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Wednesday, December 30, 2009
Notes from the PowerGen Conference
A couple of months ago in this space, I proclaimed that wind, solar and other renewable energy projects, as well as federal mandates to reduce emissions from fossil fuel plants will allow this sector in 2010 to leverage the momentum it built up in 2009. While perhaps not in the same class as Nostradamus, the prediction was confirmed by many energy industry experts at a recent conference I attended in Las Vegas. The PowerGen International Conference focused – as you might expect – on renewable energy sources, the recent Copenhagen Climate Summit and the Waxman-Markey bill that seeks to limit the carbon and other greenhouse gases produced by automobiles, power plants and other industrial and household activities.
President Obama’s federal stimulus plan contains measures that make energy sector construction projects attractive to owners. But some measures being floated by the administration and Congress could make utilities and alternative energy providers loath to invest until and unless they receive acceptable answers to some pressing environmental questions. If those answers are not forthcoming, these issues could throw a monkey wrench into the President’s plans to stimulate the economy through aggressive construction projects.
Environmental engineer Robynn Andrascek said many of the Bush administration’s “logical and clear” Environmental Protection Agency rules on carbon emissions have been rescinded under Obama.“We need clear rules, even if they are strict,” she said. “Right now the industry is usurped by uncertainty.”
Michael Yackira, president and CEO of NV Energy, said because utilities don’t know what carbon limitations the government will impose, “the risks and uncertainties are simply too large” for his company to build more coal-fired generation plants during his tenure.
Still, many utilities still are looking ahead and taking advantage of federal and state incentives to develop renewable energy resources. NV Energy planners have identified likely regulation scenarios and the company’s best strategies for dealing with them. The utility will invest in transmission lines to connect northern Nevada’s vast geothermal resources with Las Vegas’ voracious appetite for power.
A seminar at Nuclear Power International, held in conjunction with PowerGen showed how contractors can tap into the energy construction market. Though focused on nuclear power plants, the seminar revealed important trends applicable to all building in the energy sector. A case in point is increased use of modules constructed off site.
Contractors who can bring this service to their projects present tangible value to owners and a competitive advantage for themselves. Different modules can be built concurrently and installed one after another, saving time over projects that require one system to be completed before the next can begin. This modular approach also reduces an owner’s risk by cutting down on construction duration, labor supply squeezes and exposure to weather-related delays, according to Keyes Niemer, a project manager working on a nuclear plant.
The re-emergence of nuclear power plants and the burgeoning interest in geothermal, solar, wind and other renewable energy sources are additional opportunities for construction’s first movers to gain advantage. Contractors who can adapt to new paradigms and standards, deliver superior safety and quality and find qualified suppliers and subcontractors will profit from this construction sector, noted Charles Hess, director of nuclear technology at Tetra Tech.
While the chance to explore the issues that will drive the energy industries in the future, the PowerGen seminars and discussions gave attendees tremendous opportunities to meet with leaders in the alternative energy industries. This contact is vital for contractors looking to enter this construction sector or expand their expertise or geography. The hints these important players dropped may well lead construction executives to explore avenues that will improve their businesses, open doors to new contracting frontiers and lead to new sources of revenue.
The frontiers of alternative energy and the construction of generation, transmission and distribution infrastructure highlights the changing face of construction as well. Owners increasingly are placing a premium on professionalism and added value over low bids and mere field competence. Confidence in their vendors, suppliers and contractors often is an owner’s deciding factor in hiring situations. Networking savvy, presentation skills, “elevator speeches” and personal relationships are more important than ever in business development. Contractors owe it to themselves to get as much “face time” as possible with the folks who will make contracting decisions – especially in emerging markets and growing sectors such as alternative energy. PowerGen and other conferences are ideal opportunities for builders to explore the possibilities. Another great resource to find alternative energy projects is through Industrial Info Resources. They do a terrific job of tracking these projects from planning through construction.
