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Utility And Transportation Contractor

December 2015


Utility and Transportation Contractor, DECEMBER 2015

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President’s Message As I am writing this message I am thinking about the long line of prior UTCA Presidents who have written extensively and passionately about the need to fully fund a robust Transportation Trust Fund. Over the years the Association members and board have put in extensive time and efforts in identifying the dilapidated and unsafe conditions of New Jersey’s transportation infrastructure. There have been numerous reports on the precarious situation of the lack of funds with most of the available funding going towards paying off the outstanding TTF bond debt. The Association has worked with legislators, cabinet officers and staff in the Governors’ office to develop plans and legislation to solve the problem. However, time and time again we had thought we were close to an agreement to move forward only to run into a lack of political leadership necessary to address the crumbling infrastructure.   The time has run out and there are no solutions possible to allow us to continue to ignore the situation. “Kicking the can down the road”, a road full of potholes, is no longer possible. All of the available funding for the TTF now goes to pay off debt service and that is still not enough. Monies from the state general fund budget also have to be used to pay debt service. It would have been very easy to have walked away from the situation after the past failures to secure long-term funding but the Association chose not to do that. The UTCA is one of the principal founding members of ForwardNJ, a broad coalition of groups involved in the infrastructure industry as well as interested in the long-term growth and success of New Jersey. ForwardNJ was successful in highlighting the poor conditions of our roads and bridges. Regardless of recent polls, I am convinced that the public will support programs to increase the funding of a long-term solution to the problem as long as they are assured that the monies will be dedicated entirely to rebuilding New Jersey. The UTCA board members and staff have been holding meetings with

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individual legislators in every district to brief them on the status of the funding and the consequences the citizens will face if there is a failure to act. Through our efforts to factually discuss the problems and offer solutions we have developed a very good relationship with both the democratic and republican leadership in the legislature. I am hoping that our state is finally ready to act and future UTCA presidents will not have to write about the failure to fund the TTF.   I hope you have noticed how the UTCA magazine has been changing. There are a number of excellent articles with information you need to know to keep up with evolving industry issues. I want to Congratulate Lisa and Harry Chowansky and HC Constructors on celebrating 30 years in the business and also congratulate the Thompson family and Johnny On The Spot who after 45 years in business are still growing and innovating and serving the needs of our industry. Thank you to everyone in the membership who have given their time and efforts and have sponsored and participated in UTCA activities over the year. Your involvement is greatly appreciated and without your participation we cannot succeed.   Finally, I want to wish each of you very healthy and happy holidays and look forward to working with all of you to make 2016 a successful and productive year.

Best regards,

Tino Garcia Utility and Transportation Contractor, DECEMBER 2015


DECEMBER 2015

Contents

Volume XL, Number 6

Published Bimonthly During 2015 Office Address: 1670 Route 34 North Farmingdale, NJ 07727 Mailing Address: PO Box 728 Allenwood, NJ 08720 (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Anthony Attanasio Dennis Hart Dan Neville Advertising Manager: Helene Nasdeo Photographer: Image Up Cover Photo: Image Up Production/Graphics: Lauren Hagan Helene Nasdeo

Features 5 15 18 23 66

HC Constructors Completes 30 Years In Construction Five Strategies For Effective Communication Johnny On The Spot Celebrates 45 Years In Business Route 9 and Craig Road Project The Affordable Care Act

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Departments 2 32 36 48 55 63 71 74

President’s Message Accounting Corner Financial Overview Labor Relations Safety Perspective The Pipeline Legislative News Legal DIg

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Circulation: Helene Nasdeo Printed By: Regal Printing Affiliations: ARTBA Clean Water Construction Coalition Water Infrastructure Network

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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.

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Cover Story

HC CONSTRUCTORS, INC. 30 YEARS OF FAMILY, HARD WORK and TRADITION

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By: Anthony Attanasio, Executive Director

  or Harry Chowansky, construction is a way of life. Named after his father, Harry grew up in the industry and so his earliest memories are of job sites and construction equipment. Harry’s father was a lead operating engineer for Mohawk Constructors and a proud member of Local 825. As a kid, Harry would go to construction jobs with his Dad, taking rides on construction equipment, sometimes even driving them himself. Harry Chowansky was truly raised in the construction industry. His appreciation for hard work and desire to earn his success through building infrastructure was ingrained in him from his earliest years.   In Bridgewater-Raritan high school, young Harry Chowansky met not only his soul mate… but his match. Now, almost 40 years later Lisa and Harry are running the very successful HC Constructors, Inc. as a team.   After high school, Harry attended Rutgers University on a full scholarship for wrestling. He then quickly followed in his father’s footsteps and became an operating engineer and got his first job with Mohawk Constructors. With only two pieces of equipment, Harry and his father began HC Constructors in order to do oc-

casional side jobs outside of their full time employment with Mohawk. Harry was the jack of all trades for HC; operating equipment, keeping the books and covering pretty much every other aspect of running the company. At the same time, Lisa went off to Penn State University and after graduation became an account executive with Johnson & Johnson.

Aerial view of Rocktown Substation.

HC Constructors performs Caisson work.

  By 1997, HC had grown significantly but Harry realized he needed help to grow the company and really take things to the next level. He knew immediately where to turn. Lisa had a background in finance and 10 years of experience in corporate America. Lisa joined HC Constructors as President and that’s when the company truly began to take off. HC landed its first major job, handling site work and building a sound wall for the Dow Jones property on Route 1 in Princeton. The $1.3 million job put HC in a new league of the construction field and led them to more consistent and lucrative work in their core disciplines. They also began taking on increasing amounts of municipal and county projects which vastly

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HC Constructors personnel perform work at a New Jersey Pharmaceutical plant.

