A Publication of the Associated Subcontractors of Massachusetts, Inc.
Projects in the Pipeline Industry Revival Slow, But Steady An Interview With The Senate President Therese Murray Chats With ASM
What We Did On Our Summer Vacation Golf, Scholarships And Fun
Homeowners Enjoy Greater Protection
A Review Of The Homestead Act Revision
A Publication of the Associated Subcontractors of Massachusetts, Inc.
16 A Look Ahead for Construction
New development projects are planned or under construction across the state. The commercial construction industry is recovering, but this is no building boom.
04 PRESIDENT’S VIEW 20 BIDDING Recession Over? Just Look Safety Prequalification Around … Signs Abound! a Critical Element in Bidding Success 06 BEACON HILL SPOTLIGHT Senate President Therese Murray 22 TECHNOLOGY Social Media for Subcontractors 08 BIDDING Understanding the Variables of 24 LAW Successful Bidding Massachusetts’ Revised Homestead Act Provides 10 ANNUAL GOLF TOURNAMENT Greater Protection for ASM’s Day of Golf, Homeowners Scholarships and Celebration 26 TECHNOLOGY Cloud Computing and the Construction Industry
departments 28 Member News
30 Photo Gallery of ASM Events
The Professional Contractor
BY DAVID G. CANNISTRARO
Recession Over? Just Look Around … Signs Abound!
he Construction Recession must be over. No, I don’t have reams of data from experts that tell us about employment levels, permit activity and the like. I can just look out the window on my way to work and can see that two major eyesores for well over a decade are finally being razed and new developments have started. The first is the old Grossman’s site in Wellesley on Rt. 16 where National Development is building a multi-building retail, residential and office project on the banks of the Charles River. Further down the river, in Watertown, across the street from my office, the walls are being knocked down right as I type this on the old Haartz-Mason factory, a symbol of our lost manufacturing base. In its place will be constructed 174 rental apartments David G. Cannistraro is executive vice president of J.C. Cannistraro LLC in Watertown, and president of ASM. He can be reached through ASM at (617) 742-3412 or by email at email@example.com.
by Criterion Development Partners. Of course, we still don’t see the numerous tower cranes that not so long ago dotted the downtown landscape, although it seems Liberty Mutual, Vertex and now Biogen/IDEC will start to fill that void. But if cities and towns like Watertown and Wellesley can find the wherewithal to work with developers to clean up abandoned and decrepit sites like Haartz-Mason and Grossman’s, there might just be some hope that better things are to come. And, if you need more convincing, just read our cover story, page 16. The Boston Globe has also recently reported on many projects that seem to be up and coming sooner than later – Assembly Square (IKEA) in Somerville; Simon Property Group’s plans for a 47-story residential tower in Copley Square; HYM wanting to tear down the Government Center Garage; and the Fenway Center, Northwest Park, and Seaport Square, among others. Most likely, not all of them will be built, but I would settle for half. But, sooner than later, please! s
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BEACON HILL SPOTLIGHT
BY DEBBIE SWANSON
Senate President Therese Murray Senate President Therese Murray stands firmly behind the popular “It’s all here!” slogan, first introduced by the administration of former Massachusetts Gov. Mitt Romney in 2003 to spread the word about Massachusetts’ diverse strengths. As Senate president, she has led efforts to spread the word and promote the state as a prime destination for higher education, home or business ownership, and tourism.
aving represented the Plymouth and Barnstable districts in the state senate since 1992, Murray was elected to serve as the first woman president of the senate in 2007. A resident of Plymouth, Murray received a degree in personnel management and organizational studies from Northeastern University, then completed the Tier II Graduate Management Program at the University of Massachusetts. In addition to serving in political office, she has been an advocate Debbie Swanson is a freelance writer.
for Massachusetts communities and the commonwealth for over 30 years. Since assuming leadership of the Senate, one of Murray’s proudest achievements is the recent signing of a memorandum of understanding to form a strategic alliance between research institutions in three of the world’s leading life science regions: Northern Ireland, Finland and Massachusetts. Locally, the University of Massachusetts Dartmouth will partner with research and educational institutions overseas to further research in tissue engineering. Referring to the opportunity as an “untapped avenue for future economic development,” Murray looks forward to the educational and economic benefits this collaboration will bring the state. “The result will be businesses and jobs in Massachusetts,” she said. While committed to expanding the economy and attracting business to the commonwealth, helping people brings Murray the greatest satisfaction. “We receive over one hundred calls a week from people who have lost their homes, jobs, or cars, or have problems getting fuel or health care,” she said. “Getting through to help them at the end of the day is my greatest satisfaction.” In June, the Senate found itself responding to a more unexpected form of humanitarian assistance, as it quickly approved $15 million in emergency funding to Massachusetts communities devastated by the June tornados. “This funding is an important step in the recovery process,” Murray said. “The people in these communities need our help, and our emergency workers and volunteers need our support as we continue to rebuild neighborhoods and businesses in this part of the commonwealth.” Murray was a supporter of the Prompt Pay bill, sponsored by the Associated Subcontractors of Massachusetts, Inc., which took effect in November 2010 after a nearly five-year effort. Among other measures, the law sets reasonable time standards for payment on a job, and gives contractors and subcontractors the right to stop work for nonpayment. “It was a good example of how the subcontractors and general contractors got together to form an agreement that made sure everyone got paid,” Murray said of the bill. “It had come up a continued on page 21
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BY SALVATORE P. FALZONE JR.
