Utility & Transportation Contractor April 2023

Utility & Transportation

celebrates 120 years

contracTOR

american asphalt

APRIL 2023

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s 10 k r a gm ors ultin ontract s n o er c ng c Huem of helpi s year

TOP WORK

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Conqratulations

American Asphalt on 120 Years in eonstruction! & Huemer Consulting on 10 Years of Success!

We Build ...

For over 50 years, Earle has been serving the region's heavy civil construction needs. Earle specializes in public and private contracting, including heavy highway construction, milling, paving, underground utilities, and site work along with manufacturing, recycling, and transportation of construction-related materials.

C&HAGENCY

AMERICAN ASPHALT CELEBRATING 120 YEARS IN CONSTRUCTION

-AND-

HUEMER CONSULTING CELEBRATING 10 YEARS IN BUSINESS

BEST WISHES FOR CONTINUED SUCCESS! Exclusively Serving Contractors' Insurance & Bonding Needs for Over 50 Years 783 North Riverview Drive· Totowa, New Jersey 07512 P.O. Box 324 • Totowa, New Jersey 07511 PHONE 973.890.0900 • FAX 973.890.9038 • E-MAIL: info@chagency.com

www.chagency.com

president’s message

From the desk of: glenn ely

H

aving just started our spring season and enjoyed an absolutely beautiful Sunday, I am refreshed anew and eager to embark on what for the company that I work for and many of yours will be a busy construction season. Part of my renewed energy has resulted from my recent participation in two longstanding annual events.

First, on March 10th, I had the pleasure of participating in what is the culmination each year of our safety services/programs, the UTCA Annual Safety Conference. This year that conference included over 160 participants.

Among the lineup of terrific presenters, I was fascinated to hear vivid stories presented by a Minnesotan former military team leader. He described in detail a combat incident in which he and his personnel were charged with loading supplies onto a helicopter in an area where no incoming fire was expected. Knowing that helmets were mandatory and required even in circumstances such as that, the speaker saw that one of his personnel was not wearing the requisite helmet. As a leader, the speaker chose to ignore the issue because the unexpected was not expected. Suddenly enemy fire erupted and turned the whole team upside down. Though our speaker survived, the unexpected (or said differently, the once in a million) did happen with bombs erupting at the very location of his team. That very soldier who had not worn his helmet died that day because of the sudden blast, even though (and most sadly) his helmet likely would have saved his life.

All of us in construction who have been in any realm of leadership know exactly the tension that exists as forepersons, supervisors or managers, when in wholly parallel situations on our jobsites, we see personnel fail to take ALL of the right or required precautions or wear ALL of the right personal protective equipment, largely because the last nine hundred ninety-nine thousand, nine hundred and ninety-nine times, the unexpected, of course did not happen. That testimony certainly has me even more committed to NEVER allow myself or others to forego all of the right precautions every time, because I can never predict the unexpected or that one in a million time. The risk is too high!

I was also moved by statistics and stories told by a former crane operator who challenged all of us to discard the stigma and open the dialog on our jobsites regarding the ever more frequent instances of addiction, mental health impacts, depression, and suicidal thoughts or intentions.

The statistics quoted were astonishing and reflected our industry as among the worst in terms of frequency where those issues exist. And yet, ours is an industry where seemingly we are all tough and hardened, and such dialog is ignored and stigmatized. His message was clear: these issues exist and are taking a toll on our personnel. We need to open the dialog and offer help on these issues including simply asking those that need to be asked if they are ok.

And those were just the messages of two of the great lineup of speakers.

I also want to congratulate all those firms that received this year’s cov-

2 Utility & Transportation Contractor | april | 2023

eted UTCA Safety Awards at this event.

Further on safety, our season starts again with UTCA staff and members participating in the April 6th NJ Work Zone Partnership Conference at Mercer County College. Likewise, the next NJ Common Ground Alliance, including all stakeholders that are involved in underground assets or excavations, has members meeting again on April 12th at PSE&G. This past winter’s substantial safety training sessions were well attended and again received high marks for their great presenters, content, and topical interest. If you are involved in safety and/or management in your firm, I strongly encourage you to participate in the terrific UTCA safety programs, meetings, committee, alliance forums and annual conference.

Secondly, I had the pleasure in recent weeks to participate in the annual UTCA Executive Seminar in Pebble Beach, CA. Having participated in this trip only one other time in my career (decades ago), I was absolutely thrilled with the trip and all that it offered.

Starting with terrific planning from staff and that committee, the week included one awesome event after another in a location and at a facility that was at the top of the chart. Though on Tuesday all of us actual and want-to be golfers were literally blown off the famed Pebble Beach golf course, many of us adjusted and found another day to play one or the other of their three signature courses.

Two things stood out for me from the trip. First, the meeting presenters were expert, interesting and engaged on topics that were contemporary and relevant. Secondly and most notable to me, the weeklong format provided me ample opportunity to better get to know the great staff and fellow members of the UTCA. Over and over again, I found those that I got to spend time with to be warm, interesting and always willing to talk about things that I love: family and building things. Likewise terrific were their awesome spouses!

In this year when I am stretching myself to participate in as many of our meetings/events/seminars, I’m finding the value of UTCA membership ever heightened. I hope you do likewise.

I’m sure you’ll want to read our feature article on Huemer Consulting reaching 10 years in business and our cover article on American Asphalt reaching the amazing 120-year mark. Congratulations to both firms on those accomplishments.

Enjoy another great edition and read!

Glenn Ely

CONTENTS

Cover story 46 american asphalt celebrates 120 years

46

DEPARTMENTS

FEATURES

2 President’s Message 7 Financial Overview 15 Legal Dig 25 Accounting Corner 31 Legislative News 41 Labor relations 55 the pipeline

62 huemer consulting marks 10 years of helping contractors

NEWS 81 year-round employee engagement & importance of

benefits engagement 91 utca's 2023 executive seminar

Published Bimonthly During 2023

2107 Route 34 South Wall, NJ 07719 PO Box 728 Allenwood, NJ 08720 PH: (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org

Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Dan Kennedy, Ryan Sharpe, Dan Neville Advertising Manager: Helene Nasdeo Production/Graphics: Lauren Hagan, Helene Nasdeo Circulation: Helene Nasdeo Printed By: American Plus Printers Affiliations: ARTBA, Clean Water Construction Coalition, Water Infrastructure Network UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices.

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homas Paine, the famous American patriot, once said “these are the times that try men’s souls” and the quote is as relevant today as it was in 1776. While his words and others, helped create a new nation, they are unlikely to have that kind of positive impact today.

the global population. Covid has impacted them more than most and it has certainly delayed their entry into the labor force. It will however be interesting to see what happens when they begin to be accounted for amongst the working population and unemployment figures.

As 2023 quickly unfolds, businesses are faced with complicated economic conditions, including interest rates not seen in almost twenty years, inflation figures dating back to the 1970s and low unemployment numbers last seen in the 1940s. Couple that with an inverted yield curve, a renewable energy revolution and baby boomers exiting the workforce, perhaps Mr. Paine’s quote understates our current situation.

The inverted yield curve suggests a period of economic weakness in the short term with better times ahead. Investors have shifted their strategy to take advantage of the economic returns afforded them through purchasing shorter duration government securities.

Much of the capital is coming from the stock market whose high degree of volatility can make even the strongest of stomachs nauseous. The comparative investment returns and nominal risk has led many investors to shift to the more stable and much improved interest rates realized on short term government securities.

Inflation remains stubbornly high despite the Fed’s aggressive attempts to drive it down. Traditional measures to cool the economy have been largely ineffective, puzzling experts. Strong consumer demand is one of the many reasons inflation thwarts the Fed’s attempts, which seems odd, given higher interest rates.

There are several answers, including low unemployment and higher salaries. If consumers are secure in their jobs and their paycheck keeps growing, they will spend money. The ‘work from home’ phenomenon has also impacted consumer spending habits. Eliminating, or at least significantly reducing commuting costs, puts “found” money in the consumer’s pocket for discretionary spending.

Another answer lies in housing costs. Long term interest rates have been so low for so long, many homeowners have sub 3% interest rates on 30-year fixed rate mortgages. When you don’t have the looming risk of higher housing costs that come with ARMs, interest only and/or balloon mortgages, one is more likely to spend money elsewhere, bolstering, or at least maintaining high levels of consumer demand.