expanded their portfolio. In 2004 HC took the next step in their expansion by adding transportation work to their repertoire by performing bridge projects for various counties and municipalities.   What began as a small father and son side business has grown into a company that the Chowansky family is proud to say is now a go-to contractor for some of the biggest corporate names in New Jersey and beyond. HC has worked for the state’s largest private

utility companies, pharmaceutical giants, Rutgers University, NJIT and many more. Their work has also taken them to Delaware, Maryland, Virginia, Pennsylvania and New York. As of 2015 HC Constructors employs 70-80 employees in the height of construction season and has found a very successful and comfortable place within the infrastructure construction industry.   In addition to the company’s success, Harry and Lisa have also achieved professional success in industry organizations that benefit not just HC but all construction companies. Lisa currently sits on the Board of NJ Women in Construction and Harry recently completed a very successful term as President of the UTCA.   Looking ahead, Lisa and Harry continue to enjoy life with their four daughters and are always seeking to achieve greater personal and professional success while always remembering their humble roots. They are constantly looking for more efficient ways to run the company and hone their skillset. However, they are extremely proud of their award winning adherence to safety and the fact that they are developing a reputation as one of New Jersey’s top contractors for major private corporations.   The Chowanky’s like tough jobs, with tough schedules that other companies may feel are unable to be achieved. HC Constructors has and will continue to deliver for their clients on those types of jobs. Lisa and Harry are eager to see what new heights the future will bring this family operation as they move into the next decade of a story that began more than 50 years ago with a father and son on a construction site.

Pictured sitting from left to right are Bruce Junge - Chief Estimater, Lisa Chowansky - President, Harry Chowansky III - Vice-President, Liza Pope - Senior Project Manager. Standing from left to right are, Mark Iskandar - Project Manager, Scott McClymont - Controller, Shawn Kwiatek - Project Engineer, Angela Afranie - Estimating, Theresa Clother - Estimating and Dee Smaligo - Office Manager. 6

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FIVE STRATEGIES FOR EFFECTIVE COMMUNICATION By: PAUL ANOVICK   When things go wrong in the field or in the office the source of the problem is usually “miscommunication”. We often say time is money; well effective communication saves time and money.   “What we have here is a failure to communicate.” This expression sums up exchanges we have throughout our day. Why does this expression resonate with so many?   Some think communication is transferring a precise piece of information from one mind to another. Have you had data, or a conclusion: you felt so strongly about that all you had to do was explain your finding and people would instantly see your point of view? How did that work for you…not so well?   Here are several proven concepts that will help you be a more effective communicator.

1. Let others talk. My favorite acronym is WAIT—Why am I talking? By waiting and letting others speak first we are able to learn much. How do they like to communicate? Are they controlled and inexpressive or do they use their hands and many facial expressions? These are all clues on how you should communicate with them. By allowing people to speak first, your comments will be more effective and better received.

ly…” Seek first to understand, and then be understood.

5. The Golden Rule says, “Do unto others as you would do unto yourself.” A fine sentiment, however, in the 21st century the “World is Flat”. Realize the cultural, multi-generational and personality differences of the people you’re speaking with. Use the philosophy of “Do unto others as they would do unto themselves.”   The rewards of being a good communicator will directly influence your ability to lead; you will empower others to excel by clearly and effectively communicating. About the author: Paul Anovick is an Executive Coach, facilitator and public speaker who partners with C-suite executives, Industry leaders and entrepreneurs, to develop strategies, plans and processes that produce results for them and their organizations.

2. Listen. God gave us two ears and one mouth; I suggest we use them proportionately. You must work at listening…concentrate: get the information the first time. Good listeners do not jump to conclusions; they listen for ideas not just facts. Keep your mind open…hold emotion in check. Take notes and adjust to the speaker. Judge content, not delivery and listen optimistically. Good listeners are in the moment not just waiting to talk.

Create an open atmosphere. Notice the first two items were pertaining to receiving not sending. Communication is a two-way process, sending and receiving. Many focus only on the sending portion. In order to be a great communicator, you must build a climate of openness and trust. You do this by having mutual respect and the results will follow. Strive to communicate anger to others the way you would have them tell it to you. You know you have succeeded when both parties are still civil. Your listeners won't care how much you know until they know how much you care.

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4. Non-verbal communication. Eye contact. Smiling, nodding your head, appropriate facial expressions or body language all let the person know you are paying attention. Repeat what the other person says by using, “If I understand you correctUtility and Transportation Contractor, DECEMBER 2015

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Featured Article

JOHNNY ON THE SPOT CELEBRATES FORTY FIVE YEARS IN BUSINESS

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  ohnny on the Spot Temporary Site Services entered the nascent portable restroom market over forty-five years ago in 1970 with six homemade wooden portables operating out of the backyard of founders Al and Arlene Elias. Portable restrooms were a natural addition to the septic system pumping company they had started in 1969.   From its humble beginnings operating with two trucks and two employees, Johnny on the Spot rapidly grew along with the residential, commercial and public construction markets throughout Central New Jersey. Johnny on the Spot’s portable restrooms became especially popular with New Jersey’s leading contractors through its commitment to high quality portable restrooms and service. Within only a few years, Johnny on the Spot became one of the first providers of fiberglass portable restrooms in New Jersey and soon after that introduced the use of plastic restrooms, now the industry standard.   In the early 1980s, Jesse Thompson, whose stepfather and mother established the business, had formed a construction company that was active in rehabilitation work under the Housing and Urban Development (HUD) program. While at work one day early in his career, Jesse was faced with his first career crossroads after the passing of his stepfather Al; to take over responsibility and stabilize the family business or continue with his construction business. After initially planning to sell Johnny on the Spot, he quickly realized the value that portable restrooms had in filling market niches such as the busy New Jersey construction market. In the past 35 years since, Johnny on the Spot has built a construction market customer base of some of the most reputable firms in the United States.   Johnny on the Spot is constantly developing new ways to enhance customer service including creating a one stop shop for all project starts through product and service expansion. The most recent introduction is Plastic Water Filled Jersey Barriers which has 18

proven to be a popular service in addition to its Temporary Fencing division which was established in 2008. Besides its Standard Restroom, Johnny on the Spot has been a leader for years in delivering an exceptional product and developing new application for the construction industry. The Portable Water System is ideal for job trailers on work sites where a water source and/or sewer hookup is not available so that workers can maintain a sense of normalcy

Johnny on the Spot CEO Jack O’Hayre, left, and Jesse Thompson are shown at the firm’s headquarters. Utility and Transportation Contractor, DECEMBER 2015


Services and Swisher. His experience in the enterprise service industry brings new experience in logistics and efficiencies, allowing Johnny on the Spot to scale the company for geographical expansion and evolve the already reputable Johnny on the Spot brand.   Since recapitalization a year ago, Johnny on the Spot has made multiple acquisitions, including D. Lovenberg’s of Andover, On Site Johnny of Hackensack and Horizon Portable Restrooms of Trenton. These acquisitions have strengthened Johnny on the Spot’s route density, customer base and team. Johnny on the Spot has upgraded its Sparta branch and has added a branch in Trenton to better serve clients in Northern and Southern New Jersey.

