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CONSTRUCTION KNOWLEDGE BLOG

June 8, 2012

Struggling in Construction? Get Wise
Filed under: People Skills — Tags: — nedpelger

What do you know about PT Barnum? Probably that he said, “There’s a sucker born every minute.” So you know nothing about PT Barnum, because he never said that. One of his circus competitors said that while trying to explain the incredible success of PT Barnum. Ever notice how quickly we turn to criticism or flippancy when explaining a competitor’s success?

Turns out, PT Barnum treated his customers with the utmost respect. He offered up great wisdom in his book Art of Money Getting: or The Golden Rules for Making Money. If you want to get motivated with some great wisdom from the past that translates well today, study that book.

Here are a few insights that give you a taste of his writing:

  • By introducing system into all your transactions, doing one thing at a time, always meeting appointments with punctuality, you find leisure for pastime and recreation.
  • Be cautious and bold … you must exercise caution in laying your plans, but be bold in carrying them out.
  • I have discovered the philosopher’s stone: pay as you go.

You may think that a book written in 1880 couldn’t help you greatly improve your life. I’ve found, though, that wisdom presented from a different era often shines more brightly. Take a few minutes to read and see if you aren’t motivated to read the entire book.

Write down the parts that connect to you and make a plan to get to where you are capable of going. Plan carefully and execute boldly. What is it you’re waiting for?

httpv://www.youtube.com/watch?v=n97LoVg1kaQ

CONSTRUCTION KNOWLEDGE BLOG

June 6, 2012

Tech Patent Wars
Filed under: Computers in Construction — Tags: — nedpelger

I’m a sucker for a great info graphic. My buddy Kneal sent me this one called The Patent Wars: The Convoluted Battlefield of Tech IP. Click on it to get a larger view, so you can follow the logic. In a nutshell, the inside white circle represents lawsuits, with the arrow pointing to the group being sued. The outside darker hatched cylinder shows patent purchases, with the arrow end going to the purchaser.

What do I see? Apple and Microsoft sue and get sued often. That’s a sign of companies I want to avoid. Google, on the other hand, has few lawsuits, but more purchases, especially the huge patent purchase of Motorola Mobility. By avoiding the lawsuit focus, Google again shows themselves as a company I want to be associated with.

So, whether buying Google stock or utilizing their products, this slick info graphics furthers my belief that I want to hitch my little car to the big Google train.

Why should this matter to you? In construction, the technology explosion of  cloud computing will be hitting us soon. We will all be making choices who we utilize for cloud based services. I’m going all in with Google.

What does that mean practically? Of course I use Gmail, Google Calender and Contacts instead of Outlook. I changed a year ago and love the new convenience and flexibility. I’m ready to change my scheduling program from my tried and true Microsoft Project to a better sharing cloud based program. Where will I be looking? Among the Goggle offerings. I’ll let you know what i find.

CONSTRUCTION KNOWLEDGE BLOG

June 4, 2012

CA High Speed Rail: Looking Worser and Worser
Filed under: Industry outlook — Tags: — nedpelger

The $68B US high speed rail system proposed in California seems to be a stimulus project. Yet stimulus projects (funded by the government to prime the economic pump and get some money flowing through construction) should be spent on projects that substantially improve the country. The interstate highway system built in the 1950s achieved that goal.

High speed internet access for everyone or smart electrical grid applications seem to be great stimulus projects for today. The CA high speed rail project, though, just doesn’t pass the smell test. The huge cost to only slightly improve the commute from San Francisco to Los Angeles from the current plane, train and automobile options would never get done with private money.

In fact, one of the biggest project criticisms came from Huffington Post regarding the low projected operating costs. They write:

If the bullet train project is to pencil out, it must operate far more economically than any high-speed rail system in the world, according to the experts, who include former World Bank executive William Grindley.

Unless these extraordinary economies actually are achieved, the train will require alarmingly high annual operating subsidies “forever,” as the experts wrote in a report last month. The annual operating deficit could top $2 billion.

On another project front, ENR reports that farm groups filed a major environmental lawsuit seeking a preliminary injunction to block the start of construction. Making that a double whammy, the Orange County Transportation Authority want to spend much less money and simply improve the current train service. They question all the project parameters, but particularly the demand:

“We are building something new and haven’t proven there is a pent-up demand for train travel…. I find this process almost surreal,” Orange County Supervisor and transportation authority Director John Moorlach said at a recent board meeting.

So if I were a betting man, I’d be wagering that this project will be a non-starter.