Low unemployment figures are another conundrum when you consider recent lay-off announcements by large companies, most notably the technology and financial services sectors. It’s plausible that unemployment figures are artificially low because the head count process is flawed. Many employees retired early during Covid which created an unexpected void in the work force. Most of these vacancies were quickly filled by newer entries to the job market. However, recent studies suggest early retirees have re-entered the workforce for economic or boredom reasons, but they are difficult to account for in unemployment estimates.

Another factor that could impact the unemployment figure is the entry of the Generation Z population into the workforce. This group was born between 1997 and 2012, and now represent 32% of

Financial overview

making sense of it all

More data is available to demonstrate the confused economic conditions but the point has been made. Making sense of it, however, is an impossible task, as none of it seems reasonable from an historic perspective. One needs to broaden their view then, to understand how these economic dynamics are intertwined and can best be leveraged to support your company.

While increasing interest rates have increased your borrowing costs, be sure that you also benefit on the asset side with higher returns on your cash investments, most notably, money market accounts. Maintaining an acceptable level of liquidity is also prudent given the volatile market conditions. As mentioned, the yield curve is inverted and long-term rates, while higher than the more recent all-time lows, are still very attractive and represent a good economic source for capital.

Lastly, as we enter the line of credit renewal season, review how these volatile macro-economic factors have impacted your business. Higher interest costs and the adoption of lease accounting rules will negatively impact both your income statement and balance sheet influencing financial covenants. It can be alarming at first glance, so be sure to understand the impact on your financial statement before seeking the renewal of your credit facilities and/ or requesting new financing.

Thomas Paine also said “We have the power to begin the world over again.” His words are once more prophetic as we embark on a new worldwide economy and contend with conditions that frankly, don’t make sense.

Congratulations to American Asphalt on celebrating 120 years in construction and to Huemer Consulting on celebrating 10 years in business.

Utility & Transportation Contractor | april | 2023 7

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American Asphalt Celebrating 120 Years in Construction

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federal guidelines on defining a "commercially useful function"

P

rime contractors face many challenges in effectively meeting the goals or good faith efforts required in a DBE program. One of the most difficult factors in determining whether a certified DBE will likely be accepted for purposes of meeting the required goals is whether the subcontractor performs a “Commercially Useful Function” or “CUF”. Both the prime contractor and the State Transportation Agency (STA), such as the New Jersey Department of Transportation, receive credit toward the DBE goal (contract and overall) only when a DBE working on a contract performs a CUF. DBEs generally perform work on a contract either as a contractor, a trucker, a regular dealer, or a manufacturer. While each of these categories is evaluated differently when determining whether the DBE has performed a CUF, there is one overall guiding principle that must be followed. Under the terms established in 49 CFR §26.55, a DBE firm performs a CUF when it is: Responsible for execution of the work of the contract or a distinct element of the work . . . by actually performing, managing, and supervising the work involved.

Recipients of federal funds are required to review the management, supervision, and performance actions of a DBE firm that may satisfactorily meet this requirement. Evaluating these areas will form the basis to render a determination that a DBE has, in fact, performed a CUF. In the first instance, the scope of work and other terms of contract must be reviewed as a starting point in this evaluation process.

The USDOT DBE regulations identify the following key factors that should be analyzed when determining whether a CUF is being performed: • Evaluation of the amount of work subcontracted, especially whether it is consistent with normal industry practices; • Whether the amount the firm is paid under the contract is commensurate with the work that is actually being performed to be credited towards the goal; • When the DBE furnishes materials, the DBE must be responsible for negotiating the price, for determining the quality and quantity of the material, ordering the material, and paying for it. As a contractor, a DBE firm would typically be hired to both furnish the material and install it with its own labor force;

are passed in order to obtain the appearance of DBE participation. In essence, was the role merely a contrived arrangement for the purpose of meeting the DBE contract goal?

NJDOT will examine similar transactions, particularly those performed by non-DBEs. A DBE must have a necessary and useful role in the transaction, of a kind for which there is a market outside the context of the program. The firm’s role must not be a superfluous step added in an attempt to obtain credit towards the goal.

Legal Dig

By: adrienne isacoff, esq., florio, perrucci, steinhardt, cappelli, Tipton & Taylor LLC

Normal Industry Practice NJDOT will also review whether the DBE’s role on the project is consistent with “normal industry practice.” The Department will review whether the DBE is performing the work or services in the manner normally performed by all contractors—DBEs and non-DBEs. It is important for prime contractors to bear in mind that, even if a DBE is performing pursuant to normal industry practices if those practices, in fact, erode the ability of the DBE to control its work and remain independent, the practice may affect how much can be credited toward the DBE goal and may raise questions about the DBE eligibility.

One general rule of thumb that can be considered is whether a DBE would be performing in the same manner if there was no DBE program. As further evidence of meeting normal industry practice, reviewing agencies will consider if the DBE performs this work on non-federally assisted contracts.

Highway firms certified in the DBE program typically perform in four categories: prime or subcontractor, trucker, regular dealer, and manufacturer. While DBEs are occasionally awarded prime contracts, DBEs primarily work as subcontractors for the prime. Subcontractors typically perform specific contract items and provide their own labor and materials. To determine whether a DBE subcontractor is performing a CUF, five distinct operations must be considered: management, workforce, equipment, materials, and performance. The criteria below provide examples of factors that will be reviewed by NJDOT. MANAGEMENT The DBE must manage the work that has been contracted to its firm. Management includes, but is not limited to:

• Whether the DBE’s role is limited to that of an extra participant in a transaction, contract, or project through which funds

Utility & Transportation Contractor | april | 2023 15

• Scheduling work operations;

EQUIPMENT

• Ordering equipment and materials;

A DBE may lease specialized equipment from a contractor, excluding the prime, if it is consistent with normal industry practices and at rates competitive for the area. The lease must specify the terms of the agreement. The lease must be for a short period of time and involve a specialized piece of equipment to be used at the job site. The lease may include an operator for the equipment who remains on the lessor's payroll if this is a generally acceptable practice within the industry. The operation of the equipment must be subject to the full control of the DBE.

• Preparing and submitting certified payrolls; and

Legal Dig

• Hiring and firing employees.

The DBE owner must supervise daily operations, either personally, or with a full time, skilled and knowledgeable superintendent employed by and paid wages by the DBE. The superintendent must be present on the job site and under the DBE owner’s direct supervision. The DBE owner must make all operational and managerial decisions for the firm. Mere performance of administrative duties is not considered supervision of daily operations.

Practices which may warrant further review for management operations include factors such as: • The DBE owner or superintendent provides little or no supervision of the work; • The DBE’s superintendent is not a regular employee of the firm or supervision is performed by personnel associated with the prime contractor, or another business; • Key staff and personnel are not under the control of the DBE; • The DBE’s owner is not aware of the status of the work or the performance of the business; • Inquiries by department or FHWA representatives are answered by the prime contractor.

WORKFORCE In order to be considered an independent business, a DBE must keep a regular workforce. DBEs cannot "share" employees with non-DBE contractors, particularly the prime contractor. The DBE must perform its work with employees normally employed by and under the DBE’s control. All work must be performed with a workforce the DBE controls, with a minimum of 30% of the work to be performed by the DBE’s regular employees, or those hired by the DBE for the project from a source, such as a labor union. The DBE, in all instances, must have direct supervision over all of its employees.

The DBE must be responsible for payroll and labor compliance requirements for all employees performing on the contract and is expected to prepare and finance the payrolls. Direct or indirect payments by any other contractor are not allowed.

Some questionable workforce practices which may warrant further review include:

The DBE is expected to provide the operator for non-specialized equipment and is responsible for all payroll and labor compliance requirements. A separate lease agreement is required. NJDOT will likely want to review all lease agreements prior to the DBE starting the work.

On a case by case basis, the STA may approve the DBE to lease a specialized piece of equipment from the prime. However, the STA must ensure that the lease amount is not counted toward the contract goal. Equipment leased and used by the DBE with payment deducted from the prime contractor's payment(s) to the DBE is not allowed.