Johnny on the Spot restrooms on-site at bridge widening project.

with the convenience of indoor plumbing. Trailered Hitch & Go restrooms follow road crews all throughout its service area and its High Rise Restroom comes equipped with a crane hook and heavy-duty casters (wheels) for easy mobility on job sites in buildings with multiple stories. These services provide workers with the convenience of portable sanitation and also help construction companies remain efficient by minimizing the time workers spend away in the bathroom.   Johnny on the Spot also serves its clients with its Elite Coaches line of Luxury Restroom Trailers which range from economical to extraordinary and include A.D.A. (Americans with Disabilities Act) Compliant options which are used on long term construction sites throughout New Jersey, New York and Pennsylvania.   Jesse Thompson recently sold a majority share of Johnny on the Spot to Dubin Clark & Co. Inc., a private equity firm. Thompson remains a significant minority shareholder, has a seat on the Board of Directors and is the Director of Mergers and Acquisitions. Johnny on the Spot is now led by President and CEO Jack O’Hayre who had a distinguished career with Aramark Uniform

On site at a road project in Edison, NJ.

  The firm’s state of the art headquarters in Old Bridge was originally built in 1999 and has been upgraded to meet growing demand and capacity. The location sits on approximately 8 acres and includes executive offices, maintenance bays, warehouse, extensive storage space and its innovative Transfer Station and unit repair facility where all equipment undergoes a 25-point inspection before being delivered. Johnny on the Spot currently has over 170 staff members.   Throughout the years, Johnny on the Spot has been an internationally respected member of the Portable Sanitation Association International (PSAI). Through its affiliation with the PSAI, business leaders have traveled from around the world to Johnny on the Spot’s Old Bridge Headquarters to gain valuable insight into the firm’s unique and innovative operations. Johnny on the Spot is also committed to environmental sustainability, using only environmentally safe chemicals and cleaners, recycles all plastic pieces that are replaced on restrooms and uses only low emission service trucks.   Johnny on the Spot has grown and developed an outstanding reputation for quality and service over the past 45 years, in large part thanks to its clients in the construction industry. Its success is measured by its commitment to its clients and employees, while always endeavoring to innovate and better serve its customers.

Johnny on the Spot serving the Vietnam Veterans Memorial Bridge project on Rt. 46 in Little Ferry, NJ. Utility and Transportation Contractor, DECEMBER 2015

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ROUTE 9 AND CRAIG ROAD PROJECT I

n early 2014, Earle Asphalt was awarded the NJ Department of Transportation’s Route 9 and Craig Road Intersection Improvement Project in Freehold, NJ with the winning low bid of $14,846,113.13. The purpose of the project was to improve traffic flow and reduce congestion at the intersection of Route 9 and Craig Road/East Freehold Road. For years the intersection had been a traffic nightmare for commuters as well as shoppers attempting to navigate access to the many local shopping plazas.   In order to alleviate the traffic quagmire, the Department designed a plan to substantially widen Route 9 from Ryan Road to

Aerial view of Route 9 center median construction and road widening.

Schibanoff Lane. Both sides of Route 9 were to be widened and the center median removed and replaced with center median barrier. The plans also proposed a new jughandle on Route 9 Northbound, connecting Pond Road with East Freehold Road to allow drivers to more safely cross Route 9 and improve traffic flow. To deal with traffic from the new jughandle, a traffic signal was proposed at the corner of Pond Road and East Freehold Road.   As anyone who has traveled Route 9 can attest, countless utility poles line both sides of the road, with overhead wires extending in every possible direction. In conjunction with the numerous underground utilities in the area, the relocation of the existing utilities posed a major challenge for the NJ DOT, the designer, and the contractor. Almost immediately after the initial utility meeting, it became apparent to all parties that the utility relocations would exceed the already substantial durations provided for in the contract.   With all parties working together, Earle Asphalt developed a Value Engineering Proposal that would allow Earle to work out of sequence of the originally designed stages and minimize the impacts of the anticipated utility delays. By performing the widening of the Northbound roadway under temporary shoulder closures, an entire stage of temporary work was no longer required, reducing the impact to thru traffic. Earle worked behind and around the existing utility poles, ensuring that the contract did not slip behind schedule.   The result of this collaborative effort is a project that has achieved substantial completion nearly eight months ahead of

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the baseline schedule, when a substantial delay once appeared inevitable. Additionally, the DOT and New Jersey taxpayers realized a significant savings as the project will be completed well under budget. The project is an excellent example of the benefits that can be realized by all parties when the Owner and Contractor work together to complete a project.   The project team for the Department of Transportation included Resident Engineer Travis Johnson and Project Managers Stan Pierzhanowki and George Kuhn. Earle Asphalt’s project team included Project Manager Mike Corsi, Superintendent Dave Anderson, as well as key foreman Rick Lamanna Sr., Luis Silverio, and Mike Cervone along with a host of other dedicated, hard-working Earle personnel. Key subcontractors included JBL Electric, Diehl Electric, Berenato Contractors, J. Fletcher Creamer & Sons, and MV Contracting. Earle crews complete drainage crossing on Craig Road.

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Accounting Corner

FRAUD & NEW JERSEY CONTRACTORS IT CAN’T HAPPEN TO ME, OR CAN IT? By: Jerry Killian, Ferreira Construction Co.

