Located in Middle River, Bluestone Communications, Inc. is a wholly owned subsidiary of Hatzel & Buehler, Inc. Bluestone provides diversified telecommunications installation and maintenance services and has grown a portfolio of advanced technological offerings. Its services include installation of fiber optics, voice and data systems, distributed antenna systems, electronic safety and security equipment, structural cabling and audio/visual equipment. https://www.bluestonecomm.com/
What is the biggest business lesson that COVID-19 has taught you so far? And how will that knowledge help you improve your business in the future?
SMART Security Pros/Mobile Video Guard
As a company whose core focus is on security and protecting our customers’ job sites, we always “expect the unexpected.” COVID-19 took that to a whole new level from a business perspective. Our team’s ability to be nimble and adjust quickly was put to the test as we converted to an entirely remote workforce over the course of one weekend. We had a basic emergency plan documented (for things like extreme inclement weather), but we had not considered all of the logistics and equipment that would need to be purchased, programmed and issued to our surveillance agents in order for them to be able to monitor sites remotely from their homes. My team was able to pull it off without one lost minute of site coverage and zero missed intrusions, but it didn’t happen without hiccups and some avoidable missteps along the way. The biggest lesson I’ve taken away from this time is that practicing what you plan is just as important as the plan itself.
SC&H Group, LLC
Building flexibility into your business is critical. We have seen our own business and clients tested as the ramifications of the coronavirus have impacted companies of all sizes. With that said, we have witnessed industry leaders take an entrepreneurial, innovative approach to reposition how they operate, strategize and deliver their services or goods to push ahead in these trying times. While we continue to ponder not only when, but what returning to “normal” may look like, we recognize the increased capacity to be agile is crucial. Businesses now, more than ever, need their leadership teams and trusted advisors to work collaboratively and maintain flexibility to succeed. We are proud of the role we play to businesses across this region and look forward to working alongside them as we take on this challenge together.
With nearly every construction schedule thrown off track, site access limited and new operational restrictions applied, construction companies are increasingly seeking digital solutions to brick and mortar problems.
“We are seeing people embrace every technology they can to improve efficiency and that is the smart business thing to do,” said David Hatwell, President of Aegis Project Controls.
More general contractors are utilizing sophisticated project scheduling software and taking a more meticulous approach to pull planning.
At Aegis, “we plan clients’ work for the week in microscopic detail,” Hatwell said. “There are no more allowances for inefficiencies or productivity losses. It used to be when we had a problem, we threw enough manpower at it to resolve the problem. We don’t live in that world anymore. Every person who shows up at a work site has to be as productive as is humanly possible for the duration they are on site. That requires absolute precision and coordination.”
It also requires replacing the old routine of filing monthly progress reports with a new commitment to completing weekly reports, and adopting technologies that make those reports quick to complete, accurate and thorough, Hatwell said. “On some job sites at the end of the day, a contractor scans an RFID tag with their phone. The system then creates a customized daily report for them to fill out. The information then goes through a central database where people can track productivity, materials installed and number of laborers.”
KCI Technologies is helping a growing number of clients boost their project efficiency through virtual construction, said Adam Rickey, Vice President and Regional Practice Leader for MEP/FP/Energy. By using BIM to coordinate “everything down to the wiring, conduit, plumbing, piping and ductwork,” KCI can not only model all work for the trades but enable subcontractors to prefabricate many items. Through the virtual construction process, subs can detail the size, length and number of pipes and ductwork they will need and generate manufacturing and pipe spool drawings for items.
“We have been able to use the technology to break projects down to that level so some contractors with manufacturing facilities have been able to fabricate this jigsaw puzzle of equipment in their own facility then go onsite and hang it with minimal issues compared to normal construction,” Rickey said.
Other digital systems are generating other efficiency gains.
The combination of BIM plus Zoom (or Webex or another online meeting platform) is enabling KCI, its clients and project team members to efficiently and collaboratively work through design issues, changes and constructability questions, Rickey said. If a client wants to move a wall, add a washroom or make another change, the design team can sometimes do a quick sketch-up in BIM, share the visual during the meeting, get the client’s reaction and get input from engineers and other team members about resulting issues for building systems or construction.
KCI and others are also increasingly using drones, laser scanners and 360 cameras to document existing site conditions or completed work. In addition to being quick, the process enables staff to complete surveys whenever it’s convenient for workers on site and avoid creating any worker density issues. The resulting “3D point cloud and almost 360 degree photography can be stitched together and measured. We are getting accuracies of an eighth of an inch or better and we can then supply all that information to the architect, structural engineer and other design professionals,” Rickey said.
Current conditions and the need to boost efficiency could trigger lasting change in how the construction industry operates.
“Technology and construction were two words that were anomalous to each other,” Hatwell said. But the industry is showing heightened interest in new, digital tools and venture capitalists are approaching companies, like Aegis, to discuss possibilities, he said. “They say there is something like a trillion dollars of potential business [in construction technology] because COVID-19 is making us think differently about what technology we use.”
What is your company doing to boost morale and keep employees positive during this unprecedented time?
