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To provide an expert’s view on construction payment and performance surety bonds, I sat down with Ellen Neylan, the owner of Surety Bond Associates, a WBE surety bond agency and consulting firm that provides specialty surety services to small, minority women and veteran owned contractors.
Often projects presented accompany a bonding requirement – too many times this is seen as an automatic disqualifier to an unbonded GC. Ellen stressed the abundance of options out there, and the importance of differentiating all risk reduction instruments from viable alternatives.
Many GCs are working with their insurance agencies to tackle bondability needs without realizing surety agents are their own specialty that add a different, more precise value. Ellen explained to me the contrast between a surety bond and subcontractor default insurance (SDI), two concepts that can be easily confused. In almost all cases, SDI is very inferior to surety bonding. Surety bonds exist to protect taxpayer dollars and a general contractor’s organizational health, while SDI serves to allow a GC to default subcontractors quickly with no payment protection downstream for anyone. High deductibles are associated with it – and since there is no qualification process to gain this protection, it is much more of a high-risk instrument.
Along with the confusion of bonds and SDI seeming interchangeable, comes a misinterpretation that bonds and insurance in general are comparable. I’ve previously heard the phrase that “Bonds are not insurance-they’re a credit instrument” and Ellen confirmed that in her Bonds 101 workshop, this is an idea that’s represented as fact.
Even though insurance companies can provide bonds, contractors have to qualify for bonding, which makes it quite different than insurance. Anyone can buy insurance if they can afford it, however bonds require an in-depth qualification process that fully vets a firm.
Prior to my conversation with Ellen, I read that many bonding professionals sum up their evaluation of a contractor with the use of “the three c’s: character, capacity, and capital” – and I was interested to hear if this captured her interpretation of the GC review scope. She emphasized that those are definitely the main ideas, however the importance of each area isn’t quite weighted equally in thirds.
The surety typically puts 70% emphasis on financial strength. For the capacity consideration, the contractor’s experience with project management and portfolio of work shape their rating. Some factors that are evaluated include:
– Staff resumes
– Typical project valuation “sweet spot”
– Scope of work
– References with subcontactors, suppliers, and banks
When evaluating the character review, this is a bit more challenging. Ellen rightfully mentioned that you don’t really realize a contractor’s true colors until there’s an issue. Since surety bonds are essentially a partnership between the surety and the contractor, the surety has to feel comfortable that the contractor can help them resolve any problems and deliver on promises. Project success is largely tied to a GC working with the surety so that they don’t have to file a loss.
So once you’ve taken the steps to become bonded – what is required for a firm to take steps to grow that bonding capacity?
Much of growing bonding capacity involves not taking on jobs that are too large for your company’s bandwidth. Preserving as much cash in the company and tightly managing it alongside accurate job cost accounting systems is key. A great CPA is critical to keeping a company in line financially. Surety companies look for detailed financial statements because the accounting needs of construction are very unique from other industries. Building that team of a solid CPA, surety agent, and bank is a powerful trio.
Payment and performance surety bonds can seem confusing, however with a bonding expert’s guidance, contractors are able to realize their full potential and not have to lose out on opportunities from lack of bonding. There are plenty of resources available for organizations looking to become bonded, and a “dead end” is far from how a bonding stipulation should be perceived.
About the Interviewee, Ellen Neylan:
Ellen Neylan is the founder and sole owner of Surety Bond Associates. Ellen is a surety veteran with over twenty-five years’ experience in the surety industry, holding positions with several major surety companies fulfilling a variety of underwriting, management, and operations, business and product development roles. Ellen has lectured diverse audiences on surety principals and underwriting disciplines, and is an active member of the PA and NJ Chapters of the Surety and Fidelity Association of America.
It used to be that building “insulation” evoked images of rolls of fiberglass batting material in either pink or white/yellowish color. Since the late 1930s, long strips of fiberglass batting have been cut to fit between wall studs and sandwiched between the exterior wall and the sheetrock interior.
Fiberglass provided far superior (and safer) building insulation than had been used in construction for centuries. But it was, and is not without a significant health risk caused from inhaling the small fiberglass particles that can break free from the batting during handling. Protective mask, gloves, goggles, and clothing were standard safety equipment when installing fiberglass insulation.
And despite its insulating effectiveness, fiberglass does not provide a truly good vapor and air barrier if not properly installed.
Many of today’s commercial construction projects are being insulated with foam products that are providing greater insulation and other intrusion resistance than fiberglass batting. Let’s explore some of the history and uses of foam insulation.
