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A Builders Association Publication

The Builder

Volume 12, Issue 2

June 2008

Loretto Hospital is one of several joint ventures that Bulley & Andrews, LLC and Ujamaa Construction, Inc. have worked on.

Working Together Joint Venture Projects Allow Small Companies To Work On Big Projects While Giving Large Companies More Diversity BY ANDY COLE Work continues on the latest of several joint ventures involving Bulley & Andrews, LLC and Ujamaa Construction, as renovations are completed both inside and outside Loretto Hospital in Chicago. According to Ujamaa President Jimmy Akintonde, the project is a good example of one job his company might have been too small to work on were it not for its involvement in joint ventures – one of many pluses he sees in working as the junior partner in a JV. “The biggest advantage for us is being able to take a young engineering staff and give them a big construction experience,” Akintonde said. “Our staff can get the experience of working on

those bigger projects and working with a great company like (Bulley & Andrews), and they can bring what they’ve learned back to the other jobs that we do. “It’s a real strong marketing tool for us to be able to work on a project that size. People know we’re a small company, but it helps accelerate growth when you can work on a larger project. Owners see that and those projects become more projects. It’s like growth on steroids.” There’s nothing artificial about the results that Ujamaa has been able to produce through joint ventures. Akintonde estimates that work as the smaller partner in a JV accounts for around 40 percent of his company’s business.

see JOINT VENTURE, page 15

Also In This Issue... Foundation Scholarship Winners Announced Page 3

Uncertainty Surrounds Prompt Payment Act Page 6

Construction Career Opportunity Program Progress Report Inside


The environmentally friendly windows at Rubloff Hall allow for a cozy study space while negotiating sun-intake to save the cost of energy.

Going For The Gold Henry Bros. Constructs State’s First Higher Education Building To Receive LEED Gold Status BY GRACE REBAND Late last year, Henry Bros. Co. became the first construction company to receive the LEED Gold designation for a university residence in Illinois. The project on the Arthur Rubloff Hall at Saint Xavier University not only achieved one of the highest LEED ratings, but also become the first university residence hall in Illinois to achieve any LEED rating. Henry Bros. Co. constructed Rubloff Hall and is currently working on another LEED-certified building for the university. Although one building was completed in fall of 2006 and the other is expected to be completed in fall of 2008, there are many similar “green” qualities that are seen in both. “There is not much difference between the two buildings,” said Larry Morris, Director of Graphic Communication for Henry Bros. Co. said. “For the second building we may be going for the Platinum award, but at this point we’re pretty much guaranteed

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Project Spotlight Gold at least.” Both of the buildings will boast energy-efficient windows to minimize energy loss. A special coating on the double pane clear windows will allow the maximum amount of sunlight, and a shield will prevent that heat from being released outside. The highly insulated walls and roofs will also prevent energy loss from both buildings. Rubloff Hall has the first true displacement ventilation system in Illinois. “The indoor air quality sensors measure the CO2 in the space and automatically inject fresh air into an occupied room,” said engineer Mike McDermott of Environmental Design Inc. “The sensors can tell when people enter the room because the CO2 level rises significantly.” As a result of this technology, the air in the building is highly filtered. When measuring the air in Rubloff Hall it is almost as clean as the air in most hospitals. “Many student residents of the building were complaining about increased issues with allergies because the air is so clean,”

see GOLD, page 14

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Scholarship Winners Announced Foundation Golf Outing Continues To Provide Funds BY GRACE REBAND Thanks to the Builders Association members and the Builders Foundation, three more college students pursuing careers in construction have less financial strain when it comes to their college costs. Erik Johnson, Kyle Johnson and Dana Wessman have been selected as the winners of the 2008 scholarship award. This scholarship is available to undergraduates studying in the construction field. The $3,000 award is renewable for up to two years. These students became the 16th, 17th and 18th recipients of the award since it was established in 2003. Most of the funding for the scholarship program comes from the Builders Foundation Golf Outing, which this year takes place Wednesday, July 30 at Makray Memorial Golf Club in Barrington. The event begins with lunch at 11 a.m., and costs $300 per golfer, or $75 to attend just the 19th Hole Cocktail Reception, which begins at 6 p.m. Erik Johnson is a student at the University of Illinois majoring in Civil and Environmental Engineering. He graduated from East Leyden High School in 2006 and plans to graduate from U of I in 2010. “All through my life I have been involved with and loved construction,” Erik said. “From building decks and additions in the backyard to watching skyscrapers go up, I was always excited to watch or be involved.” Erik was a research engineer assistant for the Advanced Transportation Research and Engineering Laboratory (ATREL) in the summer of 2007. At the ATREL, Erik worked with engineer James Meister. “Erik is an excellent worker exhibiting common sense and a drive to accomplish all tasks,” Meister said. “He will make an excellent engineer.” Kyle Johnson plans to graduate from Bradley University in May of 2009. Kyle is

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Eric Johnson

Kyle Johnson

double majoring in Construction and Civil Engineering. He graduated from Antioch Community High School in 2004. “I would like to work for a wellrounded company that will allow me to both design and manage projects,” Kyle said. “I would like to work in all aspects of the construction industry and work my way up in a company.” Krishnanand Y. Maillacheruvu, associate professor at Bradley, had Kyle as a student in two 300-level mechanics and engineering classes. “I expect Kyle Johnson will be very successful in his career in civil engineering and construction,” Maillacheruvu said. “I also believe that he will be very successful as a leader in the community as he grows into this role in the future.” Dana Wessman, a student at Ball State University, plans to graduate in May of 2009 with a degree in Construction Management. Her father, Michael

Dana Wessman

Wessman, is a Senior Project Manager for Builders Association member W.E. O’Neil Construction Co. Dana’s enthusiasm centers on environmentalism in the construction industry. “I want to have the opportunity to learn as much as I can and make a positive impact in the construction industry. I would love to help the company that I work for attain more LEED certifications for their projects and help make their construction methods more environmentally friendly and sustainable, both areas which I feel very strongly about.” John Warner, an assistant professor at Ball State University with whom Dana has taken classes, praised Dana for her accomplishments. “Her individual and team efforts are excellent. She is the president of the Ball State Construction Management Student Organization: no small task.”

