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THE PROFESSIONAL

SPRING 2018

A Publication of the Associated Subcontractors of Massachusetts, Inc.

CANNISTRARO PULLS INTO PORT


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THE PROFESSIONAL

A Publication of the Associated Subcontractors of Massachusetts, Inc.

16 Cannistraro Pulls into Port

cover story features

04 CEO’S MESSAGE

05 CONTRACT REVIEW Without Contractual Review, Construction Firms Risk Large Financial Losses 06 MEMBER SPOTLIGHT Interview with ASM President Sue Mailman 08 ACCOUNTING It’s Not Your Father’s Coordination! 09 CYBERSECURITY Cybersecurity – Damage Beyond Customer Data 10 GENDER EQUITY Supply & Demand: A Two-Fold Approach to Gender Equity in the Workforce 12

LEGAL PROTECTION It Was the Design! Subcontractors’ Rights to Claims Against Design Professionals for Negligent Misrepresentation

14 LEAN PRINCIPLES Ideal Behaviors Drive Ideal Results 18 BALANCE SHEET AAFCPAs Guidance for Contractors: Best Practices for Optimizing the Balance Sheet for Users of Your Financials 20 MANAGING PAYMENT Not Getting Paid is Bad Business – Minimize the Risk 24

MEMBER BENEFITS Save Money with Your ASM Membership

25 Interview with the Honorable Thomas A. Golden Jr.

26 ASM NEWS

28 MEMBER NEWS 29 PROJECT PHOTO GALLERY

13 DRIVE VALUE Why Drive Value in Your Business?

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CEO’S MESSAGE

BY CARRIE L. CILIBERTO, ESQ.

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hile the first months of 2018 seem to have flown by, your ASM board and staff have been diligently working on your behalf. As just one example, I’m pleased to report that ASM expanded its scholarship program to help address workforce and diversity needs. New in 2018, ASM now offers four trade school scholarships. These scholarships will provide opportunities for those in our community who already know they want to pursue a career in the construction industry and want to develop their skills through hands-on training. Also in 2018, the traditional four-year college scholarships have been expanded to include two-year community colleges. These changes help to foster a robust and diverse workforce to ensure the success of our industry not only for our generation, but also for generations to come. While doing good to do well, the 2018 ASM scholarships also allow ASM members who contribute to the scholarship program to show some “good faith efforts” in becoming part of the solution to develop a qualified and inclusive workforce. The expanded and targeted offerings also help ASM and its members demonstrate to government officials, other business and industry stakeholders and the general public that ASM remains a leader committed to improving our industry, supporting our community, fostering better business relationships and providing opportunities for all. As you know, ASM is a powerful and influential association that plays a critical role in maintaining a fair and balanced playing field for subcontractors. Your ASM staff and lobbyists are committed to continue the fight

for ongoing legislative victories, including fair and balanced laws. But the world is changing and we must adapt. We have made progress in enhancing existing relationships and building new ones. While collaboration to create a united front is often the strongest position, we are not naïve to think that we will agree with our industry partners on all matters, and when our interests diverge, ASM will assert its position respectfully, but forcefully. To ensure we continue to live up to ASM’s mission to Educate – Communicate – Advocate, be sure to take note of the upcoming ASM events listed on page 28. We will continue to develop a variety of programming to address key business, legal, HR and industry issues. In the spirit of collaboration, ASM has co-hosted and promoted a variety of industry events, and will continue to pursue mutually beneficial opportunities. Please visit the website (www. associatedsubs.com) for the most up-to-date information as we add to your educational and networking opportunities. Your ASM membership also entitles you to a variety of members-only benefits, where you’ll see several new offers to help you save money and grow your business (see page 24). Of note, the Acadia Insurance program has paid out more than $6 million since 2003 to participating ASM members (see page 24 for more information)! Perhaps most importantly, I encourage you to let me know your thoughts, as I want our positions and programs to truly reflect what YOU want and need. ASM is only as strong as its membership, and I’m proud to serve as your CEO! s Best regards, Carrie L. Ciliberto, Esq.

Carrie L. Ciliberto, Esq., is CEO of ASM. She may be reached at 617-742-3412 or cciliberto@associatedsubs.com.

The Professional Contractor is published by Associated Subcontractors of Massachusetts, Inc. 15 Court Sq., Suite 840 Boston MA 02108 tel 617-742-3412 | mail@associatedsubs.com www.associatedsubs.com

ASM Officers

President: Susan Coghlin Mailman, Coghlin Electrical Contractors and Coghlin Network Services Inc. President-Elect: Peter J. Gormley, New England Waterproofing Inc. Vice President & Assistant Treasurer: Steven T. Amanti, E. Amanti & Sons Inc. Vice President: Dana E. Johnston Jr., Fall River Electrical Associates Treasurer: Russell J. Anderson, Southeastern Metal Fabricators, Inc. Past President: Joseph H. Bodio, LAN-TEL Communications Inc

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ASM Directors

Matthew A. Brown | Christopher M. Buell | David G. Cannistraro | Leslie M. Carrio | R. Lindsay Drisko | Lawrence F. Eagan | Richard R. Fisher | Roger A. Fuller | Wayne J. Griffin | William J. (Mac) Lynch | Jacquelyn A. Magill | Jeffrey T. Marr Jr | Erik S. Maseng | Michael R. McNulty Sr. | James B. Miller | Bernard K. Quinlan | Frank J. Smith | Peter R. Townsend David E. Wilson & John M. Curran, Executive Secretary Carrie L. Ciliberto, Esq., CEO

The Warren Group Design / Production / Advertising www.thewarrengroup.com custompubs@thewarrengroup.com

©2018 The Warren Group, Inc. and Associated Subcontractors of Massachusetts, Inc All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.


CONTRACT REVIEW BY LARS OLSON, VP, PROPERTY & CASUALTY, USI INSURANCE SERVICES

Without Contractual Review, Construction Firms Risk Large Financial Losses

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hether an owner, general contractor or subcontractor, parties involved in construction projects face significant financial impact if they do not have a clear understanding of their financial obligations and inherent contractual risks. Risks that may have been omitted, disguised or waived unintentionally in a contract can result in large financial losses that might not be covered by insurance. As such, construction firms need to engage risk specialists who can provide comprehensive contract review. This process is critical to: •• Identify and evaluate indemnification and hold harmless provisions that do not coincide with current insurance contracts or exposures for which a company is contractually obligated •• Detect unreasonable insurance coverage requests that can have negative economic impact. (E.g. a waiver of subrogation on workers’ compensation) •• Evaluate the parameters of additional insured requirements. Do you really want to provide a defense for someone else’s sole negligence? Lars Olson, vice president in the Construction Casualty Practice at USI Insurance Services in Bedford, NH, said USI frequently uncovers unreasonable terms and conditions during the contract review process. “Most recently we reviewed a contract that required a tenant to hold the owner of a property harmless and indemnify this same owner for all costs related to a building fire,” said Olson, adding that tenant unknowingly accepted this financial obligation even though he had no control over the sprinkler system and maintenance at the property. Contractual liabilities can be transferred through different types of contracts, including performance contracts, lease agreements, purchase orders, service agreements and supply contracts. Part of USI’s process is to offer construction firms guidance on structuring insurance and indemnification provisions. For example, the construction team can recommend language to improve a client’s risk position based on current coverage terms, helping to prevent under-insured and uninsured losses up to the contract value. A USI contract review is designed to: •• Prevent underinsured and uninsured losses up to millions of dollars due to inadequate limit •• Promote and support contractual compliance •• Eliminate unreasonable contractual coverage requests.

The process begins with evaluating policy language adequacy based on contractual requirements, recommend changes if needed, and quantifying any potential financial impact. Program structure and coverage terms may be revised following the review. “Most insurance agents focus on pricing, but short-cutting to the lowest price can hurt clients if they are not covered for an exposure agreed to under a contract. Unfortunately, many contractors, who only look for the best price, discover after a loss that they did not comply with the owner’s contract and also failed to appropriately transfer liability to subcontractors or vendors,” said Olson. Recently, USI engaged a contractor who builds commercial and residential buildings. USI’s goal was to protect the company from unknown costs arising from its indemnity agreement. Following a thorough review of agreements between the building owner and the company, the team discovered that the contracts required certain insurance criteria as well as indemnification and hold harmless provisions. Since the contractor was responsible for performing design/ build operations, it was required by contract to have a professional liability policy. As such, USI structured an insurance program that included a professional liability policy, helping the company avoid potentially uncovered defense costs of $400,000 and a potentially uncovered claim of $1 million. This is just one example of how USI works to protect construction firms’ contractual obligations.  s

To learn more about USI’s Contract Review and how it can deliver a significant financial impact to your insurance program, contact Lars Olson, vice president, property and casualty, at 603.665.6118 or lars.olson@usi.com.

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MEMBER SPOTLIGHT

Interview with ASM President Sue Mailman were a major electrical supplier for them. Local unions and businesses in central MA were on the front end of high-tech installation and manufacturing through that experience. That expertise translated to other hightech projects across the regions. I’d say projects that we specialize in are projects that are complex in terms of time, design and constructability, projects that require a lot of highly skilled people with technical expertise. We also have a service component that is essential to offering the whole package.

Sue Mailman with some apprentices at WPI.