President Obama’s federal stimulus plan contains measures that make energy sector construction projects attractive to owners. But some measures being floated by the administration and Congress could make utilities and alternative energy providers loath to invest until and unless they receive acceptable answers to some pressing environmental questions. If those answers are not forthcoming, these issues could throw a monkey wrench into the President’s plans to stimulate the economy through aggressive construction projects.
Environmental engineer Robynn Andrascek said many of the Bush administration’s “logical and clear” Environmental Protection Agency rules on carbon emissions have been rescinded under Obama.“We need clear rules, even if they are strict,” she said. “Right now the industry is usurped by uncertainty.”
Michael Yackira, president and CEO of NV Energy, said because utilities don’t know what carbon limitations the government will impose, “the risks and uncertainties are simply too large” for his company to build more coal-fired generation plants during his tenure.
Still, many utilities still are looking ahead and taking advantage of federal and state incentives to develop renewable energy resources. NV Energy planners have identified likely regulation scenarios and the company’s best strategies for dealing with them. The utility will invest in transmission lines to connect northern Nevada’s vast geothermal resources with Las Vegas’ voracious appetite for power.
A seminar at Nuclear Power International, held in conjunction with PowerGen showed how contractors can tap into the energy construction market. Though focused on nuclear power plants, the seminar revealed important trends applicable to all building in the energy sector. A case in point is increased use of modules constructed off site.
Contractors who can bring this service to their projects present tangible value to owners and a competitive advantage for themselves. Different modules can be built concurrently and installed one after another, saving time over projects that require one system to be completed before the next can begin. This modular approach also reduces an owner’s risk by cutting down on construction duration, labor supply squeezes and exposure to weather-related delays, according to Keyes Niemer, a project manager working on a nuclear plant.
The re-emergence of nuclear power plants and the burgeoning interest in geothermal, solar, wind and other renewable energy sources are additional opportunities for construction’s first movers to gain advantage. Contractors who can adapt to new paradigms and standards, deliver superior safety and quality and find qualified suppliers and subcontractors will profit from this construction sector, noted Charles Hess, director of nuclear technology at Tetra Tech.
While the chance to explore the issues that will drive the energy industries in the future, the PowerGen seminars and discussions gave attendees tremendous opportunities to meet with leaders in the alternative energy industries. This contact is vital for contractors looking to enter this construction sector or expand their expertise or geography. The hints these important players dropped may well lead construction executives to explore avenues that will improve their businesses, open doors to new contracting frontiers and lead to new sources of revenue.
The frontiers of alternative energy and the construction of generation, transmission and distribution infrastructure highlights the changing face of construction as well. Owners increasingly are placing a premium on professionalism and added value over low bids and mere field competence. Confidence in their vendors, suppliers and contractors often is an owner’s deciding factor in hiring situations. Networking savvy, presentation skills, “elevator speeches” and personal relationships are more important than ever in business development. Contractors owe it to themselves to get as much “face time” as possible with the folks who will make contracting decisions – especially in emerging markets and growing sectors such as alternative energy. PowerGen and other conferences are ideal opportunities for builders to explore the possibilities. Another great resource to find alternative energy projects is through Industrial Info Resources. They do a terrific job of tracking these projects from planning through construction.
Labels: Commercial, Construction Industry, Industrial
Wednesday, December 16, 2009
Project Labor Agreements
The National Labor Relations Act guarantees America’s construction employees the right to unionize. After considering what’s best for themselves and their families, more than 80 percent have decided not to exercise that option. Unfortunately, unions and the politicians their money puts into office have tailored project labor agreements – in overt disregard of these individual decisions – to impose union representation on open shop employees.