Builders Foundation Golf Outing Sponsors Verizon Wireless (Event Sponsor) ISEC, Inc. (Cooler Sponsor) McShane Construction Corporation (Course Refreshment Sponsor) James Schaeffer & Schimming (Golf Shirt Sponsor and Hole Sponsor) Ryan Companies US, Inc. (19th Hole Cocktail Reception Sponsor) Pepper Construction Company (Cigar Sponsor) W.B. Olson, Inc. (Lunch Sponsor) Ceco Concrete Construction (Sunscreen Sponsor) Rabjohns Financial Group (Hole-In-One) W.E. O’Neil Construction Company (Hole-In-One) Warady & Davis, LLP (Hole Sponsor) Burnham Nationwide (Hole Sponsor) There are still a number of sponsorships available. If you are interested in supporting the Foundation, contact Andy Cole at 847.318.8585 or acole@bldrs.org.

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Sustained Success Spring Meeting

At right, Paul Hoffman of Hoffman, Inc. delivers the keynote adress during the Spring Meeting. Below, Builders Association Chairman J. David Pepper of Pepper Construction Company poses with David Olson and Luke Lukowicz of W.B. Olson, Inc., which won the Builders Association Safety Award for Best Performance Improvement. Twentyone members were honored for their outstanding safety programs.

Hoffman, Inc. CEO Paul Hoffman includes green building mythbusters in his presentation. If those don’t clearly deliver the message, all contractors really need to do is look at some of his company’s creations. Hoffman’s unique approach to sustainable construction was the keystone of the Spring Meeting May 6 at the Hyatt Rosemont. Before the presentation, the Builders Association honored 21 companies with its 10th Annual Safety Awards. W.B. Olson, Inc. won its first Best of Class Award for companies with 75,000-250,000 hours and also won the Best Performance Improvement award. Airtite Contractors, Inc. won its second consecutive Best of Class honor for over 250,000 hours, and the top prize for companies with under 75,000 hours went to Frank H. Stowell & Sons. Close to 120 contractors were present to hear Hoffman go through the risks of sustainable building, and how building in this manner could actually increase a company’s bottom line. His presentation also covered what not to do when constructing a sustainable building and helped to ease a couple of commonly held myths related to the practice. One of the final points in Hoffman’s “Unlucky 13” risks in sustainability involved contractors who are convinced that “green” buildings cost more to construct. Hoffman, Inc. has disproved that theory on many occasions, including Northland Pines High School in Eagle River, Wisconsin. The high school includes one of the largest auditoriums in the state, an indoor

see SUSTAINABLE, page 10

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Safety

Busy Forum Covers Six Questions Required Online Training Classes, Non-English Speaking Employees And Rigging Training Discussed At May 15th’s Safety Gathering

Paul Howard of Frank H. Stowell makes a point during May 15’s Safety Forum at the Chicagoland Construction Safety Council in Hillside. The next Safety Forum will take place Thursday, August 14.

BY ASHLEIGH JOHNSON Nineteen safety professionals talked about the finer points of their profession at a Builders Association Contractor Safety Forum May 15 at the Chicagoland Construction Safety Council in Hillside, Ill. Safety Committee Chair Bob Smith of The Levy Company led the discussion, and those present also welcomed the attendance of OSHA Compliance Assistant Specialist Nancy Hauter. The group openly traded ideas, beginning with Paul Flentge of Pepper Construction Company suggesting the institution of a prequalification check for all bidding contractors. Peter Cole of DLZ Industrial, Inc. expressed that standardizing safety programs would be a great way to level the playing field for all contractors, and Kevin Kozlowski of Pepper Construction added that prequalification would create

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competition between companies to be the safest and most efficient. He added that these standards could be implemented in the public sector first, thus persuading the private sector to follow suit. There was also a consensus, however, that it would be hard to create a standardized program because all contractors do not have the same resources. Luke Lukowicz of W.B. Olson, Inc. noted that there was an issue with small subcontractors because some do not realize the importance of safety measures until something happens. Regarding Web site training, Smith recommended that safety professionals try Web sites such as www.oshapros.com and www.puresafety.com if they are interested in this type of learning, commenting that “you can’t reduce accidents if you can’t recognize a hazardous situation.” He spoke about how he gave OSHA 10-hour and 30-hour courses for informational purposes to those that

