Virginia Builder July 2009 by Association Publishing Inc.

The official magazine of the Home Builders Association of Virginia

VIRGINIA builder

Celebrating more than 50 years of service to housing in Virginia

Vol. 22, No. 6 July 2009

Membership numbers on the up and up 2009 state elections present PAC opportunity

Build A Relationship Full of

SAvingS!

Builder/Contractor Advantages • Priority scheduling for installation & service • Experienced sales team providing personal service • 24-hour fully staffed emergency service • Referral Rewards & MUCH MORE! Call us TODAY for a no obligation consultation. Charlottesville (434) 295-4194

Kenbridge (434) 676-8217

Roanoke (540) 362-0286

Culpeper (540) 825-0345

Madison Hts. (434) 528-9843

South Hill (434) 447-3600

Emporia (434) 634-3136

Mt. Jackson (540) 477-9355

Stephens City (800) 237-1320

Fredericksburg (540) 898-0357

Petersburg (804) 862-4560

Suffolk (757) 539-5371

Gloucester (804) 693-9046

Portsmouth (757) 488-7803

Warrenton (540) 347-2055

Harrisonburg (888) 526-3189

Ranson, WV (800) 222-0808

Warsaw (804) 333-3790

Iron Gate (540) 862-4148

Richmond (804) 783-9500

Waynesboro (540) 942-4101

www.amerigas.com

VIRGINIA builder

Vol. 23, No. 6

July 2009

2009 HBAV officers E. Rand Sompayrac, president Michael D. Newsom, first vice president treasurer C. Richard Bogese Jr., second vice president Kevin DeChristopher, associate vice president Robin S. Newhouse, vice president-secretary Regional vice presidents Region I: Robert J. Flynn Region II: Hugh Mitchell Region III: Chip Hudnall Region IV: David Blalock Region V: Richard Coleman Region VI: David Hepler State representative John D. Stokely Jr. (Northern Virginia) HBAV staff Michael L. Toalson, executive vice president Barrett Hardiman, vice president/director of regulatory affairs Kathy M. Harley, director of administration and finance/education director James D. Bonnell, director of member benefits services Barb Preddy, administrative assistant Rhonda Allison, legislative assistant 707 E. Franklin St., Richmond, VA 23219 (804) 643-2797 www.hbav.com Editorial inquiries can be directed to: Stacey Enesey Klemenc E-mail: staceyklemenc@cox.net 2112 Flowerdew Ct. Virginia Beach, Va. 23454, (757) 427-6355 Advertising inquiries can be directed to: Lisa Nixon E-mail: vabuilderads@yahoo.com 2213 South Brook Drive, Orange Park, FL 32003, (877) 449-2535 Published by Association Publishing Inc. www.associationpublishinginc.com Sandra K. Amidon, Joyce F. Hearn APR 2117 Smith Ave., Chesapeake, Va. 23320 (757) 420-2434 Advertising sales assistant Valerie Myers Graphic designer Paige Takach To change your address (804) 643-2797 Virginia Builder mails copies of the magazine to names supplied by the Home Builders Association of Virginia. To correct your address, please contact HBAV at the number above. Nonmember subscriptions are available from the publisher for $27 a year. Virginia Builder (ISSN 1552-8715) is published nine times a year for members of the Home Builders Association of Virginia and is edited according to AP style. Acceptance of advertising in Virginia Builder does not imply endorsement of the product or service by the Home Builders Association of Virginia. Opinions expressed in articles are those of the authors and people quoted and not necessarily those of the Home Builders Association of Virginia. Mention of specific products or services in editorial content does not imply endorsement by Virginia Builder or the Home Builders Association of Virginia. No material may be reproduced for further publication without the express permission of the association and the publisher.

Affiliated with the National Association of Home Builders.

July 2009

Superheroes of all shapes converged throughout Virginia in honor of National Membership Day in May. Seen here (from left) Tidewater BA members Matt “Greenie” Froehler, TBA President Pete A. “Super Builder” Kotarides, John “Iron Man” Ainslie and Deb “Robin” Carson join forces with TBA EVP Channing “Superman” Pfeiffer to help take the Virginia local up, up and away in the annual membership drive. TBA ended up placing fifth in the nation.

departments 2 President’s Perspective 8 Counsel’s Corner: Public contracting in Virginia – Are you ready? 10 Stateline 1 1 HBAV Build-PAC Honor Roll 12 Membership Benefits Update 12 Advertisers’ Index

FEATURES 4 Membership increases in leaps and bounds 5 Bank notes: Sales boost expected from new FHA tax credit rules 6 2009 state elections: An opportunity for HBAV Build-PAC

On the cover: The recent decision to allow home buyers to apply the $8,000 first-time home buyer tax credit toward the purchase of an FHA-insured home is expected to provide a further boost to home sales. (Photo courtesy of Andersen Windows.) Virginia Builder   1

w h at ’ s i n s i d e

The official magazine of the Home Builders Association of Virginia

President’s Perspective Sponsored by Dominion

HBAV strategic plan on the horizon By Rand Sompayrac, 2009 HBAV president

n challenging times, associations, just like private enterprise, usually become introspective of all processes and methods of doing business or serving members. Besides determining the current threats, associations also tend to look to the future to see where improvements can be made. The strategic planning process is one of

Dominion lineman Jason GeorGe helps plant hunDreDs of enerGy-savinG iDeas all over virGinia. Planting trees and shrubs to shade outdoor heat pumps and air conditioning units helps reduce their workload and can provide real savings on your home’s energy costs. Trees can help reduce heating and cooling bills in other ways, too. Trees that lose their leaves in winter let the sun’s warmth shine through. And in summer, their foliage creates shade and helps keep homes cool. Effective landscaping can help lower energy bills by up to 25%. Today, more than ever, it’s important we all work together to save energy. That’s why Dominion is investing in a wide-ranging energy conservation plan to support Virginia’s goal of reducing the state’s electricity consumption 10% by 2022—while helping customers use less electricity and make the most of their energy dollars. For more about these and hundreds of other energysaving tips, visit www.dom.com, keyword: energy-saving tips.

