Utility & Transportation
contracTOR
2020 Robert A. Briant, Sr. Award Recipient -
JIM CODDINGTON
october 2020
C&HAGENCY
ED NYLAND ON HIS INDUCTION INTO THE NJ CONSTRUCTION INDUSTRY HALL OF FAME! JIM CODDINGTON RECIPIENT OF THE ROBERT A. BRIANT, SR. MEMORIAL AWARD HANK DOBBELAAR RECIPIENT OF THE LARRY GARDNER AWARD AND A SPECIAL THANKS To -DAVE SMITH FOR HIS DEDICATION AS UTCA PRESIDENT!
BEST WISHES TO ALL 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
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president’s message
From the desk of: dave smith
A
s we all know, we hold funding as one of our highest goals. It is with great pride that I report to you several funding initiatives the UTCA staff members and our partners at the NJ DOT, NJ Turnpike, and the NJ Infrastructure Bank have acomplished. • Together in our partnership with the NJ DOT and Commisioner Scaccetti, we were able to identify an additional $600 million in bonding capacity and get it aproved with the Murphy Administation. The $600 milllion will be added to the current 2020-2021 budget, bringing the NJ DOT capital program to $1.55 billion.
The NJ I-Bank was created in 1985 in a combined effort between NJ DEP Commissioner Bob Hughey and UTCA. The NJ I-Bank has financed approximately $7.7 billion in construction projects to date. Now that we have succeeded in increasing funding for the industry, the challenge ahead for these agencies is to fill the emply pipelines with shovel-ready projects, combatting the effects of prior cuts and spending freezes. Action is underway to hire consulting engineers to build back the project pipeline . I would like to take a moment to congratulate this year’s award recipients, Jim Coddington (Robert A. Briant, Sr. Award), Ed Nyland (NJ Construction Hall of Fame) and Hank Dobbelaar (Larry Gardner Memorial Award). Your past and ongoing efforts have been of great benefit to our industry.
• The toll increase on the NJ Turnpike, Parkway, and Atlantic City Expressway are now in effect. The increases will result in these agencies spending over $1.25 billion a year on construction-related projects once the project design pipeline is fully implemented. • NJ DOT Commisioner Scaccetti was able to secure an additional $150 Million in unused federal Highway Trust Fund appropriations from other states. This has been done before under other administrations however we do not recall the number ever exceeding $50 Million. • Together with the NJ Infrastructure Bank, we were able to secure $72.15 million in funding that will be leveraged by the I-Bank’s financing program, generating over $170 million in funding for lead pipe abatment.
2 Utility & Transportation Contractor | OCTOBER | 2020
Best regards,
Dave Smith
CONTENTS
Cover story 46 utca's 2020 honorees 46
DEPARTMENTS
NEWS
2 7 13 23 31 35 63
55 cybersecurity and it budgeting for remote workers
President’s Message Financial Overview Legal Dig
71 the 4 "f words" for 401(k)s
Accounting Corner
81 leveraging employee benefits technology part 3
Legislative News labor relations the pipeline
Published Bimonthly During 2020
1670 Route 34 North Farmingdale, NJ 07727 PO Box 728 Allenwood, NJ 08720 PH: (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org
Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Dan Kennedy, Zoe Baldwin, Dan Neville Advertising Manager: Helene Nasdeo Production/Graphics: Lauren Hagan, Helene Nasdeo Circulation: Helene Nasdeo Printed By: American Plus Printers Affiliations: ARTBA, Clean Water Construction Coalition, Water Infrastructure Network UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices. POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.
Utility & Transportation Contractor | OCTOBER| 2020 3
BUILD ING THE FOUNDATION FORA RESILIENT FUTURE
Vâ–¡LLERS SITEWORK
ENVIRONMENTAL
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UTILITIES
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VOLLERS CONGRATIJI.ATES UTCA'S 2020 AWARD RECIPIENTS
DEMOLITION
JIM CO DDINGTON
Robert A. Briant, Sr. Award
HANK DOBBElAAR - Larry Gardner Award EDNYlAND NJ Construction Industry Hall of Fame Inductee
VOLLER$ FOUNDING PRINCIPALS -VISION, INTEGRITY, AND SENSE OF URGENCY
TOTAL TEAM LENDING
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By: Bill ruckert, provident bank
T
he COVID-19 pandemic has affected all of us, and I hope that you, your families, and your businesses are safe, healthy, and well. When asked to prepare an article for this month’s issue, I wanted to take a different approach, but include what is hopefully valuable information as 2020 draws to a close and we anxiously look forward to 2021. While uncertainty prevails and predicting the future is unreliable, let’s start with what we know. Government support in the form of PPP loans was very beneficial and helped many companies during the initial business shut-down period. The forgiveness process is still being refined, but revisions made to the program by the SBA have largely benefitted borrowers. Bank loan deferrals have also been fortuitous and enabled companies with tight cash-flows to deploy funds elsewhere. Lastly, the financial crisis of over a decade ago (can you believe it’s been over 10 years?) caused many companies to de-leverage their balance sheets, alleviating what would have otherwise caused additional cash flow pressures. While this data is typically helpful in predicting the future, COVID inhibits business owners’ ability to make reasonable and accurate projections. What is foreseeable, though, is the need to satisfy PPP loans through forgiveness or repayment. Either way, this source of capital has been a windfall of sorts to companies, but should any portion need to be repaid, 1%, five year, unsecured, unguaranteed financing is very attractive. Having said that, PPP loans are likely to be reported on fiscal year-end 12-31-20 financial statements serving to violate various loan covenants if they haven’t done so already. Unsettled economic conditions will also strain a company’s financial performance, which could have a detrimental impact on loan covenants. What to do? Clearly COVID responses are not a onesize-fits-all solution. Some industries have benefitted from the pandemic while others have been decimated. It is likely to have a lasting effect on many markets including real estate, retail, wholesale, logistics, and education, to name just a few. Companies that have thrived will be uniquely positioned to grow market share and make strategic acquisitions. Struggling businesses must make critical and very difficult decisions about market segments, lines of business, occupancy costs, and, most troubling of all, head count. Regardless of your situation, the most important tool business owners have
is open and active two-way communication with their financial institution. Banks need to respond to their clients’ needs as the year winds down and future capital requirements or modifications are discussed. Business owners can easily detect red flags from their bankers. Extensions on lines of credit, rather than renewals, can be an alarming indicator. Delays in receiving covenant waivers are also a warning sign. Lastly, unresponsiveness from your banker indicates unclear direction provided by the bank, reduced credit availability, or a lack of understanding of your company’s needs.
Financial overview
covid-19: What's next?
COVID too shall pass, just as other economic disruptors have over the years. All is not lost, and opportunity rests on the horizon. Business owners must consider ways to reinvent their companies as others have been doing. While a forbearance agreement or a troubled debt restructure may sound daunting, when negotiated in good faith by all parties, their structures are intended to satisfy the borrower’s needs as well as those of the bank. They can provide temporary relief as a short-term solution and revert to a mutually agreeable credit agreement in the future. Preparing for the worst and hoping for the best are needed as we look forward to the end of COVID. This cliché remains appropriate after so many years. There are many solutions for what we face, and with it comes opportunity. Embrace it! Hopefully this information provides some helpful hints as we thankfully wrap up 2020. Quoting Jerry Garcia seems quite suitable here: “If I knew the way, I would take you home.” Good luck, God bless, and be safe. Congratulations to Jim Coddington, recipient of the Robert A. Briant, Sr. Award; Hank Dobbelaar, recipient of the Larry Gardner Memorial Award; and Ed Nyland on his induction into the NJ Construction Industry Hall of Fame. Wm. J. Ruckert, III Senior Vice President (732) 800-0544 Bill.ruckert@provident.bank
Utility & Transportation Contractor | OCTOBER| 2020 7
Congratulations to Jim Coddington
2020 Robert A. Briant, Sr. Award Recipient
Hank Dobbelaar
2020 Larry Gardner Award Recipient
Ed Nyland
2020 NJ Construction Industry Hall of Fame Inductee
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2020 UTCA AWARD RECIPIENTS JIM CODDINGTON
Robert A. Briant, Sr. Award
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Legal Strategy • Government Advocacy • Business Solutions
UTCA 2020 Award Recipients Jim Coddington Robert A. Briant, Sr. Award
Hank Dobbelaar Larry Gardner Award
Ed Nyland NJ Construction Industry Hall of Fame Inductee Construction & Public Contracting Law Louis Cappelli, Jr., Esq.
