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6 tips for more effective change orders

In the construction industry, change orders are a fact of life. The trick is making them a profitable one! Managing change orders wisely can make the difference between a successful job and a losing one. Here are six tips to better managing the process: Read the contract. This may sound obvious, but contractors often assume [...]

Stopping the scourge of profit fade

Profit fade — a gradual decline in expected gross profits over the course of a project — can be the bane of many contractors’ existences. This scourge may not only hurt your financial performance, but also may raise a red flag with sureties and lenders. To avoid profit fade, you’ll need to identify its causes, [...]

Succession planning: Looking at things from a surety’s perspective

A well-designed succession plan is critical to the long-term survival of a construction business. In developing one, it’s important to consider the objectives and needs of your company’s owners as well as their family members. But it’s equally important to examine your plan from the perspective of your surety. Bonding obligations typically last for several [...]

Sec. 199 deduction looking better for contractors

For many years, contractors have been advised to look into the Section 199 tax deduction for “domestic production activities.” Although the deduction focuses on manufacturing, it’s also available for “construction of real property performed in the United States” by companies “engaged in the active conduct of a construction trade or business.” Recently, the IRS clarified [...]

Take Action to Control Workers’ Comp AFTER an Accident

No matter how careful your company is, accidents and injuries can still happen. When they do, responding properly is an important factor in keeping your Workers' Compensation insurance costs under control. Here are six steps to take in the event an injury occurs: AFTER AN ACCIDENT 1. Make sure the injured person gets immediate medical [...]

The WIP is good: A valuable management tool

          Financial statements are an indispensable tool for gauging your construction company's historical results and financial health. But relying on them alone is like driving a car by looking in the rear view mirror. To see the road ahead, you need a work-in-progress (WIP) report for every job. Too often, contractors [...]

Third-party funding helps contractors pursue claims

Like it or not, disputes are an inevitable part of the construction process. Unfortunately, to avoid the high cost of litigation, many contractors fail to pursue even strong claims or settle for far less than they deserve. An increasingly popular option that may help with this dilemma is third-party funding of construction disputes. How does [...]

Looking for skilled workers in all the right places

The problem isn’t going away. The construction industry has long faced a shortage of skilled labor. One might hope a new year would bring good news, but statistics and general sentiment indicate that there will be no breakthrough anytime soon. Construction businesses currently employ 1.6 million fewer workers than they did in 2007, according to [...]

Pay attention to “no damages for delay” clause

Construction contracts often contain “no damages for delay” clauses, which prevent a contractor or subcontractor from recovering delay damages from a property owner or general contractor. Whether, and to what extent, parties to a contract can enforce these clauses depends on the contract’s language and state law. Limited remedies for delays By denying a contractor [...]

Four ways contractors are using RFID technology

Radio frequency identification (RFID) technology has proven to be a powerful tool that can help contractors manage equipment and materials, reduce theft, enhance efficiency, and improve safety. Electromagnetic fields identify and track RFID tags — tiny computer chips with attached antennas — affixed to various objects. Contractors can read these tags remotely on a laptop [...]

Zero net energy building: Hot trend getting hotter

Zero net energy (ZNE) buildings — both residential and commercial — are a sustainable construction approach in which the building has a much smaller energy impact. ZNEs have continued to show significant growth in recent years. In fact, the increase prompted the U.S. Department of Energy (DOE) to release a common definition for ZNEs in [...]

The ins and outs of additional insured endorsements

General contractors (GCs) typically require subcontractors to procure a commercial general liability (CGL) policy and to name the GC as an “additional insured” under the policy. This practice is intended to protect the GC against liability in connection with the subcontractor’s activities. If you’re a general contractor, don’t assume that an additional insured endorsement provides [...]

You’re fired! Now please don’t sue me

No matter how diligent you are in hiring employees for your construction business, there will be times when it simply doesn’t work out. Firing workers who fail to meet expectations should be handled carefully to minimize exposure to lawsuits. Know the law on protected employees Most construction workers don’t have employment contracts, making them “at-will” [...]

Drones on the job site

These days, one probably wouldn’t be surprised to see an unmanned aerial vehicle (UAV), commonly referred to as a “drone,” hovering over a job site. These vehicles hold great promise for the construction industry. But before you run down to the local hobby store to pick one up, be sure to familiarize yourself with the [...]

Enhance your operations with benchmarking

Benchmarking is the process of comparing one’s business processes and performance metrics with your own historical data or those of other, similar companies. Through this process, you can identify the “best in class” business practices in the construction industry, or in another industry where similar processes exist, and compare these approaches and results with your [...]


Over the past 3 decades our firm has observed contractors in dispute with owners over failure to be compensated for changed conditions, extra work, and extended home office overhead due to delays.  In our experience, a sophisticated contractor tries to avoid claims by managing change orders proactively but even the most astute and sophisticated contractor [...]

Discover new opportunities with joint ventures and strategic alliances

In today’s highly competitive business environment, many construction companies are venturing into unfamiliar territory. Some are exploring opportunities across state lines or international borders. Others are branching out into different, larger or more complex projects. For many contractors — particularly smaller ones — a joint venture or strategic alliance offers an opportunity to join forces [...]

Are you getting all that you deserve?

Don’t overlook the research credit Construction businesses are often surprised to learn that they may be eligible for the research tax credit, often referred to as the “research and development,” “R&D” or “research and experimentation” credit. Too often, they assume that this tax break is for only large pharmaceutical, biotechnology, software and aerospace companies, so [...]

Maximizing the Section 199 deduction

As a construction business, your company may be eligible for the Section 199 deduction for “domestic production activities.” This tax break is known by several names, including the “domestic production activities deduction” and the “manufacturers’ deduction.” In fact, many contractors overlook the Sec. 199 deduction because they believe it’s only for manufacturers. But it’s also [...]

Get ready for new lease accounting rules

Earlier this year, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, the FASB’s long-awaited overhaul of its lease accounting rules. The ASU makes extensive changes to the treatment of lease transactions, particularly for lessees. What do the new rules require? The most significant change involves operating leases. Under current Generally [...]