How did you get started in the electrical contracting business? My company was started in 1885 by my great-grandfather. When he passed away his two sons took over and that was my grandfather and my great-uncle. My grandfather had eight kids total and two of the boys eventually took over the business. They were my father and my Uncle Jim. For many years we had multiple family businesses. While we always had the electrical contracting business we also had a distribution business, furniture store, and appliance store. In 1999 my Uncle Jim thought it would make sense for the next generations if we split up all the businesses. I should note that you don’t survive for four generations without having great people working for you. We are a central Massachusetts company and our home has always been in Worcester. We have great relationships with the schools, colleges, and businesses here. Also, from a construction perspective I appreciate the access we have from Worcester centrally located to all areas of MA and to neighboring States. I had been working at Coghlin with my dad for 15 years when the businesses split. I took over operations of the electrical contracting business at that time. I have owned and operated Coghlin Electrical Contractors Inc. since 2003. What types of projects does Coghlin Electrical Contractors, Inc. specialize in performing? We are a union electrical company in central Massachusetts which means we need to be responsive to a broad base of customers. Worcester is not necessarily union country, but I know the union brings us a skilled workforce. We mostly do large-scale commercial construction. A very important customer for us here in central Massachusetts was Digital Equipment Company, and Digital was bought by Intel many years ago. We

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What is piece of advice you would give to someone looking for a career in your industry? I think there’s a lot of great things about working in the construction industry, but number one for me is that the people you work with are down to earth. They are “let’s-get-something-done” kind of people. We sometimes sit in a lot of meetings but at the end of the day the goal is to get something built and there is great satisfaction in seeing a project through to the very end. I think it makes it fun, energizing and impactful. If you want a high-energy, rewarding profession, then construction is something to consider. At our company we look and train for skilled, knowledgeable people that can look at the big picture not just their part of a job. This approach has made for a well-rounded workforce at Coghlin. A good place to start in this business is with trade school or vocational school. These young people have become the people we are most interested in talking to about positions at Coghlin. What would you say is the secret to your success? I think a fourth-generation business has got to be adaptable. You must be adaptable in all areas of business, including your workforce and presence in the market-

Prospective students learning about Worcester Technical High School.


business legislatively, and how we can improve business operations for ourselves and our industry partners. We employ a lot of people in our industry and I think that there is great power in engaging with each other to help one another with the pitfalls. We get to right some of the injustices that we battle each day by serving on the ASM board.

Sue with a co-op student in the office

place. I am proud to own a family business in Worcester; it’s the largest gateway city and is the second largest city in New England. I play a role in the community, and that role is important to me and my business. What would you like our members to know about being an ASM board member? I think when you serve on the board of ASM you are “in the know” about what’s happening in our

What is something (other than your career) you feel passionately about? I am passionate about engaging young people (young women in particular) and welcoming them into the industry. I think female business owners are not necessarily part of the “club” and you have to push your way in. I think that I would like to help young women and young people into the “club” as much as I can because more diverse voices will make our businesses and our industry better as a whole.

Career, volunteering and personal life balance is important. How do you manage it all? I could not engage as a business leader in this community if I did not have great people at Coghlin getting the job done every day. I also know that my community engagement comes back to the business in many ways. By being an active member in the community I can look at our company from the outside and have a fresh and clean perspective. I think, as owners, the more we look from the outside in at our businesses the more discerning we can be of our company strengths and weaknesses. Also, you must love what you’re doing and if you love what you’re doing it doesn’t feel like a balance; it just feels like you’re getting it all done because that’s what you want to get done. s

Sue Mailman is the chairwoman and treasurer of Coghlin Electrical Contractors, Inc. and Coghlin Network Services, Inc. as well as the 2018 President of ASM. She can be reached at SueMailman@coghlin.com.

WE KNOW THERE’S MORE ON YOUR MIND THAN THE SAFETY OF A BUILDING ALONE.

As a contractor, you know there is risk around every corner. You need an insurance company that understands that. Not just from an insurer’s perspective, but from yours. Acadia Insurance. We’re closer to your business. And to you. With specialists in Massachusetts ready to serve you 24/7. Visit acadiainsurance.com or contact your local independent agent for more information about the ASM Safety Group and Dividend potential. Closer coverage. 290 Donald J. Lynch Blvd Marlborough, MA 01752, 1-888-665-1170 Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to applicable underwriting guidelines and the actual terms and conditions of the policies as issued.

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3/16/15 4:10 PM

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ACCOUNTING BY VINCENZO BOTTA, CPA, CGMA, RBF ADVISORS AND ACCOUNTANTS

It’s Not Your Father’s Coordination!

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n the construction world, there are few companies that do not have some sort of lease obligation that impacts their financial picture. From real estate leases to vehicle and equipment contracts, leases are a fact of business life in the industry. That’s why construction company executives need to be aware of an important accounting change that’s looming on the horizon. A new standard for how private companies account for lease agreements will take effect on Jan. 1, 2020 – a date that seems far away until you consider that most companies will need to adjust some of their previous financial statements and perhaps their existing internal accounting and control systems – in order to comply with the new approach before it takes effect. For public companies, whose switchover to the new accounting method takes place a year earlier on Jan. 1, 2019, the task of locating all of a company’s leases and extracting the data required to comply with the standard has been slow going. A survey of 500 financial executives conducted late last year by KPMG found that 34 percent said they had not even begun to address the issue, while only 19 percent were assessing the accounting impacts. Further, only 18 percent said they had completed a lease inventory, and only one percent said they had completed implementation of the new standard. The bottom line is this: the sooner companies begin to adapt, the less painful and costly the changeover will be. The net result of the new standards is not insignificant. The financial statements for a typical company will likely change in several important ways: •• Operating leases over twelve months in duration will now have an asset and a liability for the lease on the balance sheet •• Ratios such as debt-to-equity could be impacted, which means that any loan covenants based on those ratios to which the company is bound might change •• Lessors could be effected, as property currently being depreciated on the balance sheet may need to be adjusted •• The cumulative effect of the new approach may require a retained earnings adjustment for the tax year beginning on Jan. 1, 2020.

There are a number of steps that companies should be taking now to prepare for the new lease accounting standard. Get a handle on your current lease portfolio. Calculating the effect of the change on the balance sheet and internal systems as of January 1, 2020 is job one. The identification of all leasing arrangements for many companies will be a large, time- and resource-consuming exercise involving detailed data collection, data entry and frequent decision-making. Review current ratios and covenants. Your company’s balance sheet serves as the cornerstone of your financial reporting, and helps to answer the question “How leveraged is my company?” The debt-to-equity ratio is a key barometer that measures leverage, and is one of the key metrics that lenders rely on when making – and calling – loans. It’s likely that the new lease accounting standard will alter your company’s financial ratios and, in turn, the loan covenants under which you currently finance your business activities. Determine how to manage both current and future contracts. Well before the January1, 2020 implementation date arrives, changing lease management techniques may require changes to internal systems and controls. For a company with relatively few leases, an Excel-based system may suffice. But for organizations with a large and growing lease portfolio, a specialized lease management software solution may be in order. Whatever the choice, your system will need to be sufficiently flexible to account for new leases as well as existing ones. Keep those who will be impacted informed Under the new standard, lease terms can have significant repercussions for an organization’s ongoing financial health. It will be especially important to discuss the coming changes with your financial team members – banks, bonding company, insurance agents, accountants, lawyers and others – and alert them to changes they may see on both previous and future financial statements. As you can see, with all the work and resources that will be required, it’s high time for companies to acknowledge the coming changes, and rev up for the new lease accounting standard; the year 2020 is closer than you think.  s

Vincenzo Botta is a partner in the Boston-area advisory and accounting firm RBF. Through the firm’s Construction Business Services Group, he offers tax planning advice and financial statement services to the owners and managers of contracting firms of all sizes. He can be reached at 781-321-6065 or vincenzob@rbfpc.com.

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CYBERSECURITY BY ROSS ATTFIELD, SENIOR ACCOUNT EXECUTIVE, CROSS INSURANCE

Cybersecurity – Damage Beyond Customer Data

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usinesses buy cyber insurance for the same fundamental reason we buy most types of insurance coverage: the cost of a potential loss is large enough that it would hurt our business. Or stated differently, the cost of buying a cyber insurance product is less than the ultimate cost of loss. When it comes to losses resulting from cyberattacks, those costs keep rising. In 2017 the average cost of a data breach in North America for small- to medium-sized businesses was $117,000 according to Kaspersky Lab1. And the World Economic Forum Global Risks Perception Survey2 places cyberattacks third in the top ten list of risks to businesses based on likelihood. •• If your business experienced a breach, would you know how to go about complying with state mandated notifications? •• Would you know who to call to perform computer forensics? •• Let’s say there was a cyber ransom demand, do you know how or where to buy Bitcoin? •• Would your business be able to survive the fall out of a cyberattack? As a contractor, you may not think your business is susceptible to a loss due to a cyberattack; you don’t take credit card payments and you don’t process sensitive customer information online. This is a common misconception! While third-party losses from cyberattacks are well publicized particularly for specialty retailers and healthcare providers, almost every business has a cyber exposure. Is it safe to assume that you are like most business owners, and have sensitive and often critical employee information in file? And what happens if a cyberattack at your office or job site disrupts technology that your business relies on to operate?

Cyber Security and Employee Data Employee personnel records often contain Social Security numbers, addresses, emergency contact information and possibly health information that uniquely identifies an employee. If this sounds like the information your organization maintains on its employees, then you have a cyber exposure! Due to the unique and confidential nature of these employee files, businesses of all types and sizes are required to maintain internal risk management procedures to protect this sensitive information. Depending on how many employee files you maintain, the cost of a data breach could surprise you. Public relations firms, attorneys with breach specialization, forensic accountants and specialized IT firms are expensive, which explains why the cyber-response industry is growing so fast.

Cyber Security and Business Interruption The number of Internet-connected devices is growing at 80 percent every year.3 Commonly referred to as the Internet of Things (or IoT), this idea of connectivity is coming to life on construction sites in the form of site monitoring tools, machine control, fleet management and wearables for employees. Believe it or not, it is generally easier for cyberattackers to gain access to the software that controls industrial vehicles than it is to gain access to the software inside consumer cars. Researchers from the University of Michigan found that common communication standards used with the internal networks of industrial vehicles have exposed huge populations of industrial vehicles to the same security vulnerabilities.4 And if you are truly not worried about the vulnerability of your confidential data, you should at least be worried about the financial impact a breach may cause to your network. If your computer network is responsible for billing, job scheduling or running payroll and it were damaged, how long could you keep your doors open? Could it cause you to lose current projects? Lose existing clients? Lose employees? Or worse, if an attacker gained access to the controls of large equipment, could they cause bodily injury or property damage to a third party? It is easy to dismiss the idea of cyber coverage with a shrug and say, “it won’t happen to me.” But the fact remains that cyber events manifest in many ways. Cyberattackers indiscriminately attack computer networks looking for vulnerabilities. Much like a traditional thief, once inside the house (your network), these criminals may intentionally or inadvertently damage data, demand ransom or interrupt your operations – any of which can negatively impact your revenue. Whether your business uses technology to store sensitive information or to run daily operations, your business would likely benefit from a cyber insurance solution to protect your balance sheet against these ever-resourceful cybercriminals. s Ross Attfield is a senior account executive, cyber coverage specialist at Cross Insurance.