WHAT WE DO EVERY DAY, POWERS YOUR EVERY DAY.

Before you dig, don’t forget to call 811 for “Miss Utility,” a free service that marks the location of underground utility lines—because nothing’s more important than safety.

2   Virginia Builder

the best ways to accomplish this. Steve Thomas, Tidewater builder John AinHBAV’s last strategic planning session was slie, Northern Virginia/Winchester builder in 1999. Staff and the current leadership Randy Melvin and HBAV Executive Vice team recently reviewed the prior identified President Mike Toalson. short-term and long-term goals The consideration of the and concluded the last plan a sprinkler mandate is just one success. Many of the identified issue in USBC’s 2009 update. goals were reached and benefited The complete process includes the association’s growth and its four stakeholder groups: Intermembership services. national Energy Conservation At the HBAV Annual ConCode, Code Administration vention in June, the leadership and International Fire Code, proposed to the Executive ComInternational Building Code mittee that the association would (commercial) and IRC (one- and greatly benefit from another two-family dwelling units three Rand Sompayrac strategic exercise. As a result, stories or less). Each group both the HBAV Executive Committee and has met twice on the numerous proposed board of directors overwhelmingly approved changes to the ICC family of codes in an the launch of a strategic plan update this effort to reach a consensus. year, which pleased me immensely. In the IRC, the HBAV team will lead HBAV has begun the process by dethe effort to eliminate the proposed ICC signing a relevant survey that will be sent mandate that all single-family dwelling units to qualified members for their input and be sprinkled. HBAV is the only organization direction for the future. HBAV staff and at the table expressing opposition to the leadership also have begun the interview sprinkler mandate. It is strongly supported process to select a facilitator to guide the by the sprinkler industry and fire chiefs planning process to a successful conclusion from throughout Virginia. later this year. The sprinkler mandate issue was first The National Association of Home considered by the board’s Codes and Builders’ leadership handbook suggests a Standards Committee June 22. The board successful strategic plan will ensure the will conduct a public hearing July 27 in association’s continuity, establish goals and Richmond. A comment period on the objectives, direct the leadership team and issue will be held in August, September educate members about the benefits of and October. In November or December, association membership. All of these atthe C&S Committee will review the public tributes will improve HBAV for you — our comments. In June 2010 the board will valued member — and the industry we make a final decision on this and many so proudly serve. other controversial issues. The survey will be mailed soon. Please DCR stormwater thoughtfully respond as your input will management proposal help guide the discussion process toward threatens business climate improving the association for all. On June 22, the 60-day comment Home sprinkler mandate period for the controversial Department The process of the Board for Housing of Conservation and Recreation stormwaand Community Development to consider ter regulations began. HBAV Director of the International Code Council mandate Regulatory Affairs Barrett Hardiman, who in the International Residential Code that has been participating in the 15-month-long all new single-family homes be sprinkled process, drafted our comment letter to began the first week in June, when a DCR and forwarded instructions to every special subcommittee of stakeholders met local association and members of the HBAV in Richmond. HBAV will vigorously oppose Legislative Committee and Regulatory Comthe ICC sprinkler mandate before BHCD. mittee on what action needs to be taken. Representing HBAV are Richmond builder Through every step of this process, HBAV July 2009

has stated its objection to the direction of these regulations (flawed methodology) and their significant impact on the business climate in the Commonwealth. Upon completion of the comment period, DCR staff will summarize the comments for the Soil and Water Conservation Board. Additionally, they will propose changes to the regulations for the board to consider based on the comments received. DCR anticipates the board will take a final vote on the regulations at its December 2009 meeting. The regulations will become effective July 1, 2010, after the 2010 session of the Virginia General Assembly.

2009 Statewide Membership Drive: A BIG success More than 500 new members were added to the HBAV membership roll during the 2009 Statewide Membership Campaign in March, April and May. Congratulations to all the HBAV-affiliated local associations that chose to participate in an outstanding membership drive ef-

fort. As most of you know, we grouped the 16 local associations into three similar categories by member numbers, thereby leveling the contest. The contest winners in each category follow. First-place winners received a $1,500 HBAV award and second-places, $1,000: Category A – Tidewater BA won with an increase over goal of 114 percent. Roanoke Regional HBA achieved second place with an increase over goal of 83 percent. Honorable mentions go to HBA of Richmond with an increase over goal of 80 percent and Northern Virginia BIA with an increase over goal of 67 percent. Category B – Shenandoah Valley BA won with an increase over goal of 107 percent. Second place was achieved by Blue Ridge HBA with an increase of 75 percent. Category C – HBA of Rappahannock won with a whopping increase over goal of 239 percent. Augusta HBA came in second with an outstanding 163 percent increase over goal. Honorable mentions go to New River Valley HBA for its tremendous increase over goal of 139 percent, to Top of Virginia’s 91 percent and to Piedmont

Dig With C.A.R.E. Keep Virginia Safe! Whether your project is big or small, one free and easy call gets the underground utility lines marked and helps avoid costly damages, fines and even personal injury. So, please call 811 and dig with C.A.R.E.