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By: adrienne isacoff, esq., florio, perrucci, steinhardt, cappelli, Tipton & Taylor LLC
B
idders are familiar with the rules included in most bid specifications that specify how pricing mistakes will be governed. Most often, if the extension of the unit price is calculated incorrectly, the extension will be corrected to reflect the unit price. If there is a discrepancy in the written price and the numerical price, the written price prevails. These rules make it easy to know how a contracting unit will act when a bidder makes one of these mistakes. A governmental agency will follow its own rules, right? Wrong. The real answer is a lawyer’s dream and a contractor’s nightmare — it depends! Bidders, reasonably, expect that public owners should be compelled to follow their own rules since the bidder will be held to the specifications. A bidder knows, as does its competition, that if corrections amount to it no longer being the lowest bidder, then it will not be awarded the job. But when bidders take State and local agencies to court because they are not following the correction rules, they are faced with a surprising lack of concern by the courts about the lack of uniform enforcement. Typically, the courts seek to determine the intent of the bidder, rather than require the public owner to simply make the correction set forth in the specifications. For example, if the unit price in the extension column is the correct multiplier of the numeric price and the total price bid for the job is based on totaling all the extensions, the court may decide that the rule about the written price governing over the numeric price will not be followed because the total price conveys the intent of the bidder. In Spina Asphalt Paving Excavating Contractors, Inc. v. Borough of Fairview, 304 N.J. Super. 425 (App. Div. 1997), one of the leading cases of this type, the bidder wrote the numeric number $400 for a line item with an estimated quantity of 1,350 S.Y., rather than $4.00. There was no space for putting the bid quote in writing. The line item total was $5,400 – which is what the bidder intended and was used in calculating the total bid. Despite the bid specifications that in the event of a discrepancy between the unit prices and the extended totals, the unit prices shall prevail, the court held that a “patent error” in the statement of a unit price for a line item was nonmaterial and could be waived where the true intent of the bidder was obvious. Other ways that a court may try to discern the true intent of the bidder is to compare the line item prices with the engineer’s estimate and with the pricing of other bidders. If the bidder’s line item price is significantly different from the estimate or other bidders’ pricing, the court may not apply the correction rule,
calling the mistake “patent error” or “exorbitantly higher.” An example of this type of reasoning was used by the court in Colonnelli Bros., Inc. v. Village of Ridgefield Park, 284 N.J. Super. 538 (App. Div. 1995). For traffic maintenance, Colonnelli bid one hundred dollars in writing, but $10,000 numerically. The Village relied upon its engineer who estimated the line item at about $5,000, and by comparing the unit prices of other bidders in that general range. The Village concluded that $100.00 would not cover the line item and, therefore, would not apply its bid specification to correct the unit price to the written number. Colonnelli lost the award and filed a complaint demanding that the Village apply its own bid specifications. The trial court agreed with Colonnelli. The Village appealed, continuing to maintain that it could disregard its bid specifications under these circumstances.
Legal Dig
bid correction rules are not always enforced
The Appellate Division reversed, agreeing with the reasoning of the Village engineer who explained in a certification that: If a contractor was allowed to revise his bid where a lump sum bid was called for, it would lead to a situation where a person could submit two prices for a lump sum item and they would have built-in float in their bid, depending on which price was used. This could lead to irresponsible prices being submitted for the same item, which would favor bidders who failed to follow a careful analysis in preparing their bids. Id. at 543. On the one hand, the public policy behind such decisions may be to prohibit bidders from being able to pick and choose between the ambiguities in their bid after they have an opportunity to see the pricing of their competitors and then seek to persuade the owner to make the correction if they will still be the low bidder. On the other hand, despite that policy objective, there are significant problems with this approach. First, it opens the door to corruption on the part of the public owners, because they can choose to enforce their own bid specifications or to disregard them, depending on whether they want the ambiguous bid to wind up being low. Second, it is one more example of a lack of uniformity in public bidding, especially on the local level. While uncertainty about the bid process may be good for lawyers, it is not good for contractors!
Utility & Transportation Contractor | OCTOBER| 2020 13
Congratulations to Jim Coddington Hank Dobbelaar and Ed Nyland
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© 2018 Garden State Precast • (732) 938-4436 dmorris@gardenstateprecast.com & gomalley@gardenstateprecast.com
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Congratulations UTCA 2020 Award Recipients! Jim Coddington 2020 Robert A. Briant, Sr. Award Hank Dobbelaar 2020 Larry Gardner Award Ed Nyland 2020 NJ Construction Industry Hall of Fame Inductee
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Congratutations to the 2020 UTCA Award Reciptents! Edi Nytand, Hank Oobbel·aar & Jim Coddington
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the advantages of unit price contracts By: rich higgins, cpa, mccarthy & company
This type of contract is not good for most private building projects unless it is part of a lump sum or cost-plus contract, applied to select component of the job. Unit price contracts also do not work as well for complex projects that involve the coordination of multiple trades.
Pros and Cons The advantages of unit price contacts are that owners carry minimal risk; the cost is anticipated, and contractors might make more profit if it takes less manpower and materials to complete the project than anticipated. The pros also include the flexibility to adjust the project’s scope and the fact that it is not necessary to know the complete design when bidding on the job. The cons of this type of contract include the unknown cost to complete the entire project and a potentially inaccurate determination by the contractor of the quantities needed.
Public Works Projects
Identifiable Costs
A unit price public works contract is when a local government contracts for an unknown number of small public works projects over a fixed period of time. It can also mean that a larger job has been broken down into units of work that are priced out individually.
Under a unit price contract, the contractor provides the owner with a specific price for one or more tasks or a section of the overall work that is required on the project. The owner then agrees to pay the contractor for the units that the contractor expends to complete the project.
Public works contracts are typically awarded for specific projects within a budgeted total dollar value. In this case, unit price contracts are not associated with a project. Instead, the public agency agrees to pay a defined unit price for certain types of work over a certain period.
The costs that are commonly factored into unit prices include, but are not limited to:
The prices for different public work tasks can be based upon different units such as:
• Labor costs • Material costs • Overhead costs • Profit
• Weight, such as tons
• Taxes
• Surface area, such as square feet or acres
• Permit and Inspection Costs
• Volume, such as gallons or cubic yards
In addition to regional multipliers, contractors must adjust labor rates for unexpected work conditions which could delay a job such as bad weather.
• Length/depth, such as linear feet or vertical linear feet • Time, such as hours • Quantity of items • Lump sum per task
Accounting Corner
H
eavy construction contractors can benefit from unit price contracts, which are typically used for public construction projects. Unit price contracts are best suited for construction work consisting of repetitive and quantifiable tasks such as the removal or placement of soil, rock, or concrete. Unit pricing may be incorporated in the pricing for alternates or for specific portions of the project.
Breaking down a job into its smallest elements provides the most accurate estimated job costs. Even so, it takes a lot of time to determine the per unit cost, which could cut into profits. Contractors should complete a material takeoff and use a com-
Utility & Transportation Contractor | OCTOBER| 2020 23
prehensive checklist to ensure they consider everything in the building process. Advantages
Accounting Corner
The advantage of unit price contracts is that if more materials or extra work is required on the job, it can be factored into the price as more units instead of being absorbed into the overall job estimate. This reduces the risk of a contractor losing money on the project. Unit pricing benefits the owner, because it is relatively easy to verify if the price being charged for goods or services is reasonable. It is beneficial for the contractor because it mitigates the risk of inaccurate estimates of uncertain quantities for key tasks.
