NCSA – Local Emphasis with National Reach

NCSAlogo        NSA Logo        

Two years ago, the Board of Directors of the Charlotte Chapter of ASAC met over lunch in the atrium behind Amelie’s French Pastries in the NoDa Arts District. After going over the budget of the Charlotte Chapter and the budget of the ASAC, it became apparent that both organizations were in a death spiral of high costs and declining membership. There was no money coming to the local chapter from dues and the legislative budget for the ASAC was only $500 to provide coverage for two states. The Board realized that the only way to save the organization was to withdraw from ASA and ASA-Carolinas and go it alone. The Board unanimously voted to call a special meeting of membership to vote on withdrawing and re-naming the organization North Carolina Subcontractors Alliance. At the special meeting, with 16 of 18 members present, and hearing both sides of the argument, the vote to withdraw was 15-1.

One year ago, realizing that a national presence was important to some prospective members and that our finances had stabilized, we voted to join the National Subcontractors Alliance (NSA). Unlike the ASA which has a high overhead large central office in Washington DC, the NSA has only 2 paid employees located in a member company’s office in Akron, OH. The NSA is a federation of local subcontractor’s associations, all of which are former ASA chapters. The local organizations are members of NSA, so the dues paid to NCSA stay at the local chapter to meet the needs of subcontractors at the state and local level.

To meet the needs at the national level without a big Washington presence, the NSA is partnered with eight other trade associations in Associated Specialty Contractors (ASC) which is called upon to handle lobbying and other needs in Washington. http://assoc-spec-con.org/

Since NSA members are the local chapters, there has been a question as to whether a company can claim national affiliation with the NSA. That was answered at the Board of Directors at the Spring Conference in March. By unanimous vote, members of all organizations that are affiliated with NSA may display the NSA logo on letterheads, vehicles, hard hats and other advertising materials and may claim NSA affiliation on pre-qualification forms and other questionnaires asking for national affiliations.

And, one last perk. Membership in NSCA allows member companies to participate in a large number of discount programs, including freight companies like Yellow Freight and UPS, office products at Office Max and a 20% discount on all Lenovo computers products (except 12% on ThinkPads). For a small company, these discounts alone will go a long way toward covering the cost of membership. Also, since NSA is a charter member of the consortium that developed Consensus Docs, there is a 20% discount to NSA members for document purchases from Consensus Docs.

So, while NCSA works for you at the state and local level, the NSA and the ASC have our backs covered on national issues. What could be better?

 

What are we teaching our kids?

The State of Arizona has just passed a law that a student will not be issued a high school diploma unless they can pass the same Civics test that an immigrant is required to gain citizenship. Why are they doing this? A survey of graduates revealed that only 36% knew there are three branches of government. What does that have to do with construction? It illustrates the lack of attention to basics that infects public school systems throughout the country.

When I was in high school in the mid 60’s, if you were not in the college preparatory program, you were possibly enrolled in a program called Distributive Education (DE), sometimes known elsewhere as Vocational-Technical (VoTec) education where you spent half your school day learning a trade such as carpentry, welding or hair styling. Or, you could be enrolled in classes at the community college taking auto mechanics or auto body repair. And, the high school offered business classes such as typing and shorthand to prepare you to work in an office. Some high schools also offered Jr. ROTC classes to prepare students for a military career. These classes prepared students to be gainfully employed the day after they graduated from high school.

Today, it appears our public schools are turning out graduates that are woefully unprepared to perform an entry level job in construction. They need math. They need to work with fractions. They need to understand geometry. They need to understand shop drawings. They need to be able to read to learn and comprehend OSHA rules and regulations. They need to write legibly in a comprehensible manner so they fill out job reports and time sheets. They need to be able to speak clearly so that co-workers and supervisors can understand.

When I looked at the Charlotte-Mecklenburg Schools website, there is a program called CTE (Career & Technical Education). There are a few courses offered that are applicable to construction: Carpentry, Drafting and Core & Sustainable Construction. There are also some courses listed that are available through CPCC (Central Piedmont Community College.) These coursed are not prominent on the website and I only found them on my second attempt. These courses don’t appear to be promoted or have any outreach or placement programs with employers.

CPCC has a Construction Technologies program at its Harper campus. Several years ago, Steve Corriher instituted a training program to teach the basics of construction. In this case, the basics mean how to use a hammer and read a tape measure. At completion, the class can stick build a storage shed with door, windows, siding, shingles, etc. If this type training was available in high school, students might be ready for a good paying job when they graduate.