Some questionable equipment practices which may warrant further review include: • Equipment used by the DBE belongs to the prime contractor or another contractor with no formal lease agreement; • The equipment signs and markings cover another owner's identity, usually through the use of magnetic signs; • A DBE trucking business uses trucks owned by the prime contractor.

MATERIALS For a DBE contractor to receive credit for supplying materials, the DBE must perform the following four functions: (1) negotiate price; (2) determine quality and quantity; (3) order the materials; and (4) pay for the material itself. If the DBE does not perform all of these functions, the cost of the materials may not be counted toward the DBE goal. Invoices for the material should show the payor as the DBE. Some questionable material supply practices which may warrant further review include: • Materials for the DBE are ordered, or paid for, by the prime contractor;

• Supervision of DBE employees by another contractor;

• Two party checks or joint checks are sent by the prime to the supplier or manufacturer, instead of sent by the DBE;

• Actual work is performed by personnel normally employed by the prime contractor or another business;

• Materials or supplies necessary for the DBE’s performance are delivered to, billed to, or paid by another business;

• Employees are paid by the DBE and the prime contractor.

• Materials are delivered to the jobsite by a party separate from the DBE; • Payment for materials is deducted by the prime contractor

16 Utility & Transportation Contractor | april | 2023

from payments to the DBE for work performed; • A DBE prime contractor only purchases materials while performing little or no work.

DBE TRUCKING FIRMS

A DBE can supplement its fleet by leasing a truck(s) from an established equipment leasing business open to the general public.

The lease must indicate that the DBE has exclusive use of and control over the truck. This requirement does not preclude the leased truck from working for others during the term of the lease with the consent of the DBE, so long as the lease gives the DBE absolute priority for use of the leased truck. Otherwise, the DBE does not receive full credit for DBE participation.

Leased trucks must display the name and identification number of the DBE. The DBE trucker must also hold the necessary, where appropriate, license, hauling permit, etc., as required by the State to transport material on public highways.

To count the value of DBE trucking services toward a contract goal, the following is permitted: • The DBE may lease trucks from another DBE, including an owner-operator that is certified as a DBE. The DBE can count the entire value of services performed by these DBE trucks.

• The DBE may also lease trucks from non-DBEs and owner--operators. The DBE can count the value of these trucking services up to the value of services performed by the DBE trucks used on the contract.

• DBE participation can be counted for the value of services of non-DBE trucks that exceed the value of the services performed

by DBE trucks only in the amount of the fee or commission a DBE receives as a result of the lease arrangement.

In order for the STA or subrecipient to monitor the performance of a DBE trucking firm, the work to be performed must be covered by a subcontract approved by the STA prior to performing the work. To be considered valid, the lease must include such items as the lessor’s name, list of trucks to be leased by vehicle identification number (VIN), and the agreed upon amount of the cost and method of payment. It should be the responsibility of the DBE to provide the operator’s fuel, maintenance and insurance for all leased trucks.

DBE REGULAR DEALERS In order for a firm to operate as a regular dealer, it must perform a CUF, and must also comply with other requirements applicable to regular dealers. It must be an established, regular business that engages, as its principal business and under its own name, in the

It is important to make a distinction between a regular dealer and a firm that supplies a product on an ad hoc basis in relation to a particular contract or contractor. A regular dealer has a regular trade with a variety of customers. One of the key considerations of being a regular, established dealer is the presence of an inventory of materials and/or supplies. A regular dealer assumes the actual and contractual responsibility for the provision of the material and/or supplies.

A firm may be a regular dealer in bulk items such as petroleum products, steel, cement, gravel, stone, or asphalt without owning, operating, or maintaining a place of business if the firm both owns and operates distribution equipment for the products. Any supplementing of regular dealers' own distribution equipment shall be by a long-term lease agreement and not on an ad hoc or contract-by-contract basis.

Legal Dig

To be certified in the DBE program as a trucking firm, the DBE is required to own and operate at least one fully licensed, insured, and operational truck used on the contract. To perform a CUF, a DBE must also be responsible for the management and supervision of the entire trucking operation or a specified portion of the trucking operation to which it has been committed.

purchase and sale or lease of the products in question. In addition, a regular dealer is a firm that owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and regularly sold or leased to the public in the usual course of business, except as noted below.

If a DBE meets the requirements of a regular dealer, it may count 60% of the cost of the materials, if reasonable, toward the contract goal. Packagers, brokers, manufacturers' representatives, or other persons who arrange or expedite transactions are not regular dealers.

SANCTIONS FOR COMPLIANCE AND ENFORCEMENT The prime contractor is ultimately responsible for ensuring that a DBE performs a CUF. Failure of a DBE to perform a commercially useful function would result in NJDOT taking actions to enforce the CUF requirement of the contract. Some of the actions may include: • Deny or limit credit towards the contract goal; • Require the prime to make good faith efforts to replace the DBE to meet the goal on remaining work; • Withhold progress payments; • Terminate the contract; • Reduce the contractor’s prequalification limit.

TAKEAWAY The CUF requirements complicate a prime contractor's ability to have subcontracts awarded to DBEs counted to their goals. Careful consideration of the federal guidelines should be made prior to awarding a DBE subcontract.

Utility & Transportation Contractor | april | 2023 17

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12 tips for making a profit on government contracts By: salvatore schibell, cpa, cfp, cgma ms taxation, mba

Many contractors do not fully understand the implications of a “firm-fixed-price” contract. A firm-fixed-price contract does not allow any adjustment to the terms. Therefore, the contractor has maximum risk and full responsibility for all costs and resulting profit or loss.

Contractors pursuing government contracts must know the Federal Acquisition Regulations (FAR). The repercussions for failing to comply with the precise terms of a government contract can result in an audit, fines, penalties, loss of the current contract, loss of the right to work on future government contracts, or in some cases, litigation.

Government contractors must also follow generally accepted accounting principles (GAAP) issued by the Financial Accounting Standards Board (FASB). This means contractors must apply fully GAAP-compliant, accrual-based accounting principles that meet cost accounting standards (CAS). In addition, FAR supplements and other contract requirements apply.

Contractors and subcontractors generally must use CAS to estimate and report costs on government contracts unless there is a noted exception. The accounting method used for measuring a cost, assigning a cost to accounting periods, or allocating the costs must be disclosed to ensure uniformity. Many rules apply, so discussing CAS requirements with an accountant before bidding on the project is advisable.

Buy American Act The Buy American Act (BAA) requires using certain American-made goods in some government contracts, with limited exceptions or waivers. BAA applies to contracts below the current trade agreement thresholds of $183,000 for supply contracts and $7,032,000 for construction contracts, and certain types of contracts exempt from trade agreements, such as small business setasides. (The National Law Review. Final Rule Changes Buy American Requirements for Federal Contractors. March 7, 2022)

Public buildings and public works may include, without limitation, bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, and canals, and the construction, alteration, maintenance, or repair of such buildings and works.

BAA provisions apply only to iron, steel, and manufactured goods brought to the construction site for incorporation into a public building or work. Therefore, products that do not fit the definition of manufactured goods are not covered, as well as services.

The Office of Management and Budget (OMB) defines a manufactured good as a good brought to the construction site for incorporation into the building or work that has been processed into a specific form and shape or combined with another raw material to create a material that has different properties than the properties of the individual raw materials.

Two conditions must be present for BAA to apply: (1) the procurement must be intended for public use within the U.S., and (2) the items to be procured or the materials from which they are manufactured must be present in the U.S. in sufficient and reasonably available commercial quantities of satisfactory quality. The act’s provisions may be waived if the head of the procuring agency determines BAA to be inconsistent with the public interest or if the cost of acquiring the domestic product is unreasonable. Problems in administering the act involve definitions of "substantially all" of the components (percentage of U.S. materials in the final product) and descriptions of "manufactured in the U.S." (U.S. Government Accountability Office).

Accounting Corner

T

he Infrastructure Investment and Jobs Act made $110 billion available for roads, bridges, and major infrastructure projects. However, even though government contracts can be very lucrative, they can also be risky. Contractors must comply with complex rules and regulations to work with federal, state, and local government agencies. Contractors also must meet strict eligibility requirements. Therefore, working with a team of professionals with expertise in interpreting government contracts is advisable.

