Friday, 30 March 2012

Congress passes 9th extension of the Federal Surface Transportation Program

Statement of Transportation Construction Coalition Co-Chairs T. Peter Ruane, president & CEO, American Road & Transportation Builders Association and Stephen Sandherr, CEO, Associated General Contractors of America:

“We commend the House of Representatives and Senate for passing legislation to ensure the continued operation of the federal highway and public transportation programs as the 2012 construction season begins cranking up.

“This action notwithstanding, extension after extension of these programs is no substitute for a multi-year reauthorization that could begin to address the nation’s staggering infrastructure challenges.

“The current surface transportation law, SAFETEA-LU, expired more than 910 days ago. We respect the legislative process and the right of both the House and Senate to pass their own bill. With an overwhelming bipartisan majority, the Senate has passed its multi-year bill. It is now the responsibility of the House of Representatives to either advance its own alternative or utilize another mechanism to allow the two chambers to reconcile their differences.

“Given the bipartisan support in both chambers for critical transportation policy reforms and proactive steps to shore up the Highway Trust Fund’s fiscal outlook, the surface transportation bill is one of the few measures before Congress this year with a realistic prospect of becoming law.

“While we supported the extension approved March 29 to prevent a shutdown of essential infrastructure improvements across the nation, that support should not be confused as acceptance of inaction on a multi-year reauthorization bill. Our members are growing increasingly frustrated that Congress seems incapable of passing critical legislation that improves the flow of commerce and promotes economic growth.

The construction industry continues to suffer from chronic unemployment and the continued delay in enacting a longer term bill prohibits them from expanding their workforces and investing in new equipment. It is unfortunate that a program that has traditionally enjoyed strong bipartisan support is being used as a means to advance political instead of policy objectives.

“The federal highway and public transportation programs have been governed by extension for 30 months. Congress can and must do better.”  Read More.

Thursday, 29 March 2012

Awards presented at 2012 State Construction Conference

The Frank B. Turner Award was presented to a career state employee during the 31st annual State Construction Conference at the McKimmon Center in Raleigh. Additionally, the State Building Commission recognized an outstanding architecture and engineering firm and the Office for Historically Underutilized Businesses (HUB) presented six Good Faith Effort Awards to HUB leaders.

The event, which attracted more than 1,100 contractors, subcontractors, engineers, architects, landscape architects and representatives of state agencies, is presented by the State Construction Office of the N.C. Department of Administration.

The Frank B. Turner Award was presented to J. Donald Edwards Jr., former Physical Plants Director of Cherry Hospital in Goldsboro. Given annually since 1983, the Turner Award recognizes a state government employee for dedicated public service and outstanding professional contributions to the built environment.

A Certificate of Merit from the State Building Commission was presented to Clark Nexsen Architecture and Engineering for outstanding achievement in the UNC-Charlotte Residence Hall Phase IX Spruce Hall project.

The HUB Office presented six Good Faith Effort Awards to recognize outstanding HUB leaders, including:

HUB Firm: Katie Tyler, President/CEO of Tyler 2 Construction, which has been in general contracting for 28 years, in recognition of its outstanding achievements as a historically underutilized business.

HUB Advocate: Dorothy Vick, HUB Coordinator for UNC-Charlotte, in recognition of her dedication in promoting and advocating for historically underutilized businesses.

Professional Service/Construction Industry Company: Balfour Beatty Construction, in recognition of its outstanding efforts for HUB Outreach and Utilization on General Contracting and Construction Management-at-Risk Projects.

Public Sector Owner/Agency: UNC System Triad Coalition (N.C. A&T University, UNC-Greensboro and Winston-Salem State University) in recognition of its commitment to the state’s HUB Program and utilization of HUB firms.

Industry/Agency – Individual: Patrice Gilmore, Diversity Program Manger/Project Manager with LendLease Inc., in recognition of her exemplary diligence and accomplishments in promoting the HUB Utilization on the UNC Bell Tower Project.

Special Recognition Award: Sharon Ozment, Chief Financial Officer with Guilford County Public School System, in recognition of her outstanding leadership in supporting the HUB/MWBE Program initiatives of her district and the state. Read More.

Tuesday, 27 March 2012

February construction starts fall 7 percent

At a seasonally adjusted annual rate of $376.0 billion, new construction starts in February dropped 7% from the previous month, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. The nonbuilding construction sector, comprised of public works and electric utilities, lost considerable momentum in February, and diminished activity was also reported for nonresidential building.

Meanwhile, residential building in February was able to register modest growth. For the first two months of 2012, total construction starts on an unadjusted basis came in at $52.9 billion, down 14% from a year ago. For the twelve months ending February 2012 versus the twelve months ending February 2011, which lessens the volatility present in year-to-date comparisons of just two months, total construction starts were down 2%.

The February statistics lowered the Dodge Index to 80 (2000=100), compared to 85 in January. For 2011 as a whole, the Dodge Index averaged 91. “The pace of construction starts during the first two months of 2012 was subdued, retreating to the lower end of its recent range,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.

“Renewed expansion for the construction industry is still struggling to take hold, with gains for a few project types such as multifamily housing being outweighed by declines for project types that are largely publicly financed. This was especially the case in February, when much of the downward pull came from weakness for public works and institutional building,” Murray said.

Nonbuilding construction in February dropped 16% to $107.8 billion (annual rate). Highway construction plunged 26%, resuming the declining trend that was present for much of 2011 before contracting improved briefly in December and January. Murray noted, “The factors affecting new construction starts for highways are generally negative – fiscal 2012 appropriations included a 5% cut to the federal-aid highway program, the lift from the federal stimulus act has run its course, states continue to deal with budget constraints, and the funding authority under the existing federal transportation legislation is set to expire on March 31.

While Congress has taken steps to extend the funding authority by considering new transportation measures, such as the $109 billion two-year bill recently passed by the Senate, the uncertainty over the shape and timing of a new transportation package has added another negative to this year’s prospects for highway construction.”

Other large declines for public works in February were registered by water supply systems, down 18%; miscellaneous public works (including site work), down 21%; and sewers, down 22%.
The two public works categories able to register gains in February were the following – bridges, up 19% and river/harbor development, up 28%. The electric utilities category in February fell 21%.

Nonresidential building, at $127.6 billion (annual rate), dropped 7% in February. A large part of the shortfall came from a 22% slide for educational buildings, continuing the descent for this category which has been underway for the past three years. Public buildings (courthouses, detention facilities, and military buildings) weakened further in February, plummeting 46%.

The healthcare facilities category in February decreased 9%. The other institutional categories reported gains in February, including a 22% increase for amusement-related work. Transportation terminal work in February advanced 45%.

On the commercial side, warehouses and hotels retreated in February, falling 8% and 47% respectively. Office construction improved 11% in February. Store construction in February was able to advance 35% from a weak January. The manufacturing plant category in February increased 9%.

The 14% decline reported for total construction on an unadjusted basis during the first two months of 2012, compared to 2011, was the result of a mixed performance by major sector. Nonresidential building dropped 17% year-to-date, reflecting this pattern – commercial building, down 9%; institutional building, down 15%; and manufacturing building, down 54%. Residential building climbed 20% year-to-date, with multifamily housing up 23% while single family housing grew 20% from its very weak amount at the start of last year. Nonbuilding construction fell 33% year-to-date, due to a 20% retreat for public works and a 56% reduction for electric utilities.