PLAs require labor unions to serve as the only bargaining entity for the duration of a construction project in exchange for certain union guarantees of dubious worth. Despite the fact that PLAs trample workers’ rights to determine their own financial strategy, force non-union construction firms to abide by rules they have no say in establishing and drive up construction costs, local, state and federal agencies continue to bow to union pressure. They often not only allow, but in many cases mandate the use of PLAs on public works projects. This approach runs contrary to the public interest in many ways:
PLAs overrule individuals’ rights to self determination
The Associated Builders and Contractors’ blog, www.thetruthaboutplas.com, notes that PLAs can be negotiated before the contractor hires any workers or employees vote on union representation. The National Labor Relations Act generally prohibits these pre-hire agreements because they strip workers of the opportunity decide whether to choose union affiliation through a federally supervised private-ballot election or a card check process. This ban on pre-hire arrangements applies to all industries except construction – another testament to the labor unions’ influence on lawmakers.
Because public works projects governed by PLAs require contractors to agree to these provisions in order to bid on the jobs, employers, rather than their employees, make the decision to accept union representation.
While PLAs don’t allow unions to discriminate against non-union workers, many jurisdictions require all employees be hired through the union hall and mandate these hires adhere to certain union rules that limit workers’ earning potential. That is, the non-union job seeker may be allowed to “classify” herself only as a specific tradesperson. This could mean that once the classification of work for which the employee has been slotted is complete, the employee’s work – and paycheck – ends, even if she is skilled in many different tasks and job duties for which work remains. Indeed, this “multiskilling” is a hallmark of merit shop training.
PLAs force contractors to surrender negotiating power
Contractors – whether union or non-union - who successfully bid on a public work project governed by a PLA must abide by rules they have no ability to craft. In fact, with PLAs the role the contractor’s management team normally would play in negotiations opposite the owner is now played by the union. The fact that the union’s interests are at best segregated from and at worst diametrically opposed to management’s interests points to one of the PLA arrangement’s greatest flaws. Of course this isn’t fair, but contractors who refuse to compete on this unlevel playing field are relegated to the outside looking in when public projects come up for bid.
PLAs impose unwanted and unwarranted expenses on employees
Though employees working on PLA projects may choose not to join the union, in some states they still will be required to pay a portion of union dues. At the same time, PLA rules in some jurisdictions force the non-union employer to pay into the union’s pension plans. This is required even though the non-union firms most likely have established perfectly acceptable retirement and benefit plans for their workers. These merit shop companies continue to fund their own plans while being forced to pay again into the union plans. The companies’ employees, as non-union members, of course will never benefit from these employer contributions.
PLAs punish loyal employees
When project labor agreements require merit shop companies to use union members as all or a portion of the workforce on a public works project, they are forced to exclude their own loyal, hardworking employees. These workers are displaced by unfamiliar workers with skills (or at lease union rules) that limit their usefulness. Unlike the longtime firm employee, the union worker is likely to be unwilling to go the extra mile for the non-union employer. Even when the rules allow open shop companies to use some of their own workers, those employees must be assigned through the union hall clearinghouse.
PLAs work against taxpayers’ interest
There is plenty of evidence that project labor agreements often result in higher construction costs. Politicians continue to insist on PLA’s despite their fiduciary responsibility to taxpayers. Inefficient union rules and the imposition of requirements that shut out many quality bidders and workers limit competition and lead to higher costs. The unconscionable part is that this exclusion of open shop contractors from competing for public works projects often is not merely an unfortunate side effect of PLAs, but their raison d’être.
As 2009 ABC National Chairman Jerry Gorski, noted, “When the federal government sets aside work for a favored few, the result is that hardworking taxpayers pay the price.”
A Beacon Hill Institute study titled “Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem,” found that PLAs not only drove federal construction projects alarmingly higher, but that from 2001-2008 – when President George W. Bush prohibited government-mandated PLAs on federal construction projects – there were no instances in which labor disruptions occurred that resulted in significant project delays or increased costs. Clearly, PLAs don’t even offer the few dubious benefits their adherents claim.