July 2009

HBA’s 79 percent increase over goal. Congratulations also to Rappahannock, Augusta, New River Valley, Tidewater and Shenandoah Valley for exceeding the 11 percent increase of membership that qualified their local executive officers and a guest to receive free registration to HBAV’s Annual Convention at Hilton Head last month. We are extremely proud of these staff members who inspired and motivated their members to achieve their association’s goals. HBAV’s leadership and staff would like to extend to each successful association’s officers, leaders, membership and staff our most sincere appreciation for a job well done. Everyone involved at these local building associations should be extremely proud of their hard work and very successful accomplishments. You are all superheroes! In addition to the hardworking local associations mentioned above, a great big thank you goes out to HBAV Membership Chairman Richard Bogese; HBAV Membership Ambassador Mike Newsome and Team HBAV (Kathy Harley and Jim Bonnell) for a very successful membership campaign. VAB

Call Miss Utility at before you dig. Allow required time for marking. Respect the marks. Excavate carefully.

This message brought to you by the Virginia State Corporation Commission

Virginia Builder   3

Membership increases in leaps and bounds thanks to National Membership Day

he tough housing market did not deter federation members and local associations from recruiting 5,055 new members during NAHB’s National Membership Day May 19. When all was said, done and tallied, the super efforts of the Home Builders Association of Virginia’s local associations netted more than 500 new members toward that number.

2009 Annual Sponsorship Program

“We are surprised and pleased with the membership results of this year’s drive,” says Ed Brady of Brady Homes in Bloomington, Ill., and the 2009 NAHB membership chairman. “We consider the real victory to be the high participation and high energy we saw this year. Our members are no less committed today than they have been to cultivating a strong local membership.” HBAV’s successful statewide campaign concluded with a two-day push May 13 and 14, with the locals calling in their numbers May 14. “The highlight, for me, was traveling around the state to most of our local associations to promote the campaign and meet so many active, involved members.

Their accomplishments are extraordinary,” says Michael Newsome, HBAV’s first vice president/treasurer who served as campaign ambassador and led the campaign. For Virginia’s campaign, the 16 local associations were grouped into three similar categories according to size. In Group A, Tidewater BA placed first and Roanoke Regional placed second. Group B’s winner was Shenandoah Valley BA, with Blue Ridge HBA placing second. And in Group C, HBA of Rappahannock won, with Augusta HBA the runner-up. Nationwide, TBA placed fifth by recruiting more than 100 members. In Virginia, all 16 local associations agreed to enthusiastically participate in the membership campaign, which began

The Home Builders Association of Virginia wishes to express its appreciation to the following members for their generous support of the 2009 Annual Sponsorship Program: PLATINUM Dominion Virginia Power HBAV Benefits Group

Virginia Housing Development Authority

SILVER Clark Whitehill Enterprises Inc. Creative Home Builders LLC FSK Property Management

Mid South Building Supply PRO-Build

BRONZE Meridian Construction Capital 4   Virginia Builder

Napier Signature Homes

Channing Pfeiffer helped his local take off with a flying start during Tidewater Builders Association’s drive for new members. The local association finished first in its category statewide and fifth in the nation during the superherothemed competition.

statewide March 19 with a recruitment training session in Fredericksburg. More than 100 recruiters attended a three-hour motivation and training session presented by nationally known sales trainer Bob Schultz of Florida. During the campaign, HBAV sent weekly updates to its local associations and all those who attended the training session. The updates included motivation and challenges between local associations, which had formed teams across Virginia, many of which focused on the national superhero theme. “HBAV staff and local membership teams worked incredibly hard to make the national membership drive a huge success,” says Rand Sompayrac, 2009 HBAV president. “The recruited ‘new’ members realize the tremendous value of our membership and are positioning their company to take advantage of the recently begun recovery.” Editor’s note: Virginia Builder will report the actual tallies and note the member who recruited the most new members when we receive the official numbers from NAHB. VAB July 2009

he recent decision to allow home buyers to apply the Obama administration’s $8,000 first-time home buyer tax credit toward the purchase of an FHA-insured home is expected to provide a further boost to homes sales, says Robert Dietz, director of tax issues for the National Association of Home Builders. Home buyers who are using FHAapproved lenders can only apply the tax credit to a down payment exceeding the 3.5 percent minimum required on an FHAinsured mortgage — or to their closing costs, Dietz says. The mor tgagee letter permits lendMore than ers to purchase the 560,000 taxanticipated tax credit payers claimed from the home buyer. The proceeds from the tax credit for this sale can be used sales in 2008 ... by the home buyer to provide an additional and NAHB fore- down payment or casts more than to pay closing costs, such as escrow for 1 million taxpay- taxes, insurance and community associaers will claim tion assessments. The the $8,000 tax funds also can be credit for 2009 used to buy down the interest rate of purchases. the mortgage. F H A - a p p r ov e d lenders are not allowed to place a second lien on the home, he says. Instead, they must secure repayment through a contract with the home buyer. It is unclear at this time what form the lender option for monetization of the tax credit will take. NAHB will follow this issue and provide updates as they develop. In all cases, the FHA limits fees associated with either a tax credit loan from a government entity or the purchase of the tax credit by an FHA-lender to no more than 2.5 percent of the tax credit amount, or $200 for an $8,000 tax credit. Prospective first-time home buyers should be cautious in participating in programs July 2009

that offer monetization, Dietz says. If the organization is part of the state government, it is safe to assume that its program is reputable. Otherwise, home buyers may want to check with their local Better Business Bureau or a state or local government’s department of consumer affairs.