24 Utility & Transportation Contractor | OCTOBER | 2020
Because unit pricing contracts have costs that are broken down, owners can compare an invoice with the estimated price of project units. It is easy for contractors to bill for unit price contracts because the price per unit is determined before the actual work is done. There are also tax advantages associated with unit price contracts. Unit price contracts are not required to be reported for federal income tax purposes on a percentage of completion basis. This is a significant opportunity to defer substantial tax dollars for contractors. In order to comply with the IRS guidelines, contractors must obtain approval to complete this election. There are steps that must be followed to comply with the requirements, but once complete, unit price contracts can help contractors improve tax planning. About the Author. . . . Richard Higgins, CPA is the managing principal of the New Jersey office of McCarthy & Company, PC. He is a NJCPA member. Rich can be contacted at (732) 341-3893 ext. 17 or Richard.Higgins@ MCC-CPAs.com
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Anselmi & Decicco, Inc. is Proud to Honor the Accomplishments of the Utility and Transportation Contractor Association's 2020 Industry Leaders
The Anselmi & DeCicco family extends our congratulations to this year's honorees:
Jim Coddington (ofTilcon)
Robert A. Briant, Sr. Memorial Award
Hank Dobbelaar (of North Atlantic Advisors)
Larry Gardner Award
Ed Nyland
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NJ Construction Industry Hall of Fame Inductee
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in the lobby By: zoe baldwin
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Zoe Baldwin testified for UTCA, highlighting the opportunities water infrastructure construction could provide our state’s economic recovery given its ROI, that it supports living wage jobs, and that it brings the state closer to meeting critical public health and environmental goals. We also urged the committee to take up legislation and to consider increased funding for the state Infrastructure Bank. Other organizations invited to testify included NJ Utilities Assoc, American Water, Suez, Jersey Water Works, and Andy Kricun, former head of Camden County MUA. UTCA has been working on this and other legislative initiatives related to water since 2016 and is very glad to see our efforts come to fruition. We expect to see this trend continue and will keep you informed as more developments advance. FACILITATING FUNDING UTCA-led legislation to facilitate funding for local transportation projects is moving through the upper house. S767 (Gopal), would eliminate a five-percent down payment requirement for projects involving New Jersey Infrastructure Bank transportation projects. This down payment is not required on the water side of the program, and Senator Gopal’s legislation levels the playing field to open up more opportunities in more communities. The bill was passed by committee in early August and we expect it to be posted for a full vote after the budget break. DESIGN-BUILD Legislation to enable design-build procurement across local and state government has recently been advancing. UTCA has been working with Assembly Majority Leader Lou Greenwald as well as other partners to tighten up the bill language and expect the measure to advance again after the budget break. This would be an invaluable procurement tool for our state, especially now when we need to make the most out of every state dollar. We thank the Majority Leader for his initiative and look forward to our continued conversation.
PREVAILING WAGE DISCLOSURES One bill we need to flag for the industry is S1422, sponsored by Senator Singleton. The bill makes various changes to prevailing wage and contractor registration laws, described below. The bill states that a worker who works during a week in multiple job classifications for which more than one prevailing wage rate applies must be paid the highest rate for all hours worked unless contractor records show which hours of work were spent engaged in each class of work. It also establishes fines for performing work while debarred or hiring a subcontractor that is debarred, expands projects for which a Public Works Contractor Registration is required, and requires as a condition of receiving Public Works Contractor Registration disclosure of willful violations of prevailing wage law during the preceding five years. UTCA worked with the sponsor on changes to the bill that were adopted in committee, although we are still opposed to the measure’s mechanism. The bill has been second referenced to Senate Budget committee but has not yet been posted for a vote. Additionally, there is not yet an Assembly sponsor for the bill. We will continue to work on this issue should the legislation advance again
Legislative News
N THE WATER FRONT The second-ever hearing of the Assembly Infrastructure and Natural Resources Committee was held in late summer and focused on the economic benefits of investing in water infrastructure. The hearing opened with ARTBA’s Dr. Alison Black, who authored a UTCA-commissioned study showing that for every dollar invested in NJ water infrastructure, the state benefits from a three-dollar return in economic activity.
ON THE GOVERNOR’S DESK Two bills recently made their way to the Governor’s desk that we wanted to share with the industry. The first is A3999/S2380, which would create a rebuttable presumption, for workers’ compensation insurance purposes, that certain essential employees contracted the virus during the scope of their employment. As previously reported, UTCA opposed this bill and requested amendments in both houses; we were also a part of an NJBIA coalition that opposed the measure. UTCA and others argued that especially now that many establishments are open, this law is unnecessary and harmful to employers. The bill passed both houses on July 30 and was signed into law on September 14. Another bill we’ve mentioned in the past now awaits Governor Murphy’s signature: S232/A2212, sponsored by Senator Singleton and Assemblyman McKeon, would require certain facilities applying for new permits, expansion permits, or permit renewals to produce an “environmental justice impact statement” and hold public hearings if located in what the bill defines as an envi-
Utility & Transportation Contractor | OCTOBER| 2020 31
ronmentally overburdened community. The bill would also give NJDEP discretion to deny certain permits based on the findings of that process.
Legislative News
The bill rocketed through the upper house and was posted to the Assembly shortly thereafter. During that time, UTCA, along with a number of groups including NJBIA and the Building Trades Council, came forward to voice a host of concerns with the legislation. The lower house was amenable to some of the issues flagged by advocates and adopted amendments. Although the environmental justice impact statement and hearing process is still cumbersome, UTCA was glad to see the new language as it represents a more feasible process. While the Governor has not yet taken action, he is expected to sign the measure. EMPLOYER LIABILITY BILLS Two bills have been introduced that would limit employers’ liability from actions arising from Coronavirus concerns. Neither have been posted for a vote yet, but we have been advocating for action alongside our partners in the business community. The Democratic led bill is A4440/S2634 sponsored by Assemblyman Houghtaling and Senator Gopal, and the Republican version is S2703 sponsored by Senator O’Scanlon. FAST ACT EXTENSION LIKELY At the time of this writing, there are fewer than 30 days until the September 30th expiration of the FAST Act, and despite early hopes for a full reauthorization, an extension is becoming increasingly more likely. This is disappointing news on the heels of what seemed to be some Congressional movement earlier this year. As we reported in our last issue, Democrats in the House of Representatives passed a rather ambitious $1.5 Trillion infrastructure plan known as the Moving Forward Act. The measure called for a huge increase in funding to repair roads and bridges as well as water infrastructure, in addition to addressing broadband, housing, schools, and more.
32 Utility & Transportation Contractor | OCTOBER | 2020
Although it was clear that the measure was unlikely to be taken up in the Senate, the House referred to the bill as the “opening salvo,” stating they hoped to spark debate and stimulate surface transportation negotiations. Unfortunately, Congress continues to grapple with pandemic-related issues and election season is now in full swing, stalling any real progress on reauthorization talks. Infrastructure construction is a tried and true economic salve that has been left out of our national recovery conversation this time around. UTCA continues to be engaged on these issues with our federal delegation and through our national coalitions, the American Road and Transportation Builders Association and the Clean Water Construction Coalition. We will continue to advocate for increases in federal highway, transit, and utility investment and will keep you updated at the effort continues. SECOND ROUND OF PPP At the time of this writing there are two versions of a stimulus bill that each include funding for a second round of Paycheck Protection Program funding. The Senate GOP bill would allow some small businesses to apply for a second PPP loan. Specifically, the option would be available to those businesses with fewer than 300 employees that have seen a drop of at least 35% of their revenue during the first or second quarter of 2020. It would also reduce the amount a borrower can receive from $10 million to $2 million and gives businesses more flexibility on how they spend the money. In the lower house, the House Heroes Act did not include additional money for small business loans because the program had not expired when that bill was passed in May. The difference is expected to be resolved in conference, and we will keep you updated on opportunities as they become available.
Congratulations UTCA's 2020 Award ReciRients: �
Jim Coddington 7 Robert A. Briant, Sr. Award Hank Dobbelaar - Larry Gardner Award Ed Nyland - NJ Construction Industry Hall of Fame Inductee Thank yo�ftor all our hard work and efforts in your various role's su=pporting the New Jersey construction industry.