Footnotes

1. Kaspersky Lab Cyber Attack Survey Sept 2017 2. World Economic Forum Global Risks Perception Survey 2017–2018 3. The Cyber Risk Handbook, J. Wiley & Sons, Jan. 2017 4. True Hacking: An Experimental Analysis of the SAE J1939 Standard, University of Michigan Paper

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GENDER EQUITY KATE HARRISON, PIPELINE NAVIGATOR, NORTHEAST CENTER FOR TRADESWOMEN’S EQUITY

Supply & Demand: A Two-Fold Approach to Gender Equity in the Workforce

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hen the US government opened the doors to women entering the construction trades in 1978, just under 3 percent of tradespeople were women. Almost 40 years later, the number of tradeswomen across the country remains at 3 percent. But not in the Massachusetts building trades. Over the past decade, the Policy Group on Tradeswomen’s Issues (PGTI) has put

Massachusetts on the map, leading industry collaborations that have boosted the number of women in union apprenticeship to over 7 percent and growing. The number of tradeswomen across the state has tripled since 2012. The leaders of our unions and their signatory contractors have driven these changes. Massachusetts’ building trades and construction contractors have recognized that the solution to the industry labor

At an Access and Opportunity Committee, contractors, unions and other stakeholders convene to ensure maximum effort in meeting workforce diversity requirements on UMass Boston construction projects.

NCTE’s Pipeline Navigator shares information on union careers with women at the Harmon St. Apartments Job Fair in Boston.

Union pipefitter Savy Man Doherty was one of four tradeswomen featured in the Build A Life That Works Campaign, which can be seen on billboards, job site scrims and bus shelters throughout Massachusetts.

shortage is training and employment for those who were historically excluded, those who need these good careers now. PGTI’s integrated supply and demand strategy has worked to move the needle because it recognizes that a healthy workforce requires not only a supply of qualified and trained workers, but also a demand for these workers. PGTI has established Access and Opportunity Committees (AOCS) on over 3.5 billion dollars’ worth of construction on the UMass Boston, Lowell and Amherst campuses, as well as with the Mass Gaming Commission. At AOCs owners, contractors, unions and the community work together to ensure that all parties are exerting maximum effort to meet workforce hiring goals. “For years, the enforcement of federal and statewide diversity requirements has been lax. With new provisions to the Boston Residents Jobs Policy, and a pressing labor shortage, our AOC partners see that diversity is the future of the construction workforce, and that women and people of color are interested in these jobs.” says Susan Moir, Director of Research for PGTI. In addition to working with contractors on demand, PGTI has collaborated with the Metro Building Trades Council, The New England Regional Council of Carpenters and Building Pathways to ensure a supply of eligible, well trained women workers in the pipeline. They recently launched the Northeast Center for Tradeswomen’s Equity, a resource center dedicated to helping women find careers in the union building trades, and “Build A Life That Works”, an outreach and marketing campaign designed to raise awareness about opportunities for women in the union building trades. The cam-

PGTI offers customized technical assistance to industry stakeholders, including subcontractors and general contractors. For more information, or to book a TA workshop, go to policygroupontradeswomen.org. For more information about the Build a Life That Works Campaign, sponsorship opportunities or women workers, visit buildalifema.org.

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A “Build A Life That Works” campaign design featuring Contina Brooks, a union operating engineer from Springfield.

paign features the stories and images of real tradeswomen employed at Massachusetts job sites and can be seen on electronic billboards, job site scrims and bus shelters throughout the state. “There are many women who are interested in and capable of performing skilled building trades work,” says Kate Harrison, Pipeline Navigator for NCTE, “but because of a history of gender discrimination, many didn’t see construction as a viable career pathway.” “Build a Life That Works” is that pathway: It invites women working in other industries such as cleaning, personal care, and food service to consider the benefits of union construction work, and then provides them with information about the trades, how to apply and what it takes to succeed in the field. With both supply and demand initiatives underway, the face of the construction workforce is changing. NCTE and PGTI are working toward the goal of 20 percent women in the building trades by 2020, a goal that can only be achieved by the union sector. The labor shortage requires industry stakeholders to strategically consider who the construction workers of the future will be. Project owners and general contractors are prioritizing diversity, so it makes sense for contractors to think of ways to integrate best practices in promoting workforce diversity into their business operations. s

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LEGAL PROTECTION BY NORMAN BROWN IV, ESQ., ASSOCIATE ATTORNEY, CORWIN & CORWIN

It Was the Design! Subcontractors’ Rights to Claims Against Design Professionals for Negligent Misrepresentation

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ubcontractors, general contractors and owners can often find themselves embroiled in lawsuits over payments for extra work by the subcontractor that has little to do with the conduct of the parties. Rather, these increased change order costs result from design errors, such as significant differences between what is shown on the project documents and what actually exists in the field. Yet, even when this appears relatively clear to the parties, owners and general contractors often balk at bringing the design professionals into the lawsuit. This can be for a number of reasons. Certain owners do significant business with their design professionals and do not want to disrupt that relationship. Some contracts between owners and design professionals have provisions which may hinder an owner’s ability to bring these claims. On a more macro scale, owners, in general, may fear that if they sue their design professionals it will result in increased design costs to cover the increased risk of litigation. General contractors, on the other hand, either do not want to upset their relationship with owners or, in what has more often been the case, general contractors find themselves involved early in the design process and open themselves up to liability for faulty design documents as well. Regardless of the reason, it can put the parties in a difficult situation where the subcontractor is rightfully due monies and the most culpable party is not present to contribute to a settlement. Faced with this scenario, what is a subcontractor to do? If subcontractors find themselves in such a scenario, they should consider the rights they have directly against the design professionals for negligent representation. Normally, under Massachusetts law, the economic loss doctrine prohibits the recovery of a plaintiff against a defendant for negligence where the damage was purely monetary and did not also result in some form of personal injury or property damage. However, the Supreme Judicial Court in Craig v. Everett M. Brooks Co., 351 Mass. 497, 499-501 (1967) recognized an exception to the economic loss doctrine in Massachusetts where the monetary losses are result of negligent misrepresentation, such as errors in project plans and specifications, that result in extra work or possibly lead to labor impacts. As a design professional contracts, most often, directly with the owner, or sometimes the general contractor, subcontractors do not have a direct contractual relationship with the design professional, thereby denying them a right to sue under contract. However, the Supreme Judicial Court in Craig also held that liability can be imposed against a defendant in Massachusetts for the negligent perfor-

mance of services to an entity not a party to the contract where the defendant knows that the third-party entity will rely on these services. Craig, at 501. This decision has created the foundation for a subcontractor’s right to sue design professionals directly without having to rely on the general contractor’s, or the owner’s, willingness to bring the design professionals into a lawsuit. In Massachusetts, a subcontractor’s right to sue design professionals directly was squarely addressed in the Massachusetts Appeals Court decision in Nota Constr. Corp. v. Keyes Assoc., 45 Mass. App. Ct. 15 (1998). The court in Nota, relying on the foundation of the Craig case, found that a subcontractor had a right to sue a design professional for negligent representation despite the economic loss doctrine or a lack of a contractual relationship. Nota, at 21-22. The court found that because the architect, Keyes, contracted to supply information that it knew would be relied upon by Nota, the subcontractor, in the performance of its work, Keyes could be directly liable to Nota for negligent misrepresentations in the design. Additionally, the court further held that Keyes could be liable to Nota under M.G.L. c. 93A, which gives rise to possible multiple damages and attorneys’ fees. The Court found that Keyes was the administrator of the contract and that Nota put forth a potentially viable claim which could show that Keyes acted unfairly and in bad faith when it failed to properly resolve Nota’s disputes for change orders and a required redesign of the project. Id. at 21-22. This is useful, as there would otherwise be no ability to recover attorneys’ fees in such a claim, unlike a claim against a general contractor and its surety for the same costs. Massachusetts case law, highlighted by the Nota decision, has created a valuable tool for subcontractors to use when enforcing their rights to equitable adjustments to their contracts resulting from the design professionals’ failure to use the proper standard of care when discharging its role on any given project. It is important for subcontractors to understand that they have the right to rely upon the drawings and specifications they are provided with when bidding on a project. It should be noted that it remains extremely important for a subcontractor to do its own due diligence and properly assess any project before bidding it. Prevention of a problem remains far better than curing a problem through a lawsuit. But at the same time, it is important for subcontractors to understand their rights to rely upon the contract documents and the assurance that the design professionals are doing their jobs properly and adhering to the proper standard of care when discharging their duties. Utilizing this tool afforded to subcontractors under Massachusetts law is often the only way to bring the responsible party to the table in certain cases and can greatly aid a subcontractor in getting what is rightfully theirs.  s

Norman Brown IV, Esq., is an associate attorney at the Woburn-based law firm Corwin & Corwin LLP. He can be contacted at nbrown@corwinlaw.com.

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DRIVE VALUE

BY KIMBERLY A. SMALL, MANAGING PRINCIPAL, KLARITY FINANCIAL

Why Drive Value in Your Business?

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valuable business means a strong legacy and a comfortable retirement. Here are eight steps to help you get there. Will you want or need to leave your business one day? 79 percent of all business owners said they would exit their company now if they could have financial security, according to the 2016 Business Owner Survey from Business Enterprise Institute, Inc. What will your post-exit look like? Spending time with the grandchildren? Traveling the world? Doing charitable works? These things cost money – determine how much. Do you know what you have? Take inventory of everything you have, such as homes, cash, investments, retirement accounts, real estate and the value of your business. Do you understand your gap? What is the difference between what you have and what you need? How will you make up the gap? For most business owners, the difference will come from increasing value in the business. This is the fun part that most business owners enjoy from day-to-day, and the very reason for driving value! What constitutes good value? Good value includes: a stable, motivated management team; a documented and proven growth strategy; a solid, diversified customer base and significant, defensible market-share; scalability, a differentiated product/service, and competitive advantage; operating systems that increase and improve stable cash flows; recurring/sustainable revenue, resistant to “commoditization”; and financial foresight and controls/strong operating margins. What is the end result? You’ll be well-positioned for a sale when you’re ready; you’ll have the money you need to live your post-exit life; and you reduce the risk of “surprises” when you do decide to exit. Need help? Visit klarityfinancial. com/contact. Disclaimer: always consult your

legal and tax advisor during the business planning process. Klarity Financial LLC is a registered investment advisor. This article is intended to provide general information. It is

not intended to offer or deliver tax, legal or specific investment advice in any way. For tax or legal advice, please consult a qualified tax professional or legal counsel. For more information about the advisory services or fees of Klarity Financial, please review our Form ADV2. Klarity Financial will provide all prospective clients with a copy of Klarity Financial’s Form ADV2. Please contact us to request a free copy via digital or hard copy. s

Kimberly A. Small, CLU, CFP, MST, is the managing principal of Klarity Financial. Her practice is dedicated to the Greater Boston construction industry, where she contributes to the overall success and wellbeing of individuals and owners of construction companies. She can be reached at kimberly@ klarityfinancial.com or (617) 733-4441.

