ASA: Representing Subcontractors & Suppliers in the Construction Industry

The American Subcontractors Association promotes the rights and interests of subcontractors and suppliers by building strength in community through education, legislation, networking and professional growth.

Foundation of ASA Logo
The Foundation of the American
Subcontractors Association, Inc.

1004 Duke St., Alexandria, VA 22314-3588 • www.contractorsknowledgenetwork.org

NEWS RELEASE
FOR RELEASE, April 26, 2017
Contact: Marc Ramsey, (703) 684-3450, Ext. 1321, mramsey@asa-hq.com


Construction Subcontractors Are Learning About Most Popular Benefits Employees Are Buying Without Employer Contributions with Free FASA Video

ALEXANDRIA, Va.—Voluntary benefits in the workplace have grown by over 50 percent in the last decade. A new video-on-demand from the Foundation of the American Subcontractors Association is helping construction subcontractors understand non-traditional benefits like legal insurance and wellness programs.

In the video-on-demand, “Most Popular Benefits Employees Are Purchasing Without Employer Contributions,” presenter Dan Cahn, Benefit Solutions Today, answers five questions:

  1. What is informal caregiving?
  2. Why is it a growing challenge?
  3. How does it impact employees?
  4. Where do employees look for assistance?
  5. What solutions can you offer?

Most Popular Benefits Employees Are Purchasing Without Employer Contributions” (Item #8098) is free for ASA members and nonmembers. This and other on-demand videos are available through FASA’s Contractors’ Knowledge Depot.

FASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. FASA provides subcontractors and specialty trade contractors with the tools, techniques, practices, attitude and confidence they need to thrive and excel in the construction industry.

 

Foundation of ASA Logo
The Foundation of the American
Subcontractors Association, Inc.

1004 Duke St., Alexandria, VA 22314-3588 • www.contractorsknowledgenetwork.org

NEWS RELEASE
FOR RELEASE, April 12, 2017
Contact: Marc Ramsey, (703) 684-3450, Ext. 1321, mramsey@asa-hq.com


Subcontractors Are Learning About Incentive Compensation Plan Best Practices with New FASA Video-on-Demand

ALEXANDRIA, Va.—Subcontractors, specialty trade contractors and suppliers in the construction industry are learning about incentive compensation plan best practices with a new video-on-demand available from the Foundation of the American Subcontractors Association.

Incentive compensation is a huge investment. Engineering and construction companies spend an average 15 percent of net profit before taxes, on these programs. The U.S. construction industry has an enormous opportunity to improve the effectiveness of current incentive compensation programs, especially because few construction companies use industry market data to ensure adequate incentives.

“It can be challenging to create an incentive plan that supports your strategic objectives, motivates attainment of stretch goals, provides desired returns and behaviors and yields results,” says Mike Rose, Ph.D., FMI, presenter of the video-on-demand, “Incentive Compensation Plan Best Practices.”

FMI set out to answer some basic questions to find out what makes incentive compensation more effective in the eyes of top executives in the construction industry. In the on-demand video Rose shares results of this survey and discusses:

  • The seven critical issues commonly practiced in the construction industry that need to be addressed in order to improve the effectiveness of your incentive program.
  • How effective incentive compensation plans can attract and retain the best talent and increase your return on investment.
  • How to effectively balance the incentives to minimize unintended consequences such as divisional silos and free riders.
  • How to avoid the pitfall of paying out bonuses in lean years and ensure adequate time for proper transitions to new plans.

Play this on-demand video with a free media player like Windows Media Player, and use it for group training by projecting it onto a screen or wall in a conference room. “Incentive Compensation Plan Best Practices” (Item #8102) is $65 for ASA members and $95 for nonmembers. Order online.

FASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. FASA provides subcontractors and specialty trade contractors with the tools, techniques, practices, attitude and confidence they need to thrive and excel in the construction industry.

 

ASA Logo
American Subcontractors Association, Inc.
1004 Duke St., Alexandria, VA 22314-3588 • www.asaonline.comwww.subexcel.com
 

NEWS RELEASE
FOR RELEASE April 12, 2017
Contact: Sheila Ohrenberg, (913) 390-9544, sheila@sorellagroup.com, or Marc Ramsey, (703) 684-3450, Ext. 1321, mramsey@asa-hq.com


Subcontractors and Suppliers in Kansas Win Important Payment Protections on Construction Projects Financed Through P3 Arrangements

ALEXANDRIA, Va.—Construction subcontractors and suppliers in Kansas have won important payment protections on public work financed through public-private partnerships.

On April 7, Kansas Gov. Sam Brownback (R) signed SB55, which requires a contractor with a prime contract exceeding $100,000 on a public-private partnership, also known as P3 project, to provide performance and payment bonds. A performance bond states that the contractor will furnish and install whatever it has contracted to build in accordance with the contract plan and specifications. A payment bond states that those that supply labor and materials on a project will be paid subject to any restrictions and limitations imposed by statute, the contract or subcontract, and/or the bond itself.