PLAs require labor unions to serve as the only bargaining entity for the duration of a construction project in exchange for certain union guarantees of dubious worth. Despite the fact that PLAs trample workers’ rights to determine their own financial strategy, force non-union construction firms to abide by rules they have no say in establishing and drive up construction costs, local, state and federal agencies continue to bow to union pressure. They often not only allow, but in many cases mandate the use of PLAs on public works projects. This approach runs contrary to the public interest in many ways:
PLAs overrule individuals’ rights to self determination
The Associated Builders and Contractors’ blog, www.thetruthaboutplas.com, notes that PLAs can be negotiated before the contractor hires any workers or employees vote on union representation. The National Labor Relations Act generally prohibits these pre-hire agreements because they strip workers of the opportunity decide whether to choose union affiliation through a federally supervised private-ballot election or a card check process. This ban on pre-hire arrangements applies to all industries except construction – another testament to the labor unions’ influence on lawmakers.
Because public works projects governed by PLAs require contractors to agree to these provisions in order to bid on the jobs, employers, rather than their employees, make the decision to accept union representation.
While PLAs don’t allow unions to discriminate against non-union workers, many jurisdictions require all employees be hired through the union hall and mandate these hires adhere to certain union rules that limit workers’ earning potential. That is, the non-union job seeker may be allowed to “classify” herself only as a specific tradesperson. This could mean that once the classification of work for which the employee has been slotted is complete, the employee’s work – and paycheck – ends, even if she is skilled in many different tasks and job duties for which work remains. Indeed, this “multiskilling” is a hallmark of merit shop training.
PLAs force contractors to surrender negotiating power
Contractors – whether union or non-union - who successfully bid on a public work project governed by a PLA must abide by rules they have no ability to craft. In fact, with PLAs the role the contractor’s management team normally would play in negotiations opposite the owner is now played by the union. The fact that the union’s interests are at best segregated from and at worst diametrically opposed to management’s interests points to one of the PLA arrangement’s greatest flaws. Of course this isn’t fair, but contractors who refuse to compete on this unlevel playing field are relegated to the outside looking in when public projects come up for bid.
PLAs impose unwanted and unwarranted expenses on employees
Though employees working on PLA projects may choose not to join the union, in some states they still will be required to pay a portion of union dues. At the same time, PLA rules in some jurisdictions force the non-union employer to pay into the union’s pension plans. This is required even though the non-union firms most likely have established perfectly acceptable retirement and benefit plans for their workers. These merit shop companies continue to fund their own plans while being forced to pay again into the union plans. The companies’ employees, as non-union members, of course will never benefit from these employer contributions.
PLAs punish loyal employees
When project labor agreements require merit shop companies to use union members as all or a portion of the workforce on a public works project, they are forced to exclude their own loyal, hardworking employees. These workers are displaced by unfamiliar workers with skills (or at lease union rules) that limit their usefulness. Unlike the longtime firm employee, the union worker is likely to be unwilling to go the extra mile for the non-union employer. Even when the rules allow open shop companies to use some of their own workers, those employees must be assigned through the union hall clearinghouse.
PLAs work against taxpayers’ interest
There is plenty of evidence that project labor agreements often result in higher construction costs. Politicians continue to insist on PLA’s despite their fiduciary responsibility to taxpayers. Inefficient union rules and the imposition of requirements that shut out many quality bidders and workers limit competition and lead to higher costs. The unconscionable part is that this exclusion of open shop contractors from competing for public works projects often is not merely an unfortunate side effect of PLAs, but their raison d’être.
As 2009 ABC National Chairman Jerry Gorski, noted, “When the federal government sets aside work for a favored few, the result is that hardworking taxpayers pay the price.”
A Beacon Hill Institute study titled “Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem,” found that PLAs not only drove federal construction projects alarmingly higher, but that from 2001-2008 – when President George W. Bush prohibited government-mandated PLAs on federal construction projects – there were no instances in which labor disruptions occurred that resulted in significant project delays or increased costs. Clearly, PLAs don’t even offer the few dubious benefits their adherents claim.