Many rules apply, so knowing the act's provisions is in the contractor’s best interests to avoid problems. For example, an awarding agency can require that the material be removed or replaced if it is not manufactured in America. Or, the agency may withhold payment, terminate the current award, withhold further awards, or take other legal remedies.

Contracts awarded by state and local authorities under federal grant programs are only covered by BAA if authorizing statutes explicitly provide for the application of the act.

Be Strategic Making a profit on government contracts is possible if the rules are followed. Here are 12 strategies that can help:

Utility & Transportation Contractor | april | 2023 25

Accounting Corner

1. Review contract terms in the RFP: Carefully study the terms and conditions of the contract in the RFP before bidding on it. This includes reviewing the scope of work, solicitation requirements, bid eligibility, compliance requirements, payment terms, project deadlines and deliverables, and any special provisions. Contractors must be aware of contractual penalties for delays in the delivery or completion of the project. Create matrices for complex contracts to track compliance with every applicable clause under a government contract. Contractors should also form a cross-functional strategic team to manage the contract. Involve professionals from multiple departments, including HR, sales, accounting, and legal.

2. Communicate effectively with the government agency: Establish clear lines of communication with the government agency to ensure expectations can be met before bidding on the job. Once awarded the project, communicate proactively with the agency to address issues and concerns as they come up. Be prepared to provide supporting documentation, if appropriate, and discuss possible solutions. Obtain approval to move forward in writing before changing the project’s scope. Never assume that the agency agrees.

Document everything.

3. Develop a detailed project plan. A project plan will help avoid problems. It should include a work schedule, material schedule, budget, and risk management plan. Consider the economic climate, inflation, supply chain disruptions, trade agreements, politics, and other factors influencing production and project deliverables. Hold people accountable to avoid delays, duplication of efforts, costly mistakes, and cost overruns. Establish compliance risk management and controls practices that provide timely identification, intervention, monitoring, and resolution protocols.

4. Utilize technology: Project management software can manage, control, and schedule everything concerning the project. Furthermore, managers can access real-time status updates and other pertinent information, such as material cost estimates, in the office or field. Project management software can also assist in recognizing potential pitfalls or areas of concern which could increase costs. It can also enhance efficiency by ensuring everyone is on the same page.

5. Conduct regular cost tracking and analysis: Keep track of and document all costs associated with the project and regularly analyze the budget. This will help identify potential cost overruns and corrective actions to avoid losing money. For example, include a percentage of the overall contract to cover overruns in the job estimate. Address cost overruns immediately with the project team and government agency to avoid losses. Try to find ways to mitigate the financial impact of supply chain disruptions while complying with BAA. Have a system for tracking and reporting the time employees and subcontractors work on the job.

6. Manage cash flow: The federal government typically does not agree to pay contractors in advance. So, they may have to finance the project, which can strain cash flow. Furthermore, government contracts often involve long payment cycles. Before bidding on the job, contractors should develop a cash flow management plan to determine if enough funds are available to cover project expenses and avoid any cash flow issues. Securing a line of credit in advance is recommended if funds are needed quickly. Or consider selling accounts receivable to raise working capital if the fee paid to a fac-

26 Utility & Transportation Contractor | april | 2023

toring company is less than the cost of borrowing money. Contractors should also assess the financial risks before bidding on the contract. Consider if the company can handle the exposure and the lost opportunity cost if too much capital is tied up on the job, preventing the company from bidding on other work.

7. Utilize experienced staff and subcontractors: Utilize experienced staff and subcontractors who have a proven track record of working together on government contracts. Costly overruns could be avoided by working with crews that have an existing relationship because they know how each other works and have established communication channels. In addition, subcontractors can encounter trouble when they are unaware of their status as a government contractor and the accompanying compliance requirements, such as BAA. 8. Manage change orders: Change orders can be a significant source of cost overruns on government contracts. Carefully review all change orders. Ensure the contracting officer properly documents and approves change orders before commencing work. Discuss the outcome with crews to avoid similar circumstances in the future.

9. Manage billing and receivables: Track all costs associated with the project and submit timely and accurate invoices to the contracting agency. To avoid payment delays, include supporting documentation, such as time sheets and material receipts. In addition, closely monitor payment schedules and follow up promptly on issues to increase the likelihood of being paid on time.

10. Manage risks: Identify and manage risks associated with the project. This includes developing contingency plans and setting aside reserves for unexpected costs or delays. Run “what if ” scenarios to determine the impact of natural disasters, weather delays, ransomware attacks, and other circumstances that may come up during construction.

11. Comply with contract terms: Contractors must comply with all the terms and conditions of the contract, including regulations and requirements related to safety, quality control, reporting, and documentation. Failure to comply with these requirements can lead to costly penalties and the potential termination of the contract. Under the FAR Mandatory Disclosure Rule, contractors must proactively disclose credible evidence of possible violations of specific criminal and civil laws and significant overpayments concerning a government contract's award, performance, or closeout.

12. Watch Key Metrics: Key Performance Indicators (KPIs) will show where money is being made and lost on projects. Year-overyear, quarterly, monthly, and weekly comparisons should be made against company metrics and similar businesses in the region and industry. This information can be used to track profitability on specific jobs and project types. Contractors can obtain reliable benchmarks from their accountants.

Overall, the key to making a profit on government contracts is to thoroughly understand the requirements, accurately estimate costs, effectively manage the project, comply with contract requirements, accurately bill, track expenses, and manage risks.

Although most of the above suggestions are obvious, contractors that ignore even one of these 12 suggestions risk losing money on the job.

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constructors for good government 2023 contributors UTCA would like to thank all firms that have contributed to our Industry PAC for 2023 President’s Club

J. Fletcher Creamer & Son D’Annunzio & Sons George Harms Construction Montana Construction Northeast Remsco Construction PKF Mark III Petillo Inc. Union Paving & Construction

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If your firm is interested in donating to Constructors For Good Government, please visit www.utcanj.org and CLICK ON, Donate To Our PAC or contact Dave Rible at (732)292-4300 or dave@utcanj.org

state budget takes center stage in trenton By: ryan sharpe, director of government affairs and communications

A

Like prior years, Governor Murphy’s proposed budget increases spending, this time by about 5% over last year, bringing the budget up to record $53 billion. Included in the budget is funding for a second year of the ANCHOR property tax relief program, expansion of tax relief for seniors, and over a billion dollars in school and municipal aid. The plan also would set aside a surplus of $10 billion.

Also of note in this proposal is the Governor’s commitment to allocate all of the remaining federal dollars New Jersey received from the American Rescue Plan with a focus on investing in clean water infrastructure.

The budget proposal continues to follow the UTCA’s recommendation of including a $60 million appropriation for matching funds for the Drinking Water and Clean Water State Revolving Funds.

million provided in last year’s budget.

UTCA is working with a coalition of partners to ensure that the level of funding meets or exceeds $300 million.

It is important to be mindful that the budget is just a proposal that now goes to the Legislature which can and, likely will, make substantial changes to this document before sending it to the Governor for his signature.

In addition to proposing his budget, Governor Murphy also delivered a major announcement on clean energy policy in the state. After appearing to slow down on his push to transition New Jersey to all renewable energy, Murphy announced that he is seeking to accelerate this effort.

Murphy’s new goals seek to move up the target date for achieving 100% clean energy from 2050 to 2035 by banning the sale of gas vehicles by 2035, electrifying hundreds of thousands of commercial and residential properties, and increasing environmental regulations to combat climate change. While the plan sets target dates, the proposals must be enacted through legislation, executive orders and the rulemaking process. UTCA will be closely monitoring any developments related to the Governor’s clean energy goals.

Legislative News

fter taking action on a number of issues to start the year, the New Jersey Legislature is now setting its sights on the annual budget which directs state spending for the upcoming fiscal year. While many bills will be considered, passage of the budget will dominate legislative discussions before it is passed and signed ahead of the July 1 deadline.

On the legislative front, there has been action on several bills that UTCA has been advocating for and monitoring. Legislation changing the eligibility period for the New Jersey DOT’s cost escalation program recently became law. In addition, legislation expanding the cost escalation program is being drafted and will soon be introduced. This measure would create a reimbursement for public contracts under $25 million and includes additional project owners, including municipal and county governments, as well as state and bi-state agencies. The program would not be limited to Small Business Enterprises (SBE’s), as it is under the current law.