“Can Fraud happen to me” is a common question frequently asked and very often thought about by owners of construction companies. First, let me explain that FRAUD is a multi-faceted term and this article will only address fraud that is perpetrated where the Construction Company is at risk for losses against it by an employee – commonly known as “Asset Misappropriation”. Having been working in the construction industry for a number of years, I have clipped a large number of articles from New Jersey newspapers with actual fraud cases which have cost NJ construction companies’ significant amounts of monies. These cases are the ones that are actually reported to authorities and the construction company has prosecuted their fraudster. There are many more cases which are “worked out” with the individual, don’t make the newspaper and worse yet, have not been discovered by the Company. Headlines of these articles include the following:   • Construction Firm Worker Admits Stealing $630K   • Woman Admits Taking $400,000 from Raritan Borough   Business   • Woman Admits Stealing from Employer ($400K in forged   checks were used to pay for house, car and trip to Fiji)   • Bookkeeper Accused of $265,000 Theft from Firm   • Man Charged in Contractor Payroll Scam This list can go on for pages, and yes, these are actual headlines from New Jersey newspaper articles. Some interesting statistics about employee fraud:   • Fraudsters are generally first-time offenders – 87% of   cases reported,   • Most fraud is discovered by tips from other employees, 32

  customers or vendors, rarely does an audit find such fraud.   • Fraud occurs more frequently in companies with less than   100 employees, primarily due to lack of segregation of   duties or appropriate internal controls.   • Average cost of a discovered fraud in a construction   company is $330,000. Why do employees commit fraud? The 3 reasons are:   • Opportunity – Employee’s ability to commit fraud and   get away with it. (Lack of internal control)   • Incentive – Employee’s greed, desire, pressure or need.   (Employee believes that they can get away with it)   • Rationalization – Employee justifies the fraud.   (Employee believes it is “owed to him”)   Most contractor owners believe that they know their employees too well to fall victim to fraud. Some of the more common areas where employee fraud occurs follows.   Payroll- Payroll is one of the areas where fraud occurs frequently and typically includes the following:   • Employee reports more time than worked or reports additional hours at the overtime or double time rate. The employee’s supervisor typically is a part of this fraud and approves the overtime hours. Typically the employee and supervisor split the portion of the overpayment.   • Project manager/foreman lays off an employee but continues to report time worked as if the employee worked on the job. Laid off employee gets the check and splits it with the PM/foreman.   • Project manager/foreman submits information to create a “ghost” on the payroll for an employee that does not exist. Utility and Transportation Contractor, DECEMBER 2015


Preventative Measures should include: Using multiple individuals involved for new hires; confirmation of documentation submitted by new employee with union; once a year hand out paychecks to employees at jobsites; home office review and approval of overtime; layoff procedure to capture terminated employees. Subcontractors and Vendors – The most common fraud related to subcontractors and vendors includes:   • Project Manager makes a “deal” with a subcontractor or vendor for an inflated price, then the subcontractor/vendor “shares” the differential with the project manager. All of the paperwork looks legitimate, so this type of fraud is hard to detect.   • Field Employee makes a “deal” with a subcontractor or vendor to deliver materials to a different site, employee signs for materials as if the materials were delivered to the contractor site.   Preventative Measures should include: Owner or someone other than the Project Manager should review and approve all subcontractor and major material vendor agreements; material vendors should supply location where materials were delivered on delivery ticket; company should have policy to obtain multiple bids for subcontractors and material vendors.

Summary – Since the greatest source of tips is from other employees and vendors, Companies should:   • Train employees to understand fraud, what it is and how   it occurs.   • Encourage employees and vendors to report illegal or   suspicious behavior.   • Reassure all employees and vendors that any reports will   be made confidentially. Designate one person within the   organization for which employees and vendors can report   these matters.   • Re-assess the Company’s internal control, including the   segregation of duties, periodically to determine that the   opportunity does not exist for an employee to commit fraud. About the Author…. Jerry Killian, CPA, CCIFP is SVP & CFO of Ferreira Construction Co., Inc. in Branchburg, New Jersey. Prior to joining Ferreira, Jerry practiced as a CPA in the construction industry for 35 years and has worked with a number of ENR 400 Companies and UTCA Member Firms.

Check Disbursements – For smaller construction companies, generally there is not sufficient employees for adequate segregation of duties. It is common where the bookkeeper approves, enters in accounts payable invoices, prints checks, signs checks and does the bank reconciliation. Fraud typically occurs:   • Bookkeeper writes checks out to cover personal expenses   for themselves.   • Bookkeeper inflates their own payroll check.   • Bookkeeper uses company credit card for own use.   Preventative Measures should include: Owner reviewing check register for payroll and accounts payable, owner signing all checks; owner receiving bank statement at home and timely reviewing checks cashed and wire transfers; periodically reviewing bank reconciliations and asking questions on certain checks that are not familiar to the owner.     Misuse of Company credit at Vendors/ Diversion of Company Owned Assets – Diversion of assets usually does not add up to large amounts, but if rampant among a number of employees, it could add up to a larger dollar amount annually. These include:   • Use of company credit card or purchasing materials on credit (at say Home Depot) for which the employee picks up the materials then takes the material for use at home.   • Diversion of small tools and equipment, i.e., power tools, ladders, left over materials.   • Sale of scrap or excess materials for which the funds are pocketed by the employee.   Preventative Measures should include: Documentation of all purchases using a company credit card including approval from immediate supervisor of the person making the charge; review of credit card bill by Company owner to detect suspect transactions; policy on sale of scrap and reporting daily of any funds received in cash or check; assigning equipment to specific employees and make them responsible if it is lost or stolen, setting a policy that employee theft will not be tolerated and follow through by terminating such employees.

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Financial Overview

RELATIONSHIPS:

DE-COMMODITIZING COMMODITIES By: William J. Ruckert, Provident Bank

  Sometimes, the reality of doing business can seem cold and indifferent, cut-throat. Amid the chaos, hard work, competition, and ROIs, it’s easy to lose sight of how we do business and why. What makes us successful or not, and how is it measured?   The recent UTCA convention got me thinking about the importance of relationships on the ways we do business, and with whom. The old adage that “people to business with people they like,” couldn’t be more true. This is especially relevant in the construction industry.   That’s why I don’t want to talk about business tips this month. I want to talk about something so much more important than that: people. At the convention, there were billions of dollars of commerce in that room. But as I watched industry members milling and laughing and shaking hands, it dawned on me. The dollars aren’t the only thing that makes this institution and the industry so strong. It’s the people—and the relationships we forge with one another.   The UTCA is built on steadfast relationships. It’s so true isn’t it? Look no further than the organization’s past presidents—more than 30 of them—who were honored during Saturday evenings’ ceremony. In an industry as fiercely competitive as this one, dampened by economic weakness and scarce funding, they should, by any measure—fight tooth and nail. But every person who has held the President’s position, including out-going Scott Latimer and incoming Tino Garcia, has recognized that they’d get much further by building relationships rather than tearing them down. After all, “A rising tide lifts all boats.”   They also have one more thing in common: they realize that what’s most important of all are people. Bobby Briant continuing his father’s long-standing tradition of providing UTCA support to our veterans and Toys for Tots is a fine legacy that all members should be proud of. It demonstrates in a very tangible way the importance of strong relationships and how they have a positive effect in countless ways. Nurture your relationships. There’s no denying that the construc36