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Construction Division We speak your language. Our Construction Division has specialized in your industry for over 85 years. Contact us today and see the in your business. Property/Liability | Fleet Automobile | Workers Compensation | Surety Bonding Contractors Equipment | Group Health | Subcontractors Design E&O Pollution Liability | Railroad Protective

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Jim Herlihy CIC, CRIS jimherlihy@herlihygroup.com Mark Herlihy CIC, CRIS mherlihy@herlihygroup.com

Member: Associated Subcontractors of MA | Builders Association of Central MA

The Professional Contractor

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LEAN PRINCIPLES BY KELLY MEADE, SENIOR LEAN PRACTITIONER, HALEY & ALDRICH

Ideal Behaviors Drive Ideal Results planned percent complete are doing a good job checking in on the process for obstacles and adjusting before it’s too late. But often it’s behaviors that cause obstacles. Teams incorporating Lean project delivery approaches such as A3 thinking and Last Planner System® know very well that these approaches just don’t work without team members exhibiting specific behaviors; it’s the combination of Lean tools and behaviors that make them achieve desired outcomes of on time and on budget.

Getting inspiration from the Shingo Model

Bob Halloran and Paul Arthur both went through Lean Fundamentals and Visual Workplace Management training with Haley & Aldrich.

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he construction industry has seen a huge increase in Lean being used as an approach to improve project delivery. According to the Lean Construction Institute, projects with Lean applied consistently are three times more likely to finish ahead of schedule and two times more likely to finish under budget. But despite the results, many organizations are slow to implement Lean. There are many one-off events, a handful of project success stories, and even fewer true Integrated Project Delivery (IPD) projects. Why aren’t more people practicing Lean project delivery? Learning and implementing a new tool is easy but practicing and sustaining a new behavior is hard. A majority of the focus in our industry has been on “doing Lean tools” instead of “being Lean” with the right behaviors, and the reality is, ideal results require ideal behaviors. Imagine if we could make Lean behaviors more tangible, more practical and be able to put them to work in our everyday operations? What if practicing Lean behaviors improved relationships amongst teams and yielded better performance?

Focusing only on performance outcomes won’t get us the results we want

What an organization measures tells a lot about how it will perform. Cost and schedule are good measures of project outcomes, but they are lagging metrics that don’t give us the right information about how the project is performing in time for us to intervene and adjust our actions. We need leading indicators too: measures during the project delivery process that tell us whether we’re on track to achieve a desired outcome. If we measure them early enough, we have time to intervene, solve the problems getting in the way and achieve our goals. Project teams that measure leading indicators, such as 14

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Shigeo Shingo is one of the cofounders of the Toyota Production System and developed a model for operational excellence. In The Shingo Model for Operational Excellence,” the authors describe Shingo’s vision: “When people understand more deeply the why behind the how and the what, they become empowered to innovate and take individual initiative.” The Shingo Model provides four guidelines on how to drive ideal behaviors: •• Lead with humility. This means go to gemba (where the work happens) and seek to understand the perspective of people doing the work. Being vulnerable and welcoming input from all members of a team, regardless of seniority. The leader must set the tone for this behavior by paying due regard to every team member’s perspective, struggles, and ideas, from the office to the field, and back. •• Align around a common purpose and hold everyone accountable to it. Whether it’s a problem statement, a project objective, or a target condition, we seek to rally a team around a common purpose. When team members come together from different organizations and trades to develop this “true north” together, they develop their shared purpose to rely on when problems emerge. •• Respect and empower everyone involved in a project. Challenge people by engaging in a back and forth dialogue about their problems, root causes, and possible solutions. This behavior prevents us from jumping to solutions based on what worked on a past project or someone’s preferred method, and instead requires that we gather data from people who know the true causes of the problems. •• Commit to continuous improvement as a team. Any users of A3 thinking and the Plan-Do-Check-Adjust cycle understand that a high-performing project team is measured by the speed with which they learn together, not individually. Projects using Last Planner System® and a “big room” use the space to be transparent, vulnerable, build trust, problem-solve together and reinforce these positive behaviors at a regular cadence. By practicing these behaviors, individuals feel better about the work, teams and projects perform better, and the results are an outcome. We can learn from the example of J&M Brown,


an ASM member. J&M Brown is a 450-person electrical contractor serving the Boston market since its founding in 1921. In 2017 they embarked on a Lean journey to identify ways they could get the work done more effectively, with less waste and rework and to collaborate better as a team. Bob Halloran was one of the people who went through training in Lean approaches and visual management techniques. He needed to find a way to improve J&M Brown’s CAD coordination process, which was not keeping up with the install process, causing rework, lost time, a less than happy CAD team and a concerned General Contractor. As a Project Manager, he had to understand what the nature of the problems were facing the CAD team and get them to open up, without coming across as an outsider. Halloran used the Lean approach of the A3 process to define the purpose and needed value that everyone could rally around. He gathered data about the current state by going to gemba to talk with the CAD team about what was getting in their way. Without having to understand the software, Halloran was able to get them talking about their obstacles. Halloran said, “By showing respect by sitting down with them and asking them what problems they were facing, they opened up. You couldn’t believe the lists they made of all the problems they were having! They had too many things on their plate – they were changing ink cartridges and programming software. Now we’ve got other people supporting those non-core tasks and it’s really helping them out. We also identified they needed training in certain areas. Now the whole CAD team is going through the training they need together.” Halloran identified the leading indicators that would make a difference in the outcome: leveling the work, ensuring the team had the right training to do the work required, and creating a shared understanding of the project’s purpose and status by using visual management. The results are telling: his project team experiences less rework, fewer delays, and the CAD team is now in time with or ahead of the install process, creating accurate drawings for people in the field to use. They’re responding more quickly to requests with less overburden. And their customer is more

Visual representation of Bob Halloran’s project progress on the job. Easy to understand and color-coded showing steps completed in process.

confident they are doing the work that will help ensure the outcomes of ontime and on-budget. Halloran reflected and said, “I couldn’t see why things were happening. Through the A3 process, it opened up the opportunity to ask questions, and now I see what’s causing problems and how we can help. Solving things visually has taken such a load off my mind. Now when we take people on a tour, we explain what they’ll see using visual management – what’s roughed in, what’s ready to go up. This puts everybody at ease, including the GC, and gives people a good feeling of what’s going on.” The positive benefits of taking a Lean approach has spread: J&M Brown is also applying what they learned in Lean training to make huge improvements to their warehouse, prefab and shipping and receiving departments. Regardless of your organization’s size or experience with Lean, you can start to practice ideal behaviors to get more of the ideal results you’re seeking, and measure more than outcomes: •• Lead with humility. Go to the gemba, show respect, and ask what’s getting in the way of people doing their best work. •• As a group, collaborate to identify your team’s “true north” and leading indicators. Get the office and the field to participate equally in defining a shared purpose and how the team will track success. Choose a few, simple leading indicators

(measures) that show both the behaviors and process are on the right track. •• Respect and empower everyone involved in a project. Encourage everyone regardless of their status or role on the job to challenge the status quo. And thank them for their contributions! •• Make problem-solving and continuous improvement an ongoing, transparent process. If you are a member of the team, tell your truth by sharing your concerns about what could get in the way of achieving the shared purpose, and offer up your own ideas. Use an A3, idea boards and dashboards to show visually how the team is doing. Lean isn’t a checklist of things, a set of tools or an event; it’s a way of thinking and being. Being Lean provides the opportunity to inject respect for people into daily operations. We can take a step by asking a question instead of telling someone what to do. We can show respect and get everyone on a job to contribute to better team and project performance. If each of us did one thing differently to model ideal behaviors – from the field to the office and back – we’d collectively be able to integrate Lean approaches into more projects and achieve better outcomes.  s

Kelly Meade is a Senior Lean Practitioner and Lean Black Belt at Haley & Aldrich. She can be contacted at kmeade@haleyaldrich.com

The Professional Contractor

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CANNISTRARO PULLS INTO PORT

The upper floor of Cannistraro’s new facility.

By Mike Flaim

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.C. Cannistraro’s days of having their fabrication operations straddle nearly 50 miles – they are headquartered in Watertown but have a facility each in Stoughton and Wilmington – are happily over. They have invested in a massive space with a historical pedigree in Boston’s Seaport District, and want to bring every ounce of the lean principles they’ve honed over the years into their future at 25 Fid Kennedy Ave. “Cannistraro has grown significantly, not just with the economy, but with the services we provide,” said Tom Palange, director of marketing for the Watertownbased mechanical construction company. “With the industry moving towards more off-site fabrication, the most efficient use of space is to have everyone under one roof and sharing resources.”

