By Brad Nichols

A rigorous inspection of a construction site verifies that workers are performing their job safely, that applicable laws and regulations are being followed, and that the finished building will meet the owner’s expectations. With swarms of workers, schedule pressure and a constantly changing job site, inspecting a construction site can be challenging but the following steps will result in an efficient, effective inspection.

Preparation

First, you should verify that you have the name and cell phone number of your on-site contact. Then, set the standard with your use of personnel protective equipment; arrive at the jobsite with a hard hat, safety shoes, long sleeve shirt and safety glasses at a minimum.

Workers should arrive on site with a hard hat and safety goggles.

Inspect for Worker Safety

Construction consistently ranks near the top of the lists of most hazardous occupations. Your inspection of the job site should include a walk-through of the entire job site including remote staging or storage areas. In particular, check for the following high risk topics:

• Fall Protection – Falls are the leading cause of death on construction sites. When workers are six feet or more above the ground, properly fitting fall protection must be used. Verify that workers are using fall protection when required and that the fall protection is being used correctly. Check to see that harnesses are worn snugly and inspect both in-service and tool room storage fall protection equipment for cuts, wear, abrasion and repairs that reduce the integrity of those items.

• Ladders – Ladders must be placed on solid footing, a challenging criteria for many worksites. Ensure that ladders are in good repair with no missing rungs or field repairs. Look overhead for any electrical wires near the ladder. Observe workers on ladders for incidences of over-reaching to the side or standing on the top steps.

• Trenches – Trench collapses are often fatal. Verify that approved shoring methods are being used before any worker enters a trench.

Inspect for Compliance

Local building inspectors, fire marshals and OSHA inspectors may arrive at your jobsite at any time. Make sure your jobsite is in compliance by following all applicable regulations. In particular, check for:

•  Information – Ensure that the OSHA “It’s the Law” poster (English and Spanish), the phone number of local emergency services, and the phone number of the job site safety supervisor are conspicuously posted.

•  Regulations – Review the OSHA regulations particularly applicable to the jobsite; check Standard 1926 for general construction.

•  Building permit – Verify that the job site is in compliance with all the conditions of the building permit(s).

Documentation

Record your inspection with photographs, notes and sketches of your observations. Not only do these records provide objective evidence of worksite conditions, but the simple act of recording such details heightens your focus and improves the quality of your construction site inspection.

Brad Nichols is the owner of ICPS Australia, a company with combined experience in building inspections and investigations and engineering consulting. ICPS provide a wide range of services from disaster management, project management and engineering solutions. He can be reached at icps@icps.net.au. 

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Ron Antevy

The great recession of 2008 and 2009 has forever changed the way facility owners think about construction. What was once simply a means to an end is now viewed as a strategic and important consideration to their overall business success.  Owners construct facilities in order to meet their business objectives, whether to increase patient throughput for a hospital, serve a community need for a local government, or drive revenue and profit growth for a traditional business.  For the most part, owners did not actively participate in the construction process – until now.

We are seeing an unprecedented trend where owners are becoming more hands on in all aspects of the process.  They are recruiting construction management talent to work in house or through program management firms.  They are deploying systems and technology to give them visibility and control over the process and their desired outcomes.  Executives as well as end users are getting more involved in the scope, schedule and cost.  They are also asserting themselves regarding the business arrangements and level of collaboration they expect from their contractors and designers.

As a general contractor, designer or other non-owner participant, how should you respond to this trend?  In working with hundreds of facility owners on over 50,000 projects, our team has seen two trends emerge among leading contractors and designers.

1. They welcome the owner’s involvement and look for ways to complement it.  Companies that push back too hard and come to the table with a “that’s not how we like to do it” mentality might win the battle on a project, but will lose the war for repeat work.  Companies that are viewed as more flexible and open to new ideas are getting more work – and more profitable work too.
2. They take the time to understand “why.”  For example, if the owner wants a certain type of contractual arrangement, the company that takes the time to ask questions and really dig until they understand the owner’s goal might find an easier way or a different way to achieve that goal.  They act as a trusted advisor. They are perceived that way by the owner – and they get more work.

