5 Minutes to Wellness: Are Your Feet Happy? Check Your Shoes!
By Dr. Micheala E. Edwards
Today, it’s not unusual to spend more than $100 on a pair of tennis shoes. But are you sure that your shoes are the right ones for you? The way that your feet respond to external forces directly affects your walking and running gaits. Wearing improper shoes can cause increased joint shock, which is interpreted in the body as joint pain that grows from the bottom up (ankles to the knees, then to the hip, and then in the neck). Achy joints may be caused by broken down or worn out shoes. They can also be caused by wearing improper shoes for the activities that you are doing. Therefore, it is imperative that you have the correct shoes on your feet.
Different shoes should be worn for different purposes. For example, you wouldn’t benefit much from wearing a sprinting shoe (track spikes) when walking a mile. A wrestling boot will not give you much support while on the basketball court. First, know what your goals are when selecting a shoe to wear:
• Do you want motion control?
• Do you need a shoe for more stability when walking/running?
• Do you need more support for your ankles?
• What about the cushioning inside of the shoe?
• Are you looking for a high-performance shoe?
You should ask yourself each of these questions before purchasing a pair of tennis shoes. A good shoe salesman should be able to make suggestions on the best shoe for you when you describe your needs for the purchase. Once you’ve made your decision and begin to wear your new tennis shoes, it’s important to maintain proper care of them so that you can obtain optimal results:
• Keep your shoes dry at all costs (wet midsoles decrease shock absorption by 40-50%)
• Always untie your shoes when removing them to avoid breaking down the heel counter/Achilles box
• Add insoles for additional cushioning when necessary (running shoes lose 30-50% of their cushioning in the first 250 miles of wearing the shoe)
• Inspect your soles for discoloration or material deterioration (avoid shoes that may be on sale and have a long shelf life with yellow soles)
• Replace all shoes after 400-600 miles to avoid leg and ankle fatigue
It’s also important to know when to replace your tennis shoes depending on their purpose. Even the best shoes will have some breakdown of their materials and may cause achy joints and injuries in the long run. Know when to replace your tennis shoes according to how often you wear them:
• 10 miles per week or fewer: Replace every 12 months
• 15 miles per week: Replace in 8 months
• 25-30 miles per week: Replace in 4-6 months
A lot of thought should go into your tennis shoe purchase. Be sure to ask plenty of questions and inspect your shoes before you purchase them. Buying the correct type of shoes will help prevent unnecessary aches, pains and injuries, and will guarantee a more comfortable experience when walking or running.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.
Why Bonding Capacity Is As Good As Gold
By Brady Cox
For contractors, bonding capacity is as good as gold. It enables the company to pursue new projects with the confidence that their surety will back the contracts when the need arises. This is the source of increased revenues and greater profits!
How is available bonding capacity calculated? First, a bonding line is determined, consisting of an aggregate (total) amount and a single per-job limit. The aggregate is then decreased by different factors that consume the line. What can be done to minimize this effect, so bonds remain available for your company? Let’s look at how the numbers are developed and how they can be appropriately managed.
Both bonded and unbonded work is included in the analysis. Here’s the math:
Aggregate capacity amount minus
- Undecided bids (full contract amount)
- Low but unawarded bids (full contract amount)
- Projects that are awarded, signed, or just started (full contract amount)
- Remaining costs to complete on open contracts
Equals the available bonding capacity.
So how can agents help their contractors preserve this vital asset?
- Prompt reporting of bid results – When bid bonds are issued, the entire estimated contract amount is deducted from available capacity, not the bid bond amount. The capacity is not restored until the “not low” results reach the underwriter.
- Updated Work In Process (WIP) schedule:
- Surety underwriters and accountants determine a contractor’s “current work load” based on the costs they must incur (such as labor and materials) to complete their open contracts. When there are no remaining costs to incur on a project, it is considered completed. The WIP schedule shows revised “Costs Incurred to Date” and “Estimated Costs to Complete.” Both increased costs incurred and decreased future costs improve available capacity. Future costs may be reduced by progress on the contracts as well as greater labor efficiency, material cost savings, improved scheduling and other factors.
- A reduction in the contract amount (by amendment) has the same effect because it reduces unincurred costs. Report such amendments immediately.
- Prompt reporting of completed or terminated work, including unbonded projects, removes it from the work load and therefore increases availability.
Note: Factors that can reduce available capacity include unincurred contract costs that increase for any reason and the addition of new unbonded projects.
*The aggregate capacity amount is based on all the contractor’s professional and financial capabilities. If unbonded projects are acquired, they consume resources (supervisory staff, equipment, etc.) and therefore must be recognized within the use of the bond line.