The short story
Spray foam insulation is polyurethane product that was developed in 1937 by the German industrial chemist, Otto Bayer. It was brought to the United States where it was used in military and aviation projects in the mid-1940s.
After the war, the auto industry began using polyurethane polymers in car bodies and the housing industry began using it on a limited basis for insulating homes. By the 1970s, technology had improved the application and affordability of spray insulation for use in the construction industry.
Today’s spray foam insulation products provide greater energy efficiency and are achieving increasingly improved “green ratings.” This insulation is utilized in many housing and commercial construction projects around the world.
R-value ratings, Open Cell and Closed Cell foam insulation
Insulation has an R-value rating, “a measure of resistance to heat flow through a given thickness.” Generally, the higher the R-value, the greater the heat flow resistance will be.Spray foam insulation has higher R-value ratings than does fiberglass insulation.
Modern spray insulation used in construction is usually one of two types: “Open Cell” or “Closed Cell” foam.
- Open Cell foam is comprised of tiny foam cells that are not fully closed. Air fills the “open” space inside the material. Open Cell foam has an R-value of 3.4 to 4.5 per inch.
Open Cell insulation is a very effective sound barrier (nearly twice the sound resistance as Closed Cell foam).
- Closed Cell foam is comprised of fully closed cells densely packed together and filled with gas, enabling the foam to rise and expand. Closed Cell foam has an R-value of 5.4 to 7.2 per inch.
Closed Cell provides superior insulation and because of its greater cellular density it provides structural reinforcement to insulated surfaces.
Benefits of spray insulation
This insulation offers a number of unique benefits when used in commercial and residential construction:
- This insulation has no food value meaning that the foam is of no food interest to destructive insects and rodents.
- Bacteria and fungal growth cannot develop on spray foam insulation because it is an inert substance.
- Applied in liquid form, spray foam insulation expands and conforms to all open spaces creating a “continued thermal envelope” that effectively seals off leaks and gaps and prevents insects and vermin from entering.
- Spray foam insulation adheres to any clean and dry surface, will not shrink, settle, or disintegrate.
Value in commercial construction
Spray foam insulation is more expensive to install than traditional fiberglass insulation. However, spray foam offers considerable sound and weather insulation benefits to nearly any imaginable construction application.
Its initial expense will be offset by its durability (80+ years), its ability to fill even the smallest areas that fiberglass can’t even reach, and provide higher energy efficiency thus reducing energy expenses.
With the increasing focus on energy efficiency, it is highly likely that spray foam insulation will continue to gain in use in both the housing and commercial construction industries.
Woodcraft construction kits have been around for a good number of years now, but just recently started to really take off. We now find that there are a lot of people that choose to buy these toys for their kids, or even for themselves, because they offer a lot of things in return. It is known that they are some of the most educational and enjoyable toys on the market today and they also come very cheap. The price range doesn’t really compare to any other when it comes to toys, that’s why these are great for those that also need to save a few bucks. We’ve created a list of 9 important woodcraft construction kits advantages that you need to be aware of.
1. Woodcraft construction kits feature a lot of models. Really, there is no limit to what these toys can form. From structures and vehicles to dinosaurs and wild animals, you will find that these toys can satisfy every need that your child may have!
2. Woodcraft kits are great for the little ones. Thanks to the entertainment and education value that they have, the general opinion is now that these toys are really beneficial for little kids.
3. Woodcraft construction kits can be great for adults as well. Due to the fact that they come in a great number of models, some of them being more complicated than other, you will find that some of these will prove themselves quite enjoyable even if you’re not a kid anymore!
4. The quality of these toys is often times exceptional. Some models also feature some of the finest wood available alongside with top quality materials.
5. Woodcraft kits are amazingly cheap. The price starts from just a few dollars and it doesn’t go up that much. When it comes to saving money, woodcraft toys are perfect!
6. The entertainment value of these is really something else. It’s commonly known that the human brain likes to solve puzzles. Well, these toys help it do just that in the most enjoyable way imaginable!
7. Woodcraft construction kits are great for education. Due to the fact that they come in a great number of shapes, your little one will now be able to know how certain types of buildings are constructed, for example.
8. These toys feature a number of designs that you won’t be able to find with other toys. This aspect can be observed in the technical area.
9. Woodcraft construction kits are amazingly simple to use. They don’t require any gluing or complicated procedures, all you are required to do is put the pieces in order!