Expected market benefit Assessing the impact of the tax credit on the housing market, NAHB economists earlier this year calculated it would help to stimulate 160,000 incremental home sales — 101,000 to first-time buyers who receive the credit and another 59,000 to existing homeowners who will be able to buy another home after selling their current home to a first-time buyer. In an update of those projections following the FHA announcement and including the impact of prior state monetization

programs, NAHB analysis indicates the tax credit program now will generate 192,000 incremental home sales, including 121,000 to first-timers and an additional 71,000 to move-up buyers. These transactions will add 73,000 jobs to the economy this year. More than 560,000 taxpayers claimed the tax credit for sales in 2008, according to data from the treasury inspector general for tax administration, and NAHB forecasts more than 1 million taxpayers will claim the $8,000 tax credit for 2009 purchases. Under current law, the first-time home buyer tax credit only applies to home sales completed prior to Dec. 1, 2009. For more information on the tax rules of the program visit www.federalhousing taxcredit.com/. For further information, e-mail rdietz@ nahb.com or call Dietz at (800) 368-5242, ext. 8285. VAB

Virginia Builder   5

Bank Notes

Sales boost expected from the new FHA tax credit rules

build-pac

2009 state elections: An opportunity for HBAV Build-PAC

BAV Build-PAC Chairman Anthony Clatterbuck has called 2009 an important election year for the housing industry in Virginia, explaining, “All 100 seats in the House of Delegates and the three statewide offices are up for election. This is an opportunity for HBAV Build-PAC to help elect a governor, lieutenant

Visit One Of these LOcatiOns: fishersViLLe, Va 22939 (540)337-9300 (800)914-8959 fax(540)337-9306 fredericksburg, Va 22401 (540)373-5253 (888)246-5264 fax(540)373-5293 gainesViLLe, Va 20155 (703)753-8814 (800)237-5434 fax(703)753-8834 gLen aLLen, Va 23059 (804)550-3711 (800)544-7701 fax(804)550-5137 newpOrt news, Va 23606 (757)873-3939 (800)927-4477 fax(757)873-0134 nOrfOLk, Va 23502 (757)857-5377 (800)868-5377 fax(757)855-4201 richmOnd, Va 23237 (804)714-0974 (800)818-3853 fax(804)714-1397

governor and attorney general who respect and appreciate the many contributions our business makes to the Virginia economy, not bash it or over-regulate it to the point few can afford a new home. “The decisions of the HBAV Build-PAC trustees will make a difference in our business climate,” he says. “I cannot think of a

All the Parts You Need to Build a Dream Home! Follow these instructions for building the ideal dream home. 1 Use only top quality exterior building products; 2 Choose a local, reputable distributor; 3 Choose one that offers an expansive line of products; 4 One that offers exemplary service and stands behind its products; 5 Choose Norandex Building Materials Distribution. With a nationwide system of fully stocked branches, staffed by knowledgeable professionals, you can count on the products you need, on time and where you need them, including: Siding / Soffit / Manufactured Stone / Windows / Doors Gutters & Downspouts / Storm Products / Skylights Vinyl Fence / Deck & Rail / Accent Products, and more.

rOanOke, Va 24012 (540)362-9200 (800)346-2230 fax(540)362-2529 winchester, Va 22603 (540)662-2244 (800)327-2142 fax(540)667-8779

6   Virginia Builder

www.norandex.com

better investment for me and my company to make to protect its future. “Heck, I know this is a difficult year for the housing industry and I can’t contribute to HBAV Build-PAC at the same level I did when the housing market was much better, but I can contribute a little. I encourage every member of HBAV to follow my lead. The state legislature isn’t going to close shop in 2010 because my business is off. It’s going to meet and it’s going to consider lots of legislation that will impact housing. I need to do my fair share to help elect candidates this year who will support housing,” he says. “There are state legislators and statewide candidates who understand the value of affordable housing and homeownership to neighborhood schools, community safety and family stability and we should help re-elect and elect those candidates,” says Clatterbuck. “Some politicians have found it easy to bash home builders and vote that way, and we should make every one of them face stiff opposition in the 2009 general elections.” HBAV Build-PAC was formed more than 20 years ago to enable the housing industry to coordinate and make informed decisions on its support for candidates for state legislature and statewide office. “Every year the Virginia General Assembly considers numerous issues that threaten the affordability of housing and consequently the vitality of the housing industry,” says Clatterbuck. “This is our opportunity to help elect pro-housing/pro-business candidates to the Virginia General Assembly.” Every contribution to HBAV Build-PAC goes to candidates and all contributions are approved by the HBAV Build-PAC trustees. Build-PAC also receives contributions from state association dues and HBAV voluntarily directs $12.50 of the state dues to the PAC. The PAC is nonpartisan—it’s neither a Republican nor Democratic entity. Its politics is housing and pro-business/pro-housing candidates receive support for their campaigns. “One-hundred percent or fair-share support of $100 from every member of HBAV for HBAV Build-PAC would be a strong defense for housing,” Clatterbuck concludes. HBAV members may support HBAV Build-PAC by sending a business or personal contribution to HBAV Build-PAC, 707 East Franklin St., Richmond, VA 23219. VAB July 2009

vALue-ADDeD ASSoCiATion BenefiTS

Benefits through Anthem Life Anthem Life’s group life insurance helps employees provide financial security for their loved ones. As an association member

As an association member, you receive — at no additional cost — special benefits and programs designed to bring even more value to your Anthem plan.

you now get this security as part of your benefits plan at no additional cost.

ALL COVERED EmpLOyEEs AnD DEpEnDEnts RECEiVE: $10,000 Life and AD&D coverage • Group Term Life & AD&D Insurance promise timely benefit payments for the family if an employee passes away or faces a qualified loss in an accident. $2,000/Spouse and $2,000/Child Dependent Life coverage • Dependent Life Insurance pays a benefit to your employee if a spouse or child passes away. Resource Advisor • This program gives employees and their families free and confidential access to support resources, including: • Up to three legal and/or financial consultations for all employees • • • •

Up to three visits per year with a counselor for employees with a disability Up to three in-person counseling sessions as well as three legal and/or financial consultations for beneficiaries 24/7 telephone counseling and referral services Web site resources for child care and elder care databases, wellness information, wills, and power of attorney forms

Travel Assistance • Provides emergency medical assistance, travel services, and pre-departure information for members in case a medical emergency arises while traveling 100+ miles from home for personal or business reasons.