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are on restrictive duty. His company then sent them into the field with safety representatives. Hauter mentioned that online training needed to be supplemented with on-site requirements, which the safety professionals agreed with. Cole posed the question of whether prime contractors prefer their subcontractors have their supervisors and foremen attend a 30-hour OSHA class. Smith said his supervisors and foremen must attend the class, and the idea was also brought forth to possibly put a requirement in the contract that supervisors and foremen have 30-hour OSHA training. On the subject of how companies deal with safety in regards to nonEnglish speaking subcontractors, Dan Torres of Pepper Construction stated that he places a bilingual tradesman on each job site and uses photos to show proper safety practices. Smith stated that Hispanics are the most injured ethnicity in the construction industry; therefore it is imperative for them to know the right safety procedures. Valenti Builders raised the issue of fall protection and the differences between Leading Edge work and Restricted Access Zones. Smith defined Restricted Access Zones as areas that are restricted to a select group of people with usually only one or two workers allowed in at a time. He added that Restricted Access Zones are usually mislabeled on-site. He defined Leading Edge work as an edge that is constantly changing as the structure is being built. In this instance, zones are set up to follow change, such as building a deck. Doug Schultz of Herlihy Mid-Continent Company posed the topic of what types of training other contractors were doing in regards to rigging. Flentge revealed that Pepper Construction uses The Crosby Group, Inc. to prepare their tradesmen. The group concluded that credentials were not always asked for when it came to rigging.

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Pay It Forward Questions Abound Surrounding Prompt Payment Act, And Definitive Answers May Only Come With Court Rulings Margery Newman of Ogletree Deakins Nash Smoak & Stewart began her presentation by stating that the answer to many of the questions flying around the room would be “we don’t know.” It’s a phrase that’s bound to be thrown around plenty until experience and court decisions give contractors a better handle on the Contractor Prompt Payment Act, which the Governor signed into law last year. Newman and Randy Ruff of Ogletree Deakins were among presenters at a seminar on the Act conducted by the Chicago Building Congress. Panelists outlined the ins-and-outs of the Act, which dictates – among other things – that a contractor must pay a subcontractor within 15 days of receiving payment from the owner or General Contractor. When the bill first came about last year, Builders Association members polled were uncertain of the impact the Act would have. The general consensus was that good contractors paid their subcontractors well ahead of time, and that the Act would be tough to enforce. Uncertainty is likely to remain until court cases in Illinois create precedent, as the Act is written in a vague enough manner to have even experts on the topic guessing about what’s going to happen. “I don’t like the Act, the reasons go beyond what’s actually in it,” Ruff said. “It’s not very well drafted and it’s likely to be ineffective because there are ways around it. “Despite all of the confusion, I don’t see it as having a huge impact.” Be that as it may, Ruff was quick to point out simple things for a contractor to keep in mind regarding the Act. Contractors shouldn’t set subcontractor money received on one contract against a debt on another contract. The entire payment process should be expedited in general, but if a GC discovers any reason to withhold money from a subcontractor, that GC should either not draw that money from the owner or return the disputed money to the owner until the conflict is resolved. “Contractors should always be hesitant to hold on to money for more than three days,” Ruff said. “It can be very risky, and it becomes an even more of a difficult proposition with the Prompt

“Contractors should always be hesitant to hold on to money for more than three days. It can be very risky, and it becomes even more of a difficult proposition with the Prompt Payment Act.” -Randy Ruff Ogletree Deakins Nash Smoak & Stewart, P.C. 56

Contractor Prompt Payment Act Payment Act. “The main thing is, when you receive money from the owner, you’ve got to either pay it down or send it back. You can’t just hang on to it.” Under the Contractor Prompt Payment Act, the owner is obligated to approve or reject pay applications within 25 days of receipts and pay the approved amount less than 15 days after approval. General Contractors and subcontractors likewise are obligated to pay down all amounts received from the owner or GC within 15 days. Penalties for late payment include 10 percent simple interest, and the right of unpaid subcontractors to suspend work with seven days written notice. “In my eyes, that threat to stop work helps to bring things into balance,” said Robert Lessman of SmithAmundsen, LLC. “On one hand, you could say ‘why would a guy continue to work for free?’ On the other hand, there aren’t going to be many subcontractors who decide to stop work. A lot depends on the relationship between the contractor and the subcontractor.” Also presenting at the seminar was Paul Peterson, Vice President and Assistant General Counsel for the Chicago Title Insurance Company, who gave the angle of the insurance and title companies on the Prompt Payment Act. He stressed that regardless of work stoppages, non-payment or the reason for non-payment, contractors and subcontractors are still responsible for the coverage. “As insurers, we don’t care about (the Act),” Peterson said. “We don’t care about it and we don’t want to hear about it. We’re bound by the terms of the escrow agreement, which doesn’t include anything about (the Act).” There’s also some unsettling news for contractors wishing to simply write the Act out of contracts. Again, it comes down to interpretation by the courts, but law experts aren’t sure the contractor can write the Act out. “That seems to be a question that’s gotten a good deal of conversation,” Lessman said. “It’s still a fair question, and there’s nothing specifically in the statute that says it can’t be waived, but the general feeling from a number of good construction lawyers is that companies will not be able to do that.” Contractors and subcontractors will have to develop a waitand-see attitude to see what impact, if any, the Contractor Prompt Payment Act has the construction industry in the area, although much more should be known when precedent is established. “There’s a lot of confusion about this, and the source of that confusion is that this document just isn’t put together very well,” Ruff said. “Can the Act be waived? What constitutes payment approval? There are a number of things we just don’t know yet.”

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Labor Dispute Heats Up In late January, the Builders Association was given notice of grievances by the Operating Engineers against five Association companies. The grievances dealt with the monitoring of temporary heaters on the jobsites in question — work that Laborers were doing on most sites but that the Operators claimed as part of the contract. As with any other jurisdictional dispute or labor issue, the Builders Association went into action for its members. Labor Director Denise Herdrich contacted lawyers and unions on behalf of these companies, and kept grieved contractors in the loop by informing them of developments as the issue progressed. The issue reached a stalemate at the Joint Grievance Committee hearing in May, and is likely to sent to an arbitrator.