Based on the Governor’s proposal, UTCA expects that the budget that gets sent to the Governor will include an additional allocation from the State Fiscal Recovery Fund, building on the $300

Other bills moving through the legislative process include a measure that increases the percent of recycled pavement allowed to be used on local road projects, a bill allowing the New Jersey Infrastructure Bank (I-Bank) to utilize federal hazard mitigation funding, and legislation that would let water and wastewater systems recoup their investments in projects that improve water quality and resiliency. It is also expected that a bill establishing a

Utility & Transportation Contractor | april | 2023 31

work zone safety camera program will be introduced and will be taken up in this Legislature during this session. The bill dedicates a portion of fines collected to enhancing the police presence on roadway job sites.

Legislative News

An additional bill to note is a measure introduced in February that would eliminate the requirement that contractors participate in a US Department of Labor-approved apprenticeship in order to obtain a New Jersey Public Works Contractor Registration (PWRC) certificate. UTCA has been working with our labor partners on this bill and is seeking to have this measure passed and enacted quickly to avoid disruptions to the industry.

Another positive development for the industry is the release of new rules from the New Jersey Department of Community Affairs (DCA) that would implement long sought after limits on the fees charged to provide traffic control. These new rules regulating the administrative fees imposed by local government would be huge cost savings for contractors and ensures that public dollars are used for their intended purpose of promoting public safety.

The rules would prohibit imposing fees not directly related to providing off-duty law enforcement officers and allow fees only

32 Utility & Transportation Contractor | april | 2023

for the cost of scheduling, maintaining records, processing, and billing.

Among other provisions, the proposal would also cap the administrative fees at the same level as the cost of hourly compensation for the lowest paid government employee that can efficiently perform these tasks.

Finally, any legislative update would be incomplete without mentioning the political environment which provides a backdrop to any policy discussion in the state. There is an election every year in in New Jersey and both the State Senate and Assembly are up for election this fall. Moreover, multiple retirements, including that of the Senate Minority Leader, and intra-party squabbles mean substantial changes are coming to the Legislature after this year’s elections. In addition, rumors continue to swirl that Governor Murphy is positioning himself to run for President, should President Biden decline to seek another term.

As always, it’s shaping up to be another interesting year in the government and political worlds and UTCA will continue to monitor and engage with policy leaders as we navigate the ever-changing political environment in New Jersey.

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the uncertain future of noncompete agreements By: jonathan landesman, esq. and aislinn srocynski, esq.

O

Assuming that a final version of the proposed rule is issued, the FTC is expecting a series of legal challenges either way. The U.S. Chamber of Commerce has publicly committed to fighting the FTC’s proposed rule, deeming it “blatantly unlawful.” Just days before the FTC’s public forum, Commissioner Christine Wilson, who publicly dissented against the FTC’s proposed rule, announced that she was leaving the agency effective March 31, 2023, out of frustration with its chair, Lina Khan, who she claims has a “disregard for the rule of law and due process.” Commissioner Wilson issued a concurring statement for the unanimous 4-0 vote to extend the time for comments, noting that because “the proposed rule is a departure from hundreds of years of precedent and would prohibit conduct that 47 states allow, I would have supported extending the public comment by 60 days.”

In addition to its comment period, the FTC hosted a public forum on February 16, 2023 to provide an opportunity for different people to directly share their experiences with noncompetes. At the forum, a panel of six individuals of both workers and employers spoke to the impacts of noncompete contracts. As expected, employers condemned the blanket ban as too broad, while workers supported a complete ban. Those in support spoke out about depressed wages, lack of mobility, poor working conditions, and protracted litigation resulting from the use of noncompete agreements. Critics of the proposed rule highlighted concerns regarding the FTC’s lack of Congressional authority to implement such a rule, as well as its lack of foresight when it comes to how the rule would hurt those companies with high-level executives or employees with strategic or trade secret knowledge.

Despite some of the explicit disapproval, it is still highly unlikely the FTC abandons its proposed rule altogether, especially given remarks by FTC leadership in support of workers, as well as President Biden’s comments during the State of the Union that “[w]e’re banning [noncompete] agreements so companies have to compete for workers and pay them what they’re worth.”

With heightened agency scrutiny and employee awareness of the issue, the proposed rule presents companies that utilize noncompetes with a reason to review and reevaluate current employee contracts. Any companies that wish to review their existing noncompete agreements or have an interest in submitting a public comment can contact our team directly.

About the Authors...Jonathan Landesman, Esq. is the Chair of the Labor and Employment Department at Cohen, Seglias, Pallas, Greenhall & Furman, P.C. He has been drafting noncompete agreements and litigating noncompete cases for 25 years. Aislinn Sroczynski, Esq. is an Associate in both the Labor and Employment and Commercial Litigation Departments at Cohen, Seglias, Pallas, Greenhall & Furman, P.C.

Labor Relations

n January 5, 2023, the Federal Trade Commission (FTC) announced its unexpected proposed rule change that would essentially ban noncompete agreements and require employers to rescind existing noncompete agreements.

Following the announcement, the FTC invited members of the public to submit comments on the proposed rule. While the original public comment section was set to end on March 20, 2023, on March 6, 2023, the FTC voted 4-0 to extend the comment period until April 19, 2023. Anyone interested in submitting a comment on the proposed rule must do so here. At the end of the public comment period, the FTC will consider whether to finalize the rule as written, revise the rule, or terminate the proposed rulemaking. To date, over 18,000 comments have been submitted.

Utility & Transportation Contractor | april | 2023 41

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Cover Story

commitment to serving others By: ryan sharpe, director of government affairs and communications

I

n today’s politically charged atmosphere, many companies are understandably reluctant to even allow a mention of religion in the workplace. This is not the case at American Asphalt where a commitment to faith-based principles is actually embraced as a key tenet of the company’s beliefs.

In fact, before you even enter its headquarters in West Collingswood Heights, you see the company’s core beliefs painted in large blue letters on its manufacturing facility. Those beliefs note the company’s commitment to doing things “RIGHT”, which is an acronym for the first letter of the words Respect, Integrity, God, Honesty and Trust.

But that’s not the only thing that makes American Asphalt unique. Many companies in the construction industry provide their employees with excellent wages and generous benefits.

However, American takes this to a whole new level by making employees owners of the company through an Employee Stock Ownership Plan (ESOP) that offers its team a lucrative retirement benefit that goes far and above the majority of retirement benefits available through retirement savings plans like 401k’s.

Dave Galway, Plant Manager and the crew at the West Collingswood Plant. The facility's cleanliness is an indication of the "We Care" attitude.

Under its ESOP, eligible employees are awarded shares of company stock every year, at no cost to the employee. As dividends are paid and the stock value rises, the accounts grow. When the employee retires, American buys back the shares over a five year period which provides the employee with generous retirement income and also allows them to benefit from the company’s success, even when they are no longer working.

In addition to providing tremendous benefits to the employee, the ESOP program is equally beneficial for the company. In fact, American’s chairman, Bob Brown says the unique arrangement, combined with good pay and other benefits, helps the company retain its workforce and limit employee turnover, which is especially valuable when the industry is struggling to hire workers.

Brown proudly points out its employees now own the majority of American Asphalt.

“How many workers can say they are part owners of the company they work for?” he said. “And ownership does have its benefits.”

This unique program, as well as American’s commitment to core values rooted in its faith have played a significant role in the incredible success achieved by American Asphalt over 120 years and will surely allow them to flourish for the next century.

Founded in 1903, American Asphalt began as Weeks Asphalt Company in Camden before moving to its current location in West Collingswood Heights in the 1950s, where they built a oneton asphalt plant. For the next 30 years, the company offered various services for local paving contractors and utilities and performed paving for contractors and homebuilders.

One of the company paving crews show the Safety awareness and group effort that makes American Asphalt a Team.

46 Utility & Transportation Contractor | april | 2023

In 1986, Brown purchased Weeks and renamed it American As-

tioned several factors that have fueled their many accomplishments and have them uniquely positioned to continue to build on that success.