Roots

The name “Fid” refers to a South Boston longshoreman named Thomas 16

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“Fid” Kennedy (1906-1961), who worked tirelessly for his local union to help raise the working and living standards of the city’s dockworkers. In state documents, this plot of industrial land at 25 Fid Kennedy, and the massive building sitting on it, was variously referred to as simply “building 16” or “parcel N.” The tract dates back to 1940 and was built by the Army Corp of Engineers for the Navy who needed additional heavy machine shops in what became known as the South Boston Navel Annex. Its crown jewel was a 40-ton overhead crane that, along with round-the clock workers that slept in barracks on the building’s roof, kept allied ship production running smoothly. Building 16 was just one of many industrial facilities that made up Boston’s Marine Industrial Park (now named The Raymond L. Flynn Ma-

rine Park, in honor of Boston’s 52nd mayor). This 191-acre tract of land that was largely abandoned for years after 1974 when the Navy ceased operations in the area. But it’s plainly visible that the Seaport is in a state of rapid transformation, and Cannistraro’s move into the neighborhood suggests that the rapid pace of Boston’s building boom won’t ebb anytime soon. They’re certainly no stranger to the neighborhood, first having worked on the World Trade Center almost two decades ago, and more recently on Vertex Pharmaceuticals’ sprawling headquarters a dozen blocks away at Fan Pier. As big as a project as that may have been, Palange says that their new facility at Fid Kennedy is likely their biggest undertaking to date. Cannistro aims to retain as much of the facility as possible while reno-


The facility during construction.

vating it into a modern facility, but as with any building that’s been out of service for so long, some things are unsalvageable, while others were given new life elsewhere. Some of the heavy wooden beams that had to be removed, for example, weren’t simply discarded but became part of the Mayflower II, a sea-worthy replica of the original ship and floating museum in Plymouth.

Building exterior before the renovations.

Leaning Forward

Part of the impetus for this move was the desire to make cogent a workforce that had multiple specialties operating miles apart. Back in 2014, for example, Cannistraro acquired Stoughton-based Harrington Brothers Corp., a sheet metal contractor. Their plumbing and HVAC-piping operation is headquartered in Wilmington, and their fire protection unit continued on page 23

Building exterior after the renovations.

The Professional Contractor

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BALANCE SHEET BY DAN STANHOPE, CPA, AAFCPA

AAFCPAs Guidance for Contractors: Best Practices for Optimizing the Balance Sheet for Users of Your Financials

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AFCPAs reminds readers of the critical importance of the balance sheet, and advises our construction clients to ensure their presentation of this statement of financial position is optimized in order to demonstrate a solid foundation. Your balance sheet provides a snapshot of your company’s financial position at a single point in time, and provides critical insight to surety and bank lenders regarding your ability to meet short and long-term debt obligations. AAFCPAs provides the following best practice recommendations to ensure your balance sheet is best-in-class: •• Cash: The old adage ‘Cash is King’ is true for many businesses, however it is extremely important for contractors who must have liquidity to make payroll and fund future job costs. AAFCPAs advises clients to perform cash flow projections weekly or monthly if you operate with low liquidity or working capital, and quarterly or annually if your operations are more established. Cash flow projections should be analyzed by job and for the company overall. The projections should account for your receivable and payable turnover, and other monthly expenditures like payroll, rent, leases and debts that do not go through accounts payable. •• Contract Receivables (Current and Retainage): The A/R Aging is typically the second most requested document by users of your financials. The construction industry is known for stretched out payment terms, however, unless the receivable is in retainage, after 60 days the money becomes harder to collect in full. AAFCPAs advises clients to ensure receivables are current, and if you identify receivables that are questionable, it is prudent to provide a reserve for those receivables. We also advise clients to formalize their collection activities by ensuring that billing requisition forms, or “AIAs” receive sign-off by the appropriate parties and by making collection calls at 45 days. Additionally, retainage on closed projects is even more difficult to collect. Although projects may need to be completed in order to have the retainage released, often amounts get paid more quickly when they are asked

for as the project nears completion. •• Unbilled Contract Receivables: Again, as outstanding balances age, they become more difficult to collect because they may be perceived as disputed change orders, cost overruns or bad estimates. In order to minimize disputes and optimize receivables, bill for costs and profit as soon as the work is complete. Monitor your unbilled contract receivables, and set expectations with your team that these will be billed for within 10 days of project completion. •• Underbillings: Users of your financial statements scrutinize costs and estimated earnings in excess of billings on uncomplete contracts. Naturally you bill for costs that are valid, so it may be perceived by users of your financials that you cannot bill for these unkowns, which would result in a write-down on the job. AAFCPAs advises clients to facilitate monthly cost meetings with your project managers to discuss under billings, and to stress the strain these put on liquidity and profitability. (See our previous blog on utilizing the construction WIP to monitor key performance indicators and trends affecting profitability, and to download a sample WIP schedule template, which includes standard, predefined columns that will be helpful for many contractors in measuring and analyzing their WIP results.) •• Prepaid Expenses: Generally, prepaid expenses include insurance, taxes or expenses that provide future benefit. When simply recorded on the P&L, these expenses can distort earnings from month to month. Ensure you have proper cutoff procedures to reflect items as prepaid or as expenses in the correct period. •• Officer Loans: Officer loans should be avoided if possible because sureties and bankers do not see these as lendable assets. These can also come into question by the IRS, who considers these to be distributions. If an officer loan is necessary, you should have a documented plan for addressing the payback, including terms and timeline. •• Property Plant and Equipment: PP&E are fixed assets that have been capitalized and will be depreciated over their economic useful life. These are carried at their historical value, which may differ from fair value.

If you have any questions or need help executing any of these strategies, please contact your AAFCPAs partner or Dan Stanhope, CPA, at 774.512.4134, dstanhope@aafcpa.com.

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AAFCPAs advises clients to use accurate useful lives, and record depreciation on a monthly basis to not give contractors a false sense of profit. •• Short-term Debt: Short-term debt encompasses maturities due within the next twelve months, typically on vehicles or equipment that might be financed. This impacts working capital calculations as well as debt covenant calculations. We recommend amortization schedules on all debt that reflects accurate short-term portions in the current liabilities. •• Accounts Payable (Current and Retainage): Your accounts payable represents all amounts due for work/services received, including those to subcontractors (including retainage), service providers, utilities and more. Ensure that your payables are current, and you do not stretch out payment terms resulting in interest charges. You may also take advantage of discounts provided by vendors/ suppliers if you pay early. Best practices in accounts payable can

be achieved with proper cash flow projections. •• Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts: Overbilling on projects may help with cash flow, but may result in job borrow. Additionally, overbillings may be perceived as, or an indication you are overly conservative in job estimates. Again, monthly cost meetings are crucial to provide finance with insight into where each job stands. •• Accrued Expenses: Accrued expenses encompass all other amounts owed outside payables or debt. These can include payroll earned but not yet paid, 401k matches, PTO liabilities, income taxes, payroll taxes, etc. It is important to have proper cutoff procedures to capture all expenditures in the correct period. •• Long Term Debt: Long term debt represents the balance of what you owe beyond twelve-month maturities. Monitor how leveraged the company is by looking at debt to equity ratios. A debt-to-

equity ration of 2:1 is generally the best practice. •• Equity:Preserving equity in the company should be a top priority, especially if you are growing and looking to increase bonding capacity. If distributions are necessary, e.g. to pay income taxes for owners, discuss the impact prior to taking equity out of the business. Consult with your AAFCPAs tax professional to plan accordingly in order to limit the need for tax distributions. AAFCPAs encourages contractor clients to benchmark their performance metrics against the industry norms. Valuable balance sheet performance indicators include: current ratio, quick ratio, working capital, debt service coverage, return on equity, return on assets, AR turn and days outstanding, AP turn and days outstanding, revenue to working capital, debt-to-equity, and current debtto-equity. Monitoring these indicators and reviewing your balance sheet on a monthly basis will ensure financial stability over the long term. s

The Professional Contractor

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MANAGING PAYMENT BY MICHAEL P. SAMS, ESQ., COFOUNDER, KENNEY & SAMS

Not Getting Paid is Bad Business – Minimize the Risk

You should review and consider the following as you negotiate the contract or assess payment problems that have since developed (unless otherwise distinguished, “Contractor” refers to general contractors and subcontractors).

tor’s measure of damages in such instances. Subcontractors do not have the right to determine whether an Owner has funds to pay. Subcontractors with contract provision incorporating the general contract, however, should obtain the general contract to assess among other things, whether the general has those rights. Especially with an unfamiliar Owner, inquire of the general as to whether it is aware of the Owner’s viability. This is particularly important if there is a Subcontract ‘pay if paid’ provision. Separately, Subcontractors also need to do their due diligence on the general and, if payment issues arise, stay focused on lien rights (discussed later).

1. Proof of Funding What assurances do you have that the Owner can pay for the project? Give this some thought before diving in. The general contract should have a provision providing the Contractor the right to request and obtain proof that the Owner has funding sufficient to satisfy the Contract price. The provision should provide that the Contractor may at any time before or during performance of the work, upon some specified written notice, review relevant records to confirm that the Owner remains capable of satisfying the Contract price and any Change Orders thereto. The provision should provide that the Contractor can terminate for cause: 1) if the Owner refuses to allow the Contractor to review the documents; or 2) should the Contractor reasonably determine that the Owner does not have sufficient funds to pay for the work. Finally, there should be a corresponding ‘termination for cause’ provision specifying the Contrac-

2. Material Costs Try to minimize the impact of material costs. The following can help in that regard. •• Insert a provision in the Contract providing that the Contractor will be paid for delivery and acceptance of material on-site or at some other designated location. This minimizes carrying costs the Contractor would otherwise have to incur between the time it purchases and actually installs the applicable material. •• Beware of the potential for sharply escalating material cost. Price escalation clauses provide protection in the Contract. As its name implies, a Price Escalation Clause provides the right to seek increased compensation if a material price increases between specified intervals. •• Restatement 2d of Contracts, § 261 (Discharge by supervening impracticability) – “Where, after a Contract is made, a party’s performance is made

The Key Points to Consider

As you draft contracts or assess how to pursue payment, focus on these points: •• contractual payment provisions; •• payment risks – dangers/protections (depending on where you sit); and •• leverage and avenues to obtain payment.