These leading firms are the ones that owners want to continue bringing in for new projects.  Most of the owners that we work with have multiple projects and we’ve seen it first-hand.  Hopefully, you’ll consider this as you look at your next potential project.
Ron Antevy is president and CEO of e-builder. He can be reached at
rantevy@e-builder.net.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Phil Freeman  

The construction lending industry is undoubtedly still reeling from the effects of the 2008 economic crisis. At that time, construction projects halted, leaving buildings partially finished while unsold homes and condos began to pile up across the country. A lot of consumers were left under water with their loans. This period and its effects on the economy resembled that of the savings and loan crisis of the 1980s. Just as the industry recovered from that, we are starting to see the signs of positive momentum today.

In March 2010, according to the Federal Deposit Insurance Corporation (FDIC), nearly 17 percent of construction loans were non-current – at least 90 days past due or otherwise in trouble. Also, 23 percent of construction loans for one to four family residences were non-current. At this critical juncture, the industry had to make immediate changes, and now banks have altered how they managed their portfolios to keep lending and ultimately surviving through this time.

Prior to 2008, the number of newly built homes was as high as 1.4 million annually, which dropped to 0.5 million in 2009. We are now at the highest level of new home construction since 2008, approximately one million homes per year. We have also seen a drop in vacant properties. In 2008, there were approximately 120,000 vacant, unsold detached homes, but today there are only 29,000.

As we approach the halfway mark of 2013, the construction lending industry is finally beginning to see a slow but steady recovery. Many abandoned construction sites are now picking up activity, unfinished neighborhoods are on their way to completion and banks are becoming more comfortable taking on new construction projects. Builders are finally able to start new construction, with some even purchasing land to build entire developments, something unheard of in recent years.

The signs of a comeback are encouraging; according to research firm Chandan Economics, the default rate on construction loans was 9.5 percent in Q3 2012, the lowest number since 2008. Banks are renewing their focus on construction lending, which creates the ripple effect greatly needed for a strong, vibrant construction market.

History has proven that whenever the housing market swings – whether it is in a positive or negative direction – the effect on our economy can be overwhelming. However, communities prove to be resilient as they continue to rebuild and grow to become stronger than ever. The industry will certainly face challenges again, which is why it is more important than ever to focus on the lessons learned during the last five years to better prepare for the future.

Phil Freeman (pictured) is CEO and founder of Westlake Village, Calif.-based Data Select, which provides the Construction Loan Control System (CLCS), a commercial real estate banking and construction loan software. He is also chairman of the board of directors. Freeman has more than 45 years of experience working with computer applications and various banking industry services.

By Dan Fields, AIA

The successful completion of any project, no matter the size or scope, depends on input from client stakeholders. This type of engagement ensures that everyone involved, from building occupants to the management team and maintenance staff, understands project goals in order to keep the budget and project schedule on track and minimize unexpected costs or delays. When architects integrate stakeholder input into the design process, clients will better understand the scope and purpose of a project as well as the decision making process that led to the final building design.

Identify Your Stakeholders Before You Design
Designers must identify key stakeholders, who in many cases are project owners or managers, prior to the start of any project. There are, however, circumstances in which other stakeholders emerge. For example, North Carolina A&T State University involved students as stakeholders during the design process on its new on-campus student health center for which ground breaking was held earlier this year. These day-to-day users of the facility would be key in providing a different perspective in the building design. While the original project stakeholders were concerned about the privacy of students entering a health facility on such a prominent site, the student input shifted the focus to making a building that was warm and inviting to everyone on campus. They believed that for the center to attract students as a gathering place, it should be a noticeable part of their campus.

To ensure the smooth completion any project, the architectural team must incorporate key stakeholders throughout the entire design process. Although these target publics do not need to attend all meetings and be part of every discussion, it will be to everyone’s benefit if they are regularly informed of design updates and any serious issues that arise.