Eminent domain is generally the ability of the government to take private property for public purposes. It is a power granted by the Fifth Amendment of the United States Constitution, and exists to ensure the public has streets, sewers, electrical lines, and much of the rest of the public infrastructure that exists today. But, if the government is going to take your property, they must pay you “just compensation.” Just compensation is determined by figuring out what a seller would pay and a buyer would buy if there wasn’t the threat of the government taking the property. It sounds easy, but becomes difficult when applied in real life, particularly with temporary construction easements.
Before I go any further I want to stress to everyone reading this article that eminent domain is not something you should try to negotiate on your own. It is a very technical area of the law, and determining how to get the right amount of compensation for your property takes a lot of experience. Please don’t read this article and try to negotiate the sale of your property to the government on your own. Hire an eminent domain lawyer.
In many cases, the land to be used for the road, for example, is not the only property required to complete the public project your property is needed for. For example, if the Seattle Department of Transportation were widening Mercer Street, they would need not only the property for the actual road, but some property outside of that area to move their construction equipment, store supplies, and create what will eventually be the new street. This property outside the actual construction area is often referred to as a temporary construction easement, since once construction is complete the property is returned to the landowner.
But how is this valued? Traditionally it is valued in one of two ways: a set rental rate is established and applied to the amount of time the property is to be rented; or a percentage of the overall property value is taken and multiplied by the amount of time the property is needed. In either case, these numbers can vary widely and can be very far from the true value of the land that is lost for that time.
For example, let’s say that while widening Mercer Street, the Seattle Department of Transportation’s construction easement would shut off one of the driveways to your gas station, making it nearly impossible for traffic to get in and out of your business. The true value of the easement is much higher than the result using the above two methods. It may be the entire value of the income that could be derived from the property during the time the construction easement is being used.
Another problem with these methodologies is that it is often difficult to determine what an acceptable rental rate is or what an acceptable percentage of property value is. For example, as a renter of property in Seattle near Mercer Street, would you expect an 8% rate of return or a 10% rate of return? This difference could have a great effect on the final amount of just compensation.
Determining the value of temporary easements is difficult. It is not an exact science. If you are a landowner whose property is being taken for a temporary construction easement or other kind of temporary easement, please contact an eminent domain attorney today to help.
Retail construction is a relatively simple concept to understand. When it comes to building and renting retail spaces there are certain obligations that the builder has to the tenants and vice versa. Basic retail construction means the building of a space that is either finished on the interior or left for the tenant to complete.
When a company starts a retail construction project they generally have an idea of what type of business and tenant they will be hosting when the building is complete. With this in mind builders generally construct a building to the specifications that they believe will best fit the type of business that may be housed within the building. For instance, a company that wants to attract restaurants to their retail construction project will likely structure their project to reflect the needs of a restaurant space. Adding rooms like rest rooms, dining rooms, kitchens, and utility closets to mimic the interior of a restaurant. For companies that want to attract stores they may build large show rooms and stocking rooms.
For businesses that do not have a preconceived notion about what type of business may be housed in the building it is generally better for them to build only the outer structure. This means building four walls with space inside that can be customized by the renter or tenant when they start renting the space. This type of build is generally beneficial for businesses that have a highly specialized style or that have special needs when it comes to a space. Though this is good if you want an incredibly custom space for your business, it is also a bit pricier than renting a completed space.
Tenant build outs are a process by which the tenant rents or purchases a building that has been zoned for commercial use and they complete the interior of the building themselves. This can include painting, flooring, lighting, any extra rooms, furnishing, and any other sort of customization that they require. Because they provide the finishing touches to the building, it is no longer the responsibility of the retail construction company to complete the building unless they are contracted to do so by the tenant. The price of rental and other fees may change after the building has been completed and there is also the possibility that the retail building owner can essentially purchase the completion from the tenant should they vacate the building.
In a plasma screen, there are over sixteen million pixels making up the display. Each of those sixteen million are made up of three pixel colors of blue, red and green phosphors, which are evenly distributed across the screen. The entire screen which you view, or rather the picture you watch is made up of a combination of these three colors.
The plasma itself sits and operates between two thin glass panels. Millions of tiny images (made up of the greens, reds and blues) are made by the illumination of fluorescent lights put through them. And the plasma is made of a gas made up from electrically charged atoms and negatively charged particles. Then electricity is passed through it, which starts the ‘lighting’ process, or what we see on-screen.