These are not dead end jobs. Most people who manage or own construction companies worked their way up through the ranks. In my company, below the corporate office level, people with degrees are in the minority. They have advanced because they work hard, work smart and never quit learning. We can teach someone the specific operations of our industry, but only if they have the basic education that is required to perform the job.

There is No Job Shortage – It’s a Training Shortage

Hire me

In My Opinion:

Politicians keep shouting “Jobs, Jobs, Jobs” but it should be “Training, Training, Training.” If you talk to just about anyone in business management, the number one challenge they identify is the difficulty in finding and retaining qualified employees. In addition, the education system has done a very poor job in preparing students for the jobs and careers that are available.

According to the Associated General Contractors (AGC) Worker Shortage Survey, 83% of construction companies have difficulty recruiting qualified craft workers and 61% cannot find qualified construction professionals (project managers, engineers, draftsmen, etc.). The Bureau of Labor Statistics projected in 2012 that in ten years the number of construction trades workers would increase 22%. This compares to 11% for all trades, 11% for heavy truck and tractor-trailer drivers. There will be some dislocation and manufacturing and production occupations will only increase by 1%.

The AGC’s Chief Economist, Ken Simonson was quoted as saying, “Construction firms across the country are having a hard time filling available positions. Considering how much the nation’s educational focus has moved away from teaching students career and technical skills during the past few decades, it is easy to understand why the construction industry is facing such severe labor shortages.”

Due to increasing automation and improvements in production processing, the manufacturing sector is only predicting a 1% increase in the total number of workers. However, in a survey of members by the National Association of Manufacturers, 69% of respondents say they have difficulty filling skilled production positions. As manufacturing plants become more automated, the required skills become more technical and workers need to be familiar with computers and programming. Machine mechanics have become mechanical engineers with far more expertise required.

One industry that affects all aspects of the economy is the trucking industry. There are currently 35,000 job openings across the country for heavy truck and tractor-trailer drivers. My industry, glass and glazing contracting, is already seeing the effects of this shortage. Transporting the raw glass sheets from the manufacturer to the fabricating and distribution centers is highly specialized. The glass is transported in large sheets 11 feet by 18 feet, bundled into four 10,000 pound blocks (stoces), on an a-frame low-boy trailer. The drivers are required to have a minimum number of hours driving experience and special certification. The cargo is top heavy. The route must be considered to avoid low bridges, rough rail crossings and the like to avoid stressing the load. The driver has to stop and inspect the load every 150 miles. The driver is required to inspect the customer’s rigging before unloading begins. As the economy improves, glass deliveries are falling behind and creating delays partly because of the lack of qualified truck drivers.

So, it appears to me that much of the unemployment problem is not due so much to a lack of jobs, but to some of the following:

  1. Lack of technical and career training in high schools. Not everyone needs to, or should, go to college.
  2. College students are getting degrees in fields not applicable to industry’s needs today.
  3. Unwillingness to re-train and switch to a new field
  4. Unwillingness to relocate to where the jobs are. Cars are built in the South by robots, not just in Detroit.
  5. A general unwillingness of people to start and the bottom and work hard.

I will expand on some of the above topics in future postings, but my best advice is to get the education and training to prepare yourself for a career that can sustain you and your dependents. For future college students, one career counselor recently recommended that you get your degree in a career subject such as engineering, computer sciences, geology or chemistry, then minor in business administration or education. Save the arts and social subjects for electives.

Sources:

Bureau of Labor Statistics Occupational Handbook

Katy Devlin, Glass Magazine, December 2014

 

2016 Events

 

Save the date for our upcoming events!  Details are subject to change:

2.15.16   no monthly meeting

3.15.16   SubPaddys Day Event 

4.13.16    Steel Toe Boot Award  – Trade Specialties Joint Meeting

5.13.16  NCSA Annual Golf Tournament at Renaissance.

6.07.16   Annual Membership Meeting – State of Affairs Election.

7.00.16    no monthly meeting

8.00.16    Bowling

9.00.16    GC Round table

10.00.16   SubTober Fest Event

11.00.16   TBA

12.00.16   Holiday Party 

 

 

 

 

Outstanding Subcontractors

Handford PS

The closing speaker at the annual meeting of the North Carolina Subcontractors Alliance was Rick Handford, president of Myers and Chapman, Inc. Myers and Chapman is one of the larger general contractors based in Charlotte and serves North Carolina and the surrounding states. Mr. Handford has been and is very supportive of subcontractors in general and the NCSA in particular, which endowed him with their Golden Boot award in November, 2013.

