivation Productivity Enhancements Risk Assessments Stakeholder Alignment (IPD+) Hosted by: Jon O’Brein of the KCA and Chris Martin of Atlas Marketing Want to advertise, become a sponsor, or suggest a guest? Contact Tracy@AtlasStories.com THE KEYSTONE CONTRACTOR 17
THE SUPPLY CHAIN RIPPLE EFFECT THE SUPPLY CHAIN RIPPLE EFFECT
AND ITS IMPACT ON THE CONSTRUCTION INDUSTRY
A new building project in the Pittsburgh area was moving right along. It was about 80% finished. Painting was underway.
Then, one phone call changed everything.
The elevator manufacturer was two months behind schedule. That’s a big problem for a five-story building.
The project team had to get creative. It planned to apply for a temporary occupancy permit to at least be able to occupy the lower levels.
Stories like that, unfortunately, were all too common for the construction industry in 2021. Supply chain issues made completing projects on time even more challenging.
While building an expansion for the UPMC Mercy hospital in Pittsburgh, Mascaro Construction was faced with a shortage of plywood needed to lay concrete. It found a way to wash and reuse old plywood, according to an article in the TribuneReview.
As 2022 begins, there is no evidence that supply chain problems will end anytime soon.
With some materials expected to remain scarce and require longer lead times to secure, contractors must plan better, communicate more and continue to be prepared for the unexpected.
Shortages also can impact the bottom line.
Sales are up for contractors, “but they can’t generate the revenue because they’re not getting the supplies to be able to continue to build the projects. So, the projects are just being extended out,” said Jamie Keener, CEO of Cumberland Area Economic Development Corporation.
That affects his role, which is to boost the region’s economy. The longer it takes for projects to be built, the longer it takes newly constructed buildings to be occupied, create jobs, and stimulate the local economy.
“It can take 16 to 20 weeks to get windows, up from two or three weeks before COVID,” said K.C. Lezzer, vice president of Lezzer Lumber in Curwensville.
18 THE KEYSTONE CONTRACTOR
“It makes all of us have to work together to plan ahead to meet the extended lead times,” Leezer said.
Scheduling and budgeting are more challenging. And there are other considerations, too.
As companies order supplies way ahead of time and order more than needed, other problems emerge.
“Now I have to warehouse more stuff because we’re ordering materials so far ahead of time trying to keep ahead of the builders. Sometimes, if there are delays on a project, then I’ve got extra materials sitting here in our warehouse,” Lezzer said.
Materials manufacturers are also having trouble with their supply chains, waiting longer to receive the raw materials they need to make their products. Some manufacturers cannot produce as much as quickly because of worker shortages. And what they do produce may sit longer because of a shortage of truck drivers.
“It’s still hard for us to get materials delivered on time because the manufacturers are trying to find somebody to haul the loads,” Lezzer said.
At Pennsy Supply in Harrisburg, which makes concrete and partners with other contractors on PennDOT jobs, the lack of drivers is the biggest concern. Drivers are working close to their maximum allowable hours each week. And there aren’t enough to handle the
In the middle of 2021, there were not enough drivers to get materials to pour concrete on Saturdays, said Jeff Stauffer, who is in sales with the company.
“It’s putting the customer behind, which puts us behind,” he said.
Larger projects, such as warehouses, are getting priority.
“All the concrete companies are in the same shape. We can’t take care of the smaller guys. The oneand two-person operations are really having a tough time getting concrete,” Stauffer said. continued
THE KEYSTONE CONTRACTOR 19
...Although there are record sales, the revenue’s not being generated because they just can’t get the supplies.
Jamie Keener, CEO Cumberland Area Economic Development Corporation
THE SUPPLY CHAIN RIPPLE EFFECT continued
Keener talks regularly with contractors. In late 2021, he was told it could take nine weeks to get roofing insulation and 50 weeks to get bar joist.
“It’s hard to be scheduling construction projects when we’re almost a year out,” Keener said.
“It’s delaying those projects. Although there are record sales, the revenue’s not being generated because they just can’t get the supplies,” he said.
Some builders have mulled whether to substitute different materials.