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third circuit affirms decision empowering courts with authority to determine the arbitrability of labor disputes By: greg trif & kyle h. cassidy, trif law llc
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(“CBA”) that extended to all New Jersey projects and contained a provision obligating all disputes be resolved through arbitration. Ultimately, the contractor executed the SFA to avoid a union walk-off while also believing that it only applied to the Airport Project.
The case arises from a contractor’s use of a local labor union to perform work on a construction project at the Newark Liberty International Airport (“Airport Project”). During construction, the union’s representative allegedly approached the contractor, advising that the union did not have any agreement with the contractor for the Airport Project. Consequently, the union representative presented the contractor with a one-page short-form agreement (“SFA”), allegedly representing that the union would walk off the Airport Project if the contractor did not agree to sign it. The union representative also purportedly represented to the contractor that the SFA would only govern the contractor’s use of union labor on the Airport Project. Despite these alleged representations, the SFA contained language that incorporated by reference the terms of a Collective Bargaining Agreement
The contractor subsequently filed an action with the Court seeking, among other things, to enjoin the arbitration from occurring and ultimately absolve itself of liability for the allegedly unpaid contributions. Central to the contractor’s action was the threshold issue of whether the court or arbitrator was authorized to decide the enforceability of the arbitration provision in the CBA. The District Court ultimately agreed with the contractor: (i) holding that the issue of arbitrability was for the court to decide; (ii) staying the pending arbitration; and (iii) authorizing expedited discovery to determine the extent to which the SFA was validly executed. The District Court reasoned that the court should decide the arbitrability issue because the contractor raised legitimate questions about its knowledge of the existence of any CBA and the arbitration clause therein. The union thereafter appealed the District Court’s decision to the Third Circuit.
Years later, and in connection with New Jersey projects other than the Airport Project, the union audited the contractor’s records and determined that $230,000 was due and owing. When the contractor challenged the basis of the audit, the union referred to the SFA and the language incorporating the CBA by reference. The union thereafter sought to collect the unpaid contributions by unilaterally scheduling an arbitration pursuant to the arbitration provision in the CBA.
Labor Relations
n September 14, 2020, the United States Court of Appeals for the Third Circuit, in the matter MZM Constr. Co. v. N.J. Bldg. Laborers Statewide Benefit Funds, affirmed a key threshold principle in arbitration law, finding that courts (as opposed to arbitrators) are generally empowered to determine whether parties are bound by an arbitration agreement. This decision is significant because most labor agreements contain arbitration provisions and, to the extent a dispute arises thereunder, contractors may have an opportunity to contest their arbitration obligations in court. Through its decision, the Third Circuit specifically recognized that contractors may challenge an arbitration clause in a labor agreement if there exists a valid basis to challenge the enforceability of the agreement itself, such as where there are allegations of fraud in the execution.
On appeal, the Third Circuit affirmed the District Court’s decision, holding that “unless the parties clearly and unmistakably agreed to arbitrate questions of contract formation in a contract whose formation is not in issue, those gateway questions are for the courts to decide.” Stated differently, unless there is an undisputed agreement requiring the parties to arbitrate and resolve issues of arbitrability before the arbitrator, then the court (not the arbitrator) must decide the enforceability of an arbitration clause. In reaching this decision, the Court applied the Federal Arbitration Act, which is consistent with the rules imposed by the New Jersey Arbitration Act, both of which favor courts as the decider of questions about the formation or existence of an arbitration agreement. Going forward, unless an agreement
Utility & Transportation Contractor | OCTOBER| 2020 35
unmistakably provides otherwise, the District Court must determine whether the CBA and its arbitration clause are enforceable as against the contractor. The circumstances of this case should serve as a reminder to all contractors to be cognizant of the terms of the contracts they sign, and particularly the agreements referenced therein. In addition, the decision presents a potential avenue, albeit limited, for contractors to avoid arbitration despite the existence of an arbitration provision in an operative agreement.
Labor Relations
In addition to considering whether there exists a basis to challenge the enforceability of an arbitration provision, contractors should be mindful of the advantages and disadvantages of courtroom litigation verses arbitration. For example, litigating in court generally offers: (i) easier access to third party discovery/ testimony; (ii) appellate review; (iii) expansive discovery; and (iv) stringent rules of evidence. Conversely, arbitration generally provides: (i) quicker resolutions; (ii) a decision maker with knowledge of the industry; (iii) lower cost and fewer expenses;
36 Utility & Transportation Contractor | OCTOBER | 2020
and (iv) confidential proceedings. Moreover, the COVID-19 pandemic may make one method of dispute resolution preferable to the other. For instance, contractors looking to quickly resolve their disputes may prefer arbitration because, due to COVID-19, many courts have been unable to conduct trials thereby creating a significant backlog and delay in the adjudication of matters. In contrast, arbitrations have proceeded through remote means of communication, allowing the parties to maintain more control over the resolution of their dispute. Ultimately, contractors must consider whether they have a valid basis to challenge the enforceability of an arbitration clause in their labor or other agreements and, if courtroom litigation is preferrable, challenge the enforceability of such agreements in court. About the Authors. . . . Greg Trif, a member of Trif Law LLC, represents developers, general contractors, subcontractors, and suppliers in all areas of law affecting the construction industry including contract claims, project crisis management, labor and employment disputes, and business torts. Kyle H. Cassidy, an associate at Trif Law, LLC, represents contractors and subcontractors in all areas affecting the construction industry.
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We congratulate this year 1s UTCA Award recipients: Hank Dobbelaar - Larry Gardner Award Jim Coddington - Robert A. Briant, Sr. Award Ed Nyland - NJ Construction Industry Hall of Fame Inductee
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Cover Story
UTCA's 2020 Honorees By: zoe baldwin
E
ach Fall, the UTCA Annual Convention brings together contractors, suppliers, and industry professionals from across the state. The event reunites old friends, facilitates new relationships, and unifies us as an industry. Beyond the networking, the Annual Convention is also the place where we take the time to pay homage to the leaders in our field and to say thank you to the individuals who have dedicated their lives to infrastructure construction and who have helped shape not only the UTCA, but the industry it represents. Unfortunately, the UTCA Annual Convention was unable to proceed this year due to COVID-19 restrictions. While this year’s considerations have precluded us from providing the convention floor experience and all that goes with it, we do hope you’ll take a moment and join us in honoring our 2020 award recipients. Ed Nyland, Jim Coddington, and Hank Dobbelaar have spent their careers in construction and have left an indelible mark on our industry and Association. Dedication and perseverance have defined each of their legacies, and we are proud to count them among our ranks. Thank you, Ed, Jim, and Hank, for your contributions to infrastructure construction.
Ed Nyland, NJ Construction Industry Hall of Fame Ed Nyland has a rich legacy in our industry, built upon his ascension through the ranks of George Harms Construction (GHCCI), his two terms as UTCA President, and his term as President of the Contractors Division of the American Road and Transportation Builders Association (ARTBA) . Starting as a self-described “coffee boy” part time in 1971 while he attended Newark College of Engineering, Mr. Nyland rose to become the President of Business Development and a Director of GHCCI. With 49 years of experience in heavy construction, Mr. Nyland is currently a consultant to the industry who draws on his half-century of experience to help firms of all sizes find success.