Timeline Late January The Builders Association receives notice from five companies of grievances filed against them by the Operating Engineers. Association contacts attorney Steve Adelman of Lord Bissell & Brook LLP.

Early February Adelman reviews Laborers and Operators contracts.

Early March Laborers attorney contacted. MARBA Operating Engineers Joint Grievance Committee meets. Builders Association keeps affected members apprised of progress.

Mid-March

Scheduled 10K hearing on grievances is canceled. Builders Association helps set up conference call with attorneys, MARBA Joint Grievance Committee and affected contractors.

Late March Laborers get in contact with grieved contractors.

Mid-May A solution wasn’t reached in front of a Joint Grivevance Committee, meaning the matter is likely to go arbitration.

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Labor

Pension Plans Updated Requirements For ‘Endangered’ And ‘Critical’ Plans Will Go Into Effect As Part Of Revisions To The Pension Protection Act BY ROBERT CHRISTENSON Fisher & Phillips LLP Certain notice and funding provisions of the Pension Protection Act (PPA) became law January 1, 2008, and the first impact of these requirements is about to be felt. In late March, most multiemployer pension plans sent status notices to employers and others. Many of these notices contained bad news. Here’s what’s going on in somewhat non-technical terms. The PPA requires that each year, a multiemployer plan’s actuary must certify to the plan sponsor, usually the board of trustees, whether or not the plan is in “endangered” or “critical” status. This certification must be made not later than the 90th day of the plan year – that was

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March 30, 2008 for calendar year plans. Since March 30 fell on a Sunday and it is not clear whether the law allows an extension until the next business day, most actuaries certified on Friday, March 28. In certain multiemployer plan circles, this day had been labeled “Black Friday.” The endangered and critical labels are based on the degree of financial health enjoyed by the plan. Many multiemployer plans are going to end up falling under one or the other of these classifications. If this is the case, the plan sponsor has 30 days after the date of certification to notify participants, contributing employers, unions and various governmental agencies of the plan’s status. In the case of critical plans, the notice must also include an explanation that any

adjustable benefits may be reduced for participants going into pay status after the notice. Plans which will not fall under one of these categories will probably be sending out gleeful notices to employers telling them how lucky they are. Requirements For Endangered Plans Endangered Plans must adopt and implement a “Funding Improvement Plan” which is actuarially designed to meet certain statutory funding improvement benchmarks during a period of time known as the “Funding Improvement Period.” Generally, this Funding Improvement Period begins several years after the Funding Improvement Plan is adopted, and lasts either 10 or 15 years, depending

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on how bad the situation is. Plans that are “seriously” endangered have more lenient benchmarks and are allowed the greater period of time to achieve them. In the case of a calendar year plan, the sponsor has until November 25, 2008 to adopt a Funding Improvement Plan. The Plan will consist of the actions the sponsor intends to take to meet the required benchmarks, based on reasonable actuarial assumptions and reasonably anticipated experience. Most importantly from an employer’s standpoint, the Plan must contain options calling for benefit cutbacks and/or increased contributions, which must be bargained with the union. The plan sponsor is required to notify the bargaining parties of these options within 30 days of adoption of the Funding Improvement Plan. This notice will take the form of a series of proposed “schedules” based on revised benefit formulas and revised contribution requirements. One schedule (called the “default” schedule) must be based on the maximum allowable reduction in future benefit accruals, although if the funding benchmarks cannot be met solely by cutting future benefits, then this schedule can require added contributions to make up the difference. Another schedule must be based on achieving the benchmarks solely through added contributions, without cutting future benefits. The sponsor can also provide additional schedules which fall in the range between the two required schedules, meeting the benchmarks by various combinations of benefit cutbacks and contribution increases. Upon the expiration of any collective bargaining agreement in effect while the plan is in Endangered Status (in other words, in effect on January 1, 2008), the bargaining parties must enter into an agreement which meets the requirements of the Funding Improvement Plan, by the earlier of 1) 180 days, or 2) a certification of impasse by the Secretary of Labor. Failure to agree within this period means that the default schedule goes into effect automatically. Funding Improvement Plans and related contribution/benefit cut back schedules are updated every year to reflect actual plan experience. During the period in which a Funding Improvement Plan is being adopted, or after it goes into effect, the multiemployer plan is prohibited by law from accepting any collective bargaining agreement that provides for:

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Reduced contributions for any participant • A suspension of contributions for any period • Any new direct or indirect exclusion of newly hired or younger employees from the plan The multiemployer plan is also barred from any amendment which increases plan liabilities, except those required to maintain qualified status or those otherwise required by law. Benefits can be increased only if the actuary certifies that the increase is being funded from contributions other than those required to meet the Funding Improvement Plan benchmarks. An employer that fails to make a contribution required by a Funding Improvement Plan, or is late in making a payment, is subject to an excise tax penalty equal to 100% of the missed or late contribution. This is in addition to •