“It’s either time or additional cost. Ultimately, the owners must make a difficult decision. Do they bear that additional cost, or do they wait six months for the regular project materials?” Keener said.
Pennsy Supply provides a lot of concrete for warehouse construction. They need large volumes for their thick floors.
Those floors also need rebar and wire mesh, which haven’t always been available.
“Some of them are having trouble getting the steel to the point where they are actually now using fiberglass rebar,” Stauffer said.
They don’t have a choice but to substitute if they want to keep the project moving.
“Without reinforcement, the project stops,” Stauffer said.
It’s not as big of a deal to swap out the brand of insulation inside a wall. But it’s not always easy to convince a project owner to change the style of floor tile, the color of paint or other items that customers will see.
Changing major items can mean major headaches because that can mean going back through the permitting process.
Concrete companies are worried about supplies of sand.
Pennsy Supply produces sand, to make its concrete and to sell.
“Stone-wise, we’re in good shape, producing enough stone to make our concrete. Sand-wise, we
have been on a wait and see or watch,” Stauffer said. “That is becoming a challenge, to make sure we have enough sand for our own needs. All the concrete companies are concerned about sand supply.”
A majority of Pennsy Supply’s sand comes from Delaware. Getting it to Pennsylvania can be a logistical challenge because the company isn’t going to send an empty truck to pick it up. It must coordinate sand pickups with stone deliveries to its sister companies there.
“It’s all about people. You need to logistically make sure that when you move a truck, something positive is happening. And not running empty,” Stauffer said.
And with a limited number of drivers, that is challenging.
“Right now, the key is to make sure you’re utilizing your equipment as well as possible.”
The construction industry has always been good at adjusting to unforeseen changes and solving problems. It is managing to weather the supply chain crisis, too.
“I don’t see too many projects that are just sitting idle,” Keener said “They’re still moving forward. But I think it’s just at a slower pace.”
Right now, the key is to make sure you’re utilizing your equipment as well as possible.
Jeff Stauffer, Pennsy Supply
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Advantage Steel & Construction, LLC.
Alexander Building Construction LLC
Babst, Calland, Clements &Zomnir, P.C.
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Brown Schultz Sheridan & Fritz
Business Information Group, Inc.
Carlisle Area Chamber of Commerce
Carlisle Construction Materials
CBIZ Insurance Services, Inc.
Central Contractors’ Supply Co., Inc./ Overhead Door Co. of Johnstown
Charlson Braber McCabe & Denmark
Civil & Environmental Consultants, Inc.
CLA (ClftonLarsonAllen LLP)
Cohen Seglia Pallas Greenhall & Furman PC
Darr Construction Co.
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Eshbach Brothers LP
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G.C. Zarnas & Co., Inc.
George M. Wildasin Ce Inc.
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J.C. Orr & Son, Inc.
Joseph Miorelli & Co.
Lockton Companies, LLC
M.L. Acri, Inc
Macri Concrete Marmat Inc.
Masonry Contractors Association of Central PA
McConkey Insurance & Benefits
Modernfold of Central PA
PA Masonry dba PA Group, Inc.
Perdomo National Wrecking Co LLC.
Performance Construction Services, Inc.
PJ Dick PPL Electric Utilities
Providence Engineering Corp
Quandel Construction Group
Ralph E. Jones, Inc
Reager & Adler, PC
Ridgetop Interiors, Inc.
Rocky Bleier Construction Group
Sandra Palone & Associates, LLC
Schlaegle Design Build Associates, Inc.
Schooley Mitchell of Pittsburgh
Seubert & Associates, Inc.
Smith Masonry, Inc.
Spartan Construction Services
Stalwart Insurance Group
Stouffer Mechanical Contractor LLC
Strategic Executive Consulting
The Blue Book
The SRS Group, LLC
Troianiello Masonry, Inc.
Willig Williams & Davidson
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THE KEYSTONE CONTRACTOR 21
EMERGING LEADERS Q&A
What gets you excited to start your workday?
I wake up every day genuinely looking forward to going to work. I enjoy watching the progress of the job and the challenges of keeping the job on track when there are varying issues that pop up almost daily in our line of work. I also like dealing with the men and different crews I get to work with on a project.