Understanding the Variables of Successful Bidding Part One: The Role of Mixed Costs in Formulating Bids
or many readers of this magazine, the process of bidding for projects has always been a fairly straightforward equation that involves some math, some guesswork and often a stubborn adherence to “the way we’ve always done it.” Back in the go-go days when times were flush and work flowed, these formulas seemed to work well enough. Jobs came in, crews remained busy and there were profits to show for it at the end of the day. Over the last several years, however, the industry’s prolonged downturn has forced closer examination of these business practices. Competition for work has been the fiercest in a generation. Business owners have struggled to find new opportunities to fill their project pipelines. And when bids are lost, those in charge of estimating jobs may wonder why the old methods no longer seem to be working. Successful bidding comes down to a clear understanding of a few important variables – costs (both fixed and variable), overhead, and a company’s true break-even point. In this first installment of a two-part series, we’ll examine the concept of “mixed costs” and their role in producing more accurate bids. Traditionally, “cost” has been defined as the sum total of fixed and variable expenses required to complete a project. But a third kind of expense, called a “mixed cost,” is one that is neither totally fixed nor totally variable. This hybrid category is not simply a matter of semantics, but rather a key component in a contractor’s overhead – a component that, once understood and mastered, can help you win more of the jobs that are worth winning. In an ideal world of purely fixed and variable costs, profits are made once you pass your breakeven point. Table 1 shows two sales scenarios. Materials and direct labor are variable costs, because they vary proportionally to the jobs or sales in hand. Indirect labor and other overhead are fixed Sal Falzone, CPA, is a partner in the Boston area accounting and business advisory firm Rucci, Bardaro & Barrett PC, whose Construction Business Services Group offers business, financial and strategic planning advice to companies in transition. He can be reached at (781) 321-6065 or firstname.lastname@example.org.
Table 1 Sales
$1,000,000 100% $2,000,000 100%
Variable costs Materials
Contribution to overhead
costs, because they are incurred no matter how slow or busy you are throughout the year. When comparing the two sales scenarios, note that the percentage of variable costs to sales remains the same, while the dollar values of fixed costs to sales also remain the same. Clearly, the $2 million sales scenario highlights the advantage of these fixed costs. With sales significantly above break-even, a profit is produced that is equal to the contribution to overhead (your sales minus your variable costs) of 45 percent (100 percent less 55 percent), once you go above your break-even sales level of $1 million ($450,000 equals 45 percent of the sales above break-even). Table 2 shows a more real-world picture where mixed costs come into play. Here, we have re-categorized 50 percent of the owner’s theoretical $100,000 salary from indirect to direct labor, to account for the fact that half of his time is actually spent in the field managing the work of specific projects. Comparing Tables 1 and 2 shows how easy it is to be fooled by the numbers, even though we know that simply moving a cost from one line to another would not affect profitability. But it does raise several important questions. Does your current estimating process accurately account for
Cost of materials 200,000
1,000,000 100% 880,000
your company’s real-world costs? Would fine-tuning the process give you a better handle on your expenses and your true break-even point? And, would this understanding lead to more accurate – and ultimately more successful – project bids on jobs that are worth winning? Now let’s consider a scenario that many contractors have grown uncomfortably familiar with – a decrease in sales. In Table 3 we see that our direct labor costs have increased as a percentage, not because of added workers, but because sales volume has declined. Without adjusting the company workforce, direct labor costs actually increased as a percentage of sales by 25 percent (from 40 percent to 50 percent) while sales dropped by 20 percent and direct labor costs remained the same. This multiplier effect shows how critically important it is to understand and monitor the true, real-
$1,000,000 100% $800,000 100% $800,000 100%
$ (80,000) -10% $(160,000) -20%
world costs of doing business, to allocate them appropriately between fixed, variable and mixed costs, and to react nimbly with proper adjustments to the company’s expense centers, especially in the area of labor costs. Unfortunately, too many business owners fail to realize the impact that fewer direct (i.e., project generated) labor hours has on their company’s fixed overhead. Others may recognize it, but aren’t sure what to do about it. In Part Two of this series, we will delve further into the importance of accurately determining breakeven, setting realistic profit margin and factoring these numbers into bids that will win future business. s
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The Professional Contractor
ANNUAL GOLF TOURNAMENT
ASM’s Day of Golf, Scholarships and Celebration ASM 16th Annual Golf Tournament
hat a day! The 16th annual ASM Golf Tournament held at Pinehills Golf Club in Plymouth on July 25 was a great success. The weather held out as a record number of golfers turned out to enjoy a truly spectacular day! Golfers enjoyed two luxury golf courses, designed by Rees Jones and Nicklaus Design, complemented by an old fashioned barbeque lunch and dinner. Guests also enjoyed many festivities including contests, prizes and more. The day also paid tribute to retired Rep. David Flynn of Bridgewater, who was awarded the Legislative Lifetime Achievement Award for his role as the leading advocate for ASM’s Prompt Pay Bill (now the Prompt Pay Law). The bill was front and center for Flynn during his last session in the legislature. It was our pleasure to honor Flynn for his remarkable service. Also honored at the event were the winners of the 2011 ASM Scholarship Awards. Proceeds from the event support the scholarship awards. Winners were presented with a certificate and a scholarship check for $2,000. Many thanks go out to Steve Kenney and the golf committee for an extraordinary job well done this year. The committee faced many challenges and rose to the occasion with record numbers of participants and sponsors.
ASM Presents 2011 Scholarship Awards ASM is proud to present each of this year’s three lucky winners with a $2,000 ASM Scholarship Award for excellence in academic achievement. Congratulations to the 2011 winners: Nathan Kingston, sponsored by East10
ern Insurance, Nicole Fontes, sponsored by ENE Systems and Nolan Schmidlein, sponsored by Architectural Paving & Stone, Inc. All three students have demonstrated outstanding academic, extra-curricular and civic achievements and exemplify superior commitment to their communities. Kingston has been accepted to Brown University, where he plans to major in chemistry, and Fontes will be attending Boston College in the fall, where she will pursue a history and sociology career. Schmidlein will begin his career as a premed major at Fairfield University. Congratulations and best wishes to all the winners as they pursue their education and future careers!
ASM Presents Rep. David Flynn with the Legislative Lifetime Achievement Award State Rep. David L. Flynn of Bridgewater has worn many hats – from Navy veteran to Golden Globe Fighter to Dean of the House – and donned many titles throughout his career. On July 25 at the ASM 16th annual Golf Tournament, a new title was bestowed upon him – Legislative Lifetime Achievement Honoree. Flynn, sponsor and House champion of ASM’s Prompt Pay Law, last year made passage of the bill his final mission before retiring from the Massachusetts’ House of Representatives. Throughout the process he remained a true diplomat, bestowing credit on many parties for the ultimate success of the bill. It is little surprise that Flynn has often been referred to as “an old-school politician,” putting the needs of his constituents and others first.