The size of the year-to-date decline for nonbuilding construction was affected by the comparison to elevated activity during the first two months of 2011.

By region, total construction starts in the first two months of 2012 showed an increase for one region, with the South Atlantic climbing 7%, while declines were registered by the other four regions – the Midwest, down 2%; the West, down 11%; the Northeast, down 21%; and the South Central, down 32%.

The 2% drop for total construction on a twelve-month moving total basis, meaning the twelve months ending February 2012 versus the twelve months ending February 2011, was the result of this behavior by major sector – nonresidential building, down 3%; residential building, up 8%; and nonbuilding construction, down 10%. By geography, the twelve months ending February 2012 showed the following performance for total construction – the South Atlantic, up 13%; the West, up 3%; the Northeast and Midwest, each down 8%; and the South Central, down 12%.  Read More.

Monday, 26 March 2012

Security in Bonding Act approved by House Judiciary Committee

On March 20, the Judiciary Committee of the U.S. House of Representatives unanimously passed the “Security in Bonding Act of 2011″ (H.R. 3534) after the American Subcontractors Association (ASA) warned that “a payment bond from an individual surety providing only illusory protection can easily result in a catastrophic loss to a small subcontractor or supplier.”

ASA told the Subcommittee on Courts, Commercial and Administrative Law on March 9 that the Security in Bonding Act is a “targeted Congressional intervention” that the full Judiciary Committee should approve right away. The legislation would require individual sureties that provide bonds on federal projects to use only assets that can easily be liquidated to quickly fund valid claims.

It also would require that those assets be placed in the custody and control of the federal government. “Payment bonds provided by individual sureties are essentially worthless, unless the pledged assets are real, adequate in amount, and readily available to meet the legitimate payment claims of the myriad subcontractors and suppliers performing on a typical modern federal construction contract,” ASA said.

Current federal regulations contain two different standards regarding the assets that a surety can pledge to assure payment of subcontractors or suppliers on federal projects. One set of standards applies to corporate sureties, but a weaker set of standards applies to individual sureties, permitting individual sureties to pledge unusual, illiquid and potentially even worthless assets to allegedly assure subcontractors of payment.

ASA and other supporters of H.R. 3534, including the National Association of Surety Bond Producers, are calling for prompt passage of the bill by the House, so that the U.S. Senate can take up the bill and end this regulatory double-standard that puts subcontractors at risk.

H.R. 3534 is supported by the following national organizations: American Insurance Association (AIA), American Subcontractors Association, Inc. (ASA), Associated Builders & Contractors, Inc. (ABC), Associated General Contractors of America (AGC), Mechanical Contractors Association of America (MCAA), National Association of Minority Contractors (NAMC), National Association of Surety Bond Producers (NASBP), National Electrical Contractors Association (NECA), Property Casualty Insurers Association of America (PCI), Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA), and Surety & Fidelity Association of America (SFAA). Read More.

Friday, 23 March 2012

CPNI team focuses on Ramseur redevelopment

Members of the Construction Professionals Network Institute (CPNI) will guide a community discussion on Tuesday, March 27 focused on identifying strategies for redevelopment of vacant structures in the town of Ramseur. The public event will be held 6-8 p.m. at the First Christian Church fellowship hall, 1381 Church St., Ramseur, reported the Courier-Tribune.

The Construction Professionals Network of North Carolina (CPN) is a statewide, multi-disciplined and professionally diverse construction industry membership organization. It is a construction trade association which includes architects and designers, engineers, developers, constructors and sub-contractors, and related services professionals.

The institute was formed in 2006 by CPN to expand its mission of service to the construction industry and communities throughout North Carolina. CPNI focuses on research, education and community service. The institute focuses on revitalizing legacy built environment and infrastructure in North Carolina.

Members of the institute’s volunteer community team have made two investigative and assessment visits to Ramseur, meeting with community leaders and touring the town’s historic downtown and legacy industrial buildings.

The institute team plans for the Ramseur community meeting on March 27 to focus on community visioning and engagement.

The team will share its perspective of the community’s legacy properties – downtown and industrial – and work with the community to recognize its inherent community assets and resources. Community residents and CPNI team members will work together to compile a list of redevelopment strategies and potential implementation steps in relationship to the community’s economic, environmental and social circumstances.

The CPNI assistance is an extension of Ramseur’s participation in the NC Small Towns Economic Prosperity (NC STEP) program, which is an economic development program of the N.C. Rural Center. NC STEP has three primary goals:

* Support economic recovery and revitalization in small towns.

* Implement a comprehensive model of technical assistance and grantmaking to aid revitalization.

* Inform the development of public policies that encourage the economic vitality of North Carolina’s small towns.

Ramseur’s monthly meetings are open to the public and participation by the entire community is encouraged. Read More.

Thursday, 22 March 2012

New bankruptcy court ruling strengthens lien rights for NC subcontractors and suppliers

Guest editorial from the NC law firm of Smith Debnam Narron Drake Saintsing & Myers, LLP.

Our firm’s recent article, posted on the North Carolina Construction News website, discussed the ruling questioning the 2009 decisions of the United States Bankruptcy Court for the Eastern District of North Carolina in In re Harrelson Utilities, Inc. No. 09-028158 (E.D.N.C. Bankr. July 30, 2009) (“Harrelson”), and In re Mammoth Grading, Inc., No. 09-01286-8 (E.D.N.C. Bankr. Aug. 24, 2009) (Mammoth”). Those rulings held that post-bankruptcy petition liens filed by Ferguson Enterprises Inc. of Virginia (“Ferguson”) and other subcontractors and suppliers to Mammoth and Harrelson violated the automatic stay imposed by 11 U.S.C. § 362.

Prior to Mammoth and Harrelson, it was generally accepted practice that the filing and service of post-bankruptcy petition claims of lien and claims of lien on funds were not a violation of the automatic stay and were freely allowed without seeking relief from the automatic stay. Ferguson, along with four other subcontractors, appealed the Bankruptcy Court’s orders in both cases to the United States District Court. On August 26, 2010, the United States District Court consolidated the Harrelson and Mammoth appeals.

The District Court’s Ruling in Mammoth

As discussed in our previous article, U.S. District Court Judge Malcolm Howard issued an order granting Mammoth’s Motion to Dismiss Ferguson’s appeal on February 23, 2012. However, in doing so, Judge Howard raised concerns about the Bankruptcy Court’s rulings in Mammoth and Harrelson. Judge Howard commented that the Bankruptcy Court’s rulings in Mammoth and Harrelson have, “turned the construction industry’s standard operating procedure on its head ,” and questioned if the Bankruptcy Court’s rulings prohibiting the post-petition filing of claims of lien and notices claims of lien on funds violated North Carolina’s Constitution and statutory lien law. Judge Howard vacated the Mammoth ruling and remanded the case to the Bankruptcy Court for further proceedings.

The Latest Ruling: Construction Supervision Services

The most recent ruling to impact the rights of lien claimants came from the Honorable Randy D. Doub in In Re Construction Supervision Services, Inc., (E.D.N.C. Bankr. March 14, 2012) (“CSSI”). CSSI, like Mammoth and Harrelson, involved a general contractor/subcontractor seeking Chapter 11 bankruptcy protection from its creditors. Many of CSSI’s creditors were material suppliers and subcontractors that prior to the rulings in Mammoth and Harrelson would have been able to protect their rights to payment with the filing of post-petition claims of lien and claims of lien on funds.