Available bonding capacity is a moving target subject to frequent revision. To maximize availability, send your bonding agent the right information and keep it current.
Brady K. Cox is a Principle with the Baldwin-Cox Agency, LLC. in Dallas, TX. The agency was founded in 1990, and has always focused on providing construction bonds to contractors. Today the Baldwin-Cox Agency,LLC is one of the largest bond producers in all of North Texas.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.
Top Five Reasons to Use a Benefits Consultant
By Marc Pieroni
The federal government launched the Health Insurance Marketplace on October 1, 2013. The online marketplace, currently available in 36 states, is where individuals may shop and compare insurance plans and rates, with 14 states operating their own state-run exchanges. With all this information now at your fingertips, you may find yourself wondering, “why choose the services of a benefits consultant?”
With reported glitches in the online portals, compromising of secure information and vague information as to specific coverage, it is now more important than ever to utilize the services of a benefits consultant. A recent panel asked people what mattered most when buying insurance and used those criteria to determine the differences between buying direct and using a benefits consultant. The results revealed that using a benefits consultant excelled at satisfying the top five most important criteria when considering purchasing insurance.
The top five reasons to choose a benefits consultant are:
- Cost. Contrary to popular belief, benefit consultant pricing is actually better than going it alone. A good benefits consultant knows the difference between what looks like a good plan and what is the best plan.
- Half of consumers believed buying online direct would be the easiest option. However, when put to the test, most direct services fell short when queries or changes became necessary, especially later in the life of the policy. A benefits consultant has their own website and is much better at answering questions and providing follow-up services. A benefits consultant also offers a full service on-site facility.
- Speed. A benefits consultant can access information more accurately and quickly than an online service. This leads to better pricing, faster dispute resolution and personal detail. A benefits consultant will save you time by offering personal service and swift resolutions so that you can focus on growing your business.
- Peace of mind. A benefits consultant is more efficient at cross-checking policies and educating its clients about the best coverage available to suit each client’s needs. A good benefits consultant should provide superior customer service so that clients achieve peace of mind about their insurance needs.
- Security of personal data. Internet-based services rely solely on the data provided and do not provide personal care. Diligence about providing personal security and making sure the client is in safe hands should be top priority when considering a secure and trustworthy option for your insurance needs.
Marc Pieroni is the Managing Partner of BenefitCorp, a commercial insurance consulting agency founded in 1995. Marc is dedicated to helping businesses implement, administer and communicate all lines of insurance and financial products. Please call Marc at 972-480-0109 www.benefitcorp.com
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.
Vince – the blogger’s Reality Bite: Agree whole heartedly that if you are interested in providing health coverage for you employees a benefit consultant is the way to go. After all, the ones I have used over the years are not paid by you but by the insurance company.
Additional Insured and Indemnity Requirements in Your Contracts: Will Your Insurance Respond?
By Brad Burnham
Agreements between general and subcontractors have been changing in recent years. Many, if not all, contracts have always had an insurance provision requiring the subcontractor to carry specific types of policies and limits of insurance. More recently, requirements for Excess Liability (Umbrella) and Workers’ Compensation have been included and many general contractors now require very specific wording on the Certificate of Insurance.
Contracts may call for the subcontractor to specifically name the general contractor (GC) and/or owner as an “Additional Insured” and require very specific wording about the completed operations coverage and far-reaching indemnification.
The requirements may include the subcontractor assuming so much of the GC’s liability that the insurance company becomes unable or unwilling to provide the coverage needed, leaving the subcontractor out of compliance. Some insurance agents will issue the Certificate of Insurance without understanding the scope of the coverage and without reading the client’s contracts and insurance requirements. However, only the policy itself defines the coverage and will always supersede a Certificate of Insurance.
Are you out of compliance with your subcontract agreements?
- Look at your current contracts for the Insurance and Indemnity Provisions.
- Ask a qualified construction insurance agent to explain how your current insurance program will respond to the contract requirements.
- Send contracts to your attorney and insurance agent prior to signing them.
Why have the contracts changed?
- More litigation in our society – a “find fault first” approach to occurrences
- Rising defense and investigative costs
- Risk managers (rightfully) assuring that any claims are paid by the party causing the injury or property damage
Overreaching Indemnification
By indemnifying, the subcontractor promises that it will stand by its work and protect the general contractor from all claims, including those for defective work, injuries and property damage. General contractors generally will not hire subcontractors without the inclusion of such a provision, and they are not unreasonable. What the subcontractor must avoid is a provision that obligates it beyond acts and omissions that it or its employees performed. Indemnification clauses that require the subcontractor to indemnify the GC for work beyond the subcontractor’s control are not reasonable and, in many states, not enforceable. A reasonable general contractor will agree that the indemnification clause should be limited to only those damages caused by the subcontractor or those under its control.