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THIRD PLACE NET TEAM EASTERN INSURANCE
Flynn applied the same unwavering dedication to the construction industry prior to his departure from government service. He was an adamant advocate for badly needed funding for rapidly deteriorating infrastructure in the region. Realizing the particular challenges that deteriorating infrastructure would pose in the future, Flynn fought for – and won – emergency funding for failing infrastructure including Bridgewater-Raynham high school. ASM is proud to present Rep. David Flynn with this distinguished award in recognition of his dedication and service to his constituents and to subcontractors across the commonwealth. We could not think of a more appropriate venue to present this award than the 2011 Golf Tournament. It was at last year’s tournament where members first learned the Prompt Pay Law had cleared major hurdles and was ready for passage. On the first year anniversary of the new law, ASM extends Rep. Flynn our sincere appreciation, and our best wishes as he begins the next chapter of his colorful career. s
Protection starts here
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Serving the Bonding and Insurance needs of the N.E. construction industry for over 35 years. Ad a m De Sa n c t i s Gre g o r y Ju w a Ja m e s A xo n Mi c h a e l Ca rn e y Wi l d e r Pa rk s Mi c h a e l Gi l b e r t Br y a n Ju w a Da v i d B o u t i e t t e Pa u l Pa t a l a n o Dick Caruso DeSanctis Insurance Agency, Inc. 36 Cummings Park Woburn, MA 01801 (781) 935-8480 www.desanctisins.com
The Professional Contractor
ANNUAL GOLF TOURNAMENT
1 2 3 4 5
So close to a $50,000 hole-in-one. Scholarship winners and families enjoy the evening. A happy foursome from Griffin Electric. Committee Chair Steve Kenney happy it’s a hit! Getting warmed up! Fall 2011
6 ASM President David Cannistraro and 7 Looking for that winning raffle ticket! 8 What’s our next move? 9 Team Cape Cod Plastering. 10 Golfing on a beautiful day.
11 Serving up lunch on the patio. 12 Relaxing before dinner. 13 Southeastern Metal team is proud 14 Happy volunteers! 15 Success! On to the next tee.
to play (and pose).
16 Golfers and volunteers. 17 Now this is how you stay cool! 18 Enterprise Fleet Management taking 19 Having a good time!
advantage of a photo-op.
The Professional Contractor
THANKS TO THE SPONSORS OF THE GOLF & SCHOLARSHIP EVENT! Cross Insurance Wakefield Wind Shirt
J.C. Cannistraro, LLC Dinner
Acadia Insurance Company Dinner
U-S-I New England Reception
Energy Insulation Lunch
Aon Putting Green
Enterprise Fleet Management
Milwaukee Valve Company
Closest to the Pin
Greater Boston NECA
N.B. Kenney Co.
Rees Jones Course Banner
Corwin & Corwin
PHCC of Greater Boston
Nicklaus Course Banner
Closest to the Pin
The Protector Group
Hole in One Insurance
Pro Tool & Supply
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Colony Hardware Practice Tee
McGladrey Scholarships & Raffle
Robert W. Irvine Company
Royal Steam Heater Scholarships
Skillings Shaw & Associates Score Cards
Siemens Industry Score Cards
Southeastern Metal Fabricators, Inc.
Victaulic Golf Balls
Wayne J. Griffin Electric Golf Carts
William F. Lynch Co. Scholarships
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Closest to the Pin & Scholarships
A & A Window Products, Inc. Alfieri-Proctor Assoc., Inc. AR Jensen Atlantic Contracting & Specialties Boston Air Systems, Inc. Brite Lite Electric Co., Inc. Building Trades Employers Association C/F Data Systems LLC Chandler Architectural Products Inc. Cheviot Corporation, The Delaney & Associates DeSanctis Insurance Agency, Inc. E. Amanti and Sons Inc. E.H. Marchant Co., Inc. E.M. Duggan, Inc. Emerson Swan Empire Masonry Corp. Equipment Direct Sales Inc. Excel HVAC Fall River Electrical Associates, Co., Inc. Fluid Industrial Associates Front Line Inc. HTS Engineering Harry Grodsky and Co. Inc. Independent Pipe and Supply Corp. Insulated Piping Systems J & M Brown Company Inc.
J.C. Cannistraro, LLC J.F. Shine Mechanical, Inc. J.M. Electrical Co., Inc. Johnson Controls LAN-TEL Communications, Inc. Leasing Associates, Inc. M.L. McDonald Sales Co. Inc. Manganaro Northeast, LLC McGladrey N. B. Kenney Co. Inc. N.E. Mechanical Contractors Assn., Inc. R.H. Keleher Co., Inc. Salem Glass Company Stafford Construction Services, Inc. Stebbins-Duffy, Inc. Stephenson and Brook Triboro Crane & Rigging United Rentals Vibra-Conn Inc. Victaulic Co. of America Viking Controls, Inc. W.A. O’Leary & Sons, Inc. Walsh Mechanical Wayne J. Griffin Electric Inc. William F. Lynch Co. Inc. Worcester Air Conditioning Yankee Technology
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The Professional Contractor
PROJECTS IN THE PIPELINE SIGNAL A TENTATIVE INDUSTRY REVIVAL
BY JAY FITZGERALD
A slew of new development projects across the state are raising hopes that the commercial construction industry is now in the early stages of a recovery. Make no mistake: There’s definitely no building boom underway. The Filene’s Basement site remains an undisturbed hole in the middle of Boston’s Downtown Crossing, and Harvard University’s mammoth life-sciences development project in Allston is still effectively in mothballs. Both projects, as well as scores of others across the state, ground to a halt soon after the financial crisis hit in 2008. But last month industry and political leaders officially broke ground on a new Fan Pier headquarters building for Vertex Pharmaceuticals in Boston.
In Somerville, developers are getting ready for an expected resumption of construction work on Somerville’s massive Assembly Square project. And other development projects are now moving through various zoning and permitting pipelines, as credit markets ease up a bit and Massachusetts’ economic recovery continues to outperform the nation’s economy. Following are some of the projects tentatively poised to start later this year or next year, assuming they get final approvals and assuming large financial backers don’t get spooked by today’s shaky economic times.