One of those reasons they cite is their product offerings, which includes EZ Street Cold Patch which utilizes unique ingredients and a specific manufacturing process to create a patch with superior drying and application capabilities that sets it apart from other premium cold patch products. Because it is environmen-

Cover Story

Stamped Asphalt is an example of the company's willingness to offer specialty work in addition to traditional paving.

phalt. Since then, American Asphalt has grown from a small company with less than $1 million in sales to a 200-plus employee operation with revenues exceeding $50 million. During that time, American upgraded to a two-ton batch plant and later replaced that with a four-ton asphalt batch plant. In 2004 they expanded into Burlington County with a new 400 TPH drum mix plant. To keep up with growing demand, a five-ton batch plant was added at that site in 2017.

Most recently, through its acquisition of asphalt maintenance company Tri-State Asphalt, American now offers its services throughout the entire state. With its three asphalt plants, American has the capacity to produce 6,000 tons of hot mix asphalt per day. Its fleet of tri-axle trucks, decked out in American flag wraps, delivers material where it is utilized by multiple crews that perform excavation, milling, paving and related asphalt work.

The high daily tonnage paving capabilities allows the company to offer competitive pricing and covers a lot of ground in a day.

tally friendly, can work in water and can be used as a permanent repair, EZ Street has attracted many happy and repeat customers.

Another unique product they offer is porous asphalt which can be installed over an underground retention basin, and thus, eliminate the need to use additional land for storm water management.

Just some of the work performed by American Asphalt includes This option has proven to be tremendously popular, especially malls, commercial “big box” stores, warehouses, car dealerships, when land space is at a premium. housing developments and various municipal and county proj- The success of American Asphalt is also a result of its unique manects. agement structure in which its management team, led by Polazzo,

When asked the reason for the company’s sustained run of suc- James Wildish, Karen Littlefield, and Ron Livingston reports to a cess, Brown and the company’s president, Patrick Polazzo men- Board of Directors that consists of two outside directors and two inside directors that chart the company’s strategic course.

“We have learned there is real value in bringing in outside board members,” said Brown. “They see the issues from a different vantage point and bring new ideas to light.”

The other major driver at American is its commitment to faith as a core value and a part of the company’s culture.

“Having a faith and belief that God owns it all, and we are just the stewards of this business while we are here on earth, gives great perspective to ownership and management,” says Brown, who proudly points out the company has a chaplain who supports the employees from a spiritual perspective and that bibles are readily available. Prayer is also a part of the company dynamic.

Customers value minimal disruption to their parking facilities, so crews complete work quickly, supported by their three plants' production abilities.

A good illustration of the company living its faith is seen in its Caring Committee which is an employee group that organizes and supports local non-profits. Under this program, American

Utility & Transportation Contractor | april | 2023 47

Cover Story

provides monetary contributions to charitable groups that its employees have identified as an organization they personally support.

Some of the groups that have benefitted from this program include the Ronald McDonald House, Food Bank of South Jersey, Homeward Bound animal shelter, Saints Prison Ministry, and non-profits supporting cancer research, victims of domestic violence, and children in foster care. The caring committee also supports employees in need with full discretion to allocate funds to employees as they deem appropriate. They have provided funds for everything from fixing a broken car to helping pay for fees not covered by insurance With this and other employee perks, it’s no wonder, American Asphalt has been recognized as one of the best places to work and why many employees have been with the company decades, with some surpassing 35 years with the company.

“The actions we take affect the lives of our workforce. Safety, good hiring, ongoing training, solid compensation, and good communication are things that make American Asphalt a special place to work,” adds Polazzo. “The Bible calls us to love others, and what better place to express this than in the workplace?”

When discussing challenges American is facing, Brown and Polazzo are quick to point out that they are not unique in contending with increased fuel costs and difficulties acquiring resources, like aggregate. They also note the lack of available new equipment in stock has forced them to adapt. For instance, low inventory at dealerships forced them to purchase used dump trucks instead

48 Utility & Transportation Contractor | april | 2023

of buying new vehicles that sometimes aren’t available for many months.

When asked what they envision for the future, Brown and Polazzo are heading in different directions with Polazzo taking the reins at American, while Brown transitions into retirement where he is looking forward to spending more time with this 10 grandchildren.

They are in agreement that American will continue to grow by increasing its geographic footprint without changing the superior services they provide. Another thing they agree on is that the company will continue to be rooted in its faith and commitment to serving its fellow man.

“Our mission is to help others,” says Polazzo.

“Helping others is why we get out of bed in the morning,” adds Brown. “Making a profit in the asphalt industry allows us to accomplish our mission.”

That commitment to faith and helping others has clearly played an integral role in the unprecedented success experienced by American Asphalt which is celebrating its 120th anniversary.

After all these years and dramatic changes in the industry, American Asphalt will continue to embrace the core values that have not only allowed the company to prosper, but have had such a positive impact for its employees, customers, and the many communities they continue to serve.

Congratulations to American Asphalt on this remarkable milestone and we wish you continued success.

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Campbell Foundry Berlin Office Congratulates Everyone at American Asphalt on 120 Years of Success in Construction.

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nj energy master plan dreams meet reality By: dan kennedy, senior director In mid-2019, this column reported on the overhaul of New Jersey’s existing Energy Master Plan (EMP) and predicted that a storm was on the horizon. I thought it was about time to update UTCA members on how things are going since I last wrote on this topic. The bottom line is that the EMP adopted by the Murphy Administration is more expensive than any resident or business would have expected. In addition, no matter how much the state tries to force residents and businesses to spend, when it comes to climate change what New Jersey does to lower its emissions will make an untraceable impact on predicted global climate change implications.

2019 Energy Master Plan

The 2019 EMP has become the prime vehicle for the Murphy Administration to meet its goal for New Jersey to be 100% reliant on renewable energy sources by 2050. This concept was and is also supported by a majority in the Legislature at least on paper. While many aspects of the EMP are sensible, it includes two fundamental errors–lumping all non-renewable energy sources together and ignoring the economic impact of the plan. The former fails to respect the energy, environmental and economic value of natural gas and nuclear energy generation to our state. The latter issue breaks all the rules of governance by failing to be able to project the estimated costs of implementation.

Most observers (including the UTCA) expected the release of the 2019 EMP to kick start a clash of priorities that would pit staunch environmentalists against the business community and ratepayers.

That prediction has unfortunately played out to be true. UTCA has joined representatives of labor, energy, business and civic groups in a coalition called “Affordable Energy for New Jersey.” This coalition is led by our partners at the Engineers Labor-Employer Cooperative (ELEC 825).

This coalition has become the state’s leading voice for transparency in energy policy for electric and gas utility customers. Since the state has refused to produce a cost estimate of its EMP, the Coalition did. In January 2023, it released an updated and detailed cost estimate for the 2019 EMP. Affordable Energy for New Jersey worked with economists and energy policy experts to estimate that the 2019 EMP will cost New Jersey residents $1.4 trillion – about $140,000 per resident between now and 2050.

Dr. Jonathan Lesser, who prepared the previous and updated cost estimates said “meeting the EMP’s goals of electrifying virtually all energy use and supplying that electricity with zero-emissions electricity will require almost incomprehensible amounts of offshore wind and solar power, along with technologies that don’t even exist today. The EMP is a bureaucrat’s dream, an all-encompassing plan to control virtually every aspect of New Jerseyan’s lives.”

Early Mandates Floated and Sunk Research shows voters prefer free-market solutions to solve their energy needs. They prefer to see new technologies developed that will address these problems, rather than the government mandating unrealistic and unaffordable solutions.

The Pipeline

The 2019 EMP was adopted by the NJ Board of Public Utilities (BPU) through an engagement process directed by one of the Governor’s early Executive Orders (EO). EO 28 directed the Energy Master Plan Committee—a team of state employees from various departments led by the BPU—to take stakeholder input and then propose a new EMP. While the EMP sets forth a strategic vision for the production, distribution, consumption and conservation of energy in NJ, luckily it is not a regulatory document. Without supportive legislative or state agency actions, the actions recommended by any EMP are recommendations—not requirements.

disapprove of many of the key elements of the recently announced Energy Master Plan. Specifically, the voters reject the government mandates imposed by the Energy Master Plan and they oppose efforts to eliminate consumer choice in how to provide energy to their home, specifically the loss of natural gas.” When questioned about individual elements of the new Energy Master Plan, respondents expressed significant opposition when it came to costs and choice (mandates).