Several of these creditor suppliers filed emergency motions for relief from stay seeking the Bankruptcy Court’s permission to file and serve liens on funds in the hands of CSSI. The movants believed that CSSI was attempting to use money that would have normally been used to pay secured subcontractor/supplier lien claims to fund a portion of its reorganization plan.

Bankruptcy Judge Doub ruled that based on the instructive guidance from the United States District Court in its order resolving the Mammoth appeal and his own detailed analysis ofNorth Carolina lien law and the Bankruptcy Code:
  • subcontractors and suppliers have the right to file post-petition liens, and that doing so is not a violation of the automatic stay imposed by 11 U.S.C. § 362.; and
  • suppliers and subcontractors are not required to make a motion seeking relief from the automatic stay before filing such liens.
Immediate Impact for North Carolina Lien Claimants

While the ruling in Harrelson may still be considered “good law” as one bankruptcy court judge cannot overrule another, it is fairly clear that the Eastern District Bankruptcy Court recognizes that Harrelson and Mammoth were based on flawed reasoning and were in contradiction to the intent and meaning of Chapter 44A of the North Carolina General Statutes. Pending any appeal of Judge Doub’s CSSI decision, suppliers and subcontractors may once again protect their lien rights with the filing of post-petition liens in the Eastern District of North Carolina without the worry of facing penalties for violating the automatic stay of the Bankruptcy Code. Read More.

Byron L. Saintsing is a partner and John M. Sperati is an associate with the NC law firm of Smith Debnam Narron Drake Saintsing & Myers, LLP. Both concentrate their practices in construction law.

Wednesday, 21 March 2012

NC construction employment increased 3 percent statewide

Construction employment rose 3% statewide between January 2011 and January 2012 according to a new analysis of federal employment data released by the Associated General Contractors of America. However the new construction employment data comes out amid growing concerns within the business community about Washington’s failure to enact a number of long-term infrastructure measures.

The Greensboro-High Point metro area experienced an 11 percent increase in construction job growth (1,400) between January 2011 & January 2012. Both the Asheville and Winston-Salem metro areas had a 9 percent increse in construction employment. (600 jobs). The largest job losses were recorded in Wilmington (-900 jobs, -10 percent), followed by Hickory-Lenoir-Morganton (-300 jobs, -3 percent).

The mixed construction employment results reflect the conflict between slowly rebounding private sector demand for construction and declining public sector investments,” said Ken Simonson, the association’s chief economist. “For every metro area that is adding construction jobs, there is another one where construction employment continues to fall or is stagnant.”

Association officials said that the relatively mixed construction employment numbers would have been much better if Washington wasn’t years late in passing a number of key infrastructure measures to fund highway, transit, water and utility maintenance and upgrades. They noted that hundreds of contractors gathered this week in Washington, D.C. to push for action of highway and transit legislation as part of the “Rally for Roads,” for example.

“What makes these jobs figures so frustrating is that they could, and should, have been much better,” said the association’s chief executive officer, Stephen E. Sandherr. “There is a growing sense among the broader business community that the economy is being held back by Washington’s failure to reach agreement on legislation everyone agrees is essential.”

View construction employment figures by state metro areas Here.

Tuesday, 20 March 2012

Nanoscience school spurs collaboration and regional economic growth

A coach has a whistle. A symphony conductor has a baton. Both leaders use their special tools to smoothly integrate all the players into a beautiful whole. Fortunately, a commercial construction team has Building Information Modeling. That, says Ken Grube of Samet Corp, is largely why the highly complex, $64 million Joint School for Nanoscience and Nanotechnology (JSNN) in Greensboro was completed successfully.

The JSNN building, at Gateway University Research Park, is a collaboration of North Carolina A & T State University and The University of North Carolina at Greensboro.. Users of this four-level, 105,000-square-foot building specialize in work at the molecular and atomic level. Nanoscience is the study of atoms and molecules smaller than 100 nanometers –or about 1,000 times smaller than the width of a human hair. City, county and state leaders anticipate long-range academic and regional economic benefits. They foresee the nanoscience school as a place where state-of-the-art learning and research will occur, sparking innovation and ultimately, business growth that benefits the region.

The JSNN’s fellow tenants at the Gateway University Research Park are the USDA’s East National Technology Support Center, and Advaero LLC, a composites company that’s a commercial spin-off from North Carolina A&T State University’s Division of Research and Economic Development.

At the groundbreaking, UNCG Chancellor Linda Brady pointed out the value of these particular schools teaming up for the project. “By leveraging the strengths of our two universities and their historic significance, one, a historically black university, and the other, formerly the Woman’s College of the University of North Carolina, we understand that the whole is greater than the sum of the parts,” she said, adding it’s “a united front for education, economic development and technological advancement.”

“The Joint School of Nanoscience and Nanoengineering is an exciting partnership between North Carolina A&T State University and the University o f North Carolina at Greensboro that builds on each institution’s educational and research strengths in engineering and science respectively. Through our collaborative efforts and the significant investments in world class faculty and educational and research facilities, we are positioned to more significantly aid in enhancing the economic competitiveness of the region through job creation” said A&T Chancellor Harold L. Martin Sr.

Just as the pair of universities came together, a joint venture of construction professionals provided construction services. Samet Corporation, in Greensboro, has been a major player in the southeast construction market for more than 50 years. Its portfolio includes a wide range of industrial, retail, office, education, civic, religious and residential structures. The Barton Malow Company, a Southfield, MI contractor with special expertise in laboratories and research based facilities, and SRS Inc., Gallatin, TN, bringing both private and government work experience, participated in the joint venture.

One of the goals for the project was to double the number of minority-owned companies that normally participate in a project of this type. That goal was not only met but exceeded. John Merrill, executive director of the Gateway University Research Park, reported 27 percent minority participation in the project. “Gateway was established to promote economic development in the region and success in achieving significant minority participation is just one example of how we achieved that goal,” Merrill added. Merrill also noted that more than 95 percent of the subcontracted firms were from the Triad area.

The key to that achievement was doing more than simply advertising for bidders, said Monte Edwards, executive vice president at SRS. “We really engaged the companies, for example, by making phone calls and having mixers to get to know them,” he said. The construction managers also helped the companies do necessary paperwork and pre-qualify for bids, he said.

“We set out to engage local, small and minority business owners because that was very important to the owners. It was an express wish of the client, which we thought was great because those are our values, too,” added Edwards.

Construction of the JSNN project began in December 2009 and ended in December 2011. At times, as many as 450 workers were on site.

The attractive building, with its glass wall system and sleek angles, has lecture/seminar space, dedicated biophysics, chemistry and related areas, and other modern teaching features. What makes it extraordinary, however, is a 7,000-square-foot cleanroom with nine air handlers, which Grube calls “like a hospital on steroids.”

“This was a unique commercial project for anyone in the Southeast United States, because of the technical requirements for a Class 100 level cleanroom,” Grube said. Its complexities were far greater than a hospital.

When a project has such unusual requirements, requiring multiple managers and subcontractors, chaos could ensue. BIM ensured it didn’t.

“This project had so much piping and ductwork , if we hadn’t coordinated it with BIM we would still be building it right now. It eliminated conflicts and kept track of changes,” Grube said. “We were able to coordinate in the 3D platform before we put things together in the field. This was a textbook example of the value of using BIM for a project.”