Sharon Commons, Sharon First proposed in 2007, the Congress Group’s Sharon Commons was initially envisioned as a new “lifestyle center,” similar to the $200 million Legacy Place development in Dedham. Legacy Place, which opened two years ago, has
Now it plans to push a more straight-forward retail, services and restaurant project – with BJ’s Wholesale Club and Target anchoring the future 450,000-square-foot complex. Sharon Commons is now in the middle of its permitting process, but, if all goes well, construction could conceivably start later this year or, more likely, next year. No subcontractors have been lined up yet, Kershaw said. But he did note that a distinctive characteristic of the site will be a new half-mile long road to get in and out of the complex, requiring extensive street, water and utilities work for potential subcontractors. Right now, there’s only a dirt road to the site along I-95. “Everything will be brand new,” said Kershaw of construction at the 50-acre property.
FM Global, Norwood
deliberately created a more quaint, “Main Street” atmosphere for its open-air shopping, dining and entertainment complex, complete with old-fashioned street lamps and brick-lined sidewalks. But the original plan for Sharon Commons, located 19 miles southeast of Boston in the heart of the Interstate 95 south-suburban corridor, came to a screeching halt during the Great Recession. Richard Kershaw, an executive at the Congress Group, said developers used the down time during the recession to re-evaluate whether the “lifestyle center” concept would actually work in Sharon. “Before the recession, the market was hot for lifestyle centers,” said Kershaw. “Unfortunately, the recession came and we lost 50 percent of our [signed up] retailers.” Congress Group ultimately came to the conclusion that the proposed site for Sharon Commons was not densely populated enough to support a life-style center, so it redesigned the project.
FM Global, one of the nation’s largest businessproperty insurers, already has a small campus along Route 1 in Norwood, but it’s planning to build a new 160,000-square-foot office facility in order to further consolidate its Massachusetts operations. The project, which could start this fall, will eventually lead to relocation of nearly 200 FM Global employees who currently work at 500 River Ridge Drive in Norwood to the new $40 million, four-story building. The new facility will be next to FM Global’s engineering and research offices at 1151 BostonProvidence Turnpike (Route 1), according to the company. “We’re basically taking an underutilized parking lot and constructing a new building on it,” said Steve Zenofsky, an assistant vice president at FM Global. “We’ll get all the efficiencies of having all of our employees on one campus.” Of interest to contractors, the new building’s most distinctive feature is that it’s going to be a LEED-certified office facility, the town of Norwood’s first. The new building will be designed, constructed and operated as a high-performance green building and is expected to earn a silver LEED certification from the U.S. Green Building Council, the company says. FM Global is already working with Hobbs Brook Management LLC of Waltham, Margulies Perruzzi Architects of Boston, A|H|A Consulting Engineers of Lexington and Kelly Engineering Group, Inc. of Braintree on finalizing the design of the new building.
The Professional Contractor
LEFT TO RIGHT: FM GLOBAL OFFICE FACILITY, NORWOOD; TWO VIEWS OF SHARON COMMONS, SHARON; 1282 BOYLSTON STREET MIXED-USE DEVELOPMENT.
Besides using cutting-edge materials, Zenofsky said the building will also contain eating areas for employees and other working amenities. Construction of the building is expected to be completed by 2013.
1282 Boylston Street, Boston A planned 16-story, 330,000-square-foot mixeduse building at 1282 Boylston Street in Boston is yet another project that will make heavy use of environmentally friendly materials and construction standards. The Abbey Group, which is pushing the project, is known for its extensive work in the Fenway neighborhood, including the nearby Landmark 11-0234 Boston Cedar_Layout 7/11/11 11:10 AM Page 1projects. Center1 and Landmark Square
For its latest Fenway-area venture, David Epstein, chief executive of the Abbey Group, said his company will transform what is now a parking lot (it used to have a McDonald’s restaurant on it) into 210 apartments, 99,000 square feet of office, 15,000 square feet of retail and 295 underground parking spaces. To meet strict environmental standards, Abbey Group will need “a variety of subcontractors” with experience in terracotta tiling, curtain walls, rain screen facades and other features for the exterior of the building, Epstein said. The interior will have an eclectic combination of residential, office and retail space, all constructed to high environmental standards, he said. While Abbey Group hasn’t yet gotten all its
permits for 1282 Boylston, its successful track record indicates that the city is generally favorable toward Abbey-led projects. Besides the Landmark projects, Abbey Group also developed 45 Province Place near Downtown Crossing. “It sort of fits into the urban village concept, with lot of active street life,” Epstein said of his company’s latest project in the Fenway. If all goes well, the project could conceivably start later this fall or, more likely, next year. It will take about 20 months to complete.
Government Center Garage, Boston A wide variety of contractors and subcontractors could be kept busy for years if HYM Investment Group gets approval to fully redevelop the giant Government Center Garage in the Haymarket area of downtown Boston. HYM Investment, which owns the current 2,100car garage and offices on top, hopes to eventually construct four buildings containing about 3 million square feet of housing, offices, retail shops, a hotel and parking. Conceivably, construction of the first phase of the project – 340 housing units in a 38-story tower – could start toward the end of 2012, said Tom O’Brien, managing director at HYM Investment. The second phase will include a 37-story residential tower. The third phase will entail building a 40-story office complex. And the fourth phase calls for retail space and a hotel, running along Congress Street, near the new Rose Kennedy Greenway. The project will include extensive steel construction to support all four buildings, requiring heavy steel fabricators and steel erecters, O’Brien said. “It will be a great project for ironworkers,” said O’Brien, the former head of the Boston Redevelopment Authority. A previous proposal to develop the Government Center Garage went down in flames due to concerns about its size and shadows over the greenway and North End. “We’ve shrunk the proposal down quite a lot, by
about 30 percent in volume,” he said. HYM will file its official plan for the site this September, with the goal of winning approvals by the first half of next year. The NEBF Pension Fund and Brittania Pacific are partners in the HYM venture. “Financing is all lined up,” he said. “We have two strong partners involved.”
