Reshaping the Construction Industry

The following article originally appeared in the October newsletter to clients of Kiley Advisors, LLC.  Reprinted with permission.

Every CEO and senior executive has, as a major part of their responsibilities, the obligation to set the strategic direction for their organization so that it has a deliberately designed future – one that is believable and desirable.  They also have the obligation to lead their organization toward that future, acquiring the necessary resources and making the critical changes.

Strategy, simply defined by the reigning guru Michael Porter of the Center for Strategy and Competitiveness at Harvard, is what an organization faced with competition does to gain a sustainable completive advantage in the markets.  It is how it puts resources at risk to provide more value, or a different value than competitors, to a targeted group of customers within target market segments.  It becomes in essence “What” the company does.   Read more » about Who Before What: Talent Enables Strategy

The federal government is getting more serious all the time about cracking down on businesses that pretend their employees are subcontractors when, by law, they should be paid as employees.  That was part of the message of labor law attorney Daniel Ramirez as he spoke to about a hundred representatives of various businesses at a labor law conference in the Dallas area hosted by
K&S Insurance Agency.

Ramirez, who also spoke in great detail about workplace issues like sexual harassment and the realities of the Affordable Care Act, said that his main concern for employers about worker misclassification is that companies can quickly find themselves in court facing class-action lawsuits.

“This is one of the hottest litigated issues,” Ramirez said, in large part because some workers will find out they should have been paid as employees and therefore should have received overtime pay.   Read more » about Noted Labor Law Attorney Warns Employers Against Worker Misclassification

Workforce shortages have been predicted for decades.  I recall a sociology professor talking about the “snake eating a pig” theory of demographics and how that would be a problem in the workforce in the early 21st century.  That talk took place 50 years ago and today those predictions are a reality.

Despite the early warnings and the facts pointing to potential shortages, many firms in the construction industry are still ill-prepared to deal with issues surrounding the possibility that they would experience shortages in skilled workers until recently.  The response from some in the industry is to deny that the shortages exist on their projects.  Some recognize the problems but don’t know what to do about them; some recognize the problems and are looking for solutions; and some are even leading the industry in solving those issues.   Read more » about Workforce Shortages in Green Building

PPIs remain mild in September; employment rises; construction spending drops in August

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

The producer price index (PPI) for final demand dropped 0.3%, not seasonally adjusted (-0.1%, seasonally adjusted), in September and rose 1.6% over 12 months, the Bureau of Labor Statistics (BLS) reported last Wednesday. AGC posted an explanation and tables focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. There are no indexes yet for other building types, or for residential or nonbuilding construction. The PPI for final demand construction, not seasonally adjusted, was flat in September and rose 3.0% over 12 months. The overall PPI for new nonresidential building construction—a measure of the price contractors say they would charge to build a fixed set of five categories of buildings—was flat for the month and up 3.1% since September 2013. The PPI for new warehouse construction fell 0.1% in September and rose 2.2% over 12 months; offices, 0.1% and 3.2%, respectively; industrial buildings, 0 and 3.3%; school buildings, -0.1% and 3.4%; and health care buildings, 0 and 2.7%. PPIs for new, repair and maintenance work on nonresidential buildings by concrete contractors rose 0.1% and 1.5%; electrical contractors, 0 and 1.0%; plumbing contractors, 0 and 4.7%; and roofers, -0.4% and 4.9%.   Read more » about AGC's Data DIGest: September 30 - October 20, 2014

Following concerns raised here on Construction Citizen by contractors in Austin, the Austin Community College Board of Trustees has decided to create a task force to hammer out new rules for construction under a proposed $386 million bond.

The ACC board was planning to move ahead with the new rules when Associated General Contractors Austin President Phil Thoden wrote on Construction Citizen that it appeared the proposal was being rammed through:

"...the resolution appears to have been crafted without input from a broad range of the local construction community.  This is especially puzzling when you consider that the owner in this case has the word “community” as part its official name.   Read more » about Austin Community College Taps the Brakes on New Rules for Construction

The following article was written by Marek Workforce Development Coordinator, Arthur Ehmling and was originally published on

After the 2014 Workforce Development Graduation July 23rd, I met with one of the twenty-one new Marek Helper graduates, Rodrick Horn. Rodrick came to us during the probation period of the Workforce Development Training program. Rodrick completed the process and started the probation period in January 2013. He proved to be an outstanding trainee, and was switched to MBS payroll that March. Rodrick is working toward his goal of becoming a foreman.