Contract Payment Provisions

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impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the Contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.” This may not help, however, in the event the issue is material price escalation. Indeed, the Comment to the Restatement explains that, “mere market shifts or financial inability do not usually affect discharge under the Rule stated in this Section.” See Jason Johnson, Esq., “Protection Against Sharply Increasing Material Prices,” CFMA Building Profits (April 2006). So material price escalation clauses remain helpful. •• Force Majeure clauses potentially excuse performance based on ‘Acts of God,’ disasters, and miscellaneous other issues that occur, ostensibly beyond the parties’ control. 3. Change Orders Insert into the Contract an agreed-to mark-up for the Contractor’s fee on any change orders. 4. Define Recoverable Costs •• In any non-fixed price contract, where the Contractor will be seeking to recover costs, ensure that the recoverable costs are defined clearly in the contract. The following are items that you may seek to have covered: •• Wages paid for labor in the Contractor’s employ; •• Salaries of the Contractor’s employees when stationed at the Field Office or those on the road expediting production or transportation of materials and equipment;


•• Cost of employee benefits and taxes (Workers’ Compensation, Unemployment Compensation, Social Security, etc.); •• Reasonable transportation, travel, hotel and moving expenses of the Contractor’s personnel; •• Cost of materials, utilities, supplies and equipment; •• Contractor’s payments to Subcontractors; •• Rental charges of all necessary machinery and equipment; •• Costs of liability insurance and bonds; •• Permits, fees, licenses; •• Costs associated with equipping, operating, maintaining, and mobilizing the Field Office; •• Demobilizing the Field Office; •• Reproduction costs (photocopying), telephone costs; •• Water, power and fuel costs; •• Costs of removing non-hazardous materials; •• Costs incurred due to an emergency affecting the safety of persons and/or property; •• Legal (including mediation and arbitration costs) other than those arising from disputes between Owner and Contractor; •• Additional costs incurred from laws or ordinances, rules and regulations enacted post-Contract; and •• A safety net – all costs reasonably incurred in the performance of the work, or in any way connected with the project and not included in the contractor’s fee, that are reasonably inferable from the contract documents. 5. Minimize Retainage Minimize retainage and/or provide for reduction of retainage when achieving certain milestones (i.e. when Contractor achieves 50 percent completion, retainage shall be reduced from 10 percent to 5 percent).

Dangers/Protections (Depending on Where You Sit) The following items are key when it comes to payment and assessing related liability.

1. Pay if Paid Which of the following constitutes a valid and enforceable pay if paid provision? a. Each project payment will be distributed to the Subcontractor within three (3) working days after the Contractor receives payment from the Owner. b. The Contractor shall promptly pay the Subcontractor upon receipt of payment from the Owner, out of the amount paid to the Contractor on account of such Subcontractor’s portion of the work, the amount to which said Subcontractor is entitled. c. Payment to the Contractor by the Owner is a condition precedent to payment being due to the Subcontractor from the Contractor. Payment to Subcontractor is directly contingent upon the receipt by the General Contractor of payment from the Owner. According to the Appeals Court in Framingham Heavy Equipment Company v. John T. Callahan & Sons Inc., 6 Mass. App. Ct 171 (2004), it is likely that only the last provision constitutes an enforceable pay-ifpaid provision. The others serve only to postpone payment for a reasonable time after requisition, “so as to afford the general contractor an opportunity to obtain funds from the Owner.” Id. Further, even if the pay-if-paid language otherwise is enforceable, assess whether the Prompt Pay law applies. If so, follow-up with your counsel. The language may not be enforceable. 2. Beware of Lien Waivers Signing partial lien waivers is okay, but not if it requires you to waive or release claims. Be careful not to waive lien claims for disputed amounts due. For instance, be careful not to waive all claims such as the following, unless that is what you intend: Contractor acknowledges and agrees that it has been paid all sums due on the project and, therefore, waives and releases any and all claims for payment as of this date, including without limitation all liens and rights of lien on such real prop-

erty for labor and materials... and for any other services performed or furnished through this date which Contractor ever had, now has, or may herein ever have through this date against …. 3. Beware of Lien Bond Requirements Lien bond requirements are common. Nonetheless, some such provisions really attempt to squeeze the Contractor. The emphasized language below is such an example (standard general contract language that also gets incorporated into the subcontract). If any Subcontractor or lower tier Sub-subcontractor or material supplier, records a Notice of Contract or otherwise encumbers the project property, the Contractor shall immediately record a lien bond pursuant to applicable statute at its own cost. It shall not be a defense to this requirement that the Contractor claims non-payment by the Owner. Pursuant to this language, the Contractor potentially owns bonding off the lien even if it was recorded because of Owner nonpayment (for instance, when a lien is recorded because of an Owner disputed, subcontractor-proposed change order). 4. Beware of the Claims Process Most contracts contain a claims process and, in such instances, the claims process must be followed, or claims can be waived. The Supreme Judicial Court has stated, [a] Contractor seeking to recover payment in excess of the Contract price must follow the procedures set out in the Contract.” Sutton Corp. v. MDC, 423 Mass. 200, 207 (1996); Chiappisi, et al. v. Granger Construction Co. Inc., et al., 352 Mass. 174 (1967). There are potential defenses to enforcement but rather than create risk, follow the process. 5. Set-offs to Payment The following contract provisions often are used as set-offs to payments due the Contractor, thereby minimizing the payment due: •• the value of defective work; •• third-party claims; •• lien claims; •• evidence that the work cannot continued on page 22 The Professional Contractor

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Managing Payment continued from 21 be completed for the unpaid balance of the Contract sum; •• damages arising out of other projects the Contractor and Subcontractor work together on; •• damage claimed by the Owner; and •• evidence that the work will not be timely completed or evidence that it cannot be completed for the remaining Contract balance. Some may be reasonable (the value of defective work; some third party claims, liens you cause because of your own non-payment to the tier below), but review these carefully with your counsel before signing the Contract. 6. Holding Money as a “Trust Fund” The Owner may attempt to put pressure on the Contractor/Subcontractor to “do the right thing” with any payment being provided, to minimize the risk of lien claims. One way to do this is to insert a provision providing for the following as a condition to payment: •• the Contractor/Subcontractor only receives funds in trust for its subcontractors and material suppliers with an express representation that all amounts have been paid and that any amounts received are being fully; •• that the payment received will be completely disbursed consistent with the requisition; •• that no claims are outstanding other than as represented in the current requisition for payment; and •• that this payment will result in full payment to all subcontractors and suppliers and extinguish all existing payment claims. 7. Beware of No Damages For Delay Clauses A typical no damages for delay provision provides substantially as follows: the contractor] shall have no claim for money damages or additional compensation for delay no matter how caused, and in such instances of delay not caused by contractor, shall be entitled 22

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only to an extension of time for performance. One way to deal with them is to assess whether what some jurisdictions refer to as waiver precludes enforcement. That is, if the entity to whom the benefit of this provision ensures, does not enforce it earlier in the project when it could have and instead grants not only additional time, but also financial change orders related to delay, the Contractor may argue that the right to future enforcement of this provision has been waived by conduct. Further, assess whether the Owner afforded the Contractor (or the Contractor afforded the Subcontractor) additional contract time when contractually required. If not, the ‘no damages for delay’ provision will not prevent recovery of additional costs incurred because of the failure to grant additional time. Loss of productivity damages also may be available in addressing this provision.

Leverage

The following are all tools to assist in securing a future judgment. 1. Collect Your Fees and Costs Insert a provision in the contract entitling you to recover reasonable attorney’s fees and costs (in addition to interest) on non-payment. Otherwise, the potential cost of litigation can be used as leverage against you. 2. Mechanic’s Liens – The Contractor’s Best Friend With a lien, the contractor can potentially foreclose on property, force a sale, and get paid from equity proceeds coming out of the sale. Therefore, liens provide great leverage to getting paid. Perfect compliance with the statutory process is required to effectuate those rights, so ensure that you are timely in recording your Notice of Contract, Statement of Account, and Complaint at the registry of deed (lower tier subcontractors and suppliers also need to send the general contractor via certified mail, a notice of identification within thirty (30) days of beginning work).

3. Attachment Attachment can be used for real estate, goods, chattel and other property. It is much more difficult to obtain though, than a mechanic’s lien. Rather than just meeting a statutory process to effectuate a lien, an attachment requires a court order. To obtain that order, one must demonstrate to the court a reasonable likelihood of success on the merits of the claim in an amount, including interest and costs, equal to or greater than the attachment sought over and above available liability insurance. 4. Trustee Process This is an attachment avenue in trying to capture bank account monies. If granted, the attachment only captures what is then on account. The reasonable likelihood of success standard applies. 5. Reach and Apply This process is used to “reach” money owed to your debtor, and “apply” it to what is owed to you. Accordingly, it involves an assessment of whether someone else owes money to your target defendant. If so, then add that third party as a reach and apply defendant and move to attach its debt to your debtor. 6. Bonds Is there a payment bond? If so, make your claim. As part of doing so, you need to assess statutory process and deadlines if it’s a public job bond. 7. Piercing Claims If the debtor/defendant entity has no assets, consider whether there are grounds to pierce the corporate veil. The following are piercing factors considered in at least some jurisdictions: •• Common ownership; •• pervasive control; •• confused intermingling of business activity assets, or management; •• thin capitalization; •• nonobservance of corporate formalities;


•• absence of corporate records; •• no payment of dividends; •• insolvency at the time of the litigated transaction; •• siphoning away of corporate assets by the dominant shareholders; •• Nonfunctioning of officers and directors; •• use of the corporation for transactions of the dominant shareholders; and •• use of the corporation in promoting fraud. It typically is difficult to succeed on a piercing claim but it should be reviewed where the defendant/debtor otherwise is judgment proof. 8. Fraud/Negligence Did any of the defendant entity’s principals or employees act negligently or fraudulently? If so, they can be sued individually.

9. Ex Parte Motions Ex Parte process means one party goes into court seeking an order without notice to the other side. Sometimes ex parte process is necessary and reasonable. It can be overused, though, and courts may look unfavorably upon ex parte attempts. It should be used only when you believe the court will agree with you that if the other side received notice of what you are seeking, it would take an adverse action that could unduly prejudice the party giving notice. Manage your payment risk. It will help your bottom line.  s Michael Sams, Esq., co-founder of Kenney & Sams, is a litigator, advocate and business advisor. He can be reached at mpsams@ kandslegal.com or at (617)722.6045

Cannistraro Pulls into Port continued from 17 is at their home office of Watertown. Now, over 100 skilled tradespeople representing numerous unions will be employed at the new facility. With approximately 157,000 square feet of space, they’ll certainly have room to spread out. “The industry is becoming more collaborative. Team members are brought into the fold early in the process, enabling jobs to run more smoothly and quickly onsite,” said Palange. “We’re doing a lot of multi-trade assemblies for some of the area’s largest projects. ‘The Fid’ gives us the unique space to do it all in one place and in the heart of our domain.” Modular fabrication and manufacturing has been gaining traction over the decades, and evolved from simple prefab into complex structures. The fact that Cannistraro signed on for such a long lease for 25 Fid Kennedy offers some insight on where they think the industry is heading. “We certainly see this as a standard for the future and are taking the long-term view, here for the next 70 years,” said the company’s president, John Cannistraro. “It is not lost on us that this area of Boston is also known as the Innovation District. Innovation is what we stand for in the industry. It is the present and future of our company.”  s

A new slab is the basis on which all of the renovations rest.