Mr. Handford began by stating that Myers and Chapman, like most commercial general contractors today, does not do any of the work. Their function is to facilitate the construction of a building. They put together the bid, negotiate the contracts, manage the actual construction and manage the risks. The actual work is done by subcontractors and their suppliers. Without subcontractors, the general contractors would be unable to perform their job. And, without outstanding subcontractors, the jobs can’t be performed on time, as specified and profitable.

He said that Myers and Chapman believes that the Charlotte market has depleted its inventory of desirable commercial properties and is predicting a ten year period of continuous growth. He also believes, based on past experience, that this will be a perilous time for subcontractors and encouraged the NCSA to reach out to the small subcontractors that will attempt to perform larger work and residential subcontractors that attempt to move up to commercial work without the proper knowledge.

He also cautions subcontractors to not try to take on more work than they can do comfortably. There is a shortage of skilled tradesmen, and vendors have longer lead times and are raising prices. And, the big thing is you may end up with all your working capital tied up in inventory and retainage. Without available working capital, you are out of business.

Mr. Handford also presented a poster that hangs in Myers & Chapman jobsite trailers. It details what Myers and Chapman expects from subcontractors and what it takes to be on their team:

1. Are committed to safety. – The costs of safety and insurance can be substantial.
2. Communicate well with the team. – Advise them if there are delivery or money problems, they may be able to help you through a temporary condition.
3. Meet schedules. – The schedule is important to the profitability of the job and the failure to meet them impacts everyone who comes after you.
4. Know the job. – Your workmen should arrive with drawings and all the tools and equipment to do their job.
5. Do it right the first time. – The cost of doing it right is always less than re-doing defective work.
6. Represent us well with our clients. – Workmen should always be presentable and respectful on the job. They not only represent the subcontractor, but Myers and Chapman as well.

I put a copy of these in my company’s conference/training room and I strongly advise everyone to do likewise.

Report on National Affiliation

The following report on National Affiliation was delivered my me (Art Rouse) at the NCSA Annual Business Meeting on June 18, 2014:

North Carolina Subcontractors Alliance, Inc.

Annual Meeting – June 18, 2014

Topic: National Affiliation

One year ago, the ASAC Charlotte Chapter changed its name and disaffiliated with the American Subcontractors Association and ASA of the Carolinas. At the Board of Directors meeting about a week later, I was asked as Past President, to investigate the possibilities of national affiliation and make a recommendation.

My first meeting was with ASA. Since my company had already paid for the ASAC Convention and July dues, I attended the convention. During the course of the convention, I was able to have a meeting with Walter Bazan, outgoing ASA president, Jack Austhof, incoming ASA president, Brian Johnson, incoming ASA vice president and Marty Swain, ASAC president. During the course of this meeting, we had a frank discussion of the reasons leading up to our decision to leave ASAC and our intention to affiliate with a national organization after NCSA stabilized its finances. I made it clear that an affiliation with ASA would need to be direct and not with ASAC. Bazan and Austhof asked to have further discussions when that happened to see if a direct membership would be available. Ensuing phone calls with Jack Austhof did not lead to an offer of direct affiliation, only an offer to review the charter with ASAC to see if it could be done in the Carolinas.

My next contact was to the National Subcontractors Alliance. I spoke to Lynne Black, executive director of NSA for several hours over the course of two days and for a couple hours more with Pete Snider, executive director of the Subcontractors Association of the Metroplex (Dallas-Fort Worth.) I got a good feeling for how NSA operates and how it differs from ASA.

The NSA has two meetings per year. One is the Executive Directors Meeting in Chicago in the fall. They invited us to send our ED to the meeting to get to know the other ED’s and how the NSA functions. We sent Margaret to the meeting and she came back with a very favorable report.

The other meeting is the annual Spring Conference. This year it was held in Denver, Colorado. I attended on behalf of the NCSA. There were two excellent seminars, one on building your business’ brand and the other on embracing technology as tools rather than toys. An example would be utilizing video conferencing to broaden the associations’ reach and how easily it can be done with Google Hangouts.