UMass-Amherst Meanwhile, colleges and universities continue to build. Non-commercial projects such as these tend to even out the economic hills and gulleys of the industry, so it’s fitting that there’s a continuing run of construction activity in the Pioneer Valley in the western part of the state. In Amherst, the UMass-Amherst campus has more than 50 projects estimated to be bid from fall 2011 through December 2012, ranging in size from $300,000 to $85 million. Contractors wishing to bid must be DCAM-certified. The largest project reported by the Facilities Planning department is a new academic classroom building, a construction manager at risk project managed by the Division of Capital Asset Management, at $85 million; a $15 million upgrade of the DuBois Library to address deferred maintenance, plumbing and fire suppression, and an electrical service upgrade for the library estimated at $8.4 million; dining common renovations at $10 million; and fire suppression projects at the Emerson, James, Melville and Thoreau houses at $4.9 million. Other projects include laboratory renovations at the Morrill Science Center, and roof, parapet and masonry work at the McNamara House. UMass-Amherst advises contractors to visit the Central Register or university website at www.umass.edu/fp URL for more information on pending projects. s
Jay Fitzgerald is a freelance writer. Christina P. O’Neill contributed reporting to this article. She is custom publications editor for The Warren Group, publisher of The Professional Contractor.
The Professional Contractor
BY GARRETT BURKE
Safety Prequalification a Critical Element in Bidding Success
he human and financial cost of construction accidents is staggering. The U.S. Commerce Department estimates that the total cost of construction accidents is over $1 trillion annually. With incidents like the crane collapse in New York City and the Big Dig issues here in Boston, it is easy to see how the costs can escalate. OSHA has reported that one in 10 construction workers are injured on the job each year. On average there are 1,000 deaths
Garrett Burke is the chief operating officer of ConstructSecure, www.constructsecure.com. A certified safety professional, he was formerly associate director of Harvard Universityâ€™s EH&S Department, and is currently an instructor at the Harvard School of Public Health.
each year and over 150,000 incidents. With tight budgets and tight margins, owners, construction managers, general contractors and subcontractors are looking for ways to improve safety, reduce the human and financial costs of accidents and maintain their reputations. This awareness becomes particularly acute with owner or contractor controlled insurance programs. These programs are designed to improve costs but put more risk in the hands of owners or general contractors. With this industry background, ConstructSecure began as a program initiated by the Environmental Health and Safety Department (EH&S) at Harvard University. EH&S was looking at the most effective ways to reduce the cost of accidents, incidents and project delays. After careful research of industry best
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practices, EH&S found that there were certain parameters that were more effective than simply using the experience modification rating (EMR) in predicting the safety performance of contractors. The ConstructSecure process uses EMR as one of many factors. Harvard has demonstrated the substantial positive effect of the program on costs and delays and has sought to patent the technology and methodology of the process. Because of the success, and potential benefit to the industry as a whole, Harvard has also sought to make the service commercially available. ConstructSecure has obtained an exclusive license to the intellectual property rights and has commercialized the service. ConstructSecure provides online software as a service capability for safety evaluation and prequalification for contractors in the non-residential area of the construction industry. The evaluation includes both historical experience and forward-looking factors in training and safety programs. The goal of the service is to provide critical information to general contractors and owners for their use in the selection of subcontractors, and to provide subcontractors with the ability to do one rigorous prequalification. Subcontractors can use that information for multiple bids, thereby saving considerable time and effort in the prequal process. ConstructSecure also seeks to improve overall safety performance by providing guidance and feedback to the subcontractors on the effectiveness of their programs, and the areas for potential improvement. The service provides a complete online data repository for the information. The information is available to both the subcontractor and, with the permission of the subcontractor, to the owner and general contractor programs of ConstructSecure. Currently ConstructSecure has many national and large regional owners and general contractors using the program for prequalification. A subcontractor or general contractor who completes the program can also download a certificate of completion with the score. This can be used with all bids and can be provided to
their insurance company for possible discounts for excellent performance in an independent evaluation.
Construction Safety Assessment Program The Construction Safety Assessment Program (CSAP) is the primary service offering of ConstructSecure. The CSAP service begins with a request for information from a construction contractor. The information includes the company’s historical safety data, a set of proprietary questions and a review of the contractor’s safety and training programs, all done online. Because the service is provided as a web-based offering, the feedback is virtually instantaneous. The value to subcontractors includes: Independent assessment of your company’s safety program. The assessment determines the program’s strengths and weakness and allows you to make changes at any time. Premiere contractor list is published daily that lists all contractors that score 85 or better. The award that accompanies the Premiere designation is a powerful marketing and bidding tool. Potential insurance discounts on Workers Compensation and General Liability policies for contractors with strong scores. Access to qualified contractor lists of Fortune 100 companies such as Intel and PepsiCo. Your company can appear on their list of contractors with one check of a box. Warehouse safety program information in one location that is accessible from anywhere you have an internet connection. Monthly safety webinars at no additional charge. Learn the best practices for implementing construction safety and changing the safety culture of your organization. The ConstructSecure service is a highly effective and cost-efficient means to pre-qualify contractors for safety performance. With experience in both construction safety and software systems, ConstructSecure can tailor a service to meet the needs of any project or program, in consultation with general contractors and owners. s
Beacon Hill Spotlight continued from 6
couple of times, and one side or the other couldn’t reach agreement, but they sat down, had some tough negotiations and got the bill passed.” One of the most significant legislative achievements Murray has witnessed was passing a budget in light of the difficult economy. “Massachusetts joined every state in facing a huge deficit this year. Getting the [fiscal year 2012] budget passed, in light of a $1.9 billion deficit, was a herculean effort,” she says. Murray remains optimistic about the state’s economic rebound, however, and sees continued improvements in terms of building, new businesses and growth. “Check the Boston papers – you’ll see building going on in the Seaport district, in Weymouth. People are going back to work. New businesses are moving into Cambridge, the Route 128 belt, and Plymouth,” she said. “We’re attracting interest from overseas in our life sciences and high tech opportunities. Massachusetts is much better off than many other states.” Pointing to recent measures such as the Economic Development Bill, which passed in July 2010, Murray feels the state today has a much more coordinated and cohesive process to address growth and development. The new law was designed to help small businesses access new capital, and to re-structure the state’s economic development model by streamlining redundant agencies. A key point was the extension of issued permits for any developer unable to proceed with their project because of tight credit markets. “States and towns have permitted sites ready to go, which means building will move along much more quickly,” she said. As the state continues to rebound economically, Murray feels its many assets will help it continue to thrive. “Education and quality of life are two of the major factors that drive people to Massachusetts,” she said. “We can compete right along with any other state.”s The Professional Contractor
BY GORDON PLUTSKY
Social Media for Subcontractors
any subcontractors are trying to decide if a social media presence and strategy is right for their business. This article will provide some background on social media platforms and a few tips to get started in the right direction. Social media are digital tools and web-based platforms that let people share information and network with each other. For companies, social media is a direct channel to engage with customers, prospects and employees. It is best used for conversations, listening and sharing/posting news and other content. The best known sites are Facebook, Twitter and LinkedIn. We’ll discuss each of the platforms below and how you can use them to help your business. Before delving into the details, let’s look at why subcontractors should be considering social media. Social media can enhance your appearance to the market and customer – current and prospective. You can build brand awareness and project an image of being forward looking and technologically advanced. It can be a direct line to customers to generate feedback and listen to what the market thinks about your company. Social media can be a
Gordon Plutsky is the director of marketing and research for King Fish Media in Boston. He can be reached at gplutsky@ kingfishmedia.com or (978) 832-1485.