CONSTRUCTION KNOWLEDGE BLOG

June 1, 2012

Oops
Filed under: Construction — Tags: — nedpelger

We’ve been working for about a year on the pre-construction services for a $50M student housing project. We were ready to start in a few weeks. Yesterday, I got the news that our construction team is out, the owners are bringing in national builders. Oops.

httpv://www.youtube.com/watch?v=9haxOZvlAFs

The gut punch feeling of receiving that surprising news hasn’t gone away. We have lots of trade contractors counting on this work, now scrambling for something else to do.

We all know that in this crazy construction business, that a job isn’t a job till signed and started…and not always then. Owners can change directions, permits get delayed, things happen.

When we lose a project we were counting on, though, we actually go through the grief process.

  1. Denial
  2. Anger
  3. Bargaining
  4. Depression
  5. Acceptance

In fact, we don’t just pass cleanly through that process, we bounce back and forth between the emotions for awhile. I need to keep this insight in mind as I work through the end of project issues.

Age and experience help, though, because I know that time wounds all heels. In the long run, things seem to work out.

CONSTRUCTION KNOWLEDGE BLOG

May 25, 2012

Memorial Day Coolness
Filed under: People Skills — Tags: — nedpelger

Every Memorial Day, for as long as I can remember, I stood with my Dad in Lititz and watched our small town Memorial Day Parade. Cub Scouts and Brownies, a kid’s dance troupe, the community band, fire trucks and Army jeeps, a few Veterans in their old, tight uniforms march through the streets for a short parade. As a kid my Dad remembers Civil War Veterans walking in this same parade.

We see lots of folks we know, exchanging the same pleasantries year after year, then we walk up to the cemetery. A service honoring the Veterans follows. Dad served in the Pacific in World War II, at the Battle of Okinawa then later picking up POWs from China and Japan. He always refuses to step forward when they honor Navy vets, saying, “I was paid. I don’t see what all the fuss is about.”

He goes to the service every year to honor his best friend from high school, Bobby Kline, who died while fighting in Germany. Dad always had a distaste for glorifying war and the many lies that emanate from it. He taught me to be skeptical of everything I hear from anyone about war experiences. In the 1945 photo below, he’s taking a bite of the apple.

I’m blessed to still have my Dad (at nearly 86) to hang out with. He’s still one of the coolest people I know.

Since Memorial Day encourages us to contemplate those that have touched our lives and passed on, I also tend to think about an artist friend who died about 20 years ago. I recently wrote a Letter to the Editor responding to a memorial article about him.

To the Editors:

The article on David Brumbach brought back some of my life’s best memories.

I was one of the five speakers at his funeral service. As I prepared those words, I knew he wanted me to try to explain his love of Jesus.

Since David was such a reserved and gentle person, many of his friends didn’t know about his deep Christian beliefs. The fruits of his life were obvious to see, but the underlying cause wasn’t.

We had many conversations about the reality of the Holy Spirit filling us and guiding our lives. We often laughed that we both, at some level, wished we were Amish men.

I remember sitting at his wedding, tears streaming down my cheeks as he struggled to stand to say the vows. That marriage ceremony brimmed with courage and integrity. David simply didn’t let circumstances control his life.

One of my most cherished possessions is a book David gave me, titled “Disciplines for the Inner Life.” Written by Bob Benson, who also died young from cancer, the book remains one of the best study guides for peace and wisdom.

My favorite and best memory of David, though, came from a visit a few days before he died. As we sat and joked a bit, he suddenly got serious. He explained that he felt so guilty that he knew he should be struggling harder to stay alive for his new wife and son. Then he said, “But I can see Heaven, and it’s so beautiful. I just want to go.”

That statement, from one of the most beautiful souls I’ve ever had the privilege to know, forever deepened my faith. So, David, my friend, thank you.

To quote the last words of another devout friend’s wife, who also died from cancer, “I’ll see you in a second.”

Ned Pelger

Have a wonderful Memorial Day Weekend. Take some time to think about those that have walked with you and made your life better. Think about how you can help make someone else’s life better. Live the dream, baby. Live the dream.