Plasma TV’s are at the top end of the scale, when it comes to price compared to other types of flat screen. But is there an advantage we clearly see with a plasma TV, compared to LCD?
Because of the flat screen, there is no edge distortion which you sometimes get on normal or CRT TV’s.
View movies made in widescreen or 16:9 format as they should be – in widescreen, not with half a picture cut off! And you know how annoying and frustrating that can be, when you get half the picture cut off or you can’t see the subtitles at the bottom of the screen!
With a plasma, brightness of the display is uniform from one corner to the other. With conventional TV’s you get bright and dark mixed colors, but you don’t have this problem with a plasma display. All sixteen pixels are illuminated evenly.
A major problem with the old type televisions is the huge amount of space they take up in your living room, but this problem is non existent with a flat screen. Because of the slim design, plasma televisions give more options when it comes to mounting them. Be it eye level height, or up higher you can mount a plasma on the wall or it can sit on a normal TV stand.
Another thing which is great about plasmas is that magnetic fields do not interrupt the screen. Plasma displays work completely different from conventional televisions, which uses electron beams, which as you know can be affected greatly by magnetism.The advantages of a plasma can easily be seen here. So you know that sound system you wanted to plant right next to your TV set? With a plasma, you can have the speakers as close as you like without it affecting the picture.
Have you noticed whenever you buy a burger, the sales people always try to persuade you to ‘Go Large’, or have ‘extra fries’ etc. Have you also noticed at the checkout of every superstore are racks of things you would not have thought of buying, but as you stand there waiting at the checkout, you suddenly realise all the things you ‘need’! Scary stuff! Real profits come when you get the client to buy a larger, more expensive, or more comprehensive product or service.
This is how it works in the construction industry:
EXAMPLE A: The Remodeler, Home Refurbishment: in the business of building extensions, bathrooms, sun rooms, loft conversions etc. How about suggesting certain enhancements at the point of survey. Or ask them if they had considered extending the work to include the latest whiz bang disposal unit, designed to be 150% more efficient and thus delivering significant cost savings to your client.
EXAMPLE B: The Commercial Contractor: how about offering a Repairs and Maintenance service after the initial defects period following contract completion. This can deliver great benefits for your client because you already know the premises and can operate much more efficiently with the prior knowledge base you already have.
EXAMPLE C: The House Builder: If you are building housing schemes where a number of homes will be rented/leased you could offer and Liaison Officer based on site for the first 6 months after completion, to make sure people are secure in their homes, know where to find everything and are happy. You could offer this service as a free added benefit – this may be the deciding factor that will win you the contract over your competition! Alternatively, if the client/housing association/ local housing authority are intending to employ someone for this job, you could easily extend your business reach by supplying the right person for the job – someone who already knows the property and has proven qualifications to do the job.
EXAMPLE D: The Sub-Contractor: if you work for a number of larger contractors, the way you source the products you use is crucial. It may be that the main contractor already has an approved list of suppliers, but often good relationships can be established with individual Buyers to enable the Subbie to recommend where to source materials at competitive prices. A whole range of complex partnerships can be made to enable commissions to be paid and everyone benefits! Of course, it goes without saying that any deal agreed should be completely transparent and should ultimately benefit the client in terms of cost savings and quality products and services. One wrong move or ‘under the table’ deal can result in lost credibility and trust. So keep everything above board.
EXAMPLE E: The Architect: Design & Build contracts are one obvious root to establish good working relationships with construction professionals on a project team and can be one way architects can ‘up-sell’ their professional skills by working on a partnering basis. Partnered Contracts can be lucrative for all involved, including the client, but they have to be set up correctly to work efficiently. Architects who are willing to get involved at the Pre-Construction phase of a project on a ‘No Pass No Fee’ basis are more likely to keep busy down the line. (‘No Pass’ meaning not getting Planning Approval for a project).
EXAMPLE F: Whatever area of construction you are in, you will have a network of approved professionals you work with. So you will have a lot of bargaining power when soliciting goods and services for your project. Sub-contractors, agents, architects, quantity surveyors, building consultants and merchants will all be part of the mix. This can be an area of healthy growth for your business when approved list suppliers, partners and subsidiaries reciprocate with their own recommendations for your company.
Pole buildings are old and proven structures. Ancient civilizations discovered the ease of pole building construction centuries ago and now it’s catching on again. A basic pole structure consists of vertical supports, horizontal members, rafters or trusses, and supports. Pole buildings are very simple and sturdily constructed.