Minimize Surprise Budget Increases
Stakeholder input also significantly impacts the amount of money spent on each project. Sticking to a construction budget is critical for a successful outcome for project owners and stakeholders. When stakeholders offer their input early in the design phase, it leads to a streamlined construction process that will yield more positive future results. Stakeholders will better understand why certain decisions were made, leading to fewer questions and changes in the construction process. Changes are much less expensive to make on paper than during construction.

Eliminate Unexpected Timing Delays
Similarly, stakeholder input matters for projects that need to be completed in a timely manner. Questions posed by stakeholders allow project managers to determine what changes to address first. When necessary changes are recognized early on, they can be made without significant impact to the original time frame laid out for the project’s completion.

While your client expects excellent results from your expertise, everyone involved will appreciate being included in decision making and will be happier with the final product and understand why decisions were made that led to the final design. By including their input from the early stages of your partnership, you will be more able to manage your project and will minimize any unusual time or budget demands.

Dan Fields, AIA, is a project executive and principal at EYP/BJAC, an expertise-based architecture firm that partners with academic, medical, research, and government clients to realize vital long and short-term objectives, offering specialized design, planning, sustainability consulting, and project delivery services.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Allen Pryor

Within the engineering and construction industry, revenue recognition is a critical issue for both Generally Accepted Accounting Principles (GAAP) and tax purposes. Engineering and construction companies continue to focus on the impact that tax depreciation of fixed assets has on revenue recognition. In recent years, Congress has provided a special depreciation allowance for certain property. This special depreciation allowance, commonly referred to as “bonus depreciation,” has permitted taxpayers to deduct between 50 percent and 100 percent of the cost of qualified property, in the year such property is placed in service, for federal income tax purposes. The special depreciation allowance is taken into account prior to the regular depreciation deductions otherwise permitted. For construction companies with significant fixed assets, the benefit of bonus depreciation can be significant.

However, bonus depreciation does not necessarily provide any added tax benefit to taxpayers that are required to recognize revenue under the percentage of completion method for long-term contracts. This method of accounting is required for certain construction contracts that are not completed within the taxable year in which the contract is entered into. Under the percentage of completion method, taxpayers estimate the total contract costs and total contract revenues each year. The amount of revenue recognized each year is determined by taking total contract revenue, multiplied by a ratio of total contract costs incurred to date over total estimated contract costs, less contract revenues recognized in prior years. Thus, the acceleration of deductions provided by bonus depreciation often results in higher revenues for taxpayers subject to the percentage of completion method, rather than the lower taxable revenues intended by Congress.

Congress has temporarily addressed this issue in the American Taxpayer Relief Act of 2012. This Act extended 50 percent bonus depreciation to property placed in service in 2012 and 2013, and added a decoupling provision to the percentage of completion rules. As a result, taxpayers computing income under the percentage of completion method do so assuming bonus depreciation does not apply for assets placed in service during 2013. However, longer production period property with recovery periods of ten or more years, do not qualify for this exception.

While bonus depreciation has now been in effect for a window period stretching from 2008 through 2013, Congress has not consistently decoupled bonus depreciation from the percentage of completion method. Therefore, companies particularly in the engineering and construction sector must focus on the impact of these provisions and their policies for revenue recognition for tax purposes.

Allen Pryor is PwC’s U.S. Engineering & Construction tax leader, based in the Dallas office. He has more than 17 years of experience providing tax planning and compliance in both public accounting and industry. He has extensive experience providing tax consultation related to companies with multi-state and international activity, as well as tax planning for business formations, acquisition structuring, internal revenue service dispute resolution and analysis, and ASC 740.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Megan Browning

BikeWorks (BWorks) is a non-profit organization in St. Louis that teaches children about bicycles, books and bytes (computers). With as many as 30 bicycles coming in every day for refurbishment, donation and sale, BWorks recently expanded into a 13,000-square-foot space in St. Louis’s Soulard neighborhood.