CONSTRUCTION KNOWLEDGE BLOG

May 24, 2012

Oh The Stories We’ll Tell…
Filed under: People Skills — Tags: — nedpelger

I came across Scott Eblin’s Next Level Blog and was impressed with his insights. He was at a Harvard reunion recently and heard Prof Joseph Nye speak. Here are Scott’s insightful notes:

  • Soft power is as important as hard power. Twenty years ago, Nye came up with the term soft power.  As he said last weekend, it used to be that whoever had the biggest army won.  That’s hard power.  In the 21st century, whoever has the best story wins.  That’s soft power.  The effective use of hard and soft power is what Nye calls smart power.  If you step back and assess your own power, you’ll likely find that your hard power is limited by your circumstances.  Your soft power, however, is entirely dependent on how compelling your story is.  The way in which you share your story is something over which you have direct control.
  • Power is no longer a zero sum game. Nye reminded us that for much of history, power was a zero sum game.  One party won and the other lost.  That’s rarely the case anymore.  Today, the game is not so much about power over others but developing power with others.  That can be a difficult mental shift for a country (or a person) that’s gotten used to being the biggest kid on the block.  In your own case, it might be productive to look for opportunities to combine your power with others.  Doing so can create a 1 + 1 = 3 scenario.
  • Whoever collaborates most wins. Professor Nye shared several stories of a recent speech he gave to 500 students at Beijing University.  It was fascinating to hear how candid he and the students were with each other.   When one student asked him what it would take for China to compete long term with the U.S., Nye told him that it couldn’t as long as the Great Firewall of Internet censorship is in place in the country.  His point was that sustainable long growth and innovation only occurs in an open and collaborative environment.   It used to be that information was power.  Today, sharing information is power.  What sort of opportunities do you and your organization have to gain fromcollaborative leadership?

How does this apply to construction? The difficult building code review you just received acts as a good example. If you try to fight, you likely lose. If you just give in, you lose as well. The only viable alternative is to collaborate, to understand the code official’s viewpoint as well as he or she does, but to also have woven a story with your own interpretation. You put in the time to clearly develop your story that respects the code official but also gets the project done in a reasonable way.

So think about the struggles you face in the context of hard power vs soft power. Learn to develop the stories that most effectively make your point…and to use those stories. This may seem like way too much work to you, but those that do it will find fascinating futures.

CONSTRUCTION KNOWLEDGE BLOG

May 23, 2012

3 things to know about contract surety bonds
Filed under: Construction — Tags: — nedpelger

Readers: I have a guest blogger explaining the basics of surety bonds today. I think she does a nice job of presenting the info concisely.

If you’re like most construction professionals, you’ve probably heard about surety bonds but don’t know much about how they work, why they’re required and how you can get them. To help you along your way, this article will summarize three crucial aspects of contract surety bonds.
1. How they work:

To put it simply, contractor bonds guarantee that a certain quality of work will be achieved when construction professionals work on projects. Each bond that’s issued functions as a legally binding contact that brings three entities together.

  1. By purchasing the bond as a guarantee of future work performance, the contractor becomes the bond’s principal.
  2. By requiring the bond to prevent financial loss, the government agency or project owner becomes the bond’s obligee.
  3. By backing the bond with a financial guarantee, the insurance company becomes the bond’s surety.

If a bonded construction professional fails to fulfill the bond’s terms, then the bond amount can be used to keep government agencies, project owners and consumers from losing their investments in a project.
2. Why you may need them:
The federal Miller Act requires all contractors to purchase surety bonds before they can be granted permission to work on publicly funded construction projects that cost $100,000 or more. Other state, county and city regulations have their own unique contract surety bond requirements. No matter why they’re required, most construction projects require three different contract bond types.

  • Bid bonds guarantee that contractors won’t increase their bids after contracts are awarded.
  • Performance bonds guarantee that contractors will complete projects according to contractual terms.
  • Payment bonds guarantee that contractors will pay for all materials and subcontractors used on a project.

3. How you get them:
Before getting bonds, construction professionals must undergo a strict application process that includes a thorough review of financial credentials and work histories. Contractors should work with surety providers that can fully explain all material clearly.

Surety bond premiums vary for a number of reasons, but contractors who have poor credit typically pay much higher rates for their bonds. Construction professionals who cannot qualify or afford to pay for the required contract bonds they need will not be awarded projects.

Although the bonding process can seem confusing at first, it successfully regulates the industry, limits fraud and keeps unqualified individuals from working in the market.

Danielle Rodabaugh is the chief editor of SuretyBonds.com, a nationwide surety bond agency. Danielle writes articles that help construction professionals understand the legal implications of surety bonds as well as the bonding process. You can keep up with Danielle on Google+.

CONSTRUCTION KNOWLEDGE BLOG

May 21, 2012

They Get Drunk and Act Stupid, Just Like Us
Filed under: People Skills — Tags: — nedpelger

I spoke with a young man who grew up with my son this weekend. He’s just back from Iraq, having served several tours of duty there in the military, then several more years as a sniper, then team leader for Blackwater Security. He’s a fine man now and we talked about people.