This insert is only one piece of your enrollment package. is only onepolicy piece of your enrollment package. Exclusions, limitations,This andadapplicable numbers can be found in the enrollment brochure.

Exclusions, limitations, and applicable policy numbers can be found in the enrollment brochure.

Payment of of thethepremium and agreement agreementofofthe theterms termsdetailed detailedininthethegroup group insurance policy certificate as outlined above. In Virginia: Anthem Blue payment premiumbybythe theemployer employerconstitutes constitutes acceptance acceptance and insurance policy andand certificate and and as outlined above. Cross and Blue Shield is the trade name of Anthem Health Plans of Virginia, Inc. (serving Virginia excluding the city of Fairfax, the town of Vienna and the area east of State Route 123). Life and DisIn Virginia: Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Virginia, Inc. (serving Virginia excluding the city of Fairfax, the town of Vienna and the area east of State Route ability by Anthem Life Insurance Company, an independent of the Blue Crossofand Association. Blue Cross and Blue Shield affilated 123).products Life and underwritten Disability products underwritten by Anthem Life Insurance Company,licensee an independent licensee the Blue Blue Shield Cross and Blue ShieldAnthem Association. Anthem Blue Cross and and Blueits Shield and HMOs, its affiliated HMOs, HealthKeepers, Inc., Peninsula Care, Inc. andCare, Priority Care, Inc. arelicensees independent of the Blue Cross andAssociation. Blue Shield Association. ANTHEM 360oare Health are HealthKeepers, Inc., Peninsula Health Care, Inc. Health and Priority Health Inc.Health are independent of thelicensees Blue Cross and Blue Shield ® ANTHEM®and 360°and Health registered registered trademarks of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. trademarks of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.EVASH4220A (10/08) EVASH4220A (10/08)

July 2009

Virginia Builder   7

counsel's corner

Public contracting in Virginia – Are you ready? by Joseph Luchini

tion of nonresponsibility — notify the affected bidder resident Barack Obama’s in writing. The bidder then has 10 business days to economic stimulus plan will respond in writing with its rebuttal. The public body must then make a decision in provide more money for writing and serve that decision on the bidder. The public construction projects in bidder then has 10 days — not 10 business days — to file an appeal, either in court or pursuant to Virginia. Contractors should be familiar an administrative process that the public body has in with the requirements of the Virginia place. Compliance with these time requirements is boyack Luchini critical and the failure to do so will render the public Public Procurement Act, Va. Code body’s decision final (Sections 2.2-4357-4359). §2.2-4300 et. seq. The PPA applies to A claim that an error has been made in a bid is not sufficient withdraw that bid. A bid can only be withdrawn due to a most Virginia state and local public construction to good faith clerical mistake, rather than a judgment mistake, and projects and sets forth provisions applicable to which was due to an unintentional arithmetic error or unintentional of a quantity of work, labor or material. Such error has their bidding, contracting and resolution of dis- omission to be clearly shown by objective evidence from the original work putes. This article will summarize some of the papers (Section 2.2-4330). An unsuccessful bidder might also protest the award or deciPPA’s key provisions. sion to award a contract to another, but such a claim cannot be

Bidding A construction contract can be awarded either pursuant to a “competitive negotiation” or a “competitive sealed bid (Section 2.2-4303).” Competitive negotiation for construction projects is disfavored but, when used, typically requires two or more fully qualified offerors selected on the basis of evaluation factors set forth in the Request for Proposals. Price is considered, of course, but it’s not the sole determining factor. The public body selects the best proposal after interviews with the offerors. A competitive sealed bid is exactly what it says. Pursuant to an invitation to bid, contractors submit their sealed bids, which are then publicly opened and announced. The contract is then awarded to the lowest “responsive” and “responsible” bidder. A responsive bidder is a bidder who has submitted a bid that conforms in all material respects to the invitation to bid. A responsible bidder means “a person who has the capability in all respects to perform fully the contract requirements and the moral and business integrity and reliability that will assure good faith performance, and who has been prequalified, if required (Section 2.2-4301).” Disputes can arise during the bidding process. A bidder’s low bid can be rejected if it is considered not responsive. A bidder can be disqualified before or during the bid process as being not responsible. A bidder can seek to withdraw its bid claiming it contains an error. When the public body determines the apparent low bidder is not responsible, it must — prior to issuing its written determina8   Virginia Builder

based on a claim that the successful bidder is not a responsible bidder. The disappointed bidder must submit its protest within 10 days after the award or the announcement of the award. In this circumstance, the unsuccessful bidder has not been served with a notice of the award, so he must be cognizant of when the award or announcement of the award has been made. Otherwise the time to file an objection may have passed by the time the disappointed bidder becomes aware of the award (Section 2.2-4330).