What would you say to attract young professionals to the construction industry?
Cory Schaeffer Superintendent
There is never a boring day. We are always doing something different. You can look at what you built and accomplished through your hard work at the end of the day. It’s not like having a dead-end job; depending on how hard you work and what you want out of it, there is always room for advancement and the opportunity to be a leader. We are in high demand. There will always be work out there.
Did you have a mentor when you started your career in construction? My father is my mentor even before starting my career in the construction industry 12 years ago. He has been a union carpenter for almost 30 years.
What trends do you see happening in construction?
Technology is a big one, I think. The way we look at prints, laying out jobs now with GPS systems, there are constantly new advancements to make the jobs easier and more efficient. Another trend I notice is a demand for workers, especially young up-and-coming workers. Many older carpenters are starting to retire, and not enough young workers are coming in to take over.
22 THE KEYSTONE CONTRACTOR
Performance Construction Number of years with company: 12 Know an Emerging Leader you’d like us to feature? Or, have exciting industry news to share. Maybe a story idea? Tell us more by emailing firstname.lastname@example.org We’d love to hear from you!
Travis Soprano, P.E. Project Manager Providence Engineering
?What gets you excited to start your workday?
I enjoy having the opportunity to problem-solve each day and work on different projects alongside my office co-workers. We have a great group of people on our team. As a project manager, I work with the same project and watch it grow from a conceptual idea, through developing the documents and into a construction project. Seeing projects grow from concept drawings into reality is an awesome part of what I do.
What would you say to attract young professionals to the construction industry?
We are in a constantly changing field and young professionals with the ability to integrate technology into the construction process are in high demand. Technology enables us to work on projects from a remote location anywhere. Job stability — having a diverse team and workload allowed us to be prepared at Providence (and throughout the industry) to remain working and busy throughout the Covid pandemic.
Did you have a mentor when you started your career in construction?
I was lucky to start my career out of Penn State University (’13), working under three professional engineers. The knowledge they’ve bestowed upon me has been immeasurable. Out of college, it’s easy to perceive a design career as one that focuses on numbers and calculations. Matt Kalmanowicz, P.E., Mark Ritchie, P.E. and Nicole Bassler, P.E. quickly helped me realize the numbers must be correct, but managing a successful project is so much more than numbers. Our numbers and calculations have to be right, but this is the expectation of all engineering firms — what sets us apart in the industry is our service to our clients. Treating their problems as our own and anticipating risks before they come to fruition. This level of concern for their project is valued and remembered by our clients.
What trends do you see happening in construction?
With the current supply chain delays and material shortages, being flexible and creative is even more important. Thinking outside of the box to develop solutions that help our clients stay on budget and on schedule is even more critical during times of reduced material availability. There has been a shift to offsite modular/panelized construction practices. I’ve seen the number of affordable housing projects rising — focusing on residential units incorporating energy-efficient building practices to create an environmentally friendly building.
THE KEYSTONE CONTRACTOR 23
EMERGING LEADERS Q&A
What gets you excited to start your workday?
My work is a daily opportunity to nurture strengths and grow from experience, gaining benefits that apply to all facets of life. Every day, I am presented with new information and obstacles that help me develop stronger communication, creativity, collaboration, and critical thinking skills. I am increasingly grateful for the opportunities we take as a team to discuss how we can improve and challenge one another in our daily work and life. The individual strengths of each person are well-known and utilized and I am lucky to work for a company that empowers individual employee assets.
Margaret Smith Assistant Project Manager JEM Group
Number of years with company: 2
Justin Wingenfield Project Manager Alexander Building Construction Company
What would you say to attract young professionals to the construction industry?
When I was exploring potential careers, I read a book titled Shop Class as Soul Craft, by Matthew B. Crawford. Crawford expresses the value of manual labor with a discourse on the unique satisfaction found in creating tangible products in work. While many jobs deal with abstractions (data, ideas, relationships, etc.), the construction industry offers distinctly physical and measurable outputs. Whether you are working as a designer, estimator, project manager, or field personnel, you play an important part in constructing a building that will stand for years to come.
Did you have a mentor when you started your career in construction?