tion industry deals in commodities for general contractors, subcontractors, suppliers, and engineers. Every bid is a commodity. And it all comes down to the numbers. You’ve probably been led to believe that as a business professional you should look solely at price, but it is the relationships that de-commoditize the economics. Understanding their importance will help you earn more opportunities and ultimately win more business.   Besides the companies you work with directly, there’s one more very important person you should have a strong relationship with: your banker. Provident supports the UTCA in a variety of ways, including sponsoring the convention. Bankers are rare at the convention, which is puzzling given the size of the industry and the successful business people that attend. Their absence is indicative of a weak relationship and suggests a lack of industry support.   Much like the nature of a bid, bank products are commodities, but how are they differentiated? Working capital, term loans, mortgages, cash management, estate planning—all have an economic element, but it is the relationship that separates the competition. You work in the trenches, slugging it out, riding the highs, suffering the lows. You need a relationship with your banker that is illustrated by active dialogue, listening, and tailored solutions. The relationship is what de-commoditizes commodities.   I’d like to close with Tim McCarver, renowned sportscaster and former catcher for the St. Louis Cardinals, and his presentation at the Friday luncheon. It’s clear that he, too, knows the importance of relationships both on and off the field. Like the construction industry, baseball is a highly competitive business, but it was strong relationships that allowed McCarver to learn the game from competitors, be embraced by new teams, and make a seamless transition to the announcer booth. His relationships put him in a position to succeed both in and outside of baseball.   I believe he would agree that it isn’t numbers that drive the construction industry, but the people. And I am now convinced that nothing in business is stronger than the ironclad bond of a handshake, a pact of loyalty and friendship, i.e. relationships. Utility and Transportation Contractor, DECEMBER 2015


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Labor Relations

SUFFICIENT CONSIDERATION FOR RESTRICTIVE COVENANTS: IS CONTINUED EMPLOYMENT ENOUGH? By: Jill Tobia, Esq., Tobia & Sorger

  UTCA Contractors are undoubtedly familiar with using restrictive covenants such as non-competition and/or non-solicitation agreements to protect their customer relationships and confidential business information. Binding key company employees, who have access to sensitive company information and customers, to such agreements is essential for almost every employer in any industry. As with any agreement imposing limitations on an individual, restrictive covenants require a delicate balance between protecting an employer’s legitimate business interests and recognizing the employee’s right to earn a living after termination of employment. Parameters such as the scope and duration of the restrictive covenant weigh heavily in the drafting of an enforceable agreement.   However, in addition to scope and duration, the most essential component of a non-competition and/or non-solicitation agreement is that the agreement must be supported by consideration to be enforceable (i.e., the employee must receive something of value in order for the agreement to be binding). The issue of what constitutes sufficient consideration is a continual struggle for an employer, and has recently been the subject of even more turmoil as different state courts have taken conflicting views on this important component. UTCA Contractors, therefore, should familiarize themselves with this trend and examine both their existing and future agreements to ensure enforceability. Sufficient Consideration for Restrictive Covenants: Is Continued Employment Enough?:   Under New Jersey law, as well as in most other states, at the time of an offer of employment, the promise of the job itself constitutes sufficient consideration to support a non-competition and/or non-solicitation agreement. However, the more difficult question is what happens if an employer desires that an existing employee sign such an agreement? This happens frequently when an employee is given added job responsibilities and duties from his or her original position and gains access to more sensitive information. To date, New Jersey 48

courts have consistently held that the promise of continued employment constitutes sufficient consideration to make a non-competition and/or non-solicitation agreement enforceable even when the agreement is signed during the course of employment.   However, many other states, including Pennsylvania, have rejected this view and found that non-competition/non-solicitation agreements entered into after commencing employment, which are not supported by any additional benefit to the employee other than continued employment, are unenforceable for lack of consideration. Recent decisions in these states have rendered many restrictive covenants unenforceable, thereby leaving employers powerless to stop a terminated employee from utilizing knowledge and client connections gained during employment for the benefit of another employer. Although every case turns on its individual facts, courts in these states have increasingly required additional benefits, such as a wage increase or bonus payment, to support the enforceability of a non-competition and/or non-solicitation agreement. Advice for UTCA Contractors:   Although the law in New Jersey remains that continued employment constitutes sufficient consideration regardless of when a noncompetition and/or non-solicitation agreement is signed, UTCA Contractors should be aware of the fact that this is not the case in many other states including Pennsylvania. It is essential, therefore, for UTCA Contractors to review their use of non-competition and/or non-solicitation agreements to ensure that they are being offered at the onset of employment in as many instances as possible. Also, UTCA Contractors should review all existing agreements to evaluate whether additional compensation should be offered, such as an increase in compensation and/or a bonus, to avoid the lack of consideration argument in its entirety. The enforceability of restrictive covenants is an important enough issue that any time and expense devoted to addressing potential problems now will far outweigh risking a challenge to their enforceability in the future. Utility and Transportation Contractor, DECEMBER 2015


In Loving Memory Of

Joseph D’Annunzio 1929-2015

“Little Joe”

The February 2016 magazine will feature a Tribute to Joe D’Annunzio Utility and Transportation Contractor, DECEMBER 2015