AC Corp. of Greensboro was proud to perform the HVAC/mechanical work on the Nanoscience project. Project manager Derek Bull, project manager of the Greensboro-based firm, said the company employed best practices in clean technology from beginning to end in the construction process. “Building Information Modeling (BIM) 3-D modeling was necessary to ensure all the mechanical equipment fit into a very tight footprint, theoretically saving on change orders, waste and remakes in the field,” Bull said.

“Our office is only six miles away from the project site, so we were able to custom-build much of the equipment in our shop. The local economy benefited because all of our people working on the project live in the Triad region,” Bull added.

AC collaborated with the general contractor, electrical contractor and engineering team to complete the work on time and on budget.

Greensboro-based Absolute Recycling Contractors (ARC) handled the recycling needs of the high profile LEED project. President Chad Morris said, “The goal of recycling 95% of the waste from the project would scare some companies away, as would the request to paint each dumpster a separate color to ease the separation of recyclables by the crew on the ground. We had fun with it and even decided to make a special camouflaged dumpster as a salute to our troops.”

As the project came to a close and all of the information was compiled, ARC had recycled well over the 95% mark set for the project, helping the JSNN achieve 3 points toward LEED certification.
Reflecting on the project, Grube points out that the Greensboro area always has been known as a place for higher education, and the JSNN pushes that into the future. This level of facility and its research capabilities are going to “catapult” the area into the 21st Century. He adds: “It’s really going to open some doors. “ Read More.

Friday, 16 March 2012

Carolinas AGC Honors 2011 Pinnacle Award Winners

The Carolinas AGC (CAGC) bestowed the 2011 Pinnacle Awards to two companies, three projects and an individual presented March 10, 2012 at the Association’s 91st Annual Convention in Hilton Head, SC. The Pinnacle Awards embody CAGC’s mission statement: Advancing the construction industry to enhance the quality of life and deliver a sustainable difference in the Carolinas.

BEST GENERAL CONTRACTOR AWARD:

Sloan Construction Company, Duncan, SC
Founded in 1933, Sloan Construction is a heavy-highway contractor with projects ranging from excavation and site work to underground utilities, asphalt paving, bridge construction, and materials supply. Sloan is a key player in the area’s most challenging large-scale, fast-track highway and commercial projects. The firm, which has several asphalt manufacturing facilities in South Carolina, focuses on good corporate citizenship and being a good neighbor—both vital due to new population patterns that place formerly rural asphalt plants into the midst of new communities.

BEST SPECIALTY CONTRACTOR AWARD:\

Juba Aluminum Products Company, Concord, NC
Founded in 1993, Juba Aluminum Products is a glass and glazing contractor, specializing in high-performance exterior building facades of curtain walls, panels, and glass. Juba is noted for its exceptional performance in the area of employee relations; the firm offers a wellness program and Employee Assistance Program usually found only in larger firms. Equally devoted to safety and job quality, Juba received consistently high marks across every category—the evidence of an all-around great company.

BEST BUILDING PROJECT AWARD:

Jennette’s Pier – the NC Aquarium Pier at Nags Head, NC
Contractor: Clancy & Theys Construction Co., Wilmington, NC
Jennette’s Pier is a 1,000 foot concrete and wood pier with a three-story, 17,000 square foot “pier house.” Built high over sand and ocean, its features include aquarium tank exhibits; coastal study arrays; an on-site wastewater treatment facility; geothermal wells; and panoramic views of the Atlantic Ocean and Albemarle Sound. Three state-of-the-art wind energy turbines provide half the energy required to operate the full facility. One pavilion is covered in photovoltaic cells that convert sunlight into electricity, stored until needed to power pier lights at night. The entire project was designed and built to achieve LEED Platinum Certification.

BEST HIGHWAY PROJECT AWARD (1 of 2):

Interstate-40 Road and Bridge Widenings in Raleigh and Cary, NC
Contractor: S.T. Wooten Corporation, Wilson, NC
This design-build project, on one of North Carolina’s busiest urban interstate stretches, involved drainage, grading, paving, bridges, lighting, signing, sound walls, a new travel lane, a new 12-foot shoulder in each direction, and the widening of four bridges. Multiple conveyors were used as a material delivery system through the four-mile project center, which eliminated over 12,000 truckloads entering and exiting the median in the high-speed, high-traffic interstate area. In addition, over 230 lane closures were eliminated that would otherwise have been required to deliver 85,000 tons of subgrade material and 135,000 tons of asphalt. With over 305,000 man-hours on this project by both S.T. Wooten and its subcontractors, there were zero lost time accidents.

BEST HIGHWAY PROJECT AWARD (2 of 2):

Slope Stabilization & Rock Slide Removal on Interstate-40, Haywood County, NC
Contractor: Phillips & Jordan, Inc., Knoxville, TN
This project involved tackling 75,000 cubic yards of rock and debris that slid onto I-40 at the North Carolina-Tennessee border. All workers, plus machinery, had to climb the mountainside just to reach the working area. In some cases, this was 900 vertical feet above I-40. A heavy-lift helicopter ferried supplies, rock bolts and incidentals up the mountain. Clearly, safety was top priority throughout; every action contemplated had to be considered in light of its potential for new falling debris, attachment point failure, struck-by hazards, and even another catastrophic slope failure.

BUILD WITH THE BEST

Senator Paul G. Campbell, Jr., South Carolina (R-Berkeley)
The “Build with the Best” Award honors an individual whose efforts have contributed not only to the betterment of the construction industry, but also to the overall economic welfare of the Carolinas. Senator Campbell worked tirelessly to help CAGC advance Underground Damage Prevention legislation. He also is a strong supporter of tort reform, and assisted CAGC and the business community with solid reforms in 2005 and again in 2011.

For additional Pinnacle Award coverage and photos click Here.

Construction materials prices rose 0.9 percent in February

For the second consecutive month, prices for construction materials and supplies increased, rising 0.9 percent in February after an increase of 0.4 percent in January, according to the U.S. Labor Department’s producer price index report. Associated Builders & Contractors chief economist Anirban Basu reported materials prices are up 4.4 percent compared to February 2011. Similarly, nonresidential construction materials prices rose by 0.8 percent last month and are up 4.6 percent from the same time last year.

Leading the increase were non-ferrous wire products, up 3.4 percent last month, but down 3.1 percent on a year-over-year basis. Steel mill prices rose 0.6 percent from the previous month and are up 4 percent from February 2011. Prices for fabricated structural materials increased 0.9 percent last month and are 3.6 percent higher than one year ago. Concrete product prices remained unchanged in February, but are up 1.5 percent compared to a year ago.

In contrast, February plumbing fixtures and fittings prices declined 0.1 percent on a seasonally adjusted basis, but are up 2.9 percent from February 2011. Softwood lumber prices fell by 0.1 percent last month and are down 1.3 percent on a year-over-year basis. Prices of prepared asphalt, tar roofing, and siding slid 0.5 percent in February and are down 1.9 percent from one year ago. Iron and steel prices declined 1.2 percent last month, but have risen 1.9 percent during the past year.

Crude petroleum prices rose 5.4 percent in February. Finished energy goods rose 1.3 percent for the month.

Analysis

“Various leading indicators of construction – including Associated Builders and Contractors’ (ABC) Construction Backlog Indicator – point to rising demand for construction services in the year ahead,” reports Basu. “While there are many reasons to remain cautious, recent performance in the broader economy, along with rebounding financial markets, suggests that a genuine, potentially sustained construction recovery is approaching.