I started my career as a welder and fabricator with a small decorative metals manufacturer near Lancaster. The manufacturing supervisor, Larry, was my first mentor in the industry. I was constantly nosing around in production meetings, schedule discussions, and project huddles. Larry recognized my eagerness to learn, and he sought to develop me as a manager. Pushing me into positions of leadership, he taught me how
to leverage the strengths and motivations of each member of my team. Perhaps even more importantly, he encouraged me to lead with confidence in delegating and decision-making, despite my age and gender. I was 20 years old and the only female in the shop when I took a leadership position. In the early stages of my career, someone decided to invest in me and my hard work. I could speak endlessly about the things I learned under his leadership, and I will never forget the crucial role he played in my career and personal development.
What trends do you see happening in construction?
Health and wellness trends in building construction have gained significant momentum since the start of COVID. Society is increasingly aware and concerned with health safety. Building owners are pursuing heightened efforts to provide safe spaces with touchless doors and fixtures, larger hallways and spaces, hygienic finishes, mechanical system overhauls, and more. It’s amazing to learn about the emerging technology and building design influences that have materialized in the face of these global challenges.
24 THE KEYSTONE CONTRACTOR
Pauvlinch Senior Manger
Number of years with company: 9
What gets you excited to start your workday?
It’s honestly the people, as clichéd as that might sound. The construction industry brings together a wildly diverse group of people. I’ve had the pleasure of working hand-in-hand with people who have graduate degrees and with people who didn’t graduate high school (and I can tell you if you want to get something built, don’t look to the person with the graduate degree). The ability on any given day to wake up and work towards a common goal with people you might not otherwise interact with can provide some good perspective, and it gets me excited.
What would you say to attract young professionals to the construction industry?
It’s funny; I’ve spent many a day at career fairs trying to convince college students that construction (specifically geotechnical) is an excellent career opportunity. More often than not, I get a polite thank you and off they go to the major engineering firms. I get it. I was once a college engineering student and I thought that engineering meant doing a bunch of math and working at a big company. Heck, you’re spending a lot of money on an engineering degree, you should probably be an engineer, right? Well, luckily, my career path led me to the construction industry. Personally, I love the construction industry for multiple reasons; first off, obviously the people, but in addition to that, you get to spend time outdoors, travel, contribute to building things that people use every day (buildings, bridges, etc.). It’s honestly highly fulfilling. And on top of that, the construction industry really can pay well. It’s helped provide a great life for myself and my family.
Did you have a mentor when you started your career in construction?
I did. When Brayman Construction first hired me, I worked for Paul Martin. At the time, Paul oversaw the Small Diameter Drilling division of the company. He honestly taught me how to be a professional in this industry, communicate effectively, and probably the thing that has served me most of all — how to treat the people you work with and who work for you. Many companies will treat people like objects, one interchangeable with the next. That was never the case working for/with Paul. I’ve been
very fortunate to work with him for about 15 years, and to this day, he’s still teaching me how to treat people, not just superficially, but how to take a genuine interest in who they are and why they do what they do.
What trends do you see happening in construction?
One trend that is particularly concerning is the shortage of skilled labor. People aren’t enrolling in trade schools or willing/wanting to participate in the travel often required in construction. I feel like it’s ingrained in most kids’ heads from an early age that they need to go to college and the idea of working outside with your hands, mastering a trade, has gone by the wayside. The construction industry pays well and can provide a great future for lots of people. In the past, construction was viewed with pride, and I feel like now there is a stigma that “construction workers aren’t smart.” I believe it’s the exact opposite. Construction provides good wages, good benefits, excellent job security and you can do it without going hundreds of thousands of dollars in debt. I sincerely hope today’s youth consider local trade schools.
THE KEYSTONE CONTRACTOR 25
$ THE CO T OF DOING BUSINESS
With inflation and materials shortages driving up building costs, contractors find themselves facing difficult decisions.
How long do I hold my pricing? Should I put a buffer on my bid? How do I account for the potential rise in materials’ costs in my contracts? Should I attempt to renegotiate terms, or do I absorb new costs?
Owners must decide whether to pay higher prices or seek alternatives such as using replacement materials or delaying the project altogether. Most jobs are moving ahead, with owners and contractors working together to navigate the uncertainties.