Contracting and resolution of disputes The PPA also has certain requirements or limitations applicable to all contracts. For all projects in excess of $100,000 the bidder/contractor must provide bid, payment and performance bonds (Section 2.24336 – 4337). The PPA voids any contract provision which seeks to bar a contractor’s claim for damages from unreasonable delay caused by acts or omissions to act of the public body, its agents or employees and due to causes with their control (Section 2.2-4335). See also Blake Constr. Co./Poole & Kent vs. Upper Occoquan Sewage Auth., 266 Va. 564, 587 S.E. 2d 711 (2003). Although this right is preserved by statute, that same provision states a contractor can be liable for the costs incurred by a public owner for the investigation or litigation of a delay claim which is found to have been false or to have no basis in law or in fact. Similarly, the public owner can be liable to the contractor for costs incurred to pursue such a delay claim to the extent the claim has been denied by the public owner in bad faith. The Virginia General Assembly has imposed certain procedures July 2009

and limitations on the processing and enforcement of contract claims. “These are mandatory, procedural requirements which must be met in order for a court to reach the merits of a case Welding Inc. vs. Bland County Serv. Auth., 261 Va. 218, 541 S.E. 2d 909 (2001).” The PPA requires The PPA a contractor to give applies to most written notice of its Virginia state intention to file a claim and local public at the time of the occurrence or beginning construction of the work on which projects and the claim is based. A sets forth provi- contract claim must be actually submitted sions applicable no later than 60 days to their bidding, after final payment, contracting and but the contract may very well require much resolution of more contemporanedisputes. ous filing. The PPA requires each public body to include in its contract a procedure to consideration of contractual claims. This procedure must establish a time within which the public body shall make a final decision on any such claim. Once a public owner has made a written “final decision” on a contractor claim, should the contractor disagree, it must file an appeal of that decision within six months of the date of that decision. A failure to timely appeal such final decision renders that decision final and binding on both parties. For projects lasting a year or more, this provision often results in the parties being involved in disruptive dispute resolution at the same time the contract is being performed. In that event, the public owner is required to make a decision on that claim pursuant to a process established in or incorporated into the contract. There are many provisions of the Virginia Code which have specific application to public projects. Any contractor or supplier seeking to provide services or goods should be aware of those provisions and how they impact securing the work and the performance of that work. (Joseph Luchini’s practice focuses upon all aspects of commercial litigation and dispute resolution with an emphasis on construction and real property issues. He can be reached at [703] 641-4274 or jluchini@reedsmith. com.) VAB July 2009

Built to Stand the Test of Time

Introducing Builders Insurance Group to Virginia Longevity. Stability. Reliability. These are the hallmarks of Builders Insurance Group. For over 16 years, we’ve delivered competitive prices, flexible coverage and technology solutions to our partners in residential and light commercial construction throughout the Southeast. Now, we’re pleased to bring our proven products and attentive customer service to Virginia.

Workers’ Compensation General Liability • Roofers Program

To locate an independent insurance agent in your area, visit www.bldrs.com or call 1-800-883-9305.

Virginia Builder   9

Shenandoah Valley Builders Association

stateline

Tradition lives on On the last Friday in April, SVBA continued its annual Arbor Day tradition by sponsoring a tree-planting ceremony at the area’s newest health facility, Rockingham Memorial Hospital. SVBA member and local landscaper, Fine Earth, donated 30 mature trees along with the labor for planting. As in years past, area third-graders were on hand for the dedication. Harrisonburg mayor, Kai Degner, and local retired JMU botanist, Norlin Botkin, made presentations on the history of Arbor Day. t Third-grade students from a local elementary school received saplings and lunch from SVBA in honor of Arbor Day.

HBAV local associations to hold 2009 Parade of Homes The following local associations in Virginia will host new home showcases this fall:

Blue Ridge HBA – Parade of Homes, Sept. 26-27, Oct. 3-4. Out-of-town judges are needed for Tuesday, Sept. 22. (434) 973-8652, Alyson@brhba.org. B&A of Central Virginia – Parade of Homes (tentative), Sept. 26-27, Oct. 3-4. Fredericksburg Area BA – Parade of Homes, Oct. 3-4 and 10-11. Peninsula HBA – Parade of Homes, Nov. 7-22. Judges are needed. Call Karen Robison or Katie Hayes at (757) 595-1600 by Oct. 1. HBA of Richmond – Parade of Homes, Oct. 3-4, 10-11, 17-18. Roanoke Regional HBA – Parade of Homes, Oct. 3-4, 10-11. Shenandoah Valley BA – Parade of Homes, Oct. 3-4, 10-11. Judges are needed Tuesday, Sept. 29. (540) 434-8005, info@ valleybuilders.org. Tidewater BA – Homearama, Oct. 3-18. Judges are needed Sept. 30; sturner@ tbaonline.org. Top of Virginia BA – Parade of Homes, Oct. 17-18, 24-25.

s Fred and Donna Belka, owners of Tidewater Modular Homes in Virginia Beach, have been inducted into Nationwide Custom Homes’ Builder Hall of Fame. 10   Virginia Builder

July 2009

2009 HBAV Build-PAC Honor Roll (as of May 29, 2009)

Governor’s Club

s Fine Earth, a member of the Shenandoah Valley Builders Association, recently won the U.S. Chamber of Commerce Small Business Award. Seen here, Chad Layman (right), owner of Fine Earth, accepts the award from Tom Donohue, U.S. Chamber president and CEO.

Names in the news Costen Floors sweeps in awards The economy may be down, business may be down, and profits may be down, but that’s not keeping Costen Floors down. In fact, the Richmond-based company was recently recognized by three totally different venues: the American Heart Association, National Wood Flooring Association and Floor Covering Weekly. With physical inactivity becoming an increasing epidemic in our country, Ralph Costen, owner and president of Costen Floors, decided to implement a wellness program for his employees. Costen Floors now has a walking path, healthier snacks in its vending machines and an opportunity to meet weekly during business hours to measure its wellness success. By implementing various options to encourage physical activity, as well as nutrition and cultural enhancements, Costen Floors received the Start! Fit-Friendly Companies Award from the American Heart Association. Costen Floors not only believes in improving the lives of its employees, but also believes in improving its community through volunteerism and contributions. Because of its ongoing community improvement efforts, Costen Floors was awarded the Community Service Award by the National Wood Flooring Association. It was one of only 30 companies recognized, and the only company in Virginia to achieve such an accolade. Finally, Costen Floors was ranked 56th in the nation among specialty flooring retailers by Floor Covering Weekly, The Industry’s Business News & Information Resource. Costen Floors moved up an impressive eight slots July 2009