One of the many welders hard at work helping bring this 1940s facility up to date

A view of Cannistraro’s new facility.

The Professional Contractor

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MEMBER BENEFITS

Save Money with Your ASM Membership

B

eing a member of ASM offers many benefits and resources. As members you receive notices of educational programs, networking opportunities and industry updates. You also have a voice on important issues that impact your business through your membership. These are vital membership benefits that you cannot put a dollar value on.

So, what about the ASM membership benefits that you CAN put a dollar value on?

You may be interested to know that there are also many money-saving discounts available to you through your ASM membership that can help with your bottom line. Below are just a few “money-savers,” but be sure to check the ASM website under “Membership Benefits” regularly because the list is growing every day. •• ASM members receive a 20 percent-member discount on their purchase of ConsensusDocs, a complete suite of model contract documents that fairly balance the interests of all parties and are written by more than 40 industry associations. •• Save time and money using the ASM Professional Hotline. Construction contract lawyers at Corwin & Corwin LLP, employment lawyers at Hirsch Roberts Weinstein LLP and insurance lawyers at O’Connor & Associates LLC are available through the ASM Professional Hotline. To access this benefit, send your question to mail@associatedsubs.com. We will forward your question to an attorney, who will respond by phone or email. Note: Legal advice is not being provided via the ASM Professional Hotline, but it can aid with basic questions and to determine if you need to hire an attorney. •• Learn how to get paid for your work, using ASM’s free payment forms and guides to Massachusetts’ payment laws (Mechanics Lien Law; Prompt Pay Law and Retainage Law) available at the ASM website under “Membership Benefits.” •• Gain access to the Acadia Insurance CGL Insurance program; only for ASM members. This program has returned $6 million in dividends to policy holders since 2003! For more information, contact your local Acadia agent or John Varitimos at john.varitimos@ acadia-ins.com. 24

Spring 2018

•• Thirty percent discount on webinars and live seminars on construction topics from LORMAN Education Services. Go to www.lorman.com/training/associatedsubs to see their educational offerings. •• ASM members can save money on shipping, office supplies, credit card services, conference calls, computer equipment and more, through a special discount program developed by ASM’s national association, the National Subcontractors Alliance (NSA), in partnership with Meridian One. Meridian One is a company that creates, markets and manages member benefit programs for trade and professional associations throughout the U.S. The NSA/Meridian One Program includes discounts on FedEx, UPS, YRC Transportation, Office Max, TSYS Merchant Solutions (payment processing), InterCall (audio and web conferencing), Lenovo (computer products and accessories), and LifeLock (identity theft protection). To access information, go to www.1800members. com/NSA or call 1-800-636-2377 (8am-6pm EST, M-F) and mention you are a member of the National Subcontractors Alliance (NSA). •• Free one-hour marketing and/or website review and consultation, and 50 percent savings on your first month’s managed services from Growth Steps, a MA-based company specializing in digital marketing. Email ryan@growthsteps.com for more information. •• Forty percent discount on Paychex Payroll Services for new customers or existing customer upgrades. Contact Brendan Lucas (blucas@paychex. com or 781-507-1526) before purchasing to access this member benefit savings. In addition, ASM members receive many discounts from Associate Members on professional services, supplies and equipment. Those discounts are detailed in our annual Associate Member Directory and Buyers’ Guide found at www.associatedsubs.com under “Membership Benefits.” If you have ideas for other discounts you would like to see ASM offer that would help you in your business, please drop us a line at mail@associatedsubs.com. We are always looking for ways to save members money and increase ASM offerings.  s


Interview with the Honorable Thomas A. Golden Jr.

Q: Chairman Golden, you recently received ASM’s “Legislator of the Year” award for your dedication to the construction industry and attention to policy issues impacting our membership. Considering all of the other competing interests who come before you, what attracts you to our cause? A: I am honored to receive ASM’s Legislator of the Year award. Associated Subcontractors of Massachusetts is a very well-respected and effective Association on Thomas A. Golden Jr. Beacon Hill and Massachusetts House I am proud to Representative partner with Chairman, House Committee on your 400-plus Telecommunications, members Utilities & Energy throughout the commonwealth and especially those located in my district of Lowell and Chelmsford. More than anything else, as a member of Speaker DeLeo’s leadership team, we appreciate that ASM’s members “do the work” of construction. We share your concerns, because what impacts ASM, impacts Massachusetts’ economy. In order for the work to be done efficiently and our economy to grow, wages, insurance, working conditions, fair contracting practices and many other issues ASM members confront must always remain front-of-mind. Q: ASM’s priority legislation is the bill you sponsored, House Bill 2369, “An Act relative to prohibit contract provisions requiring subcontractors to assume liability for negligence of others.” Why do you feel that this issue is important? A: House Bill 2369 clarifies in statute that a subcontractor’s obligation is limited to the extent of their own negligence, so no one can be held liable for the actions of oth

ers on a job site. Despite what some court decisions have held over the years – this idea is fair, it’s basic common sense, and it’s the right thing to do. To borrow a phrase … “If I break it, I pay for it. If you break it, you pay for it. If we both break it, we both pay for it.” Q: What can ASM do to be a better partner with you and the Legislature? A: In the past few years, very few groups have had the success that ASM has had on Beacon Hill. Most trade industry groups are happy just to delay or stop things from happening. ASM is more interested in leading change for the good of the entire construction industry. From Prompt Pay legislation to your landmark 5 percent Retainage victory, to reshaping an unemployment insurance bill that would have raised all of your rates by more than 30 percent, ASM has been a very positive and active force at the State House. I would highlight the importance of keeping your membership active with their individual legislators. Very few groups on the Hill have the type of business experience and geographic diversity of ASM’s members. It is very impactful on legislators when they hear the everyday, real life experiences of business people in their districts. It is something that sets ASM apart from others. Q: We are living in an era where business policy is significantly impacted by political rhetoric. How can ASM stay above the fray when engaging the Legislature and the public on controversial issues? A: ASM is known for its substantive expertise in the construction industry and that reputation must be maintained. I believe the association already took a step in the right direction when they brought Carrie Ciliberto on board. Carrie is an attorney with significant experience in the field who brings a new and welcomed voice to the debate.

That being said, I will miss Monica Lawton who was a fixture in the hallways of the State House for as long as I can remember. Monica’s retirement was well-deserved but I couldn’t help but worry that she would really be missed. Carrie and your lobbyists, The Suffolk Group, have teamed to make sure ASM hasn’t missed a beat. I look forward to working with Carrie, Bill, Steve and Jason to bring a substantive approach and help strike an appropriate balance on all issues, regardless of rhetoric or so-called controversy.  s Special thanks to Steven L. Goldblatt, Esq. and William F. Cass of The Suffolk Group for their assistance with this interview with Rep. Golden.

ASM PARTNER SPOTLIGHT DIRECTORY

Frank Smith Executive Vice President Eastern Insurance Construction Division 508 942 2221 fsmith@easterninsurance.com

The Professional Contractor

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ASM NEWS

ASM Welcomes Jessica Martin

ASM Members Get a Spirited Lesson

A good time was had by all February 8th at ASM’s first member mixer of the year held at Cornwall’s in Kenmore Square. Those that attended sampled six great tastes including a full-bodied scotch and a smooth whiskey/port. Everyone received a lesson on how to correctly drink whiskey to appreciate all the subtle flavors (hint: always smell with your mouth open) and learned how the barrel impacts the taste of whiskey. It was a great networking opportunity for all that attended, complete with tasty appetizers and some fun whiskey knowledge. Thanks to our Sponsor Strang, Scott, Giroux and Young.

A Night at the Round Table with Representative Golden

Clockwise from bottom left: Sue Mailman, Steve Goldblatt, Bill Cass, Dave Cannistraro, Bernie Quinlan, Russ Anderson, Jim Miller (standing) and Representative Tom Golden.

ASM members didn’t let a “little” snowstorm on Thursday, March 8th keep them from enjoying an evening of great conversation and many laughs while discussing issues of importance to ASM members. The group literally “sat around the kitchen table” at The Plumbing Museum and talked with chair Golden about a variety of issues facing the commonwealth.

ASM is excited to welcome Jessica Perry Martin as the new associate director of marketing as of January of this year. Jess is responsible for the development, planning and promotion of all ASM events moving forward. She also manages ASM sponsorships and marketing programs. “We are lucky to have someone of Jess’ caliber join the ASM team,” states Carrie L. Ciliberto, ASM’s CEO. “Jess is very member-focused, and I am confident she will have an immediate and long-term, positive impact on the association’s events and communications.” She has more than 13 years of experience in marketing and event planning. “I am thrilled to be part of the ASM team,” says Martin. “I am looking forward to meeting all the members and working closely with them to develop some new and exciting programs.” She can be reached at jmartin@associatedsubs.com.

Safety First The U.S. Department of Labor’s Occupational Safety and Health Administration, the Massachusetts Division of Occupational Safety, and ASM renewed an alliance to promote workplace safety and health and educate workers on construction hazards. ASM members will receive information and educational resources to help protect employee health and safety. The alliance will focus on preventing exposures to lead and silica hazards and increasing awareness of fall protection and electrical safety, as well as supporting other key OSHA safety and health campaigns and initiatives. 26

Spring 2018

Left to Right: Kathy Flannery, MS, MA OSHA Consultation Program Supervisor, Mike Boyle, ASM Safety RoundTable Chair, Carrie L. Ciliberto, Esq., ASM CEO, and James Mulligan, OSHA Braintree Area Office Director.

Timothy S. Irving, assistant regional administrator for the OSHA Boston Region I office, bringing ASM Members up to speed on vital OSHA updates on Feb. 21, 2018.


