Ike's Newsletter June 11, 2021

Executive Director's Report

Who, What to Bid – At the June 17 SIE, members only will discuss the GCs and Owners they bid.  Why is this an important function of ASAMW?  Ask yourself: are you bidding the jobs on which your company can best be efficient and profitable?  If not, are there others to whom you should be bidding?  These are important questions as we look at the positive outlook for future work in the DMV.  Members may click here for more information

Dodge reports residential, including high rise, is booming with over 100 percent more starts this April as compared to last April.  Non-residential starts are down nine percent for the month.  Year to date, residential is up 33 percent and non-residential is down 33 percent.  It will be interesting to see how the next few months compare to last year with the effects of COVID.

A report by IBIS indicates no slow down over the next five years, nationally. It states, “The Construction sector is anticipated to expand over the five years to 2026 as the economy recovers from the coronavirus pandemic, in addition to the relatively low interest rate environment. Many of the largest industries in this sector are anticipated to experience faster growth following low building volumes over the past five years, with sector growth expected to be primarily driven by improvements in commercial and infrastructure construction.  Meanwhile, anticipated accelerations in residential construction activity will likely increase revenue growth. Overall, sector revenue is forecast to rise at an annualized rate of 1.8% to $2.5 trillion over the five years to 2026.” 

Delay Claims - There might be some hope for relief from costs for delays in material deliveries if it is contained in the Owner’s contract with the GC.  This article from ASA reveals that the AIA 201 has wording in Article 8.3.1 that offers extended time for delays in material deliveries. 

ProCore – Last year about this time we reported on unfair billing processes that ProCore used and that it might have been influenced by its intent to issue an Initial Public Offering on the NY Stock Exchange.  This Construction Dive article reports that delaying its IPO until last March seems to have paid off for ProCore.  It sold at $81.40 last Thursday after opening at $67 in May.  Please reply to this email with a report on any issues with Procore billing. 

ASA Webinar on Contract Negotiations  I attended this webinar on June 9th, put on by ConcensusDocs and ASA National.  Members make better business decisions about which Owners and GCs to bid and which not to bid based on the elements of the subcontract document.  Here are some takeaways:

  • Subs should make a decision about bidding a GC by the subcontract being used.  Why go through the bidding process if the subcontract is unacceptable.  This will require needed change – but one that would benefit the subs. 

  • The more sophisticated subs give different bids to different GCs and Owners based on known elements, including the subcontract used.

  • ASA has a number of guidelines on how to negotiate a fair subcontract.  Click here (but you will have to log in). 

  • Things are changing in the subcontract world – unfair clauses such as broad form hold harmless are not being accepted and pay when paid clauses do not mean forever. 

  • ConcensusDocs offers Owners/GCs and Subs subcontract language that is deemed fair by the entire industry.

SUBBYs will be June 23rd in Clifton – Only a few days left and a few openings for the SUBBY’s Soiree Simplified. Attendance is limited to 200 and we are getting closer to that number every dayRegister today to secure your spot. Many thanks to Foulger-Pratt, the Platinum Subby Sponsor. Remember, dress is business casual. 

Dues are Due – What are you Paying?  A close review of your dues invoice shows that $100 goes to ASA’s Subcontractor Legal Defense Fund.  This was a mistake and the extra $100 is for ASA of Metro Washington’s Advocacy Fund.  If you wish your $100 to go to SDLF rather than Advocacy, please reply to this email. 

If you have not received an invoice, we will be glad to send another one.  The dues you pay make it possible for us to continue to fight for subcontractor rights.  Your continued support is appreciated.  If you are not a member, just reply to this email and we will get you signed up. 

Owner and Subcontractor Payment – A Committee of the Board met with Paul Elias with Redbrick LMD and he has graciously agreed to help us address the payment issue.  We are seeking help from banks to see if they can compress the time it takes them to pay construction requisitions.  Also, our Sept. 14th joint meeting with the Construction Financial Managers’ Association will include discussions with GCs, banks and owners on improving the flow of payments all the way down to suppliers and sub-subcontractors. 

A good primer on owner payment issues on public vs private jobs is in this Construction Dive article of 5/25/21.  ASAMW’s task force on the Subcontract Addendum is effectively meeting with various members of our GC Partner Council.  The GCs emphasize how much they rely on the Owner for payment before paying the sub.  

Advocacy Issues

Maryland: No report 

DC:  Your association is meeting regularly with the office of Council Member Robert White, as well as the Ombudsman for subcontractors with the Office of Contracting and Procurement, Pete Teague.  We will also provide input in the disparity study being conducted by the Deputy Mayor.  You are welcome to join in these discussions.  Just reply to this email.     

Virginia: Our Lobbyist reports, “Almost 500,000 Democrats nominated a statewide ticket that will be led by former governor Terry McAuliffe who received more than 62% of the vote; his four opponents split the remaining 38%.  In House of Delegate primaries five incumbents were defeated with the Democrats replacing three in Northern Virginia with more moderate candidates and the Republicans defeating one of their conservative members with a strong Trump ally.  There is a far-reaching and oh-so-familiar shadow stretching across Virginia’s political landscape that could have profound implications for the election of a new governor, a contest that figures to be the only major competitive race in the country this fall. Former President Donald J. Trump won’t be on the ballot in Virginia, but his political legacy will be.”

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