There were also breakout groups. While the lawyers’ council was meeting, the ED’s were having their meetings and the volunteer leaders had a workshop on increasing and retaining membership. There was plenty of time to network with the other chapter leaders as well as a great dinner at a steakhouse overlooking the Denver and an entertaining tour of the ghosts and scandals of Denver. Since the NSA is for the benefit of the members, the NSA only charges the actual cost of the conference to members. It is not a profit making venture like the ASAC convention. The total cost for me, including the airfare, was less that it cost to attend the ASAC convention last year. At the end of the conference, the NSA board held a special meeting and voted to offer membership to the NCSA. After my report and recommendation to the NCSA board, it was voted to affiliate with NSA.

That is really how the NSA works. Rather than a big national organization headquartered in the most exclusive section of the Washington DC area, the NSA staff consists of only the Executive Director and her assistant. They work out of space donated by one of the member companies. What makes them great is the network of business and legal contacts across the country to lean on for advice and guidance. Almost everyone came up to introduce themselves, give me a business card and an offer of help anytime it is needed. I have been able to use those offers twice already to check out general contractors from out-of-town.

All of the NSA member chapters are disassociated ASA chapters. Unlike ASA, you are members of your local organization, not the national association. The NSA is an umbrella organization of member associations. The NSA represents over 3,500 member companies. The local association pays an annual membership fee of $800 to $2500 depending on the size of the association. The rest of the local members’ dues stays with the local association. That means the local association is solidly funded and can spend their efforts on living up to the NSA motto: “Our business is helping you do yours,” and the NCSA pledge of Advocacy, Education and Networking.
The NSA itself is a member organization of ASC, the Associated Specialty Contractors. The ASC is an umbrella organization of 9 national associations with over 25,000 members. So, when we need representation in Washington, we carry the voice of 25,000 companies.

The NSA is a stakeholder and on the governing committee of Consensus Docs. The NSA has a benefit package of negotiated discounts and special rates for UPS, Fedex, Office Max, YRC Freight and other national service vendors and suppliers.

The NSA is the antithesis of ASA. It is locally focused and low overhead. Each local association is independent and self-governing. It is low overhead so the NCSA can have the benefits of a national affiliation without breaking the bank.

NCSA Legislative Committee Annual Report

The following is the Legislative Committee Annual Report as presented by Association Counsel Edward McNaughton at the NCSA Annual Business Meeting on June 18, 2014:

Legislative Committee 2013-2014 Summary Report

The NCSA Legislative Committee has been very busy over the last year, both in keeping the membership current with the recent changes to NC law, and in actively advocating for subcontractor rights with the state legislature in Raleigh.

The Legislative Committee monitored changes in statutes and case law for issues that would affect subcontractors and the construction industry, and kept the NCSA board and the membership up to date through regular presentations and Q&As at the monthly meeting. The changes discussed included:

1. Legislative:
a. Changes to the lien agent requirements for single-family residential property;
b. Expanded workers’ compensation liability for a subcontractor’s employees;
c. New e-verify requirements;
d. New underground utility damage prevention law.
2. Case Law:
a. Allowing the 6 year statute of repose overriding longer express warranty periods;
b. Elimination of the “open and obvious” defense to unsafe site conditions;
c. Allowing subsequent behavior to modify a construction contract, despite a written clause in the contract requiring all changes to be in writing;
d. Holding the director of a GC liable to a subcontractor for non-payment under a fiduciary duty to creditors, where “circumstances amounting to a winding up or dissolution” of the GC.

The biggest victory was NCSA’s advocating for subcontractors during the latest legislative changes to NC’s mechanics’ lien laws. Under current application of NC law, contractors do not have a lien on the actual real property when their contract was with a tenant. Two years ago, however, NC Court of Appeals Judge Sanford L. Steelman wrote in an case dismissing a subcontractor’s lien for work done for a terminated Section 8 housing developer that: “the present state of our law does not provide adequate protection to suppliers of labor and materials as envisioned by Article X, section 3 of the North Carolina Constitution” and that “the increasingly complex real estate arrangements now being used make it virtually impossible for a supplier of labor or materials to protect themselves under our lien laws.”

Fearing that this judicial observation could set a legal precedent for liens attaching to rental property, the NC Land Title Association lobbied the legislature to “clarify” the state’s mechanics lien laws to expressly exempt rental property from liens for work performed under a contract with a tenant.