“However, this also implies growing demand for construction materials, and with that comes an increase in materials prices,” Basu said. “The pace of construction price increases nearly doubled from January to February of this year. All things being equal, the ongoing expansion of the U.S. economy, which has been associated with average monthly employment growth of 244,000 during the past three months, should translate into steadily rising input prices during the course of 2012.

“One area of concern is the spike in petroleum prices,” Basu said. “This type of increase could become increasingly problematic for both the broader economy and the nation’s construction industry. Turmoil in the Middle East could obliterate the chances for the U.S. construction industry to fully recover, and construction industry stakeholders need to be aware that very bad outcomes remain a distinct possibility.” Read More.

Thursday, 15 March 2012

Subcontractors support Federal 'Security in Bonding Act'

The American Subcontractors Association warned the Subcommittee on Courts, Commercial and Administrative Law of the U.S. House of Representatives’ Judiciary Committee that “a payment bond from an individual surety providing only illusory protection can easily result in a catastrophic loss to a small subcontractor or supplier.”

ASA told the subcommittee that the Security in Bonding Act of 2011 (H.R. 3534) is “a targeted Congressional intervention” that the full Judiciary Committee should approve without delay to prevent such losses.

ASA filed a letter for the record of a March 5 hearing on H.R. 3534 praising subcommittee Chair Rep. Howard Coble, R-N.C., for giving ASA and other parties an opportunity to publicly explain why existing federal law needs to be amended by H.R. 3534 to correct a glaring financial risk facing some of the most vulnerable small construction subcontractors and suppliers that work on federal projects. “Payment bonds provided by individual sureties are essentially worthless, unless the pledged assets are real, adequate in amount, and readily available to meet the legitimate payment claims of the myriad subcontractors and suppliers performing on a typical modern federal construction contract,” ASA explained.

“Subcontractors and suppliers should not be put in the position of finding out, in their hour of greatest need, that the assets pledged by an individual surety are illiquid, otherwise unavailable or simply insufficient to respond to their payment bond claims on federal projects,” said 2011-12 ASA President Kerrick Whisenant, Cornerstone Detention Products Inc., Tanner, Ala. “The Security in Bonding Act would give construction subcontractors and suppliers the confidence that the bonds furnished by the individual surety will provide the payment protection of last resort intended by the Miller Act.”

The Security in Bonding Act, introduced by Reps. Richard Hanna, R-N.Y., and Mick Mulvaney, R-S.C., would require individual sureties that provide bonds on federal projects to use only assets that can easily be liquidated to quickly fund valid claims. It also would require that those assets be placed in the custody and control of the federal government. Currently, individual sureties only have to pledge “acceptable assets” that can include stocks, bonds, and real property, and they retain custody and control of those assets pledged to secure a bond.

Under the Miller Act (31 U.S.C. 9303), bid bonds and performance bonds protect the government, as steward of the taxpayers’ money, while payment bonds provide payment protection, of last resort, for the subcontractors and suppliers that have performed their obligations in furtherance of a federal construction contract. Not all payment bonds protect subcontractors and suppliers equally. Current federal regulations contain two different standards regarding the assets that a surety can pledge to assure payment of subcontractors or suppliers on federal projects. One set of standards applies to corporate sureties, but a weaker set of standards applies to individual sureties, permitting individual sureties to pledge unusual, illiquid and potentially even worthless assets to allegedly assure subcontractors of payment. “Claims against a payment bond under the Miller Act are generally paid in cash, not, for example, timber ‘available’ to be harvested for milling,” ASA said in its letter.

ASA told the subcommittee that H.R. 3534 would simply apply “to individual sureties the same standards permitted by the Miller Act … for a prime contractor choosing to furnish ‘eligible obligations’ rather than a surety bond.” The U.S. Department of the Treasury vets and approves the corporate sureties allowed to issue surety bonds for federal projects, but individual sureties may be anyone who is willing and able to guarantee contract performance with his or her own assets. ASA strongly supports the programs operated by the U.S. Small Business Administration to facilitate access to surety bonds issued by corporate sureties that have been vetted and approved by the Department of the Treasury.

Individual sureties are not required to be licensed in any state or to be approved by the Treasury, and while some individual sureties may be able to provide the liquid assets necessary to provide assurance, others cannot or do not.

This uncertainty, ASA pointed out, creates “severe” challenges for federal contracting officers asked to evaluate the assets pledged by individual sureties.

“To these small subcontractors and suppliers, at every tier, it is paramount that the Miller Act payment bond required for their protection is actually backed by assets that are real, adequate in amount, and sufficiently liquid to be available to pay a claim for payment of the amounts due to them for the work that they have fully performed,” ASA wrote.

The Security in Bonding Act is also supported by the National Association of Surety Bond Producers, the Surety & Fidelity Association of America and other major organizations representing the construction industry. Read More

Wednesday, 14 March 2012

What Contractors Need to Know About Public-Private Partnerships

The mid-February sun pours through the atrium of the gleaming 242,000-square-foot building in downtown Winston-Salem, illuminating and warming the crowd taking the grand tour of one of the newest example of public-private partnerships in North Carolina. Wake Forest BioTech Place is so new it still glistens in that unseasonably bright sunshine, the diamond in a setting littered by factories and other buildings that once were part of the R.J. Reynolds Tobacco Co. campus that dominated the city.

The $100 million building is part of Piedmont Triad Research Park and has been in the works in some form or another since the park began being developed in 1992. About 450 people will work in the building by the middle of next year. The largest tenant, with about 350 of the employees, is the Wake Forest University School of Medicine, which has moved its departments of biochemistry, biomedical engineering, microbiology and immunology, and physiology/pharmacology into the new surrounds. Other tenants include Allegacy Federal Credit Union, Carolina Liquid Chemistries and a business incubator.

The project was put together by Wake Forest Baptist Medical Center, Baltimore-based developer and owner Wexford Science and Technology, which specializes in research buildings, and strong economic and community support from Winston-Salem, Forsyth County, the state of North Carolina and the federal government. The project was made possible through the state Mill Tax Credits program and federal New Market and Historic Tax Credits totaling about $34 million. The city and county also joined forces to split the cost of $6.2 million in infrastructure upgrades. Dan Cramer, executive vice president for Wexford, says those credits were vital to the company signing on for the project in 2009. “We all came in knowing there were credits available,” he says. “There’s no way we could do this project without this.”

Retrofitting of the two former Reynolds warehouses began in 2010 and took about 18 months. Both buildings were stripped to the basic building structure on the interior and refitted with new mechanical, HVAC and electrical systems, fire protection and vertical transportation systems to bring them up to current commercial code standards. More than 1,400 people worked on the project, with about 75 percent of that total coming from local contractors and subcontractors. “The new facility is a wonderful example of the benefits of public-private partnerships designed to breathe new life into once blighted areas,” says Doug Edgeton, president of the park.

Public-private partnerships, in which the government contributes resources – land, money or tax breaks to encourage development and the private partner also contributes to financing, could do more across the state, and contractors are pushing the state for more advances in the process. It’s not just a handout. The developments contribute long- and short-term growth in employment, and they also increase the tax value of blighted property.

The city of Durham has benefited from the development of Durham Bulls Athletic Park, the renovation of the American Tobacco Co. campus and other projects. Durham has invested about $270 million in public funds in the project but attracted $450 million in private investment. Meanwhile downtown employment has increased from about 3,800 in 1995 to more than 14,000 now. Kevin Dick, director of the city’s Office of Economic and Workforce Development, says it was an easy decision to back the projects. “If government doesn’t get involved in these economic-development projects, it doesn’t happen.”