46 Utility & Transportation Contractor | OCTOBER | 2020
Dave Smith presents Ed Nyland with the NJ Construction Industry Hall Of Fame Award
“A lot of what I am, is because George [Harms] believes in this industry!” Ed told us during a recent conversation. It was at George Harms’ insistence that Mr. Nyland became actively involved not just in the business of construction, but in the broader effort to improve the entire field of play for public infrastructure construction. In fact, after retiring from GHCCI, he continued his involvement in organizations such as UTCA and ARTBA. To this day, Ed continues his efforts to better our field locally and nationally. He has also been heavily involved in employee relations, training, and employee safety programs. He is experienced in project management and estimating, which includes the supervision of scheduling, purchasing, cost accounting, subcontract negotiations, legal negotiations, owner relations and negotiations, labor relations, and insurance management. He served as chief estimator for new construction during much of his 42-year tenure at GHCCI. While at GHCCI during most of that time frame, Mr. Nyland was GHCCI’s primary representative in the interpretation of contract specifications and then in preventing and assessing potential claims. Mr. Nyland had the lead responsibility at GHCCI in the preparation of claims and consulted with the firm’s legal representatives in the submittal and defense of construction claims. He has extensive experience on all aspects of pricing extra work as a direct result of his estimating experience. One of the initiatives of which Mr. Nyland is particularly proud was a 2011–2019 effort to clean up the NJDOT Standard Specifications. Through dialogue and cooperative efforts between the Construction Industry and Advancement Program (CIAP), the former NJDOT Commissioner Jack Lettiere, and NJDOT staff,
Ed was able to represent contractors’ interests in the negotiation and become a significant part of the team, which led to the NJDOT Standard Specifications becoming a fairer and more equitable document.
Mr. Nyland has also volunteered his time to judge several different contests at the Middletown North High School, where his wife Jill was a teacher, including the annual Iron Chef competition. This involved many hours of time and involved both the students and the teachers at that school. More recently, Mr. Nyland served as a volunteer with Habitat for Humanity building a new home on Center Street in Freehold, NJ. At the present time, Mr. Nyland and Jill have been enjoying traveling to Massachusetts to visit their children and grandchildren. They also enjoy their many bicycle trips throughout Europe and other leisure trips in other parts of the world and the USA.
Jim Coddington is being awarded the Robert A. Briant, Sr. award this year as an acknowledgment of his nearly 30 years as an active member of the infrastructure construction industry. Jim has served on the Board of Directors for UTCA since 2009 and as Board President in 2017. He is also the Chair of the Membership Committee and serves on the Asphalt and Legislative Committees. Mr. Coddington got his start as a Construction Job Cost Accountant with Mount Hope Brick Products in 1994, just after graduating East Stroudsburg University with a Bachelor of Science in Business Management. In April of 2001, Jim joined the family at Tilcon New York as a Construction Manager, where he was responsible for project management of contracts for the Port Authority of New York and New Jersey. In this role, Mr. Coddington oversaw the completion of several major projects on the George Washington Bridge, Lincoln Tunnel, Holland Tunnel, and at Newark Liberty International Airport. While working, Jim went back to school to get an advanced degree. He graduated in June of 2004 with a Master of Science in Construction Management from Stevens Institute of Technology. From there, Mr. Coddington began to climb the ranks at Tilcon. He advanced to Area Manager, where he was responsible for sales of 500,000 tons at the Keasby asphalt plant estimated at $20M. Two years later he advanced again to Vice President of Construction where he was responsible for the execution and management of $135 million in annual construction and paving contracts.
Cover Story
In addition to his professional experience, Mr. Nyland has been active his entire life in his church as an usher, deacon, and elder. He has served on various Boards and is the past Vice President of the Consistory on three separate occasions for the Colts Neck Reformed Church in Colts Neck, NJ. In this capacity, as the most significant lay leader in the congregation, Mr. Nyland spent countless hours volunteering for activities relating to the business aspects of the Church. He also serves on the Church’s Building and Grounds Committee.
Jim Coddington, Robert A. Briant, Sr. Award
After eight years, Mr. Coddington’s success had been noted, and he was once again raised up, this time to the position of Vice President of Commercial. In that role, he was responsible for the targeted sales with an estimated value of $350 million annually, developed delivery efficiencies, and successfully merged two commercial sales departments into one highly effective team. In January of 2019, Jim ascended into the position he continues to hold today, as General Manager of Asphalt, Construction, Recycle & Commercial Sales where he is responsible for the operational efficiency of 13 asphalt plants and targeted sales of 2.5M tons of asphalt. The Robert A. Briant, Sr. Award is presented annually to the Association Contractor who has worked to advance the goals for UTCA and the industry. Bob Briant, Sr. was instrumental in the growth of UTCA and worked tirelessly to make the industry better for all members.
Hank Dobbelaar, Larry Gardner Memorial Award
Jim Coddington accepts the Robert A. Briant, Sr. Award
Hank Dobbelaar has been a go-to consultant and industry staple for decades. His reputation for excellence and team building was built through years working with owner agencies, universities, developers, managers, owners, and municipal authorities to develop successful approaches for every project. Mr. Dobbelaar has
Utility & Transportation Contractor | OCTOBER| 2020 47
Cover Story
had a multi-focused career in heavy construction, construction management, construction planning, and academia. He was the founding member of HPD Associates, LLC. formed in 1995 and has spent the intervening years building a legacy of success. Mr. Dobbelaar served as Vice President for Facilities and Community Relations at Stevens Institute of Technology. He joined the University in January 1995 as the developer and Founding Director of the Graduate Program in Construction Management and advanced to Vice President of Facilities and Community Relations in August 2002. His responsibilities included planning, design and construction, physical plant operation and maintenance, utility management and conservation, and operation and maintenance of on-campus faculty and staff housing. In addition to his facilities-related charges, Mr. Dobbelaar interacted with the City of Hoboken, the County of Hudson, and the State of New Jersey with regard to athletics, campus development, funding, and land use board matters, as well as the long term community impacts from projects to upgrade the City of Hoboken’s School District and Flood Control. His charge spanned management of 100 employees; 2 million square feet of academic, administrative, athletic, and residential space; as well as a $15 million annual maintenance and capital construction budget. During Mr. Dobbelaar’s tenure as Vice President of Facilities, the University completed more than $100 million of construction and infrastructure improvements allowing the campus to blend into the Hoboken environment, as well as the 2013 completion of a 10 year Facility Master Plan enabling the University to grow its student population by 50% to almost 4,000 undergraduates. Mr. Dobbelaar is a licensed Professional Engineer in four states and a licensed Planner in New Jersey. Additionally, he is a Fellow in the American Society of Civil Engineers and the National Society of Professional Engineers, a member of the Utility Contractors Association of New Jersey, a member of The Moles, and a thirty-year member of the Hasbrouck Heights Planning Board, of which he has been chair for the last twenty five years. Mr. Dobbelaar is a frequent speaker and presenter on topics of Construc-
Hank Dobbelaar
tion Business Failure. He received a Bachelor of Science Degree from New Jersey Institute of Technology along with a Master’s Degree, both in Civil Engineering. The Larry Gardner Award recognizes the contribution of an Associate Member to UTCA and the industry and has been awarded to individuals or firms. Hank Dobbelaar has been involved with UTCA since 1976. He is well-known to many members and serves on the Golf Outing Committee.