While the new facility was big on space, it lacked amenities. Built in 1860, the stable and warehouse lacked basic systems like electricity, plumbing and heat. BWorks turned to architect Tom McGraw to renovate the shell to create the perfect space.

“It was just a shell,” McGraw said. “We completely renovated the entire thing. We have large, high spaces and we wanted to reduce our reliance on the heating and cooling system.”

To augment BWorks’ geothermal heating and cooling, McGraw installed high-volume, low-speed ceiling fans which work in tandem with the building’s newly installed heating and cooling system, as well as its operable windows. Three 8-foot diameter fans are the perfect fit.

HVLS fans use their immense size, not speed to incorporate air movement in a space. During hot summer months, the fans are run at a higher speed to create a steady circulation of air. Although air movement produced by the ceiling fans does not lower the actual temperature, the perceived cooling effect can make occupants feel up to 10F cooler.

When temperatures begin to drop in winter, the HVLS fans are slowed, not reversed, to distribute heated air throughout the space. This creates even temperatures from floor to ceiling without creating a draft. Costing just pennies-per-day to operate, these fans provide a cost-effective method of controlling energy costs through improved air circulation. “The fans are integral in moving air efficiently, allowing for maximum use of the green innovations,” said Stephen Schmitz of BikeWorks.

Beyond providing efficient, effective air movement, the HVLS fans combine a slim and compact design with an anodized aluminum finish to seamlessly blend into the newly renovated historic building. “The size and design fit onto the blend of old and new that is BWorks,” Schmitz said.

With the renovation and expansion of BWorks, the owners and operators hope to build participants’ self-esteem, self-motivation and self-discipline. In addition, BWorks strives to have kids graduate with a greater sense of respect and responsibility, and have stronger desire to serve and improve their community.

Megan Browning is a writer for Big Ass Fans, the world’s preeminent designer and manufacturer of large diameter, low speed fans.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Robert Ferris

Green building design is no longer a trend. In fact, it is hard to imagine a future where analyzing a project’s impact on the environment is not a central building design concern. A recent study conducted by Navigant Research finds revenue from constructing zero energy buildings will grow exponentially over the next 20 years. Green building revenue is expected to reach $690 billion by 2020, and may rise to $1.3 trillion by 2035. As green practices continue to become more mainstream, the goal of designing net-positive energy buildings, ones that produce more energy than they consume, will emerge as the next major frontier.

Benchmarks for Sustainable Building
Sustainable design is promoted by organizations like the U.S. Green Building Council (USGBC) using Energy Star, a program designed to help individuals and businesses protect the environment through superior energy efficiency, and LEED as industry-wide standards.

LEED is the most recognized green building certification program that provides third-party verification of green buildings, including individual buildings, homes and communities. LEED addresses a building’s entire life cycle by recognizing performance in five areas: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. LEED-certified buildings significantly enhance communities by creating places that give people healthier spaces to live, work and play. Improved indoor environmental quality, through proper air circulation or natural lighting, positively impacts the overall health of building occupants as well as increases work productivity.

The Latest Trends in Sustainable Design
Sandy Grove Middle School in Lumber Bridge, N.C., is designed as a LEED Platinum, net-positive facility. Incredibly unique, a net-positive building produces more energy than it consumes through on-site renewable energy sources. A prototype of the highest level of green building, the school pushes the boundaries and incorporates many innovative features beginning to trend in construction across the country, including geothermal heating and cooling, photovoltaic panels, sun clock adaptability, high efficiency lighting, solar energy trees, spray foam insulation and whole-building generators, which will contribute to increased energy efficiency, water savings and whole-site sustainability.

Marrying the most efficient technology available, this model for design will pay dividends for the building’s occupants and the surrounding community for generations. These measures can also be applied to make existing structures more viable. Cost savings through environmental sustainability now stands to be one of the biggest markers of architectural excellence in our industry now and in the future.