Acadia pays dividends

ASM Members are rewarded for safe worksite programs and lower insurance losses as Acadia Insurance, a Berkley Company®, pays more than $950,000 in dividends to policyholders. Acadia’s dividend programs reward members by returning a share of its profits to qualifying plan members when the groups foster safe work places and meet or exceed established loss ratio targets.

ASM Thanks Mike Boyle for His Dedication

The Associated Subcontractors of Massachusetts (ASM) want to thank ASM member Mike Boyle of Boyle Construction Safety Services LLC for his longtime service as the ASM Safety Roundtable chair. In this role, Boyle coordinated the ASM Safety RoundTable with our long-standing Alliance partners from OSHA and the Massachusetts Department of Labor Standards, identifying speakers and content for members to attend free of charge for more than 10 years. While Boyle’s contributions will be missed, ASM is pleased to welcome Eric Stalmon and Valerie Stone as the new Safety Roundtable co-chairs, effective immediately. Eric Stalmon is the vice president of safety and training for The Marr Companies in Boston. He is responsible for providing support for all company safety programs, as well as providing training and education. Valerie Stone is the safety director for TG Gallagher, Left to right: Mike Boyle, Valerie Stone, and Eric Stalmon. located in Cambridge. TG Gallagher is committed to ensuring the safest possible work environment and places the highest value on individual welfare. “On behalf of ASM Staff and Members, I want to thank Mike for his many years of dedicated service,” states Carrie L. Ciliberto, Esq., ASM’s CEO. “His efforts helped not only ASM, but also the construction industry as a whole, as safety is a critical issue for all stakeholders. ASM is very fortunate to have two leading safety professionals to take over the helm of ASM’s Safety Roundtable.” Both new co-chairs look forward to continuing the exceptional programming of the past, as well as reaching out to ASM members for feedback on new and interesting future safety programs.

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The Professional Contractor

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MEMBER NEWS FOR SPRING 2018

Marr Grows at the Top

The Marr Companies announced that two new management positions have been established to complement the companies’ current administrative team: Daniel Flannery was recently hired as vice president, administration for The Marr Companies. In this role, Dan will focus on the development and implementation of corporate plans and policies to support the operational objectives of all the Marr entities. Prior to joining Marr, Dan served for eight years as the finance director at BOND. Jeffrey Marr Jr. has been named business development manager for The Marr Companies. In this newly created position, Jeff will work with management, sales teams across all companies and divisions, operations and our customer base to strengthen partnerships and develop growth opportunities for Marr.

Congratulations to Wayne J. Griffin Electric Inc., Thomas G. Gallagher Inc. and Soep Painting Corp.

Congratulations to Wayne J. Griffin Electric Inc. of Holliston, MA, Thomas G. Gallagher Inc. of Cambridge, MA, and Soep Painting Corp. of Lawrence, MA for ranking second, sixth and thirteenth, respectively, in Engineering News Record’s list of the Top Specialty Contracting Firms in New England.

Rucci, Bardaro & Falzone Rebrands

ASM member Rucci Bardaro & Falzone PC has officially changed its name to RBF as of Feb. 5, 2018. Firm officials said the new, streamlined brand name reflects a natural continuation of how clients, colleagues and the marketplace have come to know and refer to the company in recent years using partner surname initials. As part of the re-branding effort, RBF has introduced a new firm logo, and has launched a new website with the theme, “Success, Measured.”

Marr Marks a Milestone

Congratulations to The Marr Companies on 120 years of success! In 1898, Daniel Marr arrived in America with his son John D. Marr ready to make a home for themselves and start a new venture. They established Daniel Marr & Son, a steel erection and rigging firm delivering services to important projects throughout the city of Boston. Now they employ approximately 300 people and credit the “family culture” of their business as a key contributor to their long-term success. They also credit their ability to innovate and stay ahead of industry trends through training and stateof the art equipment as the other cornerstorne of their longevity.

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Spring 2018

ASM Upcoming Events

Thursday, May 3, 2018 What’s New At DCAMM? 7:30 AM- 9:30 AM |Embassy Suites, Waltham Join us for breakfast with Commissioner Carol Gladstone, and her team from the Division of Capital Asset Management and Maintenance (DCAMM). They will discuss, what’s new at DCAMM and what’s in the works in the coming months that will impact subcontractors. Don’t miss this opportunity to ask questions, offer suggestions, and get the latest information on DCAMM projects and procedures, straight from the source! Thursday, May 3, 2018 The Quest to Building Stronger Teams 5:00 PM- 6:00 PM – Networking and pizza 6:00 PM- 8:00 PM – Questing | Boda Borg, Malden, MA ASM’s Young Professional group would like to invite you and your company to partake in a new and exciting team-building activity. At Boda Borg in Malden, MA, guests are transported into a real-world gaming environment; an experience called Questing. Teams of three to five guests move through Quests, working together to complete a variety of mental and physical challenges. Send your crew! They will have a blast while mastering the art of teamwork! Sponsored by: Cross Insurance Monday, July 16, 2018 ASM Annual Golf Tournament Start time 10:00 AM | The International It is never too early to start planning for good weather! On July 16, the ASM Annual Golf Tournament will be back at The International, home of “North America’s longest golf course” and the first Tom Fazio course in New England. Mark your calendars and think warm thoughts! Check our website regularly for updates and registration information. Wednesday, October 17, 2018 GC Showcase 4:00 p.m. – 6:30 p.m. | Newton Marriott Every two years, ASM holds its popular GC Showcase in the Fall. As in past years, this showcase will feature representatives from the area’s leading general contractors (GCs) and construction managers (CMs). The event will provide GC’s and CM’s an opportunity to meet and introduce their company to subcontractor professionals from across the state. Want to be a sponsor or get involved in these events? Email jmartin@associatedsubs.com.


PROJECT PHOTO GALLERY 2A

1A

1B

2B

1A Drake Company installed modern material hardscape at a private residence in Natick, MA. 1B Drake Company installed top installation of sod for Federow Development in Needham. 2A 2B Atlantic Prefab (Milford, NH) designed, fabricated and installed the Sto Panel Brick Ci Exterior Panels for

2C

this upscale storage facility in Downtown Westwood, NJ.  2C The exterior panels consisted of Sto Panel Brick Ci, Creative Brick Ci, & Classic Ci panels. 2D These highly detailed panels broke several Sto Panel records for complexity and overall size.

2D

Protection starts here

and here.

DeSanctis Insurance Agency

Serving the Bonding and Insurance needs of the N.E. construction industry for over 40 years. Ad a m De Sa n c t i s Br y a n Ju w a

Gre g o r y Ju w a

Da v i d B o u t i e t t e

Ja m e s A xo n

Mi c h a e l Ca rn e y

Pa u l Pa t a l a n o

Dick Caruso

Wi l d e r Pa rk s

Jonathan Duggan

DeSanctis Insurance Agency, Inc. 100 Unicorn Park Drive Woburn, MA 01801 (781) 935-8480 www.desanctisins.com

Mi c h a e l Gi l b e r t Jordan Tirone

The Professional Contractor

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PROJECT PHOTO GALLERY CONT. 2E

2G

2F

2H

2E 2F Atlantic Prefab designed and fabricated four stories of load bearing pre-finished exterior panels, including the “Frame Only” interior load bearing panels supporting the precast concrete plank floor system for the Oxford Casino Expansion in Oxford, ME.

2I

2J

2G 2H In addition, the building was topped-off with Atlantic Prefab’s CFS roof truss system. 2I 2J Atlantic Prefab provided 53,000 square feet of trusses on the Fairing Way at Southfield assisted living facility in South Weymouth, MA. 2K The project consists of two buildings, the first of which was The Commons – a two-story structure with CFS roof trusses spaced at 48” on-center bearing on structural steel.

2K

2L

2L The second building is a one-story unit with trusses spaced at 48” oncenter bearing on load bearing light gauge steel walls.

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Spring 2018


3A 3B R. H. Keleher Company is proud to be celebrating 42 years in business, and is especially proud to be the only individually owned pipe hanger supplier headquartered in Massachusetts. They take pride in working with other locally owned companies in the plumbing and heating industries. They credit their success to being able to forge mutually beneficial relationships with their customers, and are especially proud of all the jobs in the Boston area that they had been a part of, such as 100 Binney Street Cambridge (3A), 1350 Boylston Street Boston and the Bruin’s practice facility (3B).

3A

3B

4A In January, Daniel Marr & Son started erecting structural steel at MIT’s SoMA project in Cambridge, MA. SoMA is a five-building, 6.75-acre planned unit development located on the university’s east campus in Kendall Square. Turner Construction Company is the general contractor. 4B From late February through early March, Marr Scaffolding Company installed scaffolding under the arch at Rowes Wharf, Boston Harbor, so that the existing parapet could be demoed and replaced with a new one. Shawmut Design & Construction is the general contractor.

4A

4C

4E

4B

4D

4C In February, Isaac Blair & Co., Marr’s specialty shoring company, worked at the MIT.nano building in Cambridge, MA, to hydraulically jack four (4) 57,000 lb. concrete podiums – atop which multi-million-dollar state-of-the-art telescopes will sit and be used in NANO-Technology experiments and studies. The concrete podiums needed to be elevated by approx. 3.5” for workers to install a mechanism underneath to prevent any vibrations that could compromise 4D In February, Marr Scaffolding Company’s Bleacher Division installed 1,000 Hussey Legend chair seats at the new 3.5-acre baseball field located on Boston College’s Brighton campus. The seats were supplied by Robert Lord Co. of Connecticut and BOND is the construction manager. 4E In February, Marr continued work at Harvard’s new Science and Engineering Complex on the University’s Allston campus. Marr Crane & Rigging installed twin Alimak construction elevators utilizing a 100-ton crane. Also active on site are Daniel Marr & Son and Marr Scaffolding Company, providing steel work, shoring services, scaffolding and various power equipment. Turner Construction is the general contractor.

The Professional Contractor

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The Professional Contractor - Spring 2018  

In this issue, get to know ASM’s 2018 president; Cannistraro moves into bigger digs; and ways to save money with your ASM membership.

The Professional Contractor - Spring 2018  

In this issue, get to know ASM’s 2018 president; Cannistraro moves into bigger digs; and ways to save money with your ASM membership.