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the usual liquidated damages, interest, fees and costs associated with delinquent contributions under ERISA. Requirements For Critical Plans Requirements for Critical Plans are much like those for Endangered Plans, except the “Funding Improvement Plan” is now called a “Rehabilitation Plan.” The Rehabilitation Plan must be adopted no later than November 25, 2008, and must include the default and other schedules required of Endangered Plans. These schedules must be provided to the bargaining parties within 30 days of adoption of the Rehabilitation Plan. For collective bargaining agreements in effect when the plan becomes critical, the bargaining parties must agree on provisions meeting the requirements of the Rehabilitation Plan by the earlier of

see PENSION, page 11

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2007 Safety Award Winners: Airtite Contractors, Inc. BABCO Construction, Inc. Bulley & Andrews, LLC Frank H. Stowell & Sons, Inc. George Sollitt Construction Co. Glenn H. Johnson Construction Grove Masonry Maintenance Illinois Masonry Corporation Interior Alterations, Inc. Lawdensky Construction Company The Lombard Company McShane Construction Corporation Pepper Construction Company Ryan Companies US, Inc. Sigalos & Associates, Ltd. Takao Nagai Associates Tessler Construction Company, Inc. Tyler Lane Construction Valenti Builders, Inc. William J. Scown Building Company W.B. Olson, Inc.

SUSTAINABLE, from page 4 track, four basketball courts and a number of other amenities, but was constructed for just $114 per square foot. There were a number of common threads through Hoffman’s presentation of sustainable “Inconvenient Truths” and “The Unlucky 13: Sustainability Risk List,” including his notion that contractors who understand green and sustainable building now will prosper, while those who don’t will be left behind. It isn’t enough, however, to build green just for the sake of doing it if building to LEED specifications doesn’t improve the value of the building. Hoffman’s opinion is that contractors who build green just for the sake of having a green building are setting the industry back years. “There’s a tendency to get fixated on building ‘green’ and building to those specifications that LEED sets up,” Hoffman said. “Our focus is more on adding value to the building while creating a sustainable building. You need to have your focus in the right place. “It’s about creating a cost-effective building that will last and has some value. It’s about business solutions, and not about how many (LEED) points you can get.” His company’s approach - Total Project Management: Vision Taken to the Power of Green- is centered on not only doing the right thing by the environment, but increasing the value and the life of the

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Supplier Showcase The products and services offered by Builders Association Supplier members are among the best in their fields. With their association membership, these companies support the Chicagoland construction industry. The Builder will highlight suppliers in the Supplier Showcase, which will feature comments or information on a construction issue from those members. This issue’s contributor commented on changes in contracts, and the risks associated with them.

Jim Fagan – Travelers Bond Among the numerous changes that have occurred in surety bonding during the past year, one of the biggest issues at hand is the contractual risk transfer. “We have seen this occur mostly with various school district and public educational facility contracts in the suburban Chicagoland area,” said Jim Fagan of Travelers Bond. “Onerous provisions are being added into the supplemental conditions of standard industry contracts that attempt to shift more contractual risk to the hands of the contractor and their respective surety company. We have seen provisions that take away a surety’s right to defend their contractors in a claim situation as well as others that waive the penal sum of the bond.” This places unnecessary risk on the contractors working on these jobs. Another issue that is facing the surety bonding world is with the AIA A312 payment bond form. “Some unfavorable court rulings in various states have again attempted to undercut the surety’s right to defend against payment if the surety fails to meet certain notice deadlines,” Fagan said. The final issue facing the bonds is problems with the long term warranties. “The contractor’s typical obligation to the owner is to construct a building as per the owner’s or A/E firm’s specifications, with the bond backing up this obligation. Long term warranties attempt to make the contractor, and also the surety, act as a maintenance team for the owner,” Fagan said. Travelers Bond 215 Shuman Blvd. Naperville, IL 60563 www.spt.com building. Hoffman urged contractors to use the resources that the AGC has available for companies building green or sustainable. Other risks to sustainability he hit on included situations where: • Contractor doesn’t know what the architect or owner expects in terms of sustainable building • Owner and architect are only vaguely aware of what they want • Contractor gets involved in the project too late to have any say on sustainable means and monitoring • Contractor oversells its sustainable capabilities • Contractor has no “green” expert for training, compliance and risk management

Contractor signs – but doesn’t fully understand – a contract calling for LEED certification • Contractor doesn’t know capable suppliers of LEED materials or systems • Contractor doesn’t know his responsibilities related to document submittals to the U.S. Green Building Council • Staff is inadequately trained to monitor sustainable building practices or submit LEED documents The Builders Association will return to the Hyatt Rosemont for the Fall Meeting September 23. The Annual Meeting will take place December 10 at The Drake Hotel downtown. •

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Member Milestones Nine Builders Association members were honored as part of the Top 400 Contractors in the May 19 edition of Engineering News-Record magazine. Clark Construction Group was named as the 13th largest contractor, while Opus North Corporation (36th), Pepper Construction Company (45th), Ryan Companies US, Inc. (54th) and James McHugh Construction Company (88th) were also in the top 100. McShane Construction Corporation was listed 102nd, W.E. O’Neil Construction Company 112th, Weis Builders 149th and Bulley & Andrews, LLC at 294th. Four Builders Association companies were honored with AGC Safety Awards for their commendable safety performance in 2007. Valenti Builders, Inc. won for its Zero Incidence Rate for companies with over 50,000 work hours, and BABCO Construction, Lawdensky Construction Company and The Lombard Company were among companies with 10,000-50,000 work hours who displayed a Zero Incidence Rate. W.E. O’Neil Construction Company announced that Michael J. Faron has been named Chairman and John A. Russell has been named President. Faron joined W.E. O’Neil in 1973 and had been President of the company since 1989. Russell joined the O’Neil team in 1982 and was promoted to Executive Vice President in 2005. A new Ronald McDonald House near the University of Chicago Comer Children’s Hospital was completed in February by Bulley & Andrews’ Meyne division. The 30,000-square foot facility houses families whose children are being treated at the hospital. The new facility, a Victorian-style home, is close to twice the size of the original house. James McHugh Construction Company completed a renova-