Labels: Commercial, Construction Industry, Industrial
Thursday, December 3, 2009
Worforce Training & Development
In these dire economic times, it’s an easy decision for construction executives to rein in any spending they deem “discretionary.” But I would argue that workforce development, like business development, is an investment and should not fall victim to the budgetary ax. Consistent, comprehensive and challenging apprenticeship programs – with effective field and classroom training –breed desirable but intangible traits such a strong work ethic and professional pride. But they also instill employee loyalty, safer jobsites and technical proficiency – all of which produce the very tangible effect of expanding the construction firm’s profit margin.
A rapidly aging construction workforce, the dearth of qualified recruits to replenish the labor pool and the fact that many states require apprentices on public works projects have combined to create an even greater need for quality, certified apprenticeship training. With so much riding on your employees’ proficiency, it makes sense to invest some time to ensure your training program and partners measure up. Organized labor was the pioneer in developing the apprenticeship system. But union training programs in many ways are outdated (much of the union system is based on formulae developed before World War II). Fortunately, there are many efficient alternatives open to non-union shops that can provide education and on-the-job training that can be just as effective: career and technical high schools, community colleges, construction trade associations such as the Associated Builders and Contractors and the Independent Electrical Contractors and dedicated, private training schools such as the Building Trades Institute.
Federal apprenticeship rules, the newest revisions in place for about a year, offer employers a flexible, modernized system – including the option to offer three different routes to proper training. This flexibility allows construction companies to fit not only their needs but the needs of their individual workers. Because one size does not fit all, employers can choose a traditional “time-based” approach, in which the apprentice completes a predetermined number of on-the-job training hours and related technical instruction. Or the contractor may choose a “competency-based” approach, in which the apprentice to must demonstrate competency in a specific subject area after completing OJT and RTI. Or the company may institute a combination of these approaches.
Whichever path employers take to ensure their apprentices achieve the necessary abilities through training and classroom learning, it is imperative to choose training partners to help them achieve their goals.
I have developed a checklist of features and benefits construction companies should look for when qualifying potential partners for their apprenticeship training:
• Compliance Assurance – Your apprenticeship training partner must institute the specific training programs your company needs, including measurement techniques and minimum proficiency requirements. It also must ensure these standards meet or exceed state and federal thresholds.
• Customized Training – The partner should not only teach the basic skills your workers will need to succeed, but also tailor its more advanced training to meet the specific challenges they will meet on the types of jobs your company typically performs.
• Worker-level Assessments – Your training partner should quantitatively and qualitatively determine each worker’s skill level to determine where your training dollars will be best spent.
• Effective Management – The partner should compile, track, interpret and regularly report to you the training program’s effectiveness, including such rubrics as return on investment, completion rate, turnover reduction.
• Workforce Recruitment – Your training investment should perform double duty, not only making workers more productive but also serving as a tool to increase quality employees. The partner must market your program and sell it as an additional benefit of working for your company.
• Grantor Acceptance – While apprenticeship and other worker training is not an area to be scrimped on, there is no need for right-thinking construction companies not to take advantage of government assistance in this area. To fully benefit from the myriad training grants, tax benefits and federal stimulus money available, ensure your training partner is among the approved vendors for these programs.
Speaking of government help in paying for construction worker training, several avenues are available. The U.S. Department of Labor offers grants throughout the year. In 2009, DOL offered grants for training workers in the energy efficiency and renewable energy industries and for attracting minorities, women, veterans and young people to the industry. In addition, some states use contractor’s board-imposed fines to fund construction education provided by its partners. These funds often are available to established trainers such as industry employer associations to implement or expand programs and defray employers’ training costs.
Workforce Investment Boards of many states have devised programs that not only teach construction jobsite skills, but also employability skills including time management, negotiation and meeting etiquette. These programs often target the fringes of the labor pool such as non-violent criminal offenders and the longtime unemployed. Many WIB programs offer dollar-for-dollar matching for employers’ training investments.