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Safety Perspective

WOMEN IN CONSTRUCTION By: Dina Pomarico, Phoenix Safety, LLC

  Phoenix Safety, LLC is a full-service safety business that is workman’s comp claims and witnessing insurance rates climb. We 100% Woman Owned. It has been in operation for over six years and along the way we have worked with many different clients, participating in a wide variety of training and on-site safety services. My name is Dina Pomarico and I am the owner of this well established, highly diversified company. Although my background is in accounting, my vast experience working in the offices of construction companies for the past 20 years has helped me to truly understand the effects that safety and lack of proper safety procedures can have on a business’s bottom line.   My accounting and job costing background has allowed me to understand how labor, material and overhead costs can make a company profitable or put a company out of business. Labor costs in construction are inherently high, due to payroll taxes, union obligations and healthcare costs. These costs are taken into consideration when estimating a project. The hidden costs of workman’s comp claims, law suits and loss of labor due to injury sometimes are over looked and not taken into account when planning a project. Working in this industry has opened my eyes to how quickly a successful and profitable business can lose money or go out of business due to injuries, accidents and even deaths of workers. Construction is a dangerous business, but with proper safety policies and procedures in place these incidents and job costs can dramatically be reduced. Training our employees to properly and safely perform their work tasks directly affects our company’s costs and profitability.   Construction has predominately been a man’s business. Most owners, project managers, foreman, trade workers and laborers have traditionally been men, but over the years there is an increasing amount of women who are joining the industry, and who are very successful at it. Many women have been in the same position as me, working inside offices, accounting for projects, processing

are traditionally on the inside looking out. This has been changing over the years in the construction industry. More women are starting businesses, running businesses and joining the construction workforce by working on job sites. Women are very good leaders, however, we have a history of being the underdogs and fighting to lead. So many of us have families who we have organized for years, keeping two or three calendars to make sure an event isn’t missed. We are planners and have a keen sense for detail. Women are multi-taskers and often take on more than one thing at any given minute. Women are relied on by their families to make most decisions, to make sure that households run smoothly and that children are kept safe from harm. One cannot argue the important roles that women play in the home and in the work place.   Taking all of our life skills and applying them to projects in construction, gives women a leading edge to succeed. Over the years I have raised three children, run an organized household, worked two to three jobs and now have a successful safety company. Women in construction can bring their organizational skills, budgeting skills, and logic and conflict resolution skills to any construction site and be very effective in making sure projects are run smoothly and without incident.   I have taken my life experiences and have applied them to my business plan and these experiences have allowed me to run a business that truly cares about the welfare of my workers and all the workers I am hired to protect from harm. My father died over 20 years ago at the young age of 53 from cancers caused by asbestos in the workplace. He was permanently disabled and his life fell apart at the seams, he suffered greatly and left a young wife and family behind, all because no one protected him at work. More importantly, no one trained him how to protect himself from hazards he was faced with on the job. This really is the driving force behind

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my business; I take safety very seriously because I know first-hand how a permanently injured employee’s family is affected by poor safety measures and procedures in the workplace. The death of my father at greatly affected the way I look at training, safety procedures and protecting ourselves and our workers from hazards faced on jobsites. It is my business goal to spread the importance of safety to all companies who put their workers at risk every day. As a daughter, I feel obligated to preserve my dad’s memory and fight for safety in all workplaces, so that moms and dads can kiss their children goodnight, every night, after a hard day at work. It is my duty as a woman-owned safety business to do my job effectively and help educate other companies to do the same.   Working within construction companies for over 20 years I have processed workman compensation claims, I have talked to desperate wives of men who have been injured or killed on the job, and watched how quickly lives fall apart because of injuries. I have also seen how accidents and injuries affect small companies. Insurance premiums and compensation pay outs can financially ruin a business. Over the years accidents, incidents and injuries have gravely affected small and large businesses nationwide. Workman compensation claims, permanently disabled Americans and loss of work have put companies out of business, men and women out of work and has led to loss of income, homes and in some cases families. Safety is hardly ever the first concern on a project, in most

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cases; safety doesn’t even make the top three or top ten. Those who work unsafely are just lucky that they have not been injured. I often hear, “I have been doing it this way for years, nothing is going to happen to me”. What these people need to understand that no one thinks it’s going to happen to them, and it does every single day.   I am hands on in my safety business. I write Corporate Health and Safety Manuals, I conduct on-site OSHA compliance audits and inspections and I have even run confined space safety and rescue projects. I train employers on how to keep compliance in their shops and on worksites. I train employees on all OSHA related safety topics to help ensure their understanding and compliance when working on the job.   Women have a place in construction. It is my experience that more and more men on the industry are accepting us as equals on the job. We can work together to make sure we; protect ourselves from harm, put in a good day’s work and that our companies turn a profit, this in turn keeps us safe from harm, and ensures that our work will continue to financially support our families. Safety should always be first in every task, staying safe at work allows us to continue living well and our families will be grateful for that. Don’t depend on LUCK to get you home safely, follow all safety policies and procedures, and be responsible for yourself.

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The Pipeline

By: Dennis Hart, Director Of Utility Operations   The industry and the UTCA staff are working to help de-

velop the future construction industry leaders and employees by working with our New Jersey colleges and universities on engineering and construction technology curricula. It is important that graduating students have the education and experience necessary to succeed and advance our industry. To that end a number of UTCA efforts are taking place. I am an active member on the engineering and construction technology advisory committees at the New Jersey Institute of Technology, Essex County College, Union County College and the College of New Jersey. These committees focus on the courses offered to the students as well as the program’s goals and objectives. If you have suggestions on course work, certificate programs or other ideas to improve the capabilities of the graduates please let me know. The colleges need to know that these programs are important and valuable.   On October 20, 2015 The UTCA and the New Jersey Institute of Technology continued to focus on building the relationship between the University and the Industry by holding an Engineering, Design and Construction Careers Forum. The program featured representatives of ten UTCA member companies interviewing and discussing the opportunities in the construction industry with over 100 junior and senior engineering, architecture and civil construction technology majors. Following the Careers Forum the UTCA members participated in a reception and dinner meeting with University President Joel Bloom as well as with Deans, Administrators and Professors from the various related programs.