Jeff Ainslie/John Ainslie, Ainslie Group, Tidewater BA Jules Elliott, Olde Colony Homes Inc., Fredericksburg Area BA Douglas R. Fahl, Dewberry, Northern VA BIA Thomas Jordan, Carrhomes Inc., Northern VA BIA Mak Koebig, Peak Construction Co. Inc., Shenandoah Valley BA/Piedmont BIA Robin Newhouse/Pam Pekrun, Dominion Virginia Power, Fredericksburg Area BA/Tidewater BA Ginger Slavic-Jones, Craig Builders, Blue Ridge HBA Henry H. Stephens, Personal, Peninsula H&BA Scott Sterling, IDI Group Cos., Northern VA BIA John D. Stokely Jr., Personal, Northern VA BIA Tidewater BA

General Assembly Club Clem Carlisle, East West Partners, HBA of Richmond Richard A. Coleman, Coleman Homes Inc., Fredericksburg Area BA Sam Craig, Craig Builders, Blue Ridge HBA Benjamin Graham, The Graham Cos., Northern VA BIA C. Richard Napier, Personal, HBA of Richmond Vincent Napolitano/John Napolitano, Napolitano Homes, Tidewater BA

Capitol Club David Blalock, FSK Management, Peninsula H&BA C. Richard Bogese Jr., Personal, HBA of Southside VA James L. Carver, James L. Carver Builder, Fredericksburg Area BA Anthony Clatterbuck, Graystone Homes Inc., Piedmont VA BIA Louis V. Genuario Jr., Genuario Cos., Northern VA BIA Louis Hale, Walsh, Colucci, Lubeley, Emrich &Walsh, Northern VA BIA Hugh T. Mitchell, Personal, BA of Southern VA Frederick Napolitano/ Richard Olivieri, Pembroke Enterprises Inc., Tidewater BA Michael Newsome, Clark Whitehill Co., Tidewater BA John Peterson, Terry Peterson Residential Cos., Tidewater BA Rand Sompayrac, Personal, Fredericksburg Area BA Preston Stallings, Personal, Blue Ridge HBA William G. Thomas/ Maureen Stinger, Reed Smith LLP, Northern VA BIA Kenneth O. Thompson, Ken Thompson & Associates Inc., Northern VA BIA

Century Club Tommy Balzer, Birthright Family Ltd. Partnership, HBA of Richmond Roy O. Beckner, S.W. Rodgers Co., Northern VA BIA Shawn Callahan, Metwood Building Solutions, Roanoke Regional HBA Pamela Comstock/Gilbert Martin, Gilbert C. Martin Co., HBA of Southside VA Kevin DeChristopher, Mid-South Building Supply, Top of VA BA Richard Entsminger, Personal, Northern VA BIA

Bill Garrett, W.B. Garrett Inc., HBA of Richmond Chip Hudnall, Chip Hudnall Custom Building Inc., HBA of Rappahannock John Olivieri, Associated Development Mgmt. Corp., Tidewater BA Mark Granville-Smith, Personal, Northern VA BIA Clark Massie, Tetra Corp., Northern VA BIA Charles Miller, Miller Custom Homes, Tidewater BA James Petrine, Enirtep Inc., Roanoke Regional HBA Danny Plucinik, Cardan Homes, HBA of Southside VA J.M. Snell II, Valley Renovations Inc., Shenandoah Valley BA Roland Specter, Specter Construction, HBA of Southside VA Clement “Kim” Tingley, Tingley Construction Co., HBA of Richmond

Partners Club C. Eugene Baker, C.E. Baker Construction Inc., Peninsula H&BA David Bomgardner, Personal, Northern VA BIA Ron Boothe, Boone Homes, Roanoke Regional HBA Walter Cheatle Jr., Trigon Homes, Piedmont VA BIA Richard Costello, AES Consulting Engineers, Peninsula H&BA Claudia K. Cotton, Personal, Tidewater BA David Dunwody, Personal, Piedmont VA BIA Peter Fields, Fields Construction Inc., Roanoke Regional HBA Bob Flynn, Personal, Roanoke Regional HBA Don Haight, Full Services LLC, Piedmont VA BIA William Halprin, Personal, Tidewater BA Chris Hargis, Kitchen & Bath Ideas, Builders & Associates of Central VA John Hendrickson, John A. Hendrickson Construction, HBA of Rappahannock Ron Herring, The Home Crafters, HBA of Rappahannock Todd Holtzman, Holtzman Propane, Piedmont VA BIA Walt Hopkins, Cave Hill Corp., Shenandoah Valley BA Jim Jackson, Superior Equipment Sales Inc., Tidewater BA Ron Johnson, Personal, Piedmont VA BIA Pete Kotarides, Kotarides Developers LLC, Tidewater BA Steve Lawson, The Lawson Cos., Tidewater BA Laura Newman, Newman Properties, Piedmont VA BIA Joe Miller, EJ Miller Construction Co., Roanoke Regional HBA David & Judy Milstead, Milstead Construction, Shenandoah Valley BA Kenneth Patterson, D.K. Patterson Construction, Shenandoah Valley BA Bruce Reese, Personal, Fredericksburg Area BA Ron Saunders, Personal, HBA of Rappahannock Tommy Shields Jr., Shield’s Construction Co., Augusta HBA G.H. Sturtevant, Wel-Vant Construction, Tidewater BA C. Warren Wakeland, HBA of Richmond Mike West, R.D. Wade Builder Inc., Blue Ridge HBA Wendell A. White, Personal, Tidewater BA