Faron

Russell

McShane

tion of Chicago’s Blackstone Hotel in March. Renovations started in May of 2006 and called for most of the hotel to be gutted, while historic areas were restored on the skeleton of the building. The main lobby, Crystal Ballroom, Art Hall and lower level barber shop were among the areas renovated in the Blackstone. McShane Construction Company CEO James A. McShane was awarded the Richard G. Levy Presidents Award by the Chicago Chapter of the Society of Industrial & Office Realtors. The recipient is chosen based on accomplishments both in and out of the construction industry. Lombard Architectural Precast Products (LAPPCO) manufactured the architectural precast concrete for Provena St. Joseph Medical Center in four months. The concrete work - which included custom formliners to create the look of modular brick, corner brick, jumbo brick and edge caps - was part of a sweeping renovation at the hospital. Part of that renovation is Will County’s first Women’s and Children’s Center. Arnstein & Lehr launched its new construction practice group in April. Attorneys in the Chicagoland area include: Matt Bryant; Barry Chatz; Mark Enright; Samuel Levine; Hal Morris; Dan Schlade; Mark Spognardi; Skip Starck; Paul Starkman; and Justin Weisberg.

PENSION, from page 9 1) 180 days after expiration of the agreement, or 2) certification of impasse by the Secretary of Labor. If they fail to agree the default schedule goes into effect automatically. Generally, the Rehabilitation Plan will be effective for 10 years (the “Rehabilitation Period”), beginning several years after the initial year of critical status. During the Rehabilitation Plan’s adoption period (which begins on the date the plan is certified as “critical” and ends on the day before the Rehabilitation Period goes into effect), the multiemployer plan cannot accept any collective bargaining agreement which provides: • For reduced contributions for participants • A suspension of contributions for any period • Any new direct or indirect exclusion of new or younger employees from participation. Similarly, the plan cannot be amended in any way that would increase liabilities, unless the amendment is required by law or required to maintain qualified status. After the Rehabilitation Plan is adopted, tight restrictions exist on increasing benefits.

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But unlike the contribution obligations with respect to Endangered Plans, Critical Plans come with “Employer Surcharges.” In 2008, a mandatory 5% contribution surcharge is imposed 30 days after the employer is notified that the plan is in critical status and that the surcharge is in effect. This surcharge is 10% for later years as long as the plan is in critical status. The surcharge does not apply once the employer adopts a contribution schedule which meets the requirements of the Rehabilitation Plan. And if the employer already has a contribution schedule which meets Rehabilitation Plan requirements when the plan is declared Critical, then the surcharge is not imposed. Failure to make required contributions or make required contributions on a timely basis, subjects the employer to a 100% excise tax and the usual ERISA penalties and assessments. Robert Christenson, a partner at Fisher & Phillips LLP, is the chair of the firm’s Employment Benefit Practice Group. The national firm represents management in areas of labor, employment and employee benefits.

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National Building Museum Awards AGC The Associated General Contractors of America, including the Builders Association and rest of its chapters, became the first national association receive the National Building Museum Honor Award at a ceremony in early June. The AGC chapters were recognized with the Honor Award for advancement of the construction industry for the past 90 years. The AGC of America as the oldest and largest organization of contractors. Not only are all members of the Builders Association part of the AGC, but the Builders Association helped found the AGC of America in 1918. The AGC and its chapters received this prestigious award for their hard work promoting construction excellence. The many levels of the AGC have advocated the advancement of the construction industry. The Honor Award reflects the AGC’s commitment to the industry, education and career development.

Legislative News

Clock Runs Out On Structural Work Act Construction Safety Act (HB2094) was not brought to a vote in Springfield, but the planned reenactment of the Structural Work Act - which was repealed in 1995 - could surface in the future, according to the Builders Association’s lobbyist. The SWA was around five votes shy of passage and would have needed even more votes to pass the House of Representatives if brought to a vote after May 31. The Builders Association opposed the Structural Work Act on the basis that it was an unneeded law, and that safety accidents had actually gone down in Illinois since the repeal. Republicans in the House were almost universally opposed to the bill. The Builders Association would like to thank companies and individuals who took advantage of the talking points, tips and sample messages on the website to contact their legislators and register opposition to the Structural Work Act. Lobbyists and the group of industry organizations opposing the bill remarked that communications between business owners and lawmakers did have an effect. Late in the session, the legislature turned its attention to budget matters. Democrats in the House of Representatives proposed a capital improvement plan, but the Builders Association supports the Illinios Works Coalition. Illinois Works is a $34 billion capital improvement plan that would open up a number of construction opportunities around the state in education, retail, transit and a number of other areas. The coalition believes this aggressive plan to be necessary because it’s been nearly 10 years since the state legislature passed a capital improvement plan. House Democrats accepted two of the four sources of funding for the bill, but tabled the matter.

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AGC News

The National Building Museum’s Honor Award was created in 1986 for companies and individuals that are making an impact on our built environment. Many factors are considered, and the recipients of the award come from a wide variety of backgrounds. Former recipients include Clark Construction Group, Lady Bird Johnson, the National Football League and Major League Baseball. A gala was held June 4 at the National Building Museum’s historic Great Hall in Washington, DC. Many construction industry leaders were in attendance, including AGC President Douglas E. Barnhart, AGC Chief Executive Officer Stephen E. Sandherr, and BA President Al Leitschuh, who accepted the Builders Association’s award.