A similar public-private partnership recently was completed in Charlotte. Earlier this year, Concorde Construction Co. completed the renovation of the Belvedere Theater building in theQueen City into Belvedere Family Dentistry. The theater was built in the 1950s and for many years was the centerpiece for the area that is now called the Greenway Business Center, a 30-acre business park. Concorde worked with the Charlotte Mecklenburg Development Corp. on the project.

As with the efforts in the other two regions, the Charlotte project is expected to rejuvenate a part of the city that had been left behind by progress in other areas. Some contractors in the state welcome the opportunity to work on such projects, particularly during the economic downturn, when purely private projects often have trouble finding financing. A key to the PPPs, some contractors say, is that they do create new funding sources, such as toll roads and parking decks, that they provide for a level playing field for those interested in the construction work and that the construction work otherwise would not have been done.

Perry Safran, founder of the Raleigh-based Safran Law Offices , is a backer of the partnerships and hopes they will be expanded. “The key here is successful projects will lead to more opportunity — and government does not have to be the leader, but the process needs more flexibility,” Safran says.

That’s something everyone agrees on. Where the disagreement comes is in how to provide the flexibility.

The General Assembly has been considering a massive rewrite of the state’s laws governing public-private partnerships with some lawmakers looking to a model adopted in neighboring Virginia.
Dave Simpson, who handles N.C. government relations and is the building director for the Carolinas AGC (Associated General Contractors), says the association is wary about change. “We like the idea of public-private construction—if you’re talking about construction that otherwise would not be undertaken, there is a level playing field for bidders, since you are asking about public funds, and both sides have financial stakes in the project—that is the private entity provides for financing other than just tapping existing revenues.” However, he says, “We continue to have concerns about making sure there’s a level playing field for all qualified people in the construction industry.”

In particular, he says, he’s concerned that the Virginia model allows for unsolicited bids, in which a contractors can propose unsolicited projects that they’ve been preparing for months, giving other companies only 60 days to prepare and submit a competing proposal. “You’re talking about less transparency, because there’s no sealed bids.”

Moreover, Simpson says, any changes in the law won’t solve the overriding problem – a lack of money for public projects in general. He said previous proposed legislation would allow for another delivery method, in this case design-build, when the focus should be on getting new revenues for design and construction. “We need funding,” he says. “There is probably $10 billion in infrastructure needs out there. The UNC system says it needs $3 billion by itself. The General Assembly has approved $120 million for infrastructure needs for the state; it is a proverbial drop in the bucket—and even that money is being withheld because of budget issues.”

Legislative experts don’t expect the Virginia model to pass this year, but there could be tweaks in the process. Simpson just hopes that the changes will include more money for public projects. “We’ll continue to monitor the situation very carefully,” he says. We’d be having our heads in the sand if we acted like there were enough private projects out there now.” Read More.

Tuesday, 13 March 2012

Corps of Engineers announce construction projects for Fort Bragg

Construction projects at Fort Bragg totaling more than $39 million have been awarded to contractors, the Army Corps of Engineers announced. The projects went to contractors in Raleigh, Atlanta and Dallas, according to an article in the Fayetteville Observer.

The projects include:

A $17.5 million mission training complex to be built by SFL+A Architects of Raleigh,

An $11.1 million dining facility to be built by H-S Joint Venture of Atlanta and

A $10.4 million maintenance facility to be built by Balfour Beatty Construction of Dallas
.
All three projects will incorporate environmentally friendly features, the Corps of Engineers said.
The mission training complex, formerly known as a battle command training center, will replace an aging facility on Butner Road that has been supplemented in recent years with modular trailers. The facility is used to train units preparing for deployments. The 46,980-square-foot complex will simulate battlefield conditions within a classroom setting using the same technology that is currently used overseas as well as simulators, virtual trainers and gaming systems, according to the release. The project is scheduled to be completed in September 2013.

The dining facility will serve the 82nd Airborne Division’s 3rd Brigade Combat Team. The 26,500-square-foot facility will be able to provide meals for 1,300 personnel and is scheduled to be completed in June 2013, according to the release.

The maintenance facility will house tactical equipment for the 108th Air Defense Artillery Brigade, according to the Corps of Engineers. The facility will include an 18,000-square-foot vehicle maintenance shop, storage for unmanned aerial vehicles and parking. It is scheduled to be completed in June 2013. Read More.

Monday, 12 March 2012

Economists at Federal Reserve Bank of Richmond seek feedback from NC contractors


Economists at the Federal Reserve Bank of Richmond, which covers DC, MD, NC, SC, VA and WV, are interested in responses to the economic impact questionsbelow. You can answer the questionnaire electronically by clicking http://images.magnetmail.net/images/clients/agca/attach/Revised_Construction_Survey_Q1_12.docx.

1. Has private construction activity increased, decreased, or remained steady in the past 3 months, adjusting for the usual seasonal factors? In what sectors or areas has your firm experienced a pick-up in activity? In what sectors or areas has your firm experienced a decline in activity? Has government construction activity increased, decreased, or remained steady in the past 3 months, adjusting for the usual seasonal factors?

2. If you are seeing any
price changes for construction-related materials at this time: What construction-related materials have increased in price in the past three months? Are these being passed on? What construction-related materials have decreased in price in the past three months? Do you expect prices you pay for materials to increase, decrease, or remain unchanged over the next three months?

3. Was obtaining credit/financing
easier, harder, or unchanged over the past three months? Why?

4. What is your
outlook for the nonresidential construction sector over the next three months? Has your outlook changed from three months ago?

5. Has this winter’s unusually
warm weather had any impact on seasonal demand for construction in your market area? Has warm weather affected your ability to start or complete construction projects ahead of schedule?

Please send you answers Associated General Contractors of America chief economist Ken Simonson at simonsonk@agc.org or directly to Reserve Bank of Richmond economist Bob Schnorrbus at Bob.Schnorbus@rich.frb.org . Be sure to indicate the major geographic areas (states or metros) that you cover and major line of business.

Saturday, 10 March 2012

NC metro areas rank in top 10 in landing industry

For the fifth year in a row, the Greensboro-High Point metro area earned a Top 10 national ranking for attracting new industry among areas of similar size. For 2011, the nationally distributed Site Selection magazine placed the local metro seventh in the U.S. among regions with populations of 200,000 to 1 million. In the same category, the Hickory-Morganton-Lenoir metro area tied for ninth.

The Greensboro-High Point metro, which includes Guilford, Randolph and Rockingham counties, tied with Toledo, Ohio. Both landed 24 major projects. The Hickory-Morganton-Lenoir area landed 23 major projects.

“Having a nationally recognized publication recognize our (metro) to be one of the best in the country is a win for our entire region,” said Loren Hill, president of the High Point Economic Development Corp. “Our area has been able to make significant project announcements over the past year, during very difficult economic times.” Dan Lynch, president of the Greensboro Economic Development Alliance, said the region’s selection “validates that we are on the right track.”

Site Selection magazine, which caters to executives responsible for site selection and project planning, also ranked North Carolina fourth nationally among all states based on new and expanded corporate projects. The state, which finished sixth last year, secured 310 major projects.

Nationally, among cities of 10,000 to 50,000 people, Statesville-Mooresville claimed the top prize, Lexington-Thomasville finished fourth and Shelby came in fifth.

The magazine focuses on projects that involve an investment of at least $1 million, create at least 50 jobs or add at least 20,000 square feet of floor space.