President & CEO
Timber Industries, LLC
At Timber Industries, we are giving our team the flexibility to work remotely during this time and giving them the tools and software to be as efficient as possible. We are keeping in frequent communication with our team members as we make this transition to remote work as smooth as possible. As a wife and mother of two, I am aware of the amount of change this time has brought with it. Many of our team members are married and have little ones, so we have been accommodating as we adjust to this situation. At Timber, we have been intentional about using video conferencing apps to make our communication as constructive as possible, and we have been researching resources available to help employees during this time. We are aware this situation has brought pain, grief and anxiety to many, and we are doing everything we can to protect our employees’ jobs and families.
John Gregg, AIA, VMA, LEED AP
It is certainly an unprecedented time, and further complicated by the fact that none of us know when we will ultimately get back to normal. We believe that communication is the key – clear, concise and frequent communication from firm leadership to the entire staff about the current situation and the actions that are needed in order to address health concerns while continuing to get work done. It’s important that everyone understands that the firm leadership has both their best interest in mind as well as the best interest of the firm as the situation continues to change. We are also encouraging collaboration using several web-based tools. We are a collaborative office; it’s an important part of what makes us so successful, and we need to continue to work collaboratively as much as possible while working remotely. The ongoing collaboration helps to keep us all positive and remind us that we are still a team, all working toward a common goal even if we aren’t physically in the same space. We will all get through this together.
Debra Hall, SPHR, SHRM-SCP
Human Resources Manager
HMS Insurance Associates, Inc.
HMS has had a robust work-from-home and remote-access plan in place for several years. Currently we have expanded it to include 85-90 percent of our staff. We are considered an essential business, so we are able to continue to serve our customers and have a handful of essential staff in the office that can assist teleworkers when necessary. We have great communication between staff and we check in with each other via regular calls and emails. We also have an online portal with access to benefits and other essential info and are understanding and flexible with the family needs of our staff.
Vice President of Operations
F.M. Harvey Construction Co., Inc.
Unfortunately, there’s no business manual to help a company navigate a time like this. Our overall goal has been to strive for a calm, educated and safe environment. We think it’s critical that our managers don’t get sucked into the panic and that employees can look to them for consistent, measured actions. Transparency is especially important now and communicating the ever-changing conditions and expectations (both good and bad) is necessary to build trust and calm. Besides the tangible changes, like additional hand sanitizers, disinfectants and wipes, we have regularly communicated new protocol for respecting coworkers’ spaces to ensure everyone’s safety. Humor is also important; we hope to ease the anxiety felt by all. We recognize that our employees have widespread concerns, and we don’t want to minimize them by pretending they don’t exist or that our business circumstances are the same. Staying focused on what can be done, not on what cannot, creates a more positive environment.
In Nick Aello’s living room, two 3D printers are working 24/7 to churn out parts for badly needed face shields for healthcare workers. An architect with Design Collective, Aello arranged to take the printers home when the company switched to telework and added them to a grassroots effort, organized by Open Works, to make personal protective gear for medical professionals fighting the COVID-19 pandemic.
“I never would have thought our printers could be used for a medical purpose,” said Fred Marino, President and CEO of Design Collective. “We’re really excited to be helping with this effort.”
Nearly 30 member companies of AIA Baltimore have repurposed their 3D printers to make PPE, said Scott Walters, AIA Baltimore President.
Other members of the organization recently responded to a request from the Maryland Emergency Management Agency to assess possible sites to establish temporary hospitals.
Other BC&E members have also joined efforts to combat COVID-19. Wagman Construction donated N95 masks and safety goggles to Well Span Health. Johnson Controls implemented new safety and operations plans to sustain delivery of mission-critical products, services and personnel to hospitals, pharmacies, police and fire stations, government offices and food suppliers.
Responding to requests from healthcare providers to help source additional beds, tables, partitions and PPE, Price Modern unearthed some unexpected sources of masks, including a childhood friend turned seamstress and a Maryland company that, in normal times, produces fabric coverings for cubicles.
March 31, 2020 – The rapid spread of COVID-19 has necessitated a new approach to safety on construction sites.
Despite the existing regulations and safety culture within the construction industry, contractors have been confronted with a sudden need to implement new safety practices. Some have rapidly developed best practices and even innovative approaches to continuing essential construction activities while providing heightened protection to workers.
Deemed as essential businesses, the construction industry is taking necessary measures to continue to serve clients from implementing social distancing practices to mandating new hygiene rules and monitoring employees’ health and simply educating workers about COVID-19.
Social distancing onsite
According to the Centers for Disease Control and Prevention, staying at least six feet away from another person can keep an individual out of range of infectious, airborne droplets. Given the rapid spread of COVID-19 and its track record of not producing obvious symptoms in some people, infectious disease experts are urging Americans to assume than anyone could be infected.
But how do you maintain a six-foot distance on a construction site?
“Some GCs we work with throughout the country have made big changes to their construction schedules,” said Justin Heddinger, Field Operations Manager for Diversified Safety Services.