Labor Negotiation Updates Partial List Of Completed Negotiations (Full list at www.bldrs.org) Bricklayers, Local 6 (Rock Island Chapter) - The parties have concluded a one-year agreement with an economic package of $1.30. There were very minor changes in start time and make up day language. Chicago Regional Council of Carpenters - Commercial - The parties have agreed to a two-year contract with an economic package of $3.40 a year, with an additional $0.02 employers contribution to the Industry Advancement Fund ($0.06 total IAF per hour contribution). Work rule changes include a random drug testing program, shift start at 7 a.m. upon notice to the Union, contract language for employees who work outside the geographic area of the agreement and formation of a pile driving subcommittee to consider crew sizes. Electricians Local 117, 150, 461 and 701 - The Council on Industry Relations issued a ruling awarding a total wage package increase of $1.40, effective June 1. Pipefitters Local 597 (Cook, Lake, Will & McHenry Counties) - A three-year agreement was ratified by the parties. The economic package is $2.37, $3.30 and $3.30 respectively. A random drug policy will also be implemented. Plumbers and Pipefitters Local 422 (Will & Grundy Counties) - The parties concluded a three-year contract with economics of $3.37, $3.30 and $3.30. Plumbers Local 93 - A four-year deal has been reached with an economics of $3, $3, $3.20 and $3.50. Language changes include: a no strike, no lockout provision; mandatory random drug testing; and bonding structure changes.

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New Members

HRH’s insurance professionals and construction specialists are proud to be members of the Builders Association.

Arnstein & Lehr LLP 120 S. Riverside Plaza, Suite 120 Chicago, IL 60606 Contact: Attorney Samuel H. Levine, 312-876-7182 www.arnstein.com Since its founding in 1893, Arnstein & Lehr has served large and small clients throughout the United States and in foreign countries. More than a century later, the firm has established itself as a full-service practice that addresses the diverse and complex needs of its clients with vision, expertise and commitment to quality service. SmithAmundsen LLC 150 North Michigan Avenue, Suite 3300 Chicago, IL 60601 Contact: Partner Robert Lessman, 312-894-3339 www.salawus.com SmithAmundsen is a 100-plus lawyer firm headquartered in Chicago. Legal matters including those that pertain to the construction industry are business problems to be solved and we have developed a comprehensive understanding of the enterprises in which our clients operate. We pride ourselves on using this knowledge to resolve matters creatively, expediently and pragmatically.

As Chicago’s fastest growing insurance broker, HRH brings you the best talent: ƒ Our local risk management experts have specialized in the construction industry for over 40 years.

ƒ HRH’s Construction Practice professionals in

808 Drywall LLC 808 North Dearborn Chicago, IL 60610 Contact: Manager Luis Collado, 312-644-9850

Greater Chicago include safety engineers, OSHAcertified trainers, bond specialists, claims advocates and contractual and financial specialists.

ƒ We deliver best-in-class service and risk management solutions to help reduce your total cost of risk.

OGLETREE DEAKINS

ƒ HRH’s resources range from contractual risk transfer

Attorneys at Law Construction Industry Group

review to OCIP/CCIP expertise to risk financial solutions and surety and OSHA services.

Committed to the challenges you face daily Chicago Michael DeCaigny, ARM, CRIS 312.527.7046 michael.decaigny@hrh.com

LIFTING SERVICE TO NEW LEVELS

Lombard Gregory Field, CPCU, CRIS 630.324.2562 greg.field@hrh.com

www.hrh.com HRH typically acts in an agent’s capacity and receives compensation as a representative of one or more insurance companies. HRH may also receive compensation from other sources when acting as an agent. Unless HRH has a written agreement where HRH represents that it will be acting in a broker’s capacity and will be compensated only by agreement with the client, or is acting as a wholesaler for other licensed producers, HRH will be acting in an agent’s capacity.

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Two First National Plaza, 25th Floor • Chicago, Illinois 60603 P: 312.558.1220 • F: 312.807.3619 • www.ogletreedeakins.com

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Rubloff Hall, finished in 2006, is the first Illinois university residence building to receive a LEED Gold rating.

GOLD, from page 2 McDermott said. “People that were used to the older buildings noticed a big difference in the air quality.” The staircase is in a large open space, so certain measures have been taken to promote easier air flow in that area. “There is a large circular staircase in which ventilation is more difficult,” McDermott said. “A natural ventilation scheme has been put in place. During the spring and fall [when the temperature is comfortable outside] the windows will automatically open to ventilate the air naturally and to save costs. “We are all about improving the quality of life for these people. We have a good relationship with Saint Xavier University that has allowed us to work on three of their buildings already and one more now.”