With 28 corporate facility projects in 2011, Statesville-Mooresville, N.C., secured more expansion deals than any other micropolitan area in the U.S. Wooster, Ohio, finished second with 21 projects, followed by Cullman, Ala., which had 20.

This marks the eighth time in the last 10 years that Statesville-Mooresville has earned the title of Top Micropolian Area in the country. The U.S. Census Bureau defines a micropolitan area as a rural county whose largest city does not exceed a population of 50,000. The U.S. has a total of 576 micropolitan areas. Adding to Statesville-Mooresville’s dominance is the fact that since 1999, this small-town area has finished lower than second in the rankings only once.

“The activity in the past year has been phenomenal,” says Robert Carney, executive director of the Mooresville-South Iredell Economic Development Corp. (MSIEDC). “This community is successful in economic development because it has so many assets for business. We have logistics, access to three major Interstate highways, a beautiful lake, and public and private support. Our leaders recognize the importance of being an employment center rather than a bedroom community to other areas.” Read More.

Friday, 9 March 2012

Defense spending in NC up to $4 billion

Defense spending in North Carolina rose 13 percent last year, according to the North Carolina Military Business Center. The announcement is good news for an industry expecting to take some hits when the military begins making more than $480 billion in planned spending cuts, nationally, over the next 10 years, reported the News & Observer.

Gov. Bev Perdue, along with the NCMBC, announced that North Carolina received $4 billion in federal contracts in 2011.

Contractors in North Carolina produce a variety of products for the military. North Carolina has made it a priority to help entrepreneurs take advantage of the state's large military footprint.

Businesses in 87 of North Carolina’s 100 counties performed defense-related prime contracts in 2011. Twenty-two of those counties received over $20 million in defense-related work. Of all counties performing defense-related work, Onslow County received the most federal dollars in contracts with $1.2 billion.

According to a 2008 Department of Commerce study, the military has a $23.4 billion total annual impact on the state economy. Read More.

Thursday, 8 March 2012

NLRB can require 'Employee Rights' poster but must revise penalty provisions

On March 2, a U.S. District Court issued a decision in the legal challenge against the National Labor Relations Board’s (NLRB) “employee rights” notice posting requirement, ruling that the NLRB has the authority to mandate the notice posting itself, but it cannot impose an up-front, blanket penalty policy for failure to post.

The Associated Builders and Contractors (ABC)-led Coalition for a Democratic Workplace (CDW), in conjunction with the National Association of Manufacturers, filed the lawsuit Sept. 26, shortly after the NLRB released the final version of the poster, which contains only a select list of employee rights granted by the National Labor Relations Act (NLRA).

In the lawsuit, both groups asserted that the NLRB does not have the authority under the NLRA to issue the rule, to which the court disagreed. The judge eliminated the blanket penalty policy, but ruled that failure to post can still result in tolling of the statute of limitations, and serve as evidence of anti-union animus in unfair labor practice investigations on a case-by-case basis.

“The Board simply does not have authority to require this poster and the Coalition for a Democratic Workplace will appeal this decision and continue to vigorously pursue a fair, full and correct legal remedy,” said CDW Chairman and ABC Vice President of Federal Affairs Geoffrey Burr. CDW and the other litigants appealed the decision on March 5.

In addition to its participation in the lawsuit and appeal, ABC has produced an 11-by-17-inch supplemental notice designed exclusively for nonunion contractors outlining additional rights granted under the NLRA. The supplemental notice is intended for optional use on or after the current April 30 effective date.

Please note, the ABC notice can be posted in addition to the NLRB poster in a similar fashion, but not in lieu of it. The official NLRB notice can be downloaded for free at www.nlrb.gov/poster and ABC’s supplemental notice can be accessed here. Read More.

Wednesday, 7 March 2012

Debunking the Myth of the One-Year Warranty

by R. Harper Heckman, Nexsen Pruet, LLC

Perhaps the most common misconception held by even sophisticated contractors and subcontractors is that their warranty obligations expire one year after the completion of the project. This mistaken assumption most likely stems from a confusion of their contractual warranty obligations and their separate but related one-year “duty to correct” defective work.

Most form contract documents do make reference to a one-year correction, or “call back” period. Correction periods generally are intended to motivate contractors to return and repair defective work after final payment and demobilization from the site. In order to invoke a “correction” obligation, an owner generally need not prove why an element of construction failed, but only that it did fail. Put differently, it is not the owner’s burden to prove the cause of the defect that appears during the one-year period, but only that it was not due to owner abuse or neglect.

In contrast to “correction periods,” most “warranties” found in form construction contracts contain no time limitation on a contractor’s or subcontractor’s warranty obligations. Indeed, a review of the major contract document series failed to uncover any form agreement that attempts to establish an exclusive warranty of only one year in duration. Consequently, if a contractor or subcontractor desires to warrant their work for a time period shorter than that set forth in the applicable statutory period (6 years or 8 years under North or South Carolina law, respectively), the warranty will have to be “home grown.”

The first hurdle is establishing that the warranty sets forth the owner’s exclusive recourse for post-occupancy defects. In essence, a “warranty” is just one of many representations and agreements interspersed throughout the typical construction contract. Absent an agreement between the parties to the contrary, most courts will view the owner’s claim for breach of warranty as but one of several avenues of recovery for construction defects. Therefore, perhaps the simplest way to establish the exclusiveness of a warranty provision is to state that the warranty is, indeed, “exclusive.”

In addition to establishing the exclusivity of the one-year warranty amidst the many contractual provisions that can potentially give rise to claims for defective work, a contractor or subcontractor must also dispose of those obligations implied by law, including, in the Carolinas, the implied warranty that the structure will be free from hidden defects in its major systems. As with other warranties, these implied warranties may be disclaimed. However, courts generally will construe the disclaimer as narrowly as possible and in a light most favorable to the owner. Thus, in order effectively to disclaim these implied warranties, the disclaimer must be made in both conspicuous and unambiguous fashion. Read More.

Tuesday, 6 March 2012

Reed Construction Data forecasts total construction spending wil increase 6.5% in 2012

Reed Construction Data (RCD) forecasts total construction spending to increase 6.5% in 2012 and 5.9% in 2013. Continued positive economic reports indicate that the U.S. economy is on more solid footing.

Fourth quarter real (inflation adjusted) gross domestic product (GDP) rose 2.8% (SAAR), its fastest quarterly rate of growth since second quarter 2010. Nonfarm payroll employment increased 243,000 in January following a 203,000 increase in December. The unemployment rate has fallen for five consecutive months and stood at 8.3% in January compared to 9.1% a year earlier.

The U.S. Census Bureau reported that total construction spending increased 1.5% in December following a 0.4% rise in November. December total construction spending was $816.4 billion at a seasonally adjusted annual rate (SAAR). For the year, construction spending was down 2.0% from 2010.

Nonresidential building construction spending picked up in December to $286.5 billion (SAAR), an increase of 1.7%, following a modest 0.1% rise in November. For the year, spending was down 4.0%.

Heavy engineering (non-building) construction spending rose a healthy 2.0% to $281.3 billion (SAAR), its fifth consecutive monthly increase and its seventh increase over the last eight months. For 2011, heavy engineering construction spending was almost unchanged, down a modest 0.1% from 2010.

Total residential construction spending, which includes improvements, was up 0.7% after falling 0.4% in November. New residential construction spending, which excludes improvements, rose 1.2% following a 1.9% gain in November. Total residential construction spending for the year ended down 1.7% from 2010, while new residential construction was down 5.4%.