Brad Burnham is a Vice President and Partner with Hotchkiss Insurance Agency, LLC, headquartered in Dallas, Texas. Brad leads a construction team of licensed agents and Risk Managers. Contact Brad @ 972-512-7727 or bburnham@hiallc.com Hotchkiss Insurance Agency, LLC www.hiallc.com
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.
How to Have a Better Relationship with the Design Folks
By William Goodman
I recently read an article on the “Collaborating Contractors” website about contractor and architect relationships. Here is a quote from the article:
“Disagreements between an architect and general contractor are not only detrimental to the productivity of the construction project, but can become quite costly as well. The most important aspect of any relationship is communication, as well as making sure that everyone involved is on the same page. By doing these two things, you’ll keep up the flow of the construction operations.
When the contractor and the architect each know the other’s responsibilities, they can strengthen their relationship by helping each other to work on any weaknesses or to complement each other’s strengths. Since both the architect and contractor have their own distinct roles in the building process, it is very important that they know how to work together from the start. Doing this can prevent any confusion and avoid costly changes to the construction plans later down the road.”
The above quote describes the expectation the contractors and architects would want to achieve and/or need in building their relationship, but somehow the relationship tends to take one step forward and two steps backwards. It is an all-too-common occurrence in today’s so-called collaborative design and construction environment.
The truth of the matter is that the contractor and design folks need each other and are dependent on each other’s ability to manage the process without any perceived or predetermined notion of how it should be done. So with that said, here are a few tips from experience that will make for a better relationship:
- Mutual Respect. It’s important to have respect for each other’s abilities, profession and achievements. One way to do this is to check your ego at the door. Another way is to spend time at the beginning of the project discussing and sharing past experiences. For example, what problems have you had on past projects, what worked, and what didn’t work in the relationship? Try to find that middle ground both can agree upon that will define how both move forward in the relationship. Both may not always agree with each other’s philology, but each should always be respectful of the other’s profession and opinions.
- Communication is always essential if all parties desire a successful outcome. During the preconstruction or kickoff meeting, the contractor and architect need to establish what form of communication is preferred, i.e. emails, conference call, meetings, etc. In some if not all cases, you will use all of them throughout the project. Define the frequency of communication. How often will you need to meet? Will the meetings be in person or by conference call? Who is required to attend or be notified of scheduled meetings? Most importantly, both contractor and architect need to be available on short notice to address any issues, conflicts and/or clarifications needed to keep the project running smoothly.
- Deliverables are another key component of the construction process. Generally submittals are the most common and frequent deliverables required by the project contract. This usually is the most difficult and time-consuming process during the project. Architects are becoming insistent on having complete submittals for any given section, submitted at one time. This will allow them to review and coordinate all related aspects of that particular specification section during a single review. I can diffidently understand their need for this. However, the struggle for the contractor is getting the submittals from the subcontractor in the proper format, accuracy and completeness. Typically they are received piecemeal and incomplete. Again, this is something that needs to be addressed during the preconstruction or kickoff meeting: what the requirements and commitment will be on the how the submission and processing of the submittals will be accomplished. Once the contractor and architect establish these ground rules, it will make for a smoother process with less delay in the return of reviewed deliverables.
How effectively and efficiently the contractor and architect are able to work together and communicate will translate into a satisfied owner/client who will want you to work for them in the future.
William Goodman, with over 30 years of commercial construction experience, is Senior Project Manager for Triune. Founded in 1997 with headquarters in Dallas, Triune is a leading, integrated design-build General Contractor in the Southwest region of the country.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2015 TMV, LLC (Triune). Any and all rights reserved.
How To Price a Federal Government Construction Claim – Part 3
Pricing Material, Subcontractor and Jobsite Costs for REA or Claim (Part 3)
By Kay Kendall
Continuing our discussion of pricing the REA or Claim, we will pick up with material costs, subcontractor costs and jobsite overhead costs.
Material Costs
Material and subcontractor costs should be easier to track than labor and equipment costs. If a change has taken place that requires more material than originally required, the additional quantity at the price it was purchased should be included in the REA/Claim.
Documentation to support the additional costs such as purchase orders, change orders to existing orders and invoices should be provided that show the additional quantity and cost. If the quantity has only increased, it could be useful to show how the additional quantity was calculated and the calculation of the additional cost for the increased quantity.