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The Saint Xavier and Henry Bros. dream team has been actively cooperating together for years now. “We have repeatedly selected Henry Bros. for our projects because they are professional, responsible, and they are

knowledgeable in standards set forth by the U.S. Green Building Council,” said Gerald Giovannelli, plant operations and maintenance manager for Saint Xavier University. “I find Henry Bros. extremely responsive in connection with attention to detail, quality assurance and post-build warranty requests. What I most appreciate about Henry Bros. is that Henry Bros. doesn’t take short cuts.” “We’ve had a great relationship with the Sisters of Mercy and St. Xavier University, and they’ve been a client for 40 to 50 years,” Henry Bros. Co. Executive Vice President Bill Callaghan said. “St. Xavier made the decision a little over two years ago to go green, and we’ve had the privilege of working with a design team and a mechanical engineer who are very actively involved in the green building process.” The project manager for the current building, Carl Hauert, was also pleased with the working relationship not only between Henry Brothers CO. and Saint Xavier University, but also with the architect and engineer. “We all have a good working relationship which makes adjusting to the technology even easier,” Hauert said. “We become acclimated with the repeated projects, and we know what to expect.” The $9 million Rubloff Hall incorporates an abundance of earth-friendly qualities into the everyday functions of a college residence hall: a roof with 1,000 square feet of plants for heating and cooling; carpeting that is made from recycled plastics; toilets with two flush modes to help conserve water; and energy efficient lighting. “We’re excited about the work we’ve done and the work we’re still doing to make the campus more eco-friendly,” Callaghan said.

On the roof of Rubloff Hall resides 1,000 square feet of plants for heating and cooling the building

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JOINT VENTURE, from page 1 While working with a smaller firm may fulfill some minority requirements for working inside of the city, these firms wouldn’t be selected for the work if they hadn’t already established strong reputations working on smaller projects. The smaller firms also realize that the opportunity for larger jobs wouldn’t mean much if they couldn’t trust the people they’re working with. “There’s value behind any joint venture when you’re working with the right people,” said David Rambhajan, President of Industria, Inc. “If it’s a good strategic relationship, everybody wins. The larger firm brings in a company that can help get the project done well and the smaller firm gets access to work it wouldn’t normally have.” Bulley & Andrews President and Chief Operating Officer Paul Hellermann has had the chance to watch Ujamaa work with his company through a number of projects and finds the relationship mutually beneficial. “Because they’re an African-American firm, it gives us entry into some markets we wouldn’t normally have access to,” Hellermann said. “It helps us meet our requirements, and I think their project managers definitely learn from ours. “The smaller firms can get access to training and education they might find it hard to get access to otherwise, and they’ll get to work on bigger projects that they might not have a chance to on their own.” Bulley & Andrews and Ujamaa worked together to complete labs at the Illinois Institute of Technology and are currently working on Chatham Market on Chicago’s South Side. That familiarity makes future joint ventures likely because it helps to circumvent the biggest obstacle these projects usually face – lack of communication. “Communication is one of the challenges of a joint venture,” Hellermann said. “We need to make sure that their superintendent and project manager are on the same page. “It makes it easier when you work with the same people. We’re definitely familiar with their organization and they do great work. There’s big upside to joint ventures when you can trust the company you’re working with.” Hellermann points out that trust is certainly present with Ujamaa, and the sentiment is mutual. “As the minority partner, you have to understand that you don’t always have the last say,” Akintonde said. “That makes it essential that you know who you’re working with. Bulley & Andrews has

Working on projects with Bulley & Andrews allows Ujamaa Construction Project Managers to work on projects that otherwise would be too large for the company.

always had a good reputation. They deal with everyone fairly and they’re truly a class ‘A’ contractor. We’re in great hands.” Industria is currently working on a project with Wight & Company, the most recent of several joint ventures. Rambhajan says he’s been a part of both comfortable and contentious joint ventures and notes a lack of communication as one main reason companies sometimes don’t work well together. That isn’t limited to talking to each other on the jobsite, as Industia’s President believes many problems could be fixed before the job even begins if the right questions are asked and answered. “It’s so important to ensure that there is a strong working relationship between the two firms, which includes a true protocol for communications,” Rambhajan said. “Communication is important on any project, but is even more so for a joint venture. “We need to know before we start how we’re going to distribute responsibility, how the cash flow and work flow are going to work and what is expected from each firm in the joint venture. A lot of the challenges go away if you trust who you’re working with, so if you’ve had a successful joint venture, it’s likely you’ll work with the same firm again. If a joint venture is planned well ahead of time, the team can focus on building a successful project.”

Tell Us A Story The Builders Association is always looking for ideas to develop content of The Builder. If there’s a topic you’d like to see highlighted or a challenging project your company is working on that you’d like to see featured, contact Andy Cole at 847.318.8585 or acole@bldrs.org.

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The

Builders Association Staff

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. 2008 Board of Directors Chairman J. David Pepper Pepper Companies Vice Chairman John Russell W.E. O’Neil Construction Co. Treasurer R. Lynn Treat Ryan Companies US, Inc. Immediate Past Chairman Paul Hellermann Bulley & Andrews, LLC George Ferrell Henry Bros. Co.

Benjamin Johnston James McHugh Construction Company Leon LaJeunesse Custom Contracting, Ltd. Sherwin Mirsky James Schaeffer & Schimming John O’Malley Case Foundation Company Howard Strong George Sollitt Construction Co. Builders Association 9550 W. Higgins Rd., Suite 380 Rosemont, IL 60018 (847) 318-8585 www.bldrs.org

Have a construction-related problem or question? Call your professional trade association. While each staff member can assist you, you may find it helpful to speak directly to the individual who has primary responsibility for a particular area. Al Leitschuh, President Strategic Issues, Industry Relations Mike Schultze, Vice President Industry Relations, Government Relations Denise Herdrich, Labor and Membership Director Kristin Garcia, Client Services Manager Andy Cole, Communications Manager Stacey Kelly, Project Coordinator Administration, Education Programs Tim McPhillips Accounting Ashleigh Johnson Becca Katz Grace Reband Communications Interns


Volume 12, issue 2