Initiated by the American Subcontractors Association-Greater Kansas City chapter, the new Kansas law requires that the payment bond must be for “the full contract amount solely for the protection of claimants supplying labor or materials to the contractor or subcontractors in the performance of the work.” Such bonds must be underwritten by “good and sufficient sureties as determined by the public owner.”

“This new law is extremely important for construction subcontractors and suppliers,” said KCASA immediate past president and current KCASA Board member Sheila Ohrenberg, Sorella Group, Inc., Lenexa, Kan. “Lack of payment protections shifts substantial risks to the subcontractors and suppliers. Typically, they will extend large amounts of credit before submitting an invoice to the project’s prime contractor. They have paid workers, suppliers and estimated taxes before knowing if payment is forthcoming. Such increased risk cannot be accepted without a cost by the business owner. This cost is ultimately borne by the taxpayer. If the risk is deemed too great the most skilled and successful subcontractors may forgo participation especially if less risky opportunities exist.”

Construction of projects for public use through a public-private partnership is increasing at all levels of government, but especially at state and local levels. Governments are turning to P3s to be able to tap private-sector equity to finance capital projects rather than trying to budget public funds raised through taxes. Typically, the public entity will authorize the private entity to design, build and frequently operate the resulting public work. Private capital is attracted to such projects through financing arrangements that will provide profits to the private partner’s investors.

Depending on how a construction project funded by both public and private sources is structured, the project may be exempt from both payment bond requirements and mechanic’s lien laws, leaving subcontractors and suppliers without adequate payment assurances.

“This [new law] is good news for Kansas,” added Brad Miller, Midwest Crane & Rigging, Olathe, Kan. A past president and current KCASA Board member, Miller has been elected to serve on the national ASA Board of Directors. His three-year term will begin on July 1. “KCASA and ASA are committed to staying on top of issues that might jeopardize the construction industry.”

“Construction subcontractors and suppliers have a big stake in such legislation—making sure projects financed through P3s include payment rights,” said E. Colette Nelson, Chief Advocacy Officer, American Subcontractors Association, Alexandria, Va. “Unless specified in an authorizing statute or in the contract documents, there are unlikely to be subcontractor payment assurances—neither payment bonds nor mechanic’s lien rights—on such projects.”

“Construction subcontractors and suppliers considering work on projects financed through P3 arrangements need to confirm what, if any, payment assurances are available to them before they bid,” Nelson added.

Both Ohrenberg and Miller, along with KCASA Board member Nathan Buhrmester, Haas Wilkerson, Inc., Fairway, Kan., serve on KCASA’s Legislative Committee. They testified on Feb. 7 in support of SB 55 before the Senate Commerce Committee. As a surety account executive, Buhrmester was instrumental during his testimony, because he explained the bonding costs to a project. His knowledge of, and ability to explain, the bonding costs and process to the Senate and House members made it easy for them to understand subcontractors’ need for payment protections.

“The lack of this protection/guarantee [on public-private partnership projects] for subcontractors leaves them vulnerable to non-payment or slow payment, which can have an extreme adverse effect on their ability to perform on this and other projects, creating a domino effect on other projects and on their internal operations, threatening their ability to pay their employees and pursue other work,” Buhrmester testified. “Additionally, without this guarantee, many smaller subcontractors may forgo pursuing this work or surcharging their bid to account for the added risk. This could result in fewer and less qualified subcontractors bidding the project and at a higher cost.”

Buhrmester continued, “Coincidentally, cost is one of the main objections some opponents will likely bring up. The cost of payment and performance bonds are based on the contract price, and those rates are tiered. That is, while a $500,000 contract may come at a cost of 1.5 percent of the contract price, the next tier starts at $2.5 million with a lower cost, say 1 percent, and continues to decrease. The lowest tier is anything over $7.5 million and that cost could be as low as 0.2 percent of the contract price. Because most of the P3 projects are hundreds of millions or billions of dollars, this requirement could add as little as 0.5 percent to the cost of the project. However, if it is not required, smaller subcontractors and suppliers could add much more to their bids—5 percent to 15 percent—to account for the additional risk, as stated above. So I would purport that requiring these bonds will actually help to keep costs down, as well as ensure the most qualified contractors are performing the work.”

ASA–Greater Kansas City represents all construction subcontractors, specialty trade contractors, and suppliers. KCASA assists members to operate their businesses more profitably and equitably by offering educational programs, industry liaisons, government advocacy, networking opportunities, and member benefit programs for the purchase of goods and services.

Founded in 1966, the American Subcontractors Association, Alexandria, Va., amplifies the voice of, and leads, trade contractors to improve the business environment for the construction industry and to serve as a steward for the community. The ideals and beliefs of ASA are ethical and equitable business practices, quality construction, a safe and healthy work environment, and integrity and membership diversity.

 


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