UTCA's 2021 Convention September 30 - October 2, 2021 Tropicana Atlantic City, NJ 48 Utility & Transportation Contractor | OCTOBER | 2020
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he last time that I wrote an article for the UTCA, it focused on the IT fundamentals that your firm needs to grow. It acknowledged that many businesses see technology as a necessary evil but focused on the potential that technology had for scaling your business. Then COVID-19 happened. Investing in technology is no longer an option in this new world where working remotely seems to be the norm for businesses that plan to succeed. A survey done by Lenovo reported that people in the United States have personally spent an average of nearly $350 each to upgrade or improve their work-from-home situation. While the investments by employees and companies alike intended to improve productivity and communication are crucial towards any business’ survival, they can only go so far if you’re not factoring in security. Consider this: security company Morphisec and the Ponemon Institute found the average cost of a successful cyber-attack was $8.9 million in 2019. IT research firm Gartner found that the average cost of your network being down is $5,600 a minute. Now these numbers may not represent your company’s personal costs, but do you really want to find out? So, what can we do to ensure long term that your data infrastructure is flexible, scalable, and secure enough to thrive as you plan and strategize for your business? Here are Mindcore’s seven simple recommendations that should be the foundation of your employee’s remote-work security. Top 7 Cybersecurity Tips for Employees Working from Home Make a Space at Home Exclusively for the Office The number one piece of advice. By isolating a space within the house or apartment that is designated for work, people can prevent stray use of their computer, maintain security standards, and increase productivity by limiting outside influences. Since those who are in heavy, highway, utility, or marine construction are often on the go, companies should seriously consider affordable, company-issued laptops and other mobile devices that can be controlled and kept up to correct security standards. Do Not Think That Home Is Safe
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cybersecurity and it budgeting for the Remote workers Conditioning the workforce to believe that cybersecurity at home is just as important as at the office helps ensure a secure mindset. Home networks can be easily susceptible to hacking attempts, especially in highly populated areas. Make Your Wi-Fi Secure Every person in your company should be using a Wi-Fi connection that requires a password of at least 12 characters, including a mix of letters, characters, and numbers. For those who are using a mobile data connection, a VPN when accessing sensitive information can be a simple solution. Use an Antivirus Solution that Works When it comes to antivirus, any solution is better than nothing, even if it’s out-of-the-box. For those who want to take an extra step, next-gen antivirus solutions are now available that use AI to consistently stay up to date with any current security threats. Always Log Out of Your Computer or Lock the Screen For those with kids, this is particularly important. Preventing access eliminates the possibility of any misguided website visits. Multi-Factor Authentication Login processes that require more than one step have a major impact on ensuring that no one can breach your business’ operations. Be Wary of All Emails During COVID-19 During health scares or other major events, scams increase in frequency. Drill into your workforce the concept that they must be especially sensitive to out-of-the-norm e-mails and follow company protocol for using VPN or a secure connection to access data. What UTCA Leaders Can Do to Future-Proof Their IT and Cybersecurity Your IT department needs to be consistently training your employees on the dangers of risky behavior. Also, solving current IT
Utility & Transportation Contractor | OCTOBER| 2020 55
NEWS
problems with duct tape, rather than a proper solution, is a mistake. You are setting yourself up for failure if you think that your IT can run on auto-pilot year after year, without a tech roadmap that allows your business to be flexible and scale its growth. COVID-19 has been a sad and painful reminder for businesses that the unexpected can and does happen, and the impact to an unprepared business can be costly. By far the number one lesson that we have seen unfold in 2020 is that having a technology strategy, a plan, and a team that can be trusted to execute it should not be an afterthought; it’s a requirement for every business. If you aren’t sure where your firm stands, the best advice I can give is to find a trusted advisor that can help you take a look under the hood and give you guidance in a way that you can apply to your business plans. Take Inventory of Both Your Hardware and Your Processes When working remotely or from home became a necessity and not an option, your company may have been one of the 50% to initiate new work-from-home ITSM (IT Service Management) policies. Chances are they were made hastily and relied on pre-existing technology or tech personally owned by the employee. Your IT team has likely seen a surge in reactive support requests, leading to significant additional costs from both servicing and company downtime. Let’s calculate those costs: how much money has truly been spent on providing each employee with support? How much longer are tasks taking now that you are outside of a centralized workspace? How would that compare to a new company-issued computer with security protocols established by your IT team, enhanced by improved remote support capabilities? At the same time, what are the common pain points your employees consistently experience that prevent timely completion of IT-influenced tasks? How are files being organized? Is there one uniform system for project management? Are your teams able to access data reliably and securely while on site of the project? Is data being backed up correctly and are employees ensuring that they aren’t saving company data to local computers hard drives? There are many more questions that should be asked and answered to ensure that your company’s data and other assets are being managed and protected wisely. Focus Your Budget on the Three C’s Cybersecurity. Cloud. Collaboration. Just focusing on one or two is impossible in today’s modern landscape. Cybersecurity costs are going to have significant variation depending on company size and industry requirements. You may already be paying for basic antivirus software and data encryption for compliance, but how do you keep control in a decentralized workspace? Companies need to look at the benefits that AI and machine learning of next-gen antivirus software provide, as well as invest time on company security protocols like two-factor authentication(2FA). Working without outside help to create a cybersecurity framework has the potential to leave you vulnera-
56 Utility & Transportation Contractor | OCTOBER | 2020
ble or reduce time that can be spent on productivity. Investing in a cloud service such as Amazon Web Services or a hybrid cloud solution that fits your firm’s size and business needs is essential as we all must now be equipped to work remotely with confidence. You might have been thinking about migrating to the cloud prior to 2020, but it’s essential that this be a discussion as your firm prepares for 2021 and beyond. As we have seen with some of our clients who work in construction, having held off on a cloud migration left some of them down for weeks as they scrambled to put remote work solutions in place just so they could connect the systems housed in the office’s IT closets. Construction firms we serve who had moved to the cloud in 2019, some of whom belong the UTCA, flawlessly navigated the remote work experience without missing a beat. Another recent event that impacted remote workers was the storm that caused massive power outages across Northern NJ. Firms already in the cloud were fine, but others were down for days, losing revenue and falling behind on work. What are the needs of your business? Are you just needing a place to store your files and video conference? Or do you have multiple software products from multiple vendors for multiple departments? Remote work has the tendency to highlight flaws in your workflow, meaning that costs can be saved by working with someone familiar with your industry and software needs. They can then prepare a fully fleshed-out solution such as Microsoft Teams. Don’t Be Afraid of Budgeting the Fourth C - Consultation We’ve sat across the table from UTCA members in the past and listened to the multitude of technological nightmares keeping them up at night. You’re not alone, and the truth is that your cybersecurity and IT roadmap can be clear as day within a week. Does your company need a staffed IT Director or just guidance and advisory services? Can outsourcing cover your IT needs at a reduced cost? What’s the best way for your company to routinely audit your security? Do you have a cloud strategy and a plan yet? It is important to have the information that will help lead you to sound decisions and give you the perspective that enables you to be prepared. Also, important to consider is that when people start consistently working outside of the office, they become more self-reliant and start doing things their own way. Please make it a point to educate your workforce and ensure that everyone is working within the framework of your processes and workflows. In a time of uncertainty for many businesses, no IT solution is going to be one-size-fits all, which is why I never come prepared to talk through only one solution. But what we will always provide for you at the end of the day is peace of mind and the knowledge that you’re set up with a solution that provides you with long-term stability, scalability, and security. Please visit our website at https://mind-core.com/ or you can reach us at (973) 630-0255 or by email at info@mind-core.com for more information.
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reforms to nepa process finalized by trump administration By: dan kennedy, director of environmental & utility operations
I
n the February 2020 installment of this column, we reported on proposed amendments to the National Environmental Policy Act (NEPA). As a reminder, this is a foundational environmental law enacted in 1970 (exactly 50 years ago during the Nixon Administration) with a mission to enhance the environment by requiring Federal agencies to evaluate environmental effects of proposed projects prior to construction.
UTCA, ARTBA, and the CWCC view these revisions as an effort to modernize the NEPA regulations and facilitate more efficient, effective, and timely environmental reviews. As we all know, projects that trigger NEPA reviews are not put out to bid until its processes and any litigation play out. Streamlining and modernizing environmental rules is often discussed but seldom accomplished. These changes are long overdue and welcomed by the construction industry. What’s Next? The NEPA revisions took effect on September 14th. ARBTA summarized the new rule in their July-August magazine, reporting that it: • Sets both page and time limits for an environmental impact statement (EIS) and environmental assessment (EA). • Requires a single, final environmental document for projects involving multiple agencies. This mirrors Trump’s 2017 “One Federal Decision” executive order. • Allows a lead agency to set a schedule for projects involving
• Requires all issues in litigation be raised during the comment process. • Clarifies that the effects of a project must be “reasonably foreseeable and have a close causal relationship to the proposed action,” meaning that a project is only responsible for the impacts it directly causes as opposed to potential impacts that might occur in the future. • Requires that alternatives to a project be “technically and economically feasible.” • Allows for private entities to prepare an EIS under the supervision of a federal agency. • Excludes non-federal projects and those with “minimal federal involvement” from NEPA review. • Allows projects to “cure” NEPA violations while continuing to move forward, rather than be halted. As ARTBA reports, there is still work to be done. They appropriately point out that projects that will benefit the most from these reforms are large, multi-year projects such as new roads, bridges, and transit systems. Such projects cannot be undertaken, however, until Congress passes a multi-year surface transportation bill and agrees on a stable funding source for the Highway Trust Fund. Without a reliable source of federal funding, states will not be able to undertake the types of projects these NEPA reforms are designed to help.