conduit to educate customers about your company and your unique skills and experience. And, don’t underestimate it as a way to find talented new employees as a recruitment tool. However, one of the most important reasons to consider social media is, that is where more and more consumers and business decision makers are spending their time. More than half of all Americans (ages 12 and over) have a profile on one or more social media sites. Roughly 46 million Americans (12 and over) now check social media sites several times a day. And they are just not talking to friends – one in four social media users follow brands, products and services. That number rises to 43 percent among frequent users. In other words, you may be more likely to find a customer on social media than with mass media or traditional advertising methods.
Platforms Facebook: 52 percent of all Americans have an account and spend an average of 25 minutes per day on Facebook. Additionally, it is growing quickly among people over 45. In fact, the 55-64 group is as active as the 13-17 group, so it just not for the young. Over half the population of Massachusetts (3.59 million) has an active Facebook account. You can get started on Facebook by creating a personal account and following companies you’d like to follow. Check out pages for local construction management firms, competitors and local governments/elected officials to keep in the know for upcoming projects and jobs. Once you feel comfortable, you can create a fan page for your company. On this page, you can accept “fans” who want to engage and follow your company. On the page you should post news and content of interest to customers and prospects. It’s your opportunity to become a thought leader by sharing content and information of worth and value to your customers. Fan pages are also great places to post pictures and videos of your complete work. Sometimes it is better to show than tell when you want to demonstrate your ability. Twitter: Now has more than 175 million users, worldwide. It is a more targeted, older and affluent audience as only 7 percent of Americans are on Twitter versus 52 percent for Facebook. The inter-
esting thing about Twitter is that users are more likely to follow brands and companies. This is an opportunity for subcontractors to follow construction companies, competitors, local governments/politicians and local companies who are potential clients. The more intelligence and data you can gather about customers and competitors, the greater business advantage you will gain. Just like Facebook, this is a channel for you to push out news and information about your company. Also, it is a way to connect with local media to tell your story as part of a public relations campaign. LinkedIn: Now has over 100 million users and recently went public with a notable IPO. There are over 3 million users from the construction industry registered. Think of this as a giant electronic rolodex of business contacts and possible customers. You can join groups that have been set up by the large construction management companies to learn what they are doing. Also, you can ask colleagues you have as a “connection” to introduce you to people you may want to meet. LinkedIn has become one of the leading recruitment sites and is a great place to find and hire new talent. If social media is new for you, there are a few steps you can take to get started. First, claim your company or personal name and handle by setting up a Facebook fan page and Twitter account, and set up a LinkedIn account in your name. When you first wade into social media, it is best to listen to the conversation and soak in what people are talking about. Start off by following and reading about the construction companies you want to do business with as a subcontractor. You may learn about new projects that will be coming up for bid. Eventually you can begin to post your own information and content. This helps position you as an expert and thought leader. When potential customers and partners see you as an expert, they are more likely to want to hire you. The greatest benefit of social media is the ability to build relationships with current and prospective customers. If your goal is to listen and speak to customers, then social media can be a significant benefit to your business. s
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The Professional Contractor
BY CAROLYN M. FRANCISCO, ESQ. AND MICHAEL T. MULLALY, ESQ.
Massachusetts’ Revised Homestead Act Provides Greater Protection for Homeowners
ike many states, Massachusetts has long had a homestead act – a law that allows homeowners to protect their primary residence from certain creditors. Significant changes in the Massachusetts Homestead Act (GL c. 188) took effect on March 16, 2011. These changes expanded the protections available to Massachusetts homeowners. The Homestead Act, which dates back to 1851, creates a special property interest in one’s principal residence. This interest, known as a homestead, protects the residence against attachment, seizure, execution upon judgment, levy or sale for the payment of certain debts. Under the revised statute, as before, a homeowner may create a homestead by recording, at the appropriate registry, a “declaration of homestead” that meets all legal requirements. (These requirements, as well as forms that will satisfy them in most cases, are available online from the Registry of Deeds at www.sec.state.ma.us/rod/rodhom/homidx.htm.) The revised statute preserves the validity of homesteads created under the old law, but provides that their amount and effect are determined by the revised law.