The poles are embedded deep in the ground and extend to the top of the building to support the roof. Skyscrapers are engineered and constructed following a similar philosophy albeit on a much larger scale using different building materials.
Stud-frame structures must have a poured concrete slab or foundation. The frame structure is then constructed on top of an and anchored to the foundation or slab. The additional cost, time, labor, and skill needed for the concrete portion of the building is the major disadvantage with using these building techniques.
Stud frame construction uses light-weight wooden supports spaced at regular intervals to provide nailing supports for the wall coverings and to provide roof framing. The popularity of stud-frame construction in residential homes is primarily due to the availability of materials and the rigidity of the building code regulations.
Traditional timber-frame construction and contemporary post-and-beam construction are very strong and have a pleasing appearance, but the require large beams or timbers for the horizontal and vertical members, which are usually not available these days without great expense and skill in working. These types of buildings also require more effort and care in placing the heavier supports.
Pole buildings are actually constructed using a combination of post-and-beam/timber framing and stud framing, using the best of these types of approaches. The upright poles are used as the building supports to which the lighter, more easily handled, horizontal framing lumber is fastened.
Pole buildings are particularly suited for barns, sheds, shops, warehouses, waterfront piers, roadside stands, aircraft hangars, and other simple shelters or structures. Many pole buildings are uninsulated and/or have one or more sides left open. Pole buildings construction can also be used to build vacation cabins and homes.
The practice of using pole construction for building vacation homes was started on the West Coast in the 1950s and had become increasingly popular although the cost of certain pole vacation homes can run as high as that of a similar conventional stud-frame house on a concrete foundation. It mostly depends on the building design.
Pole construction has become popular for several reasons. The biggest reason is the ready availability of new materials particularly suited to pole building. The creation of pressure-treated poles and posts is the most important of these new materials. Because the embedded poles are potentially in constant contact with moisture and insects, pole construction is very dependent on long-lasting, decay-resistant, and insect-resistant wood products.
There is nothing worse than bringing contractors in to do a construction project only to find that once they have finished the job, they have left their mess behind. Construction site cleanup is part of the construction industry and it can be a messy job, but someone has to do it. You can make your life easier by cleaning as you go for starters, and that should help reduce the burden of the final cleanup to a degree. While it’s impossible to cover every aspect of a proper construction cleaning project, a good place to start would be to remove trash and debris on a daily basis, particularly wood and paint particles which can pose as dangerous fire hazards.
There are plenty of construction companies that might make use of a separate contractor to do the cleanup for them since it can save a lot of time and money by bringing in specialists (dependent on the size of the job). It is always wise to do a walk-through prior to the start of cleanup for the supervisor to find out exactly what the construction manager’s expectations are with regard to cleanup. This will also help to prevent a poor final product (when the project is completed).
So, what does construction site cleanup really entail? In general, any scuffs, hand and finger smudges, dust and dirt need to be wiped down off the walls and the same goes for trim, baseboards, windows, door frames and handrails. The ceilings will also need a good dust and the removal of any cobwebs that have sprung up. Doors need to be cleaned down- which may include the front, back, sides and the top, and don’t forget about the hinges. Any masonry will need to be vacuumed and cleaned as instructed. All of the carpeting throughout the project will need to be vacuumed as well. Wood, tile or marble should be buffed, waxed and sealed. You will need to clean the tracks, frames and glass on windows. Be sure to clean any of the light fixtures and ceiling fans dust tends to accumulate. Wall & ceiling vents, and floor vents will also be need to vacuumed, and in the case of floor vents they will need to be removed so that you can vacuum as deep as the attachments will allow. Electrical outlets and switches need cleaned since may they gather dust and hand smudges. That is just the basic cleaning inside, it doesn’t encompass the specific cleaning required in a bathroom, kitchen or the entry way. Not to mention any mirrors and cabinets throughout the house, as well as removing any of the manufacturer’s stickers that are not required.
On the topic of manufacturers, you should not forget the importance of which cleaning chemicals should and shouldn’t be used. Only cleaning products recommended by the manufacturer should be used, as the wrong chemical can cause irreparable damage and will set your project back as you have to replace any damaged items, especially things of delicate stonework like marble, granite and quartz. It is very likely that you will be unable to do all of the cleanup yourself, depending on the type of project its likely you will need to call in the professionals to finish off your flooring as it will require sealing and waxing. Now that the inside is taken care of you can begin focusing on cleaning up the outside.