  UTCA President Tino Garcia led the UTCA participants in thanking Dr. Bloom for his personal attention towards forging a close relationship with the UTCA. As stated by Tino Garcia, “The ability to discuss the issues and needs of the industry with the professors and administration is invaluable. These ongoing efforts are helping us to bring on board new employees who understand the needs of the industry and have received the education and training necessary to be successful. Our relationship with NJIT will only get stronger and will benefit the University and the UTCA”.   The Construction Industry Advancement Program of New Jersey is working on the 2016 Internship/Scholarship Program. Industry members and staff are currently interviewing 125 students who have applied for the program. The students are from 13 colleges and universities and are civil engineering or civil construction technology majors in their sophomore or junior years. The interview committee will select between 60 and 70 students to participate in the program which begins with the CIAP Career Fair on January 6th at the Pines Manor in Edison. Companies wishing to participate in the career fair should contact me as soon as possible. The 2015 program had 40 companies at the career fair interviewing 70 students. The industry was able to hire 59 of the students to work as interns for the summer of 2015 and each of these students received a $3,000 CIAP scholarship upon the successful completion of their internship. The association maintains contacts with the students who participate in the program therefore, if you are looking for interns throughout the school year or the resumes of recent graduates you can contact the association.

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THE AFFORDABLE CARE ACT:

EMPLOYER REPORTING OF HEALTH COVERAGE FOR 2015

By: Nancy Damato, Partner, RDA Benefit Services   The Affordable Care Act has created Employer Reporting requirements under Internal Revenue Code Sections 6055 and 6056 for health insurance coverage. This reporting is to be provided to the IRS in early 2016 and is based on health care coverage in calendar year 2015. REPORTING REQUIREMENTS FOR SMALL EMPLOYERS   Section 6055 (using IRS Forms 1094B and 1095B) requires reporting by employers with fewer than 50 employees. The health insurance companies will provide the reporting for fully insured health plans, but employers are required to report if they offer a SELF-INSURED health plan or are a part of a MEWA (Multiple Employer Welfare Arrangement) health plan. For those employers with fewer than 50 employees that also have union workers as part of their group, there is no obligation on the employer’s part to do any reporting in regards to the union health plan. REPORTING REQUIREMENTS FOR LARGE EMPLOYERS   Section 6056 (using IRS Forms 1094C and 1095C) is used by large employers (with more than 50 employees, inclusive of union employees), no matter what type of health plan they offer (fully insured or self-insured plans)-- and even if they currently do not offer any group health insurance. A form is filed for every fulltime employee in regards to the offer of coverage and is not just for those employees on the group’s health plan. (For example, if an employee has coverage through their spouse, a form needs to be completed for that employee since he is full-time and was offered health coverage.) There is no need for the fully-insured employer group to include dependent information on the forms; however, 66

employers of self-insured plans do need to include dependent information. There is also transitional relief for employers with 5199 employees. Even though they must file in 2016, they are not subject to any applicable penalty until 2017. NEW REPORTING GUIDELINES FOR LARGE EMPLOYERS WITH UNION EMPLOYEES   Employers with more than 50 employees are responsible for reporting on both the union and non-union employees. However, there has been some interim guidance for 2015 for MULTI-EMPLOYER PLANS. A form still needs to be filed by the employer for every union employee, but the data that is required is quite simple. Refer to the 2015 Final IRS instructions for Forms 1094C and 1095C for more detailed information. REPORTING ON NON-FULL TIME EMPLOYEES   Large employers must also report on “other” NON-FULL TIME employees, such as Directors, retirees, terminated employees and those on COBRA. COBRA participants may include former employees, as well as any active employees who have had a reduction in hours. For former employees, reporting is only required if they enroll in the health coverage under COBRA. But the coverage they had as an employee is still reportable. THE DEADLINE FOR REPORTING   These forms are required to be sent to all full-time employees no later than February 1, 2016. And the forms must be filed with the IRS no later than February 29, 2016 or March 31, 2016, if filed electronically. Entities that send out at least 250 forms must file electronically. Continued on Page 76 Utility and Transportation Contractor, DECEMBER 2015


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Legislative News

FEDERAL & STATE UPDATE By: Anthony Attanasio, Executive Director   Happy December everyone. I am happy to report that this Christmas season the construction industry isn’t getting coal in its stocking when it comes to transportation funding.   At the time this article was written the U.S. House of Representatives had approved a six year surface transportation reauthorization bill by an overwhelming 363-64 vote. The Senate had previously approved a similar measure. The legislation was passed with impressive bi-partisan support of 187 Republicans and 177 Democrats voting in favor of the first long term renewal in more than a decade. The bill will now go to a joint conference of Senators and Congressmen to iron out the differences between their two versions. The UTCA would like to acknowledge the hard work of Congressman Frank LoBiondo (R-2), Congressman Bill Pascrell (D-9) and Congressman Tom MacArthur (R-3), who all worked tirelessly to get the bill passed in the House.   Another positive announcement came out of Washington D.C. when the USDOT announced that the Federal Government would commit half of the funding to the new Gateway Rail Tunnel project. The project is estimated to cost $20 billion and the remaining half of the funds would be supplied by New York, New Jersey and the Port Authority of NY/NJ. This announcement could not have come at a better time considering the current deplorable state of the existing 100+ year old Pennsylvania Railroad Tunnels combined with the crushing demand for new capacity. In addition to the thousands of jobs in the construction industry this project will create, it will increase the reliability and capacity of our rail system between New Jersey and New York which will lead to the creation of tens of thousands of permanent jobs and economic development that will bolster this region for decades to come. We want to acknowledge the leadership of Senator Cory Booker for his efforts in this great win for the economy of New Jersey and

New York. His steadfast determination and work to bring all parties together in a bi-partisan manner to find a resolution to fund this project deserves thanks from the thousands of commuters and businesses that rely on the dependable infrastructure needed to enhance the commerce between the two States and the region. We also wish to acknowledge the efforts of Governors Christie and Cuomo, Secretary of Transportation Foxx and Senators Menendez and Schumer for their cooperation and determination to craft a funding agreement.   Back home in the Garden State, the transportation funding battle rages on. With the State elections now behind us, and the Republicans taking a devastating 4 seat loss in the Assembly, Democrats emerged from their victory and reaffirmed their desire to renew the Transportation Trust Fund (TTF). Assembly Speaker Vincent Prieto and Majority Leader Lou Greenwald held a press conference the day after the election and a long term, robust and sustainable TTF renewal was the centerpiece of their legislative agenda going forward. UTCA has met with these leaders and others from the Majority and Minority parties to continue to advocate for a solution. We are also continuing to educate and advocate with groups beyond just state government. I recently spoke at the 1st Annual Commerce and Industry Association of New Jersey (CIANJ) Manufacturing Summit. I spent the time educating many businesses in New Jersey’s manufacturing sector on the current dire status of the TTF and encouraged them to engage in the renewal process. In addition, the UTCA hosted its annual reception at the League of Municipalities Conference in Atlantic City. The event drew more than 200 attendees including dozens of legislators, County Freeholders, municipal leaders, engineers and decision makers in Trenton who spent the evening discussing the TTF with UTCA staff and Continued on Page 76