A coalition of environmental groups pushed the Murphy Administration to use the EMP process to position for a full moratorium on all non-renewable energy infrastructure (production and transmission). That hardline position was not accepted in EMP policy but in practice, most if not all non-renewable energy infrastructure projects have faced an uphill process through the state’s regulatory processes.

In 2021, NJ residents got an advanced look at what all-electric Through polling it has been demonstrated that “while New Jersey heating would cost when the Murphy administration proposed voters care strongly about the environment and pollution, they also that all boilers in apartments, schools and commercial buildings be

Utility & Transportation Contractor | april | 2023 55

converted to electric when their current system needed to be replaced. The NJDEP disclosed the cost to operate an electric boiler would be four to five times more than a natural gas boiler. What the Murphy administration didn’t disclose was that it would cost $2 million per building to upgrade the electrical system to do so.

Many towns have multiple public buildings, as well as apartments and commercial buildings, that would be impacted. Under pressure from many fronts (including the Legislature) NJDEP dropped this controversial regulatory proposal. The regulation was set to go into effect on December 6.

A group of legislators, including State Sen. Vin Gopal (D-Long Branch), introduced legislation that would stop this proposed regulation (and others) from going into effect until the legislature had time to thoroughly review it. “With the removal of the boiler mandate from NJDEP rules, we just dodged a multi-billion-dollar bullet that business owners, renters, school districts, and local governments couldn’t afford,” said State Sen. Anthony M. Bucco (R-Boonton). We are now seeing bi-partisan awareness and action pushing back on electrification mandates.

The Pipeline

Governing by Executive Order EMPs are supposed to be updated every 3 years. Earlier this year, Governor Murphy announced that he has directed a delay of the update of the EMP until 2024 to provide for time to evaluate how recent policy changes impacted his original plan. Many of Murphy’s supporters were afraid he’d grown skittish about the EMP due to cost concerns. Governor Murphy campaigned for a 2nd term on his brand as “America’s Greenest Governor.” That ranking was slipping so the Governor acted to right the ship using his favorite governance tool – the Executive Order (EO). Recently the Governor made six energy announcements and signed three separate EOs. This drew a lot of attention to the Governor, who may be angling for some higher elected or appointed office. While I won’t detail all the announcements in this column, there were two aspirational goals established by his EOs:

56 Utility & Transportation Contractor | april | 2023

• An accelerated target of 100% clean energy by 2035, defined as 100% of the electricity sold in the State to come from clean sources of electricity by January 1, 2035 • All new cars and light-duty truck sales to be zero-emission vehicles (ZEV) by 2035 Each of the EO’s issued ends with the following statement “Nothing in this Order shall be construed to confer any legal rights or additional limitations upon entities whose activities are regulated by State entities; nothing shall be construed to create a private right of action on behalf of any such regulated entities or other persons; and nothing shall be used as a basis for legal challenges to rules, approvals, permits, licenses, or other action or inaction by a State entity. Nothing in this Order shall be construed to supersede any federal, State, or local law.” Like the actions of the 2019 EMP and previous EO’s, without agency or legislative action, these aspirational directives mean nothing in practice. All had the same flaws as the 2019 EMP– no recognition of the value of lower carbon options like nuclear or natural gas and absolutely no recognition of the transition costs.

Positioning for the New 2024 EMP UTCA did not and does not oppose goals related to increasing the portfolio on renewable energy production and associated infrastructure. UTCA members and our partners in labor build utility scale renewable energy projects and want to build more of them, including offshore wind projects. We also want to upgrade and build new natural gas pipelines, energy plants and the transmission networks that bring the energy produced to where it’s needed.

We will approach the 2024 update of the EMP with the same balanced ideas as we did in 2019.

Please stay tuned to this issue and reach out to me at kennedy@ utcanj.org if you are interested in new opportunities in the offshore wind market.

Peckar & Abramson, P.C.

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Feature Story

huemer consulting marks 10 years of helping contractors by: ryan sharpe, director of government affairs and communications

R

oy Huemer was looking for work when a friend told him that George Harms Construction Company was seeking to hire a surveyor. Promised three months of work, he wound up spending a decade with Harms and another 13 years with Earle Asphalt Company before starting Huemer Consulting, a successful construction consulting company that is celebrating its 10-year anniversary this year.

After growing up working at his family’s Wildwood hotel, where his parents instilled in him a work ethic that would serve him well in the future, he studied architecture, drafting and engineering before ultimately choosing Construction Estimating as a career.

After 23 years in construction, he struck out on his own as a consultant, partnering with Heavy Construction Systems Specialists (HCSS) which provides software for the construction industry.

In his role working with HCSS, he provides training for companies utilizing two of their heavy construction estimating and job costing software products, Heavy Bid and Heavy Job. HCSS is an international company that is used by more than 50,000 estimators, 4,000 companies and 45 of the Engineering News-Record (ENR) Top 50 Heavy Civil Contractors. Huemer notes the estimating industry is extremely competitive and this software makes the estimating process more efficient which allows contractors to improve their bids and increase the number of bids they can submit. In addition, the program allows contractors to build a database to make their estimates more accurate based on their previous jobs and lets them compare their pricing to their competitors.

Roy Huemer

national and international contractors as well as many smaller companies, including “mom and pop” shops.

This growth in use of this software dovetails with the trend in estimating which is moving away from relying on your “gut” and toward a more data-driven process, says Huemer. And with tremendous volatility in areas like material, labor and fuel costs, it’s critically important that estimates are accurate.

“Contractors need to be able to bid knowing where they can cut costs so they don’t have to pay to work,” said Huemer.

In addition to training on the HCSS programs, Huemer will also create an estimating system tailored to a business if they prefer. Contractors can also hire him to streamline their estimating process. By improving estimating efficiency and accuracy, he helps contactors bid more, increasing their chances to win work.

He also provides educational programs on estimating, plan reading and specification comprehension and interpretation, noting that individuals with these skills are in high demand in the construction industry.

The programs also give contractors the ability to include documentation and cost breakdowns, which are often required by many utility service customers. This and any other vital backup information can be maintained through the software system and delivered directly to the relevant agency.

Despite taking on the additional responsibilities of owning his own firm, Huemer is enjoying this part of the construction business. His training schedule has him on the road for as many as 40 weeks a year and his work has taken him to 47 different states and multiple countries. Despite the significant travel, he says he makes his own schedule and has his weekends and summers off.

His wife pointed out that he is “awake at home” more than he ever was before.

Huemer says the software encompasses all aspects of the construction bidding and estimating process and is used by large

As for the future of the consulting firm, Huemer expects the business to continue its growth. His interactions in the industry

62 Utility & Transportation Contractor | april | 2023

as well as his construction experience have allowed the company to continuously expand its client base. While he attracts many clients through “word-of-mouth” he also engages in various networking efforts, including those offered by the UTCA.

In the meantime, he will continue to provide software and consulting services to contractors around the world who want to utilize his unique products and extensive construction experience to help their business survive and prosper in the increasingly competitive construction world. Congratulations to Huemer Consulting on its 10th anniversary and we can’t wait to see what the future holds for this company.

Feature Story

Huemer envisions expanding the educational components he offers in plan reading, specification reading, estimation and job management. His goal is to set up training programs that will allow companies to send their employees to his seminars to learn about all aspects of heavy construction. This, he says, would be a cost-effective method for contractors to train new employees without requiring existing staff to spend valuable time training new hires.

While the flourishing business keeps him busy, Huemer does find time to travel for pleasure which often involves camping with friends and family. He has plans for a future cross-country camping trip that will take him through Canada and back home through the southern part of the country.

Utility & Transportation Contractor | april | 2023 63

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By: karen walsh, senior account executive - employee benefits, ioa What is employee engagement and why is it so important?

Employee engagement is a function of the relationship between an organization and its employees. It’s about improving your workplace and culture so that employees feel more connected and dedicated to your companies’ goals and values.

Engaged employees are more than just satisfied with their jobs, they are committed to the company and its goals. They have passion, pride and energy for their work and their organization, and are willing to go the extra mile on a regular basis. Employees who are truly engaged stay because they enjoy their work and support the company. Having low engagement means employees are not committed to their own success in the workplace, let alone the organization’s. This kind of attitude can initiate a downward spiral for a company.