MBS projects that Rodrick has worked on include Minute Maid Park, BBVA, Katy High School, Baylor College of Medicine, Moody Gardens, UTMB-Galveston, Halliburton, and Nordstrom.  : Read more » about Helper Graduate Discusses Marek's Workforce Development Program [VIDEO]

In a September 2014 study entitled Sinking Underground: The Growing Informal Economy in California Construction, misclassification of more than 39,800 construction workers is a key reason that the underground economy in construction is contributing to the low wages, difficulty in recruiting qualified craft workers and loss of wages and taxes in the State of California.

According to the study, released by the Economic Roundtable, a non profit research organization based in Los Angeles, in 2011 more than 143,900 construction jobs in the state were “informal” – code for off the books, misclassified as independent contractors or unreported by employers.

The study looked at wages and construction jobs from 1972 to 2012 and found that the number of construction workers that were unreported or misclassified increased by 400% during that period.   Read more » about New Misclassification Study Shows Impact in California

It’s been said that the military’s purpose is two-fold: “To kill people and to break things.”  But in the battle against an invisible enemy, in this case the Ebola outbreak in West Africa, United States military forces are tasked with building infrastructure that will hopefully help struggling nations contain the deadly infectious disease.  Specifically, they are arriving in Monrovia, Liberia as part of a plan to build tent hospitals and train local nurses to treat a reportedly widening Ebola epidemic in Africa.

The Wall Street Journal reports the troops are getting a slow start:

“On Saturday, a handful of troops from the Navy's 133rd Mobile Construction Battalion led a bulldozer through thigh-high grass outside Liberia's main airport, bottles of hand sanitizer dangling from their belt loops.   Read more » about US Troops Get Started with Construction of Ebola Treatment Centers [VIDEO]

The following article was written by Marek Fabric Panels Project Manager, Bill Rankin, and was originally published on

In commercial construction, fabric panels systems seldom hit the radar when Fire Code compliance is considered. They usually come to light after an incident. Typically, Plan Review Departments within some major metropolitan areas focus primarily on the obvious considerations of occupancy, egress, exits, stairwells, sprinkler heads and strobes long before wall finishes and then, sometimes they are not considered or reviewed at all. The continual non-enforcement of fire ratings and testing on textiles or fabric panel systems contributes to the complacency about fire code compliance for those systems. The lack of enforcement may actually make it appear to some contractors and designers that the code is non-existent, but the code does exist.

If a state, city or metropolitan area adopts the International Building Code (IBC), then wall finishes and fabric panel systems fall under Chapter 8 Section 803 for fire code compliance. Section 803.1.1 describes that “Interior wall and ceiling finish materials shall be classified in accordance with ASTM E84 or UL 723. Such Interior finish materials shall be grouped in the following classes in accordance with their flame spread and smoke developed indexes. Class A, B or C.”

What is true about the IBC is that it establishes the minimum requirements, and a jurisdiction cannot subtract from a code or contend that a section of the code does not apply. A jurisdiction can only add to the code, and usually those additions create more stringent requirements than the code may already provide.   Read more » about Liability for Fire Code Compliance in the Absence of Enforcement

Last month marked the end of summer.  For most of us, that means no more trips to the beach or outdoor BBQs, but for many of our neighbors working construction in Texas, the falling temperatures offer desperately needed relief from brutal, and often life threatening, working conditions.

Billy Tirado is a foundation repairman from Dallas.  For the past 12 years, he’s worked hard to provide for his wife and three daughters, but he risks his health every time he works in the hot Texas sun.  Last summer, Billy was working for a foundation repair company that forbade him from stopping for water or rest.  As a result, he nearly fainted from heat exhaustion.  “Your body feels like it is suffocating...I felt dizzy.  My eyes got blurry.  I felt nauseous.”

Sadly, Billy’s experience is typical in the Texas construction industry.  Because there is no state or federal law ensuring rest breaks for construction workers, many employers fail to do the right thing; nearly 40% of Texas construction workers do not receive rest breaks on the job.  Workers who are denied rest breaks face higher risks of heat stroke, heat exhaustion, and even death.  This summer in Dallas, an average of two workers were hospitalized due to heat-related illnesses every day.   Read more » about Working Without Rest Puts Lives in Danger


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