Not about people we both knew, but about people in general. We talked about the differences when a rich world person gets killed vs. a Third World person. I mentioned how my travels led me to believe that people the world over have so much in common. We want the same things from our spouses, from our children, from our lives.

He agreed and told me about the first time this thought came clear to him. He was working as a military policeman in Iraq and they pulled over a vehicle. The four guys inside were drunk (reasonably rare in Iraq), singing and laughing. They wanted to give their new friends hugs. He realized, “They get drunk and act stupid, just like us.”

The insight followed that people are more the same than not. I don’t really know what this insight does to you in a war zone. But on a construction site, the insight should lead to a bit more patience. Perhaps we act with a bit more tolerance and acceptance of different ways when we have a job site encounter with Mexicans, or Poles, or Amish or Fill in the Blanks.

Hopefully, we eliminate offensive language and we strive to improve the productivity of the entire project. The construction industry needs to improve in this area. Each of us should do our part to move our job sites to become more inclusive and productive places. Everyone wins.

CONSTRUCTION KNOWLEDGE BLOG

May 18, 2012

Chicago Infrastructure Trust: You Heard It Here First
Filed under: Industry outlook — Tags: — nedpelger

Remember that scene in The Graduate when Dustin Hoffman, as a recent college graduate, gets some sage advice? Take 22 seconds to watch it:

httpv://www.youtube.com/watch?v=CsrLHP26zvk

Well I’m going to give you the word for our times. Actually,  let me give you the phrase: Chicago Infrastructure Trust. Imagine Rahm Emanuel whispering it to you at a party.

As most folks in America know, we haven’t been spending enough to repair our infrastructure. Inefficient transportation systems and buildings cost our society $130 billion in 2010, mostly because of higher running costs and travel delays, according to The Economist. The American Society of Civil Engineers calculates (which is something they’re good at) that this under-investment will cost each American family over $10,000 US between 2010 and 2020.

We all also understand that no political will exists to get this money raised through traditional public sources: raising taxes, selling municipal bonds, etc. So, the Chicago Infrastructure Trust (CIT) shows a new way. It’s not an infrastructure bank so much as a project facilitator, matching public infrastructure needs and private investor wants.

The Economist article says it well:

The CIT allows Mr Emanuel to tap the private sector for money, rather than just raising taxes and borrowing. The private sector will invest money in projects and get it back in the shape of tolls, user fees, premium pricing or even tax breaks.

The first project is an investment of $225m to make city buildings more energy-efficient. This is expected to reduce annual energy costs by $20m, and the savings will then be used to pay back the investors. The CIT will provide some capital, bond financing and grants. It will also offer tax-exempt debt to entice investors. Returns on investment could vary from 3% on tax-exempt bonds to 8% for equity partners.

The beauty of the CIT system, to me, is the private investor direction and oversight. Goofy projects that don’t make sense (which so often proceed in the public process), simply won’t find traction among private investors. Also, the private investors will tend to demand better selection, design and construction management. The private investors (think smart financing executives) will push for efficient pricing of public resources like parking and busy roads, allowing the free market to improve our public works.

Certainly many details need to be resolved and safeties need to be in place, but the CIT will be the future model for public investment. If you agree, you may want to think about how you could productively align yourself with the trend. Knowing an important trend early can be a huge advantage.

Now, if you have a few more minutes, why not treat yourself to the amazing conclusion of The Graduate? You know you want to.

httpv://www.youtube.com/watch?v=hSyFNvdp-Rs

CONSTRUCTION KNOWLEDGE BLOG

May 15, 2012

Building Inspector Rag
Filed under: People Skills — Tags: — nedpelger

A building inspector on a large project we completed was complimenting the way our team worked. He mentioned how we strive to get all the info a tradesperson really needs on the drawings and how we make quick decisions to resolve potential problems. He especially liked how pleasant we were with him in resolving difficult issues.

Then he told a story about another project. A commercial building was being built without a building permit. When the Authority Having Jurisdiction found out, they assigned this Building Inspector to go an ascertain the status. He requested they dig up the foundation at one location so he could evaluate the footing and that he look above the finished ceiling at one location.

The Building Owner fussed and cussed. The Building Inspector simply walked away, thinking, “Let the Township handle this.” It took a few weeks, but the Building Owner called the Building Inspector, just as nice as cherry pie, and asked, “Which spot do you want the footing exposed and to look above the ceiling?”

The Building Inspector replied, “I want every single inch of the footings exposed and the entire ceiling taken down.” And that’s the way it went.

Moral? Consider consequences…and learn to keep your pie hole shut.

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