As more buildings are designed with sustainability in mind, these features will become more common as part of a ideological shift across the architecture and construction industries. It is critical to increase the focus on sustainability with measurable results, allowing for more design professionals to create projects like Sandy Grove Middle School that promote the highest level of environmentally friendly design. Green building is not a fleeting trend; rather, it is an approach to building suited to current demands, and its importance will increase exponentially as it is a commitment to the environment, to you, your loved ones and to our future.

Robert W. Ferris, AIA, LEED AP, REFP, is president and CEO of SfL+a Architects, which offers services in architectural planning, design, construction, land planning and interior design. The firm has offices located in Raleigh, Fayetteville and Charlotte, N.C.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By Nick Lombardi and Bill Willbrand

There are many energy incentives available for your business if you take the time to explore all the sources. Your accountant may be aware of federal tax incentives and your contractor is likely to know about utility rebates, but there may be other incentives that they are not aware of. Ultimately, it comes to you, the business manager, to identify these, and more importantly to make sure the appropriate paperwork is done at the proper time. Failure to do so can result in lost benefits or penalties.

Utility rebates often require the application for the rebate to be submitted before the contract for the work is signed. Federal tax incentives change over time, so it is important to understand the impact of the timing of the kick-off and completion of the project. Also, special certifications are required for some of these incentives.

There are three things we highly recommend you do before signing an installation deal to ensure maximum benefits:
1) Make Yourself an Expert – There is a very useful source of most everything you need to know at www.dsireusa.org, which is sponsored by the US Department of Energy. It will lead you to the federal, state and utility incentives and information sources that are available in your area.
2) Contact your Local Electric and Gas Utility Providers – It may seem counterintuitive that they might want to sell you less of what they make, but they are highly motivated to please the people who regulate them to provide these services. You will likely find that they are extremely helpful.
3) Contact your Accountant – The ownership structures of businesses, overall profitability, past tax filings, and future plans for the property can have profound impacts on the cash benefits provided by tax incentives. You should work with your accountant to understand how the incentives translate into cash flow for you.

Equipment vendors or installing contractors will provide the project cost quotes and will usually help you calculate the total amount of energy the project will save. They should also be able to help you determine the maintenance costs. If the vendor does not guarantee the performance of the project, you may want to obtain an independent estimate of these factors.

Once you have all the numbers, run a discounted cash flow to understand the return on your investment. A discounted cash flow analysis for the life of the project is the best way to understand its true economics.  Comparing the cash flow of different projects is the best way to decide which to do. For projects that have a very quick payback, you can probably avoid the effort of the discounted cash flow and use a simple, undiscounted payback analysis.

Nick Lombardi is a manager in the Brown Smith Wallace risk advisory services practice. He has nearly 30 years of experience managing energy projects, including conducting energy audits, performing engineering studies and building energy models. He can be reached at nlombardi@bswllc.com, or 314.983.1323.

Bill Willbrand is partner in charge of the Brown Smith Wallace real estate advisory services practice. He has more than 25 years of experience serving clients in the construction and real estate industries. He can be reached at bwillbrand@bswllc.com, or 636-754-0200.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

By James Honnan Mellett

Sustainable building, or “green building,” is a term used to describe the construction process through which structures are built using materials that are environmentally sustainable and responsible. From conception and design to completion and maintenance, the green process is also resource-efficient, and all elements used in the build are tried and tested to coincide with the structure’s life-cycle.

In order to find the right sustainable materials for green projects, the engineers, architects, designers, and other teams involved in the build must collaborate. Not only are the end results economical and comfortable buildings, but they’re also durable structures that limit the negative effects of construction on the environment.

The Benefits of Sustainable Materials
There are a number of specific benefits to using sustainable materials in construction, not only in relation to the environment, but particularly when it comes to building cost, future maintenance and (in some cases) tax relief.

First, sustainable materials offer greater design flexibility. Construction companies are now looking to complement cutting-edge, environmentally-friendly materials with bespoke design without compromise. The cost of changing space configurations has also been driven down thanks to green materials. Excess material can be redesigned and integrated into other parts of the build instead of creating excess waste.