Employee engagement is an extremely powerful force that has the potential to impact an organization’s trajectory and further the organization’s success.

NEWS

year-round employee engagement & importance of benefits engagement 6) Encourage employees to train for additional roles and responsibilities.

7) Provide a robust benefit package.

8) Provide competitive compensation package.

Employee Benefits Engagement Not all employees have a strong understanding of our healthcare system or have the ‘know how’ to navigate it. Helping to educate your employees on their benefits will not only help them to be better healthcare consumers, but it can also lead to their long-term health and well-being as well as help to lower their healthcare spending.

Today’s everchanging and evolving employee benefits landscape is a constant challenge for most employers. Countless hours are spent researching, implementing, and properly managing a benefits program. Despite all this hard work and effort, employers are looking to benefits as one of the top ways to attract and retain great employees. But that is just the first step; don’t lose sight of what comes after implementation.

Benefits education is key. In order to take full advantage of the benefits available to them, employees need to understand their options, what their coverages are and what steps they need to take to select the right plans for their specific needs.

Ways to Engage Employees: 1) Share success stories to explain the impact employees have on your customers.

2) Listen to employee feedback through surveys, meetings, or open dialogue.

3) Reward employees for their hard work.

4) Interact one-on-one with employees.

5) Host social events and gatherings throughout the year.

Open enrollment is something you probably only think about a few times a year. For employees, it might be even less often.

Effective benefits communication should be a year-round dialogue that helps your employees, and their family members understand how to use their benefits, be more accountable in their personal health status, and access the care they need in a more well-informed manner. Educating employees on their benefits is key not only in promoting proper utilization but will also help to ensure you have an overall happy and engaged workforce.

Start by getting down to the BASICS: Employee benefits aren’t always simple. In fact, for many young employees, they’re downright confusing. Look at basic health insurance term knowledge, for example. Very few individuals can define terms like premium, deductible and coinsurance.

Here are five ways you can start informing employees about their benefits right away:

Utility & Transportation Contractor | april | 2023 81

NEWS

1. Start with benefits 101—Start educating with benefits 101 initiatives, assuming employees have no base knowledge. Resources in this area cover insurance basics, such as common terms, group health coverage ins and outs, and enrollment period restrictions.

2. Explain what’s in it for them—At the core of any transactional conversation is the question of “What’s in it for me?” Employees, especially younger ones, will undoubtedly want to understand why it’s worth it to learn insurance basics.

3. Vary the messaging—Use several formats to help get the message across to your employees and keep them interested. Examples can include email announcements or newsletters, PowerPoints, videos, mail-home flyers, posters and comprehensive packets.

4. Don’t stop educating—Benefits literacy isn’t something achieved overnight. Rather, it should begin immediately and continue year-round.

5. Be there for questions—Have a dedicated person who can be available to help answer benefits-related questions. This individual should be available to respond to emails as well as attend in-person or virtual meetings.

82 Utility & Transportation Contractor | april | 2023

Ask for Feedback After carefully considering how you plan to engage your employees, you should begin to craft a method for receiving feedback from your employees to gain an understanding as to how it is working. Use a sample engagement survey as a framework for your plan. Equally important to the feedback is analyzing the data. Make sure you have a plan for implementing the ideas you get from the survey, otherwise employees may feel like their feedback does not matter.

In conclusion, there really is no one easy way to successfully engage employees. Some people are more engaged in their work than others, but benefits engagement and education is a good starting point. Remember, there is valuable return on investment potential for engaging employees, so do not settle for disengagement. As an employer, you have a responsibility to educate your employees about their benefits.

Reach out to your health insurance carrier or benefits broker for sample employee education materials.

PERREIRA

CONGRATULATIONS AMERICAN ASPHALT FOR CELEBRATING 120 YEARS IN CONSTRUCTION & HUEMER CONSULTING FOR 10 YEARS IN BUSINESS! FERREIRACONSTRUCTION.COM I A CERTIFIED MBE COMPANY BUILT ON A FOUNDATION OF INTEGRITY NEW JERSEY • NEW YORK • FLORIDA • CALIFORNIA • NEW ENGL AND • VIRGINIA

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UTCA’s 2023 Annual Convention Friday Luncheon Keynote Speaker:

SAM CHILDERS Sam Childers is a former Outlaw/renegade biker, bad boy all-around thug.....but today he dedicates his life and resources to the rescuing of children in war zone countries like South Sudan and the Congo.

Childer's life is portrayed in the movie, Machine Gun Preacher starring Gerard Butler.

September 28 - 30, 2023 Tropicana atlantic city

NEWS

2023 executive seminar pebble beach, ca By: patrick nasdeo

T

hey say if you don’t like the weather in central California, wait 20 minutes and it will change. This was the case for our 2023 Executive Seminar in Pebble Beach, California, where 75 members were guests at The Inn at Spanish Bay resort in March. The Executive Seminar Committee, and UTCA Director of Events Lauren Hagan organized a trip that offered great options for the group even while being constrained by constantly changing weather conditions. The group activities showcased the truly beautiful resort and surrounding small towns.

Most of the group flew into San Francisco International Airport and were transported to the resort on Saturday afternoon where they were greeted by UTCA CEO Bob Briant, Jr. who welcomed them to a casual but delicious lunch, as their luggage was unloaded. The resort staff were beyond courteous, which furthered the enjoyment the group experienced. From the desk staff and concierges to the servers in the many fabulous restaurants and bars, to the room staff and valets, they all had smiles and did their best to be accommodating. The bagpiper who “puts the course to bed” every evening even sat around the firepits and visited with some of our group after her performance.

Every morning, a private breakfast for our group, sponsored by Foley, Inc. was served in “Peppoli,” a restaurant which provided a beautiful view of the golf course and bay beyond. Optional tours were scheduled and included a “local history” tour on Sunday of 17-Mile Drive where members were shown the rugged beauty of the coast line, as well as many estates and homes before continuing on to Cannery Row in Monterey for lunch and shopping; Champagne and Shopping on Monday starting at Caraccioli Cellars and then the shops and galleries in beautiful Carmel By The Sea.

Portion of the group on Pebble Beach's iconic 17-Mile Drive

Portion of the group enjoying each other's company.

As some of the members came directly from ConExpo in Las Vegas or arrived at different times and/or different days, the Sunday night Welcome Happy Hour reception, sponsored by Florio Perrucci Steinhardt Cappelli Tipton & Taylor, provided a chance for the group to get together as old friends to relax and share a few laughs and good times before the seminar kicked off.

Relevant and informative presentations were provided by Lou Cappelli, of Florio Perrucci Steinhardt Cappelli Tipton & Taylor, who spoke about Cost Escalation; Chris Colabella, of Construction Information Systems, who spoke about the value of using technology to build your business focusing on creating webcasts and video content to find and keep your most valuable resources.

The second business meeting featured Mike McKenna, of Cohen Seglias Pallas Greenhall & Furman, who spoke about safety, worker injuries and what to expect from a major safety event; and Mitchell Taraschi & Agnes Antonian who spoke about the NJ Prompt Payment Act updates, the Cardinal Change Doctrine, Dirty Dirt and Climate Reduction Regulatory impacts.

After the week of team building through the sharing of industry information, good food, good golf (hopefully), and enjoyable activities, the Farewell Dinner, sponsored by Cohen Seglias Pallas Greenhall & Furman, was held on Thursday evening at The Lodge at Pebble Beach.

Utility & Transportation Contractor | april | 2023 91

NEWS

Despite the long-range weather forecast for the dates of the seminar not looking promising, the golfers in the group did manage to get quite a bit of time on the links…with the exception of Tuesday afternoon when severe weather forced all of the golf courses in Pebble Beach to close for only the second time in the history of the area.

Special thanks to all of our sponsors: Foley, Inc – Private Breakfast Florio Perrucci Steinhardt Cappelli Tipton & Taylor Welcome Happy Hour Reception Cohen Seglias Pallas Greenhall & Furman – Farewell Dinner PKF-Mark III – General Sponsor Stone Hill Contracting – General Sponsor Taylor Oil Company – General Sponsor Weldon Materials – General Sponsor See you all next year in Ireland!

92 Utility & Transportation Contractor | april | 2023

Nightly Bagpiper on property.

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