Standard Declaration The homestead law recognizes two types of homestead declarations. The first type, a standard declaration, is available to all owners. A standard declaration protects the equity in an owner’s principal residence to the extent of up to $500,000. This is one of the largest homestead exemptions in the United States. If a home is owned by two individuals as “joint tenants” or “tenants by the entirety” (available for married persons), the homestead exemption remains whole and unallocated, for a maximum protection Carolyn M. Francisco is a partner and Michael T. Mullaly is an associate at Corwin & Corwin LLP, one of the oldest law firms in New England, dedicated solely to construction law, and counsel to ASM since 1950. They can be reached at email@example.com or firstname.lastname@example.org, or at (617) 742-3420.
of $500,000 for the residence. The second type, a special declaration, is available only to owners who are at least 62 years old or who meet the disability requirements for receipt of federal Supplemental Security Income. A special declaration protects the equity in an owner’s principal residence to the extent of $500,000. If the home is owned by two persons who qualify for elderly or disabled homestead protection, each enjoys the $500,000 exemption, for a total protection on the residence of $1,000,000. In circumstances where there are multiple owners, the revised statute permits some owners to record standard declarations and other, eligible owners to record special declarations. A major change in the homestead law is the creation of an automatic homestead. No declaration is required for an automatic homestead, which the revised law creates on all principal residences for which no declaration is in effect. The automatic homestead protects the equity in an owner’s principal residence to the extent of up to $125,000. The maximum individual amount protected will vary where there are multiple owners. In addition to this change, the revised statute also makes homestead protections available to those who own their principal residence through a trust, applies temporary homestead protections to the sale or insurance proceeds of a principal residence, and permits certain declarations to “relate back” to the date of prior declarations and thereby maintain priority over intervening recorded liens. Automatic homesteads and homesteads created by a standard declaration can sometimes create independent homestead protections for non-owners who have the right to use, occupy and enjoy the home as a principal residence. These independent, non-owner protections, which survive both divorce and the owner’s death, are automatically extended to an owner’s spouse, as well as to all minor children (aged 21 or under) of the owner and/or the owner’s spouse, who reside principally in the home.
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Special Declaration Homesteads created by a special declaration, by contrast, are personal to a particular owner and immediately terminate when, for example, that individual dies. Such homesteads alone do not afford adequate protection to minor children or to a spouse. From a creditor’s perspective, agreements to waive the protections of the automatic homestead are strictly limited, and mortgages not executed by all owners of a home are subject to the homesteads of the non-signing owner(s). There are, however, certain debts against which a homestead provides no protection. These include: federal, state and local taxes, assessments, claims and liens; a lien on the home recorded prior to the creation of the homestead; in general, a mortgage on the home; a court order for the payment of support of a spouse, former spouse or minor child; an execution from a court to enforce a judgment based on fraud, mistake, duress, undue influence or lack of capacity; and ground rent in cases where a building used as a principal residence is owned but the land on which the building is located is leased. Homes are not shielded from creditors who are owed these debts. Also, a homestead may be declared only on a principal residence. Thus, while a person may have multiple residences, the declaration may be made only on one’s primary dwelling. For many people their home is their greatest single asset. The Massachusetts homestead law provides valuable protections for homeowners, which may be especially needed in these difficult economic times. s
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The Professional Contractor
BY DIANE HAINES
Cloud Computing and the Construction Industry
What is Cloud Computing, and What Can it Do for Me? Cloud computing and the construction industry
eing “in the cloud” is the latest catchphrase in technology discussions, but the term has many definitions. According to some, it refers to virtual servers that allow users to access stored data via an internet connection. Providing access in this manner is frequently referred to as using cloud-based or web-based services. Others expand the cloud to include any application used outside of a company’s firewall. As InfoWorld magazine has noted, moving to the cloud can mean anything from increasing data capacity without having to invest in additional infrastructure to licensing new cloud-based software. This can further be expanded to include the use of mobile devices such as smart phones, such as a Blackberry or iPhone, or tablets, such as an iPad. Diane Haines is the director of strategic marketing for Sage Construction and Real Estate, which is a division of Sage Business Solutions (SBS). She can be reached at diane.haines@ sage.com or 503-439-5191.
But how does this relate to the construction industry? The construction industry balances back office functions – billing, paying invoices, running financial reports, payroll, planning logistics, etc. – with the physical presence needed on the job site or in a client’s office. Today’s technological solutions must be able to serve users in both work settings. As a result, making mission critical business applications available remotely is a hot topic these days. Remote access allows staff to work from any location without being tied to a specific physical location. With the amount of consolidation, decentralization of offices, travel-based positions, and project work being done in different regions of the country or even internationally, being able to offer solid remote access technology to employees is critical for a construction company’s success. For many companies, solving this challenge may mean moving some of its applications to the cloud. One construction company, True Value Homes (TVH), is able to give any employee with proper credentials access to these applications through a secure, web-based environment. Before the move, TVH was running operations on 17 sites, and employees could only work in the office, so all papers needed to be brought into the central office for processing and approval. Whereas TVH once had 100 personal computers for 100 employees, now 500 users can access its web-based applications from any computer. “We want to make sure that our employees get the best out of their workplace,” said Arun Nehru, TVH’s director. “What we are telling employees is that [wherever you need to work], the applications are available from office, home or outside. They need not come to [the] office to work.”
Collaboration between contractors, owners/clients Leveraging cloud-based services also extends beyond the workings of a single construction
company. As Constructech’s 2011 IT survey notes, “today’s construction professional also needs to be highly collaborative. The word ‘team’ has taken on a whole new meaning in the construction industry. Every team needs to obtain a high level of transparency and accountability for the property owner. Overall, construction companies will be more collaborative, using technology to connect all project team members – from subs to general contractors to owners – in one central location.” Yet it is highly unlikely that each of the project team members utilizes the same back office business management applications. So, as general contractors, subcontractors and owners individually look to the web to leverage capabilities, it will be critical to look at ways that technology can ensure the secure and timely exchange of project information between them.
bility, today’s business management solutions need to support the highly mobile workforce of the construction industry today and into the future.