Furthermore, there’s also a reduced risk to the builders involved in the construction of a sustainable building. The greener the materials used, the better the productivity and occupant health of the building. One of the most important benefits of using sustainable materials in construction is the conservation of energy, which also translates to reduced maintenance costs. A material’s increased life and integrity translates to less money that may need to be spent on future replacement costs.

What Makes a Material Sustainable?
The construction industry consumes more than 3 billion tons of non-renewable resources worldwide each year. Shockingly, this only accounts for around 40 percent of global use of these resources. With the increased use of sustainable materials in construction, companies can promote the conservation of ever-dwindling resources while highlighting the ever-present environmental and individual dangers of current construction practices.

There is a wide variety of sustainable construction materials used today, and it’s the ability to harvest and reuse these materials that makes them sustainable. Take lumber, for example; wood is one of the key elements in countless construction projects. Sustainable lumber can be responsibly sourced from companies that plant more trees than they cut down, which reduces the negative impact on ecosystems near lumber harvest areas.

Dimension stone, recycled metals and other non-toxic materials also fall into the category of LEED-certifiable sustainable materials, mostly because they are reusable and can be reshaped to conform to new designs.

Sustainable materials are the future of global construction, and to complement the building process, it’s a best practice to source sustainable materials from as close as possible to the project site to minimize waste, energy, and even transportation costs for the project. Identifying and using sustainable materials in such ways not only makes for more effective project management, but also has a positive impact on the planet by reducing the amount of non-renewable resources used throughout the construction process.

James Honnan Mellett is a writer for Drexel Online.

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By Allison Casey

Teamwork is unavoidable during construction. Dealing with multiple contractors, personalities and visions inevitably creates stress and conflicting challenges. Cobbling together a team from different firms, including the architect, builder and interior designer, can be an ongoing headache. The greater goal is to craft a commercial, industrial or residential structure that meets the needs of the client.

Working in Tandem
The architect, builder and interior designer have to cooperatively work together in tandem. While building a contemporary urban home, for example, the contractor’s expertise on the construction process and the designer’s innovative visions for aesthetic features, like customized window treatments and draperies, have to be clearly communicated and shared, according to scribd.com. The architect should invite the designer and builder to help influence the design-shaping step. Thereafter the designer and architect should make frequent visits to the construction site. Ongoing involvement from all professionals eliminates the potential for mistakes, miscommunication and improper execution that can result in an inflated budget or timely costs.

Joining Forces
Full-service firms are companies that have the professionals and resources to fully manage a construction project, from conception to a flawless finished product. A full-service firm offers an integrated method of completing a project by providing one point of contact. It’s easier to take a walk down the hall to clarify a design issue than to play phone tag with outside contractors. With design and construction being so inextricably intertwined, creating a full-service firm can enhance your business and better serve your clients.

Collaborating with Technology
As an independent contractor, make communication a top priority. Ensure that you and the other contractors involved on the project share the same aesthetic and financial goals. Contractors can avoid assumptions, confusion and tensions by adopting technology as a tool for collaboration. Hosted online collaborations and cloud computing technology can improve communication, workflow and the successful outcome of every project.

Shared online spaces such as PBworks and Wiki provide everyone with the tools to stay up-to-date and in-contact during the course of a project. Via the Internet, clients can watch a project progress and contractors can receive notifications through email and RSS about certain project milestones that get completed. In virtual environments, individuals can make visible changes to project guidelines and efficiently communicate in a timely fashion.

Online hosted teamwork supplies a searchable record of communications and completed changes, including time stamps and identifiers that show who did what and when. According to smarttech.com, cloud-based services, along with a commitment to communication, provides independent contractors and clients with the type of service excellence that full-service firms experience. Partner with other contractors to build a full-service company or integrate hosted online collaborations into a project for exceptional project management and execution. Not only can you stick to a timeline and budget, you’ll experience less tension and frustration.

Allison Casey is a design advisor.

Have an idea about a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.