Thank You for Your Help! Virginia Builder   11

Member benefits update

ARRA brings changes to COBRA by Jim Bonnell, LUTCF, director of member benefit services

n Feb.17, President Barack Obama signed into law the “Stimulus Bill,” otherwise known as the American Recovery and Reinvestment Act of 2009, which includes significant changes to the Consolidated Omnibus Budget Reconciliation Act. COBRA allows workers and their dependents who lose their health benefits the option to continue their coverage under the health plan for a limited time. Usually, workers who elect to continue coverage can pay up to 102 percent of the premium an employer pays. To help alleviate this cost, the ARRA provides a subsidy to eligible individuals to assist in their premium payments under COBRA. Who’s eligible to receive the subsidy? An employee (and his/her spouse and dependent children) is eligible for the subsidy if the employee was involuntarily terminated from employment between Sept. 1, 2008, and Dec. 31, 2009, and is otherwise eligible for COBRA. Under the act, the government will subsidize 65 percent of the total cost of COBRA premiums for the first nine months of continued coverage for those

Advertisers’ Index AmeriGas....................inside front cover Anthem..........................................................7 Builders Insurance Group......................9 Builders Mutual.........inside back cover Costen Floors.........................back cover Demilec USA..............................................5 Dominion......................................................2 Miss Utility...................................................3 Norandex/Reynolds................................10 Screeneze......................................................6 For more information on any of these advertisers, visit www.hbav.com and click on the Virginia Builder button to take you to the digital magazine with advertiser links. 12   Virginia Builder

individuals. Eligible individuals only have to pay 35 percent of whatever the employer charges the individual to purchase continuation of coverage. Employers can recover their portion of premiums (65 percent) by withholding the payment as a credit against federal payroll taxes. The premium assistance subsidy is available for nine months. The subsidy will end before the nine months on the date the individual becomes eligible (not enrolled) for other health plan coverage. Example A: • Active employee premium is $1,000 per month. • Employer charges $1,000 per month to purchase COBRA. • Individual will pay $350 (35 percent) per month for COBRA coverage. • Employer will pay $650 (65 percent) per month for COBRA coverage and be reimbursed via payroll tax credit. Example B: • Active employee premium is $1,000 per month. • Employer subsidizes COBRA and only charges $500 per month for COBRA. • Individual will pay $175 per month (35 percent of $500) for COBRA. • Employer will pay the additional $325 per month (65 percent of $500), but will be able to be reimbursed for this additional $325 via payroll tax credit. Subsidy does not equal extension of coverage period. The premium assistance subsidy and time frames for actual COBRA coverage run on two different tracks. The subsidy won’t affect the regular period of COBRA coverage by extending the time of coverage, which generally is 18 months after a qualifying event. Under the normal COBRA rules, an individual loses eligibility for coverage after enrolling in another health plan. Individuals will lose the subsidy once they become eligible for other health plan coverage, even if they don’t enroll in that coverage. Individuals are under the obligation to report to the employer when their subsidy eligibility is expired. Election changes permitted. An

employer may permit an eligible individual to enroll in another plan for active employees offered by the employer, but the alternative coverage cannot have a higher premium than the coverage the individual had immediately prior to the termination of employment. Notice requirements. Normal continuation of coverage notices must now include information on the premium assistance subsidy, and the Department of Labor will be issuing revised model COBRA notices. Notice of the special election period should have been sent to all eligible individuals by April 18, 2009. Limits on availability to high-income individuals. Up to a certain income level, the premium assistance subsidy isn’t taxable to the employee and dependents. Individuals with a modified adjusted gross income of $125,000 ($250,000 for joint filers) will have the subsidy taxed in gradually increasing amounts until income is $145,000 ($290,000 for joint filers), at which point individuals must repay the entire subsidy. High-income individuals have the option to waive the subsidy. Payroll tax credits. For employers, the subsidy will be a refundable payroll tax credit on the employer’s tax returns. Employers are allowed to offset any payroll tax liabilities. The Treasury Department/IRS has already amended Form 941 and has issued a FAQ for employers about the tax credit. Both Form 941 and FAQ can be found at www.irs.gov. Required reports. The act requires at least three different reports for employers: 1. An attestation of the involuntary termination of employment of each covered employee; 2. The amount of payroll taxes offset for a reporting period and the estimated offsets; and 3. A report containing all social security numbers for all covered employees, the amount of subsidy paid to each person, and whether the subsidy was for one person or more than one person. More guidance on how to comply with the new COBRA requirements is forthcoming. Interested employers should visit www. dol.gov and www.irs.gov. VAB July 2009

At ,A moment like this,

Aren t you glAd you hAve Builders mutuAl?

Safety harness purchased from buildersmutual.com.

id you know that falls are the most frequent, severe, and preventable type of injury on a jobsite?

As the only insurance carrier devoted exclusively to builders, we’ve developed our own WorkSafe Fall Protection Program. Builders Mutual takes fall protection seriously – in fact, we even offer discounted “Safety Stuff,” like the harness above, through our website. Additionally, our policyholders have unlimited access to Builders University OSHA-approved safety courses, English/Spanish Fall Protection Certification, and our risk management CD containing valuable safety reference materials. Staying safe and productive is just a matter of having the right tools.

July 2009

800.809.4859 www.buildersmutual.com

Virginia Builder   13

2117 Smith Ave. Chesapeake, VA 23320

FOR QUALITY AT EVERY STEP, COUNT ON COSTEN FLOORS.

From the captivating beauty of natural hardwood floors, to the sleek sophistication of ceramic tile and the cozy warmth of carpet, you’ll find the flooring styles you love — installed with care you deserve — at Costen Floors. STEP INTO OUR SHOWROOM AT 9840 MAYLAND DRIVE, BETWEEN GASKINS AND PEMBERTON. OR CALL 527-2929.

COSTENFLOORS.COM 14   Virginia Builder

July 2009