States and the federal government offer tax breaks for companies that train existing workers or hire and train traditionally underserved demographics.
Again, I highly recommend utilizing a Training Consultant to tap into these workforce development funds. Eric Rader and his Team at Building Trades Institute is one of the best in the business.
A rapidly aging construction workforce, the dearth of qualified recruits to replenish the labor pool and the fact that many states require apprentices on public works projects have combined to create an even greater need for quality, certified apprenticeship training. With so much riding on your employees’ proficiency, it makes sense to invest some time to ensure your training program and partners measure up. Organized labor was the pioneer in developing the apprenticeship system. But union training programs in many ways are outdated (much of the union system is based on formulae developed before World War II). Fortunately, there are many efficient alternatives open to non-union shops that can provide education and on-the-job training that can be just as effective: career and technical high schools, community colleges, construction trade associations such as the Associated Builders and Contractors and the Independent Electrical Contractors and dedicated, private training schools such as the Building Trades Institute.
Federal apprenticeship rules, the newest revisions in place for about a year, offer employers a flexible, modernized system – including the option to offer three different routes to proper training. This flexibility allows construction companies to fit not only their needs but the needs of their individual workers. Because one size does not fit all, employers can choose a traditional “time-based” approach, in which the apprentice completes a predetermined number of on-the-job training hours and related technical instruction. Or the contractor may choose a “competency-based” approach, in which the apprentice to must demonstrate competency in a specific subject area after completing OJT and RTI. Or the company may institute a combination of these approaches.
Whichever path employers take to ensure their apprentices achieve the necessary abilities through training and classroom learning, it is imperative to choose training partners to help them achieve their goals.
I have developed a checklist of features and benefits construction companies should look for when qualifying potential partners for their apprenticeship training:
• Compliance Assurance – Your apprenticeship training partner must institute the specific training programs your company needs, including measurement techniques and minimum proficiency requirements. It also must ensure these standards meet or exceed state and federal thresholds.
• Customized Training – The partner should not only teach the basic skills your workers will need to succeed, but also tailor its more advanced training to meet the specific challenges they will meet on the types of jobs your company typically performs.
• Worker-level Assessments – Your training partner should quantitatively and qualitatively determine each worker’s skill level to determine where your training dollars will be best spent.
• Effective Management – The partner should compile, track, interpret and regularly report to you the training program’s effectiveness, including such rubrics as return on investment, completion rate, turnover reduction.
• Workforce Recruitment – Your training investment should perform double duty, not only making workers more productive but also serving as a tool to increase quality employees. The partner must market your program and sell it as an additional benefit of working for your company.
• Grantor Acceptance – While apprenticeship and other worker training is not an area to be scrimped on, there is no need for right-thinking construction companies not to take advantage of government assistance in this area. To fully benefit from the myriad training grants, tax benefits and federal stimulus money available, ensure your training partner is among the approved vendors for these programs.
Speaking of government help in paying for construction worker training, several avenues are available. The U.S. Department of Labor offers grants throughout the year. In 2009, DOL offered grants for training workers in the energy efficiency and renewable energy industries and for attracting minorities, women, veterans and young people to the industry. In addition, some states use contractor’s board-imposed fines to fund construction education provided by its partners. These funds often are available to established trainers such as industry employer associations to implement or expand programs and defray employers’ training costs.
Workforce Investment Boards of many states have devised programs that not only teach construction jobsite skills, but also employability skills including time management, negotiation and meeting etiquette. These programs often target the fringes of the labor pool such as non-violent criminal offenders and the longtime unemployed. Many WIB programs offer dollar-for-dollar matching for employers’ training investments.
States and the federal government offer tax breaks for companies that train existing workers or hire and train traditionally underserved demographics.
Again, I highly recommend utilizing a Training Consultant to tap into these workforce development funds. Eric Rader and his Team at Building Trades Institute is one of the best in the business.
Labels: Commercial, Construction Industry