Total public construction spending advanced 0.5% in December after increasing 1.7% in November and was at its highest monthly level since January 2011. For 2011, spending fell 6.5%. The outlook for public spending continues to be for further declines as local governments struggle to balance their budgets and as Congress strives to reduce the federal government’s deficit. Some hope comes from the states, most of which are seeing their revenues improve faster than expected.

Meanwhile, total private construction spending rose 2.1% in December, its seventh monthly increase over the past nine months. For the year, private construction spending increased 0.7%. Read More.

Monday, 5 March 2012

NC residential construction contracts only bright spot in January:

The residential construction category was the only sector in North Carolina to record positive gains in January, compared to a year ago, according to recent data from McGraw-Hill Construction.
 
Southeast Construction reports the state’s housing sector recorded more than $439.9 million in new construction contracts during the month, for a 12% gain over the same period of a year ago.

The news wasn’t good for the other two construction sectors, however. North Carolina’s nonresidential market fell an estimated 59% compared to last January, for a total of $191.4 million in new contracts. The nonbuilding sector, which includes infrastructure contracts, fell 26% and delivered nearly $120.7 million in new projects.

Overall, North Carolina’s January contracts totaled just over $752 million, or 27% behind the same period of a year ago. Read More.

CAGC makes E-Verify recommendations to NC legislative committee

The Carolinas AGC (CAGC) recently urged a North Carolina legislative committee to minimize the administrative burden on contractors and educate businesses about new e-verification legislation approved by state lawmakers last year.

“Minimize or avoid any legislation that continues a trend of increasing the administrative burden on our industry,” said Claudia Dodgen, chair of CAGC’s Human Resources Committee. “Help us keep the focus on the things that are helpful, such as this new legislation, and away from the things that create paperwork that does not necessarily benefit our end goal–creating jobs to move people from unemployment to gainful employment.”

Dodgen, vice president of employee services for Crowder Construction Company, Charlotte, NC, gave her testimony February 29th at a meeting of the NC House Select Committee on the State’s Role in Immigration Policy. Under questioning from lawmakers, Dodgen also noted that high wage rates recently implemented under Davis-Bacon guidelines concerning construction projects with federal funds were causing problems in the construction industry. Read More.

Saturday, 3 March 2012

January nonresidential construction spending mixed amid delays in public works spending

Construction spending inched down less than 0.1 percent in January, following a large upward revision in December and November, according to a new analysis of federal data released by the Associated General Contractors of America. All forms of residential construction did well for the month and year-over-year, while private nonresidential spending was mixed and public construction declined amid continued congressional delays in passing a host of long-term infrastructure and tax measures.
“The strong gains in single-family homebuilding in December and January probably have a lot more to do with the unusually mild weather compared to year-ago conditions, than surging demand for new homes,” said Ken Simonson, the association’s chief economist. “Meanwhile, private nonresidential activity dropped after an exceptionally large jump in December, but the January total was still up an impressive 17 percent from a year ago.”

Simonson noted that private residential spending, which climbed 1.8 percent for the month and 6.7 percent compared with January 2011, was higher across-the-board. New single-family construction posted gains of 2.5 percent for the month and 5.5 percent over 12 months; new multi-family construction was up 0.7 percent and 20 percent, respectively; and improvements to existing residential structures moved up 1.3 percent and 6.4 percent.

Private nonresidential spending was at the second-highest level since December 2009, despite the 1.5 percent pullback in January, Simonson noted. The largest private category, power construction—which includes shale-related activity as well as traditional and renewable electric power—dropped 1.8 percent in January but was up a robust 28 percent over 12 months. Simonson also cited large year-over-year gains for the next three-largest types: manufacturing construction (-5.9 percent for the month, +38.5 percent over 12 months); commercial—retail, warehouse and farm—construction (-1.0 percent for the month, +8.5 percent over 12 months); and health care construction (up 1.7 percent and 12.5 percent, respectively).

Simonson noted that public construction spending was nearly flat in January, declining 0.2 percent from December and 0.5 percent from January 2011. Highway and street construction, the largest public category, edged down 0.2 percent for the month but climbed 4.5 percent year-over-year, while other transportation spending—comprising transit, ports, airports and passenger rail—rallied 2.5 percent for the month but tumbled 10 percent from a year ago.

Association officials said that despite growing private sector demand, the construction industry was being held back by partisan gridlock in Washington. They said the fact that Congress has failed to enact a host of long-term infrastructure and tax measures was making it hard for many firms to make business investment and hiring decisions.

“Construction firms fear two things: declining demand and market uncertainty,” said the association’s chief executive officer, Stephen E. Sandherr. “Unfortunately, Washington’s failure to enact long-term investment and tax measures is delivering drop in construction activity and making it impossible for contractors to make investment, hiring and many other fundamental business decisions.” Read More.

Friday, 2 March 2012

New 2012 Residential Building Code goes into effect

Mecklenburg officials say they expect no delays in processing building permits, even though the state hasn't published a final version of its new guidelines for residential properties, reports the Charlotte Observer.

The 2012 Residential Building Code went into effect March 1 and aims to make properties more energy efficient.

State officials say "unexpected delays" have prevented them from adopting a final version of the code. But Code Enforcement Director James Bartl said in that the state Department of Insurance is allowing counties to use a draft version of the policy that was published online this week. The online version is accessible on the North Carolina Home Builders Association website.

No substantive changes

In a memo, Chris Noles of the Department of Insurance said that the draft rules have the "final substantive edits" that were sent to the publisher of the new code and that they had cleared the N.C. Building Code Council. The memo said that the Department of Insurance is continuing to work on some other items in the new building code but that the final version will contain no substantive changes.

Earlier in the week, there were concerns that permitting for residential projects in the county and other areas would come to a halt since the final state rules weren't in place. Prior to the new memo, the Charlotte Business Journal reported the county's Land Use and Environmental Services Agency had been advised the Web version of the building code was not enforceable.

But in the county release, Bartl said the state will let counties use the draft code to receive and review applications, as well as to issue permits. Read More.

Thursday, 1 March 2012

ABC contractors receive national Excellence in Construction Awards

The Associated Builders and Contractors (ABC) announced Waldrop Mechanical, Spartanburg, SC; KBR/Turner a Joint Venture; Starr Electric, Greensboro, NC and Hendrick Construction, Charlotte, NC received national acclaim at the National Excellence In Construction Awards last week in Phoenix.

“The Excellence in Construction Awards showcase the best of the best construction projects from all across the country,” said Doug Carlson, ABC of the Carolinas President & CEO.” “These projects are the pinnacle of our industry in the Carolinas. The projects are judged on safety, performance, unique challenges and overall quality of construction.”

Waldrop Mechanical received the highest achievement, an Eagle Award for the Wofford College A.M. Shipp & A. Mason DuPre project in the Mechanical category. KBR/Turner also received an Eagle Award for the Boeing 787 Assembly Building in the Mega-Projects category. Starr Electric received a Pyramid Award for the Cisco Systems Data Center in the Electrical category. Hendrick Construction received a National Safety Excellence Award for their commitment and programs to providing an excellent safety program.

National Excellence in Construction Award Winners are eligible after winning at the local chapter. The Carolinas Chapter Excellence in Construction Awards were presented in November of 2011 at the Grandover Resort. Read more about the 2011 ABC Excellence in Construction awards.