Subcontractor Costs
Subcontractors have the same burden that the prime contractor has in providing sufficient detail and supporting documentation to justify their REA/Claim. Sometimes, in the interest of keeping the project moving forward and keeping cost tracking simple, it might be a good idea to have the existing subcontractor dedicate a separate crew to perform changed work. This isn’t always the case but should be considered if the features of work are separable.
This author’s experience is that the government (and other contract owners) denies portions of subcontractors’ REAs/Claims because of commingling costs. Basically, the government puts the burden of proof on the subcontractor or contractor to prove how many hours were spent on the changed work. When the features of work are so intertwined that it is not possible to track the labor or subcontractor costs separately, a loss of productivity theory of recovery should be considered.
When a subcontractor is performing changed work, the contractor should get a firm price from the sub for the defined scope of work. Also make sure the contractor’s subcontracts include flow-down clauses from the government contract for the subcontractor to follow the same FAR clauses, other contract clauses and cost principles that the prime contractor has to follow.
The contractor must exercise due diligence to review and verify the accuracy of the subcontractors’ REA/Claim costs. In some situations, it might be prudent for the contractor to submit subcontractor Claims separate from the contractor’s Claim, because the contractor will be certifying the Claim – including a proposal or claim for costs not incurred or under the direct control of the contractor.
Either way, the subcontractor should also certify their claim.
Claim certifications should be taken very seriously. Contractors that certify claims with known inaccurate or false information may be subject to civil and/or criminal prosecution.
Jobsite Overhead Costs
Jobsite overhead is another cost that should be considered in a REA or Claim. In some cases, the government and the contractor enter into forward pricing agreements on costs like jobsite overhead and general and administrative (G&A) expenses.
If a change is directed to the work and it does not extend the contract completion date, some government entities will argue that no additional jobsite overhead is due. There are some instances where additional non-working foremen, superintendents or project managers are required to execute the work in a change. In those cases, the costs for the additional personnel should be included as direct costs in the REA or Claim.
The government will sometimes subtotal the direct costs (labor, material, equipment, subcontractors) in a REA or Claim and add a percentage to that cost for jobsite overhead. This author has seen this method agreed to by the government on changes that did not result in a time extension.
In the event that the change does result in a time extension, the percentage method of calculating the jobsite overhead may not be enough to cover the jobsite overhead costs. For example, maybe the direct cost of the change is only $10,000 and the government position is at 15% markup for jobsite overhead – $1,500 in this case.
But suppose the change, when added to the construction schedule, increases the contract completion date by 25 calendar days due to the submittal and approval of something in the change, and the procurement of the material takes more time because it can’t be ordered until approved by the government.
In this case, if the contractor’s jobsite overhead cost is $1,500 per day, the cost impact is $37,500 due to this change ($1,500 per day x 25 calendar days). Therefore, the $1,500 calculated from the 15% markup doesn’t produce equitable results for the contractor.
For changes or delays that impact the contract completion date significantly, and the application of a percentage to the direct costs does not produce equitable results, the jobsite overhead costs should be calculated from the contractor’s Job Cost Report.
Costs that are normally considered jobsite overhead are on-site management, their vehicles, office facilities and utilities, secretarial and clerical workers, timekeepers, telephone costs and other similar costs charged directly to the project but not associated with any other direct cost objective.
A common way to calculate these costs is to total the types of jobsite overhead costs listed above and divide the total by the number of calendar days in the period the costs were computed. If the project is complete at the time the REA or Claim is being prepared, the total costs for jobsite overhead costs – less mobilization, demobilization and other non-recurring costs – should be divided by the duration of the costs to get a calendar day rate. The calendar day rate can then be multiplied by the number of calendar days the contract completion date was extended as a result of this change or delay.
In the next article, we will discuss general and administrative costs, bond costs, profit and miscellaneous costs.
Kay Kendall is currently president of Kendall-Dinielli Consulting, providing consulting services to government and commercial clients. She has extensive experience in preparing requests for equitable adjustment proposals and claims for government construction contractors. She has also consulted Contractors with DCAA audits and resolving audit disputes. You can visit Kendall-Dinielli Consulting at www.kendall-dinielli.com.
Vince – the blogger Reality Bite: As the general contractor, since you will be in most cases responsible for certifying all claims, it is wise to spend time educating your subcontractors on how to submit claims properly.
I have been amazed at the astronomically high claims some subcontractors will submit because they simply don’t understand the process or feel that it’s an opportunity for a financial windfall.
You will save yourself considerable time and effort if you assist them from the beginning. In just about all cases where there is substantial money involved, I suggest that you hire a good claims consultant – they are worth their weight in gold.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2014 TMV, LLC (Triune). Any and all rights reserved.
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