The Pipeline
We are happy to report that the rulemaking initiated in late 2019 by the White House Council on Environmental Quality (CEQ) has been adopted. UTCA submitted support of this proposal, and our national partners, the American Road & Transportation Builders Association (ARTBA) and the Clean Water Construction Coalition (CWCC), amplified our support. Support from the business community, especially construction, was essential for pushing past the opposition from the environmental community. Opposition to this effort was misguided, as it represents the first significant revision of the NEPA regulations since the original regulations were promulgated in 1978. With changes in technology and communications, the revisions are targeted at streamlining processes that have become mired down over the decades.
multiple agencies. The lead agency will also develop the “purpose and need” and “alternatives” for the project review.
Battlelines Hardened A coalition of 27 states (including New Jersey), commonwealths, territories, counties, and cities have filed a federal lawsuit against the Trump Administration for, in their words, “illegally gutting the nation’s bedrock environmental law.” They claim the changes to NEPA will eliminate or reduce environmental scrutiny for a wide range of major federal decisions and will harm the most susceptible communities.
Utility & Transportation Contractor | OCTOBER| 2020 63
These actions are predictable and expected. Partisan environmental lawsuits against the Trump Administration are, at last count, over 70 cases with 45 cases awaiting a judicial ruling. UTCA, ARBTA, and the CWCC will remain supportive of this proposal and take appropriate actions to see that this rule remains in place. This 50-year-old construct needed modernization and no governmental process should be exempt from improvement. The stakes are too high to leave any critical law unimproved for over five decades without a critical eye.
The Pipeline
UTCA is both supportive of action taken by the Trump Administration and the need for informed public engagement. When done correctly, informed and organized public engagement can produce better design, more community value, and fewer issues during construction. The government and its consultants do not have all the solutions. Designing and approving critical or costly infrastructure in a complete vacuum has negative consequences to taxpayers and rate payers alike. A reformed NEPA process can help save money and accelerate the construction schedules of infrastructure projects that we know are needed to improve public health and safety.
64 Utility & Transportation Contractor | OCTOBER | 2020
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Congratulations to this year's UTCA Award Recipients! Jim Coddington - Robert A. Briant, Sr. Award Hank Dobbelaar - Larry Gardner Award Ed Nyland - NJ Construction Industry Hall of Fame Inductee We thank you all for your dedicated service in the construction industry.
Jfank, (J)o66efaar
Larry qardner.Jlward <Rscipient Cheers from Frank, Linda, and your friends at West Bay
West Bay Construction, Inc. Engineers and Contractors, EEO I NJ Certified MBE I DBE I SBE 133 Pleasant Avenue, Absecon NJ 082011 (609) 380-7065 www .westbayinc.net
Congra t:ula tions to Ji:tn Coddingcon On being the recipienc ofthe Robert A. Brianc, Sr., Me.rnorial Aw-ard
Ed.N"yland On being inducced inco the NJ Const:rucdon Induscry Hall ofFa.me
Your Service and Dedication to the Global Construction Community and the State of New- Jersey is Truly Exemplary We w-ish both Continued Success in the Future Ann & Hank Dobbelaar
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Congratulations to Jim Coddington, Hank Dobbelaar and Ed Nyland MONTANA
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�Pr Northwestern Mutual" 163 YEARS OF HELPING PEOPLE STAY STRONG AND COME OUT STRONGER. From pandemics to recessions, we've been there to help our clients through it all. We believe that our version of financial planning can help you keep reaching your goals while knowing that you'll be ready for anything. LET'S WORK TOGETHER Patrick A Di Cerbo, CLU ®, ChFC", AEP ®, MSFS, CFP® Wealth Management Advisor 518.281.8200 patdicerbo.com pat.dicerbo@nm.com
07-1016 © 2020 Northwestern Mutual 1s the marketing name for The Northwestern Mutual Life Insurance Company (NM), (life and disabilrty insurance, annuities. and life insurance with long-term care benefits) and its subsidiaries in Milwaukee, WI. Northwestern Mutual Investment Services. LLC (NMIS)(secunt1es),a subsidiaiy of NM, broker-dealer, registered investment adviser and memberFINRA and SIPC. Patrick ADi Cerbo isan Insurance Agent(s)of NM.Patrick A Di Cerbo. 1s a Registered Representative(s) of NMIS. Patrick A 01 Cerbo, is a Representative of Northwestern Mutual Wealth Management Company>, (NMWMC) (fidociary and fee-based financial planning serVJces), a subllcfiaiy of NM and federal saVJngs bank. All NMWMC products and serVJces are offered only by properly credentialed Representatives who operate from agency offices of NMWMC. Certified Fmancial Planner Board of Standards Inc. owns the certification marks CFP•, CERTIFIED FINANCIAL PLANNER™ and CFP' (With flamedes�n) 10 the US., which 11 awards to individuals who successfully complete CFP Board's inillal and ongoing certification requirements
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the benefits of the utca member 401(k) Plan By: kevin ellman, cfp, ceo, Wealth preservation solutions, llc Introduction
A
recent spate of new lawsuits against employers’ 401(k) retirement plans has refocused attention on the need for plan administrators to ensure that they are honoring their fiduciary duties and prudently managing their plans. Many of these recent lawsuits allege that plan administrators use costly investment options, fail to consider alternative investment options, and don’t exercise negotiating power to reduce fees. Everything you need to know about managing your company’s 401(k) plan can be summed up with the four “F Words:” funds, fees, fiduciary responsibility, and fines. You must take care of the first three if you want to avoid the final “F word,” fines! Funds Make sure to offer a full selection of low-cost index funds. The basic rule here is not to overpay for underperformance. We advocate using low-cost index funds. Why? Because the majority of actively managed mutual funds not only fail to meet or beat their index, but as a group, are much more expensive than index funds. The spread is about 1% for actively managed funds compared to just .06% for the line-up we offer. The savings really add up in your employees’ 401(k) account balances over the years.
• Dramatic Reduction in Plan Administration. The inclusion of a third-party administrative fiduciary is unique to the UTCA Plan. Normal TPA duties include compliance testing and filing of the annual form 5500. In the case of the UTCA Plan, the administrative fiduciary goes above and beyond by handling virtually all day-to-day administration. In addition to ensuring fiduciary compliance, this can be a tremendous time and aggravation saver. • Reduced Investment-Related Fiduciary Responsibility. Wealth Preservation Solutions, LLC will select and monitor the fund lineup, thereby providing additional fiduciary protection. • Dramatic Reduction of Overall Plan Costs. You will benefit from group buying power. We have negotiated competitive rates for the recordkeeper, third party administrator, and mutual funds. Without the benefit of group buying power, we often see total plan costs of 1.5% to almost 2%. Depending on plan size, the overall cost of a UTCA Plan ranges from .81% to .99%. • Reduced Fiduciary Liability for Trustees and Owners. The Department of Labor fined 401(k) plans $2.57 billion in 2019. It is critical to follow all the rules and guidelines for 401(k) plans. This starts with plan design. The UTCA Plan includes all the required features and still retains the ability to customize the plan to your specific company needs.
Take advantage of economies of scale and leverage group buying power whenever possible.
Our team will hold regular employee education meetings and overall plan reviews to make sure everything stays on track. You will also receive our proprietary fiduciary binder that will record all the steps you have taken to fulfill your fiduciary responsibilities.
Fund fees are not the only costs of running a 401(k) plan. Your plan will need a recordkeeper, third party administrator, and an advisor. These services can easily add an additional cost of 1% or more.
• Reduced Individual Fund Costs. The UTCA Plan will take advantage of the full range of low-cost institutional index investments, the lowest cost funds available in the market brought to you by Vanguard.