NCSA became aware of the NCLTA’s proposed changes through its legal counsel and immediately reacted to protect subcontractors’ rights. NCSA published a detailed position paper on February 19, 2104, dubbing the issue the “Hidden Owner” and calling on the legislature to formally extend mechanics liens to rental property to satisfy contractors’ constitutional right to an “adequate lien.” This position paper was formally submitted to the assigned Legislative Research Commission, and copies were sent to various trade organizations and individuals. The “Hidden Owner” name was picked up by numerous blogs and by the NC Construction News editors.

Two delegations of NCSA members went to Raleigh, one in February and one in March, to participate in the Legislative Research Commission hearings on the proposed changes. NCSA’s attorney was one of the speakers the March meeting. While NCSA was ultimately unable to get the legislature to agree to formally extend contractor’s lien rights to rental property, it was instrumental in defeating both the NCLTA’s proposal, along with a second “compromise” proposal, that would have required contractors and subcontractors to give written notice to a landlord of any work being performed for a tenant, while still allow the landlord to avoid liability.

Moving forward, the Legislative Committee plans to continue monitoring legislative changes and case law, and to mobilize advocacy efforts as needed. Issues being considered as the membership continues to grow are establishing a PAC to actively advocate for subcontractor sights and interests, and hiring a Raleigh based lobbyist.

NC Subcontractors – First year on our own

The following is a review of the first year since the NCSA separated from the ASA of the Carolinas as written by Margaret Drummond and submitted to the National Subcontractors Alliance quarterly newsletter:

This July, the North Carolina Subcontractors Alliance celebrates our first year as a subcontractor group independent of the American Subcontractors Association. Twelve months ago, our meager fellowship (then as the Charlotte Chapter of the American Subcontractors Association of the Carolinas) unanimously voted to disassociate from ASA and rename our organization. Under the leadership of our devoted Board of Directors, we have spent this first year working toward our renewed goals of community leadership, unity, and support for our subcontractors.

Though we changed our name when we disaffiliated with ASA, we have not changed the strong tradition associated with North Carolina subcontractors. We are still a member-driven association and proud of our accomplishments. In March, we proudly joined the National Subcontractors Alliance. Having made contact with Executive Director Lynne Black in our early days, the NSA has nurtured our first year and provided the NCSA with continued support and encouragement. Even prior to joining officially, members of the NSA have offered their guidance and experience to help our local chapter re-establish ourselves as a stronger organization for our subcontractors. NCSA knew from our first encounter with NSA that this was where we were meant to be; an affiliation with a group of like-minded, trustworthy professionals whose goal is the betterment of our businesses.
NCSA membership has continually grown since our formal disassociation from ASA; and our membership is much more active and engaged. The positives have far outweighed the challenges already. We are confident with the help of NSA our membership will continue to grow. Our current benefits of Networking, including our Business Information Exchange meeting, Educational Materials & Programs, Monthly Newsletter, Government & Industry Legislative Advocacy, and Mentorship will continue, but joining NSA will help our members to boost their bottom line. As an NSA member, they are now eligible to receive valuable discounts that include: FedEx Shipping Services, YRC Transportation, UPS, OfficeMax Advantage Program, TSYS Merchant Solutions, Lenovo Affinity Program, Intercall, and AchieveLinks. One member has already reported the advantage of reaching out to an NSA member in another state to exchange notes on their experience with a national General Contractor.
I have discovered firsthand that if we work together and rely on one another, we are less likely to feel isolated. It is comforting to not have to “reinvent the wheel” every time we try something innovative, because through NSA, we are working together with other leading associations who freely offer their experience. Moving forward will be nothing short of an adventure. After a year we are a more successful and stronger association and are looking forward to our new relationship with NSA to continue that growth. Our membership has already been priceless.

The momentum must continue because much still needs to be done. We cannot allow our progress to stagnate. We have actively been attending local meetings, participating in the North Carolina level construction legislation, networking to keep our interests on the front line and partnering with other associations across the country with the same interests and more. For NCSA change is the new status quo. Everyone owns the responsibility for making the changes work. By joining NSA we have chosen to be a part of a national organization that is leading the construction industry into the future. “NCSA is a part of those that lead and not those that follow”…and we are very excited to see what’s next.

Margaret Drummond
North Carolina Subcontractors Alliance
PO Box 30604
Charlotte, NC 28204
ncsubcontractors@gmail.com
http://www.ncsubcontractors.com