Leveraging today’s technology for the future Does that mean that your con-
struction company needs to scrap everything it’s using today for new cloud-based applications? In today’s economy, many companies are looking more towards extending the applications that they are using today into the cloud, where it makes the most sense to do so. s
Mobility As noted by Constructech’s survey, contractors will take project information “out to the jobsite with mobile devices, as well as applying a host of applications on these mobile devices.” As the survey reports, construction companies are reporting from the field as well as “carrying out project management, scheduling, punchlists and time tracking tasks in the field today.” This is evidenced by the growing momentum in the use of mobile technologies in the construction industry. Yet the type of device varies as much as the job sites do. According to the survey, “the smart phone is still one of the most commonly used devices at the jobsite (81 percent of survey respondents). Laptops (69 percent) and tablets (26 percent) also receive a significant response.” Given the advances in and adoption of tablets such as Apple’s iPad over the past few years, growth is anticipated in the use of the tablet in the construction industry as well. Given the fast moving area of mo
The Professional Contractor
RIGHT: Lynne McKenney-Lydick in costume as Frances Perkins, the groundbreaking new deal labor secretary (and Worcester native); Averil Capers of Worcester Telegram & Gazette; Susan Mailman of Coghlin Electrical Contractors; Ambassador Swanee Hunt; motivational speaker Colette Carlson; author Mary Ellen Geist and Cindy Skowyra of the chamber.
Coghlin Electrical Contractors (Worcester) was a proud sponsor of the second annual all-day Worcester Womenâ€™s Conference, presented at the DCE Center on June 3 by the Worcester Regional Chamber of Commerce. Coghlin President Susan Mailman was chair of the conference, which featured three keynote presentations, multiple breakouts, and more than 50 exhibitors, all with a goal of promoting leadership, life balance and making a difference. More than 150 professionals attended from across the region.
2011 Ernest Wiemann Top Job Competition Category O: Restoration
Gold Award DeAngelis Iron Work Inc. 2011 Ernest Wiemann Top Job Competition Category O: Restoration
Gold Award DeAngelis Iron Work Inc.
National Ornamental & Miscellaneous Metals Association
2011 Ernest Wiemann Top Job Competition DeAngelis Iron Work Inc. (South Easton) recently announced that they are the recipient of two awards National Ornamental
Category O: Restoration for outstanding craftsmanship in an international competition sponsored by the National Ornamental & Miscellaneous & Miscellaneous Metals for forged gates and Gold Association Award (NOMMA). They received the silver award Metals Association doors (see photo) and the gold award for restoration for their work on the Copley T station in Boston. DeAngelis Iron Work Inc. The awards recognized outstanding work in the ornamental metals industry and represent the voice of approval from industry peers.
Marr Companies (Boston) announced the appointment of Eric Stalmon as safety director. Stalmon joined Marr in 2008 as safety representative, and has now assumed responsibility for implementing the companyâ€™s wide-ranging safety program for all five Marr entities: Marr Scaffolding Company, Daniel Marr & Son Company, Marr Equipment Corporation, Marr Rigging Company and Isaac Blair & Co., Inc.
McGladrey (Boston) is pleased to announce that the first McGladrey Foundation Charity Golf Event raised more than $150,000 to benefit local charities. Hosted in June, the Charity Golf Event raised money to help support Special Olympics Massachusetts and its year-round sports training, athletic completion and other related programming for more than 12,000 athletes with intellectual disabilities. Funds will also support the education, leadership, recreation and core initiatives of the Boys & Girls Clubs of Boston.
Modulease (Attleborough) is proud to have recently completed the Norton Water Department Executive Space. This handicap-accessible building consists of three modules, which include a conference/meeting room with storage, administrative offices and a kitchen/lunchroom, for a combined total of 2,160 square feet of office space. Familyowned and operated, Modulease has been providing modular buildings, office trailers and storage office space for more than 20 years.
Pavilion Floors (Woburn) has recently launched a new seminar series in partnership with Creative Office Pavilion, one of Eastern New England’s largest office planning and furnishing companies. The seminar series covers the latest products, services and trends in the workplace, from floor covering to asset inventory management, to office space design, and is available at no cost to design, facilities management and construction industry professionals across the region. Pictured is James Gilmore, president of Pavilion Floors.
Protector Group Insurance Agency Inc. (Worcester) is pleased to announce the opening of a new office in Nashua, N.H., with Jason M. Schneiderman as account executive in the commercial lines division and James A. Farrelly as account executive in the employee benefits division. “We’re incredibly excited about the potential for this new office,” said Robert J. Vaudreuil, president and CEO. “The addition of Jason and Jim to our staff further demonstrates Protector Group’s dedication to acquiring only the best professionals in the insurance business.”
Wayne J. Griffin Electric, Inc. (Holliston) is pleased to announce that the company recently received the Patriotic Employer Award for their exceptional support of National Guard and Reserve Force employees. The award was presented by the National Committee for Employer Support of the Guard and Reserve (ESGR). Pictured are WJGEI Director of Operations Gerry Richards and Human Resources Manager Donna David accepting the award from Ombudsman Rick Bedell of the ESGR. U.S. Marine Corps Reserve Lance Corporal Michael Black nominated the company for hiring him, knowing he was in the Marine Corps Reserve and would be deployed to Afghanistan. Griffin Electric granted Black time off for military training and vacation prior to his deployment. In addition to Black, two other Griffin Electric employees are serving on active duty and a third recently returned from leave. s
The Professional Contractor
PHOTO GALLERY – ASM EVENTS ASM Dinner Meeting, June 9 Members energize and socialize during the event’s buffet dinner. 2 ASM members at June 9 mingle and network during event’s cocktail reception. 3 Speaker Michael O’Brien, vice president and district operations manager for Gilbane, provides an overview of the company’s current market focus. 4 King Fish Media’s Gordon Plutsky covers the basics of social media and its value in construction. 1
The Money is Due… Now How Do You Collect?, May 18 Attorneys Carolyn Francisco and John M. Curran of Corwin & Corwin provide practical solutions to collect payment for work performed. 6 Attendees learn numerous forms of payment security for public and private projects. 7 ASM members engage with speakers during the seminar.
ASM Safety Roundtable, June 16 Members learn first-hand what to expect during an OSHA inspection. 9 Speaker Timothy Irving of the Occupational Safety and Health Administration reviews recent changes to the inspection process. 10 Members at the June 16 Safety Roundtable listen as Irving breaks down the key hazards involved during an OSHA inspection. 8
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