“We’ve had very good fortune that all the owners who have had any major impacts to their project with regard to pricing, they’ve understood it, and they’ve accepted the risk associated with it — as long as we can provide the adequate backup on where all the numbers are,” said Andrew Notarfrancesco, vice president of operations at JEM Group in Camp Hill.
JEM Group has always valued
transparency and been an openbook firm but now finds itself opening its books even further.
“Every ton of steel that’s purchased, what index was it bought off of? Where was it bought? What were the steel sheets that they purchased from, so they could then apply reason from the owner’s perspective and say, ‘yes, these increases are valid; I see what you’re talking about.’” Notarfrancesco said.
G.C. Zarnas & Co. Inc., an industrial painting and specialty coating firm in Bethlehem, has been adding a buffer on its bids to cover any cost increases between when a bid is submitted and when a project starts.
“I can’t put it so high because we’re still competitively bidding. But I have no choice now when I bid,” said Lee Zarnas, assistant vice president.
Any additional costs are absorbed as the company seeks to maintain its strong relationships with its long-time customers.
“I want my customers to know that we’re in this as a team,” Zarnas said. “We’re not here to pass every single cost off to them and nickel and dime them. We’ll absorb some cost because it’s a relationship, it’s a friendship, we want it long term.”
The company’s customers, including utility companies, chemical companies and other industries, are also being hit with rising costs. G.C. Zarnas knows that passing all new costs to them would be another hit.
G.C. Zarnas wants customers to be able to say, “’Hey, I remember during COVID, I remember during those times, Zarnas didn’t jack up their prices, they kept their prices right where they were. We believe in the long-term relationships. So, we try to be as fair to our customers as possible,” Zarnas said.
“The life span of a price quote isn’t as long,” said Dan Pietropola, vice president of business development at McClure Co., a mechanical construction, engineering, maintenance, and energy service firm in Harrisburg.
“We’ve been pushing the clients by saying, ’Hey, you’ve absolutely got to sign these contracts now and every month that goes by, you’re risking either not getting the material, or even the material increases going up further,’” Pietropola said.
“We have had a couple of projects where we’ve priced them and they’ve kind of dragged their feet for months and we say to them, ‘look, we’re happy to be on the project, but we have to go back and reprice everything.’”
The uncertainty about material availability has contractors making difficult decisions about whether to stockpile what they can get.
For one recent job, painting a
How the state’s construction industry is dealing with rising labor and supply costs
water company basin in New Jersey, G.C. Zarnas ordered $35,000 worth of materials more than a month in advance.
“So, you absorb those costs, which doesn’t really help your cash flow,” Zarnas said.
JEM Group saw only one project put off because of pricing, Notarfrancesco said.
McClure hasn’t seen a slowdown, either.
“The bidding market is as busy as we’ve ever seen it. Our revenue didn’t drop for the year,” Pietropola said. “I think part of that is although the cost of construction and goods is more expensive, people are still getting money at a very low rate. So, if they’re getting loans for the construction, the market’s still pretty
hot. I think the investments are still being made.”
The biggest issue for G.C. Zarnas is obtaining materials.
“Every single morning when I come in, I’m on the phone talking about material issues,” Zarnas said. “Where are we low? Where do we need to get materials?”
market is actually going to make a correction back to where it was … pre-pandemic or 2019 rates,” Notarfrancesco said.
G.C. Zarnas has heard prices could rise by another 15% in January. Suppliers also have been adding surcharges to invoices.
“I think there is a systemic problem that we’re all facing, and I know KCA has been on the front lines of it — we just don’t have enough people doing the things that we do and building stuff if you will, as well as manufacturing,” he said. “We don’t have a lot of people in manufacturing anymore in this country. So, all of those things are going to create a more expensive product in the end. And some economists think this is just a market correction that’s been long in the making.”
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All indications are that pricing will continue to be volatile in 2022, and perhaps even longer.
AVOID COMMON CONSTRUCTION MARKETING MISTAKES
The Keystone Contractors Association is a Pennsylvania commercial construction trade association dedicated to improving the construction industry by focusing on safety, education and training, labor relations, community service, career development, and government relations.
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