Fiduciary Responsibilities
• Full Access To Your Accounts Via A State Of The Art Online and Mobile Portal. You and your employees will have full access to your accounts online and through mobile portals.
Fees
Use a third-party administrative fiduciary to alleviate daily headaches and ensure fiduciary compliance. The plan sponsor or trustee of your company’s 401(k) program, as its fiduciary, is held to a strict fiduciary standard. Specifically, a company’s fiduciary is responsible to its employees not only for running a program that facilitates their ability to save for retirement, but for following all fiduciary guidelines. Benefits Of The UTCA Member 401(k) Plan:
NEWS
The 4 "f words" of 401(k)s:
This program is available to UTCA members and their employees. Call Kevin at 201-618-8818 or email him at kellman@wpsllc.net to discuss how you can reduce your 401(k) plan costs by taking advantage of the UTCA Member 401(k) Plan: * Phone: 201-618-8818 * Email: kellman@wpsllc.net * Website: Wealthpreservationsolutions.com
Utility & Transportation Contractor | OCTOBER| 2020 71
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Jim Coddington - 2020 Robert A. Briant, Sr. Award Hank Dobbelaar - 2020 Larry Gardner Award Ed Nyland - 2020 NJ Construction Industry Hall of Fame Inductee WATER &SEWER Ductile Iron, PVC, HOPE, CPVC, Fiberglass Fittings, Restraints & Accessories Specialty Hardware Valves & Fire Hydrants Brass, Copper, Service Material Wide Range Couplings EMERGENCY FABRICATION Custom Pipe Spools - Flanged, Grooved, Threaded Custom Filler Flanges & Dutchman Spacers Custom Supports & Hangers Miscellaneous Metals - Carbon, Stainless, Aluminum, Galvanized Concrete Filled Bollards
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Att.er 100 years, Operating Engineers Local 825 has grown through past economic crises, including the Great Depression. The COVID-19 pandemic has caused hardship to many but through hard work and expertise, we will grow through this too. We look toward our partnerships with the state and federal governments to invest in infrastructure programs - including wind, solar and natural gas - to help get the remainder of our members and the rest of New Jersey back to work.
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T hrough this holistic evaluation process, we seek to reduce your overall spend, understand your culture and enhance employee engagement. Engaged employees have proven to have lower absenteeism, fewer safety incidents, better work performance, higher customer ratings and higher productivity.
Interested? Please contact: Tim Fitzpatrick Direct: 908.309.5210 Email: tim.fitzpatrick@ioausa.com
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Congratulations 2020 UTCA Award Recipients! - Jim Coddington: Robert A. Briant, Sr. Award - Hank Dobbelaar: Larry Gardner Award - Ed Nyland: NJ Construction Industry Hall of Fame Inductee
www.ioausa.com 2020 INSURANCE OFFICE OF AMERICA ALL RIGHTS RESERVED
By: tim fitzpatrick, senior vice president, employee benefits, ioa & nancy damato, rda benefit services
I
n our prior two articles, we provided an overview of benefits administration or “Ben Admin” systems and discussed the overall benefits of leveraging technology to manage and maximize a company’s employee benefits program. In the June edition, “Leveraging Employee Benefits Technology to Improve Your Company’s Bottom Line” focused on the overall advantages for employers. The key points concentrated on the day-to-day considerations of installing a technology solution: compliance, communication, time, and money. In the August edition, “Leveraging Benefits Technology Part 2: Virtual Open Enrollment” further examined the strategy of using this type of technology to get the most out of a company’s annual Open Enrollment. In our third and final installment of this series, we will review essential factors to consider when choosing a vendor or software solution to implement. As the use of benefits technology by employers continues to grow, particularly in response to new virtual work environments, the number of options available to those employers continues to grow as well. Although more alternatives can provide a greater degree of flexibility in choice, the many options can prove overwhelming to decision makers. Max McKay, Benefits Technology Lead at IOA explains, “There are hundreds of benefit administration systems with varying technologies and capabilities, which makes it extremely difficult to determine the best solution for a company. There is no one-size-fits-all as it pertains to a firm’s benefit administration needs.” It is imperative, then, to establish baseline criteria to evaluate each solution. Among the many factors to assess, employers should focus particular attention on the following capabilities: integration, decision support, analytics and reporting, and compliance.
• Integration – The ability for a Ben Admin to integrate with payroll, medical and ancillary carriers, and COBRA and FMLA vendors is essential to reducing unnecessary administrative burden and reducing human error. Max McKay states, “A benefit administration system without proper integration is like a car without an engine.”
NEWS
leveraging employee benefits technology part 3: how to choose the right solution
• Decision Support – As previously discussed, a Ben Admin system is often used to capture Open Enrollment elections, qualified life events, and new hire enrollments. It is critical that the system is easy for employees to use. Many technology solutions offer decision support tools or AI chat boxes to help employees navigate through the decision-making process. In addition, options exist for employers to load videos and push notifications to educate employees on their benefit offerings. • Analytics & Reporting – Strategic decisions regarding total compensation and benefit offerings can be greatly improved when factoring in actionable data. Several data points can be captured in benefit administration systems, which can influence plan design, contribution, and plan offering decisions. An employer should consider what type of data they want to access and how they would like to apply it. • Compliance – A benefits administration system should be able to adapt and stay up to date with the latest regulations. Whether there are state or federal law changes, the system needs to be able to accommodate these changes and prevent manual manipulations or workarounds. Having a benefit administration system that provides ACA reporting and measurement/stability period tracking is essential to reducing the burden of the ACA requirements. Evaluating the technological needs of an organization can be difficult. Matching those needs with the right Ben Admin vendor can be even more challenging. It is, therefore, essential to align with a benefits broker or technology consultant who understands the specific needs of the organization and can provide recommendations that meet them. As noted in our prior articles, many brokers have established relationships with vendors in this space and can offer their clients product and pricing advantages over the open market. When implemented correctly, these solutions can add tremendous value to a company’s culture and bottom line. Contributions from Max McKay, Vice President and Benefits Technology Lead, IOA
Utility & Transportation Contractor | OCTOBER| 2020 81
For nearly 100 years, J. Fletcher Creamer & Son, Inc. has provided solutions to the infrastructure needs of the business community, governmental agencies and utility companies throughout the United States. To learn more visit us at JFCSON.COM UTILITY
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"Building A Better New Jersey Through Transportation And Utility Construction" Utility Contractors Industry Advancement Fund Your Industry Advancement Dollars At Work:
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County College Constrnction Technology and Engineering Scholarships College Engineering Internships and Scholarships Public Education Messaging Highlighting T he Benefits ofInfrastructure Investment NJDOT Specifications Improvements Funded Nationally-Recognized New Jersey Economic Study On Infrastructure Investment Funded Public Research On Infrastructure Investment Options
UTCA of New Jersey PO Box 728 * Allenwood, NJ 08720 (732) 292-4300 www.utcanj.org Dave Smith - President, UTCA Phil Schifano - Chairman, UCIAF Robert A. Briant, Jr. - CEO, UTCA
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* Jet Vac Cleaning of 4" pipelines up to large culverts * CCTV Video inspections performed by NASSCO Certified Technician * Air, Mandrel & Segment Testing for Sanitary Sewer * Wet Well Cleaning, Maintenance & Rehabilitation Programs * Hydro Excavation for sensitive utility exposure * Manhole & Catch Basin Lining and Rehabilitation * Trenchless Service Lateral to Main repair utilizing UV Technology * UV & CIPP Trenchless Spot Repairs on Active Lines * Grout Injection Repair of Manholes, Mains & Laterals from 4" to 48" * Trenchless CIPP Pipe Lining for all sizes of mainline pipe and service laterals * Large Diameter Centrifugally Cast Structural Lining NAP WOULD LIKE TO CONGRATULATE UTCA 2020 AWARD RECIPIENTS JIM CODDINGTON 2020 Robert A. Briant, Sr. Award HANK DOBBELAAR 2020 Larry Gardner Award ED NYLAND 2020 NJ Construction Industry Hall of Fame Inductee
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92 Utility & Transportation Contractor | OCTOBER | 2020