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Legal Dig

THE FALSE CLAIM ACT:

A POTENTIALLY DEVASTATING TOOL FOR YOUR COMPETITORS By Paul T. Fader, Esq., Association Legal Counsel

  A recent jury verdict in U.S. ex rel. Joshua Harmon v. Trinity Industries Inc. et. al. has been appealed to the U.S. Court of Appeals, Fifth Circuit and focuses on the Federal False Claims Act (“the Federal FCA”). This is a case that may have a far reaching impact on the industry and highlights that the Federal FCA can be used as a tool by contractors against competitors.   The Federal FCA states that anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval,” or who “knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim” is liable to the U.S. government for damages and penalties. 31 U.S.C. § 3729(a)(1)(A) and (B). The Federal FCA can be enforced by the Department of Justice or, like the New Jersey False Claims Act, by a private individual acting on behalf of the government sometimes referred to as a “Relator”. Damages in a Federal FCA case are usually the difference between what the government paid for the work and what the government would have paid but for the false claim. The Federal FCA provides that the plaintiff may recover triple the amount of damages or “treble damages.” The Federal FCA also permits the government to recover penalties between $5,500 and $11,000 for each false claim as well as costs and attorney’s fees.   New Jersey has its own False Claims Act which is modeled after the Federal FCA and allows individuals with evidence of fraud against the State to sue on behalf of the State and, if successful, recover treble damages. See N.J.S.A. § 2A:32C-1.   The Trinity case involved the Federal Highway Administration’s (“FHA”) requirement that guardrails must be crash-tested and accepted by the FHA in order to be eligible for reimbursement. Defendant Trinity obtained such acceptance for its ET-Plus guardrails in 1999. However, in 2005, Trinity modified the design of the ET-Plus guardrails but did not seek the FHA’s approval for the new design. Thus, the Relator (the private individual who 74

brought the lawsuit on behalf of the government) argued, and the jury agreed, that Trinity violated the Federal FCA by knowingly and falsely certifying that its guardrails had been crash-tested and approved for reimbursement by the FHA. The Relator (the private plaintiff bringing the suit on behalf of the government), who is a competitor of Trinity’s, alleged that Trinity’s false certifications induced the government to reimburse states for the costs associated with installing unapproved guardrails on federally funded highway projects.   Trinity’s primary argument throughout the trial was that the reimbursement claims could not be false because the FHA determined retroactively in 2014 that the modified guardrails were approved for reimbursement. Nevertheless, the jury found that irrespective of the FHA’s retroactive approval, Trinity’s initial certification that the modified guardrails were FHA crash-tested and approved was false since no such approval took place at the time of the certification. The jury returned a $175 million verdict against Trinity.   As a result of the verdict, the District Court entered a final judgment of $663.4 million against Trinity. The Court trebled the $175 million verdict to a total $525 million as required by statute and assessed approximately $138 million in penalties. Of the $663.4 million final judgment, a 30 percent commission was awarded to the Relator, $16 million in attorneys' fees, $2.3 million in expenses, and $177,830 in taxable costs. The government was awarded $464.4 million.   On appeal, Trinity is expected to argue that the Court erred in not relying on the retroactive approval and that the award of damages was not based on any clear set of facts. Additionally, Trinity will argue that the District Court’s final judgment was grossly excessive in violation of the Eighth Amendment’s Excessive Fines Clause. Continued on Page 76 Utility and Transportation Contractor, DECEMBER 2015


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Continued from Page 66 REQUESTING AN EXTENSION TO FILE OR A WAIVER TO NOT FILE ELECTRONICALLY   The IRS wants employers to make a good faith effort to report information timely and accurately. However, if an employer needs more time to complete the forms, they can file IRS form 8809 by the original filing due date and that will give them an automatic 30 day extension. Also, if an employer has an issue filing electronically, they can use IRS form 8508 to get an exception to file using paper. They must file this form 45 days prior to the electronic due date.   To view the forms mentioned in this article, please visit www. irs.gov. For more information about these changes and to receive updates as they occur, please feel free to contact us to be placed on our mailing list: ndamato@rdabenefits.com or 855-693-0772. RDA Benefit Services, LLC is an employee benefits firm that offers group health, dental, vision and voluntary benefits, as well as individual and executive life, disability and long term care insurance. Continued from Page 71 Board members. UTCA will continue to be the leader among the advocates to ensure that the Governor and Legislature pass legislation that will benefit the New Jersey taxpayers and economy in a meaningful way.   In addition to the TTF, the UTCA has a robust legislative agenda in the lame duck session this winter. We are working with legislative leadership on issues such as streamlining the process for road rehabilitation projects after utility work in municipalities and codifying appropriate apprenticeship language in statute. We are also working with the Department of Transportation on legislation aimed to improve the project close out process.   As we continue to do our work in Washington D.C. and Trenton to improve the working climate for the construction industry, please consider making a contribution to the UTCA Constructors for Good Government PAC. A strong political voice through our PAC will help us advance our goals in an even more effective manner. Thank you as always for your support of the UTCA.   Have a great holiday season and a happy and healthy new year! Continued from Page 74   The Fifth Circuit Court of Appeal decision in the Trinity case may go a long way in determining the parameters of the Federal FCA and specifically what constitutes a false claim. Certainly, the decision rests upon an expansive definition of a knowing “false record or statement.” Most importantly, as you can see in the Trinity case, the False Claims Act case was brought by a competitor contractor. Simply gaining the approval of, for example, a resident engineer to approve change orders in order to reach an overall outcome that may be accepted by both the contractor and the public owner is fraught with danger if the change orders are not accurate. Clearly, all contractors doing public work in New Jersey should be aware of both the Federal FCA and the New Jersey False Claims Act as it can be used by anyone including a competitor or subcontractor with devastating effects.   The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation.

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Utility And Transportation Contractor

December 2015

Utility and Transportation Contractor December 2015  
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