To reduce the density of workers on a site, some contractors have split crews in half and scheduled each half to come in on alternate days. Others have staggered schedules throughout the day to avoid having multiple trades working within the same space. Most are strictly limiting the total number of individuals on site at any time, especially within construction trailers, enclosed work areas and lifts, Heddinger said.
Workers who have to operate in closer proximity, can protect themselves by wearing a mask. But that precaution can be difficult to achieve. Workers face a severe shortage of N95 masks (which are badly needed by healthcare workers). Because those masks restrict air flow, workers also need to be trained to use them.
In situations where workers can’t be properly distanced or shielded, Heddinger suggests contractors postpone work.
New rules for hygiene
The CDC’s other two primary rules about containing the spread of COVID-19 – namely, wash your hands frequently and don’t touch your face – have also prompted changes on construction sites. In addition to placing hand-sanitizer dispensers around sites, contractors are installing soap-and-water hand-washing stations
“Instead of putting those wash areas inside the trailer where you would draw people into an enclosed area, contractors are putting them outside where workers can clean their hands in an open area and not be exposed to other people,” Heddinger said.
Live Green Landscape Associates, for example, installed a station outside its office and asks individuals to wash their hands before entering.
Since COVID-19 can live for roughly 24 hours on many solid surfaces, construction workers must also take precautions when handling materials and equipment.
“We have pushed guys for years to wear their gloves when they do material handling. Now, they are paying attention to that practice. I haven’t seen anybody working without a pair of gloves in weeks,” said Terry Horrocks, a site inspector with Diversified Safety Services.
Monitoring worker health
The rapid spread of COVID-19 also means that contractors need to more closely monitor workers’ health and enforce precautions. Some contractors, including Plano-Coudon Construction, are requiring workers to complete a short questionnaire before gaining access to a site. Based on CDC guidelines, it asks if the individual has developed any flu-like symptoms, travelled internationally in recent weeks or been in contact with anyone suspected of being infected. Some contractors are conducting temperature checks at the beginning of each shift. Finally, all contractors need to enforce a policy that workers must stay home if they develop any symptoms associated with COVID-19 – fever, cough, shortness of breath, sore throat, runny/stuffy nose, body aches, chills or fatigue.
“Guys who would have worked though a cold six months ago, can’t now,” Horrocks said. “If you have symptoms, assume it’s COVID-19 and stay home until you’re better. The CDC’s recommendation is you have to experience 72 hours with no symptoms and no medications before you go back to work.”
The most important and impactful thing that contractors can do right now is provide their employees with solid information from the CDC about the nature of COVID-19 and how it spreads, said Horrocks, who has conducted multiple briefing sessions with construction crews in recent weeks. Meanwhile, Plano-Coudon has distributed a COVID-19 toolbox talk to its superintendents to provide to crews on their sites.
“There is a lot of misinformation out on the Internet,” ranging from inaccurate reports to junk science theories to memes about home remedies, he said. That misinformation has prompted Horrocks to caution workers that social media is not the authoritative source of information about a global pandemic.
Workers need to understand that COVID-19 is spread through respiratory droplets, which can be emitted through coughs or sneezes. To spread the disease, those droplets need to make contact with the eyes, nose or mouth of another person. Understanding those two core facts are key to helping workers understand how to protect themselves.
For a few months, the new North Atlantic Fish Co. (NAFCO) warehouse in Jessup will hold a national record.
The 70,000-square-foot facility is designed to store 15 million pounds of seafood which NAFCO distributes to more than 3,100 stores in the region.
To maximize storage capacity in an expensive facility, NAFCO opted to install a power racking system. Similar to old-style, moveable file cabinets in doctors’ offices, the system sets rows of industrial shelving on tracks and those rows snug up against each other. With the push of a button, the system can move selected rows apart to create an aisle and enable forklifts to retrieve or deliver product. It’s a relatively uncommon technology in North America. It’s costly and requires contractors to complete a complex installation, including setting the system’s tracks in the building’s concrete slab.
“But a mobile racking system that accordions like that magnifies the amount of product you can store in your space,” said Drew Enstice, Director of Business Development for ARCO Design/Build Industrial, the prime contractor on the NAFCO center. “It will be the biggest system in the country for about five months” until ARCO completes a larger installation in Alabama.
The warehouse construction market is very busy and generating a variety of challenges for project teams beyond the overarching task of keeping up with clients’ needs.
SPEED TO MARKET
High demand for warehouse and even light industrial space is spurring developers to launch projects on spec. Meanwhile, pressing needs by distributors and producers to occupy new space has put those projects on “super-fast schedules,” Enstice said. Distribution centers, as large as 1.4 million square feet, are now regularly constructed within 10 months. On some projects, ARCO has erected a 1 million-square-foot building (not including site work) in four to six months.
Those kinds of schedules push project teams to overcome weather delays and complete many tasks, including excavation and concrete installation, in the middle of winter. That, in turn, has increased the use of cold-weather concrete practices and increased the need for precast concrete suppliers.
Subcontractors need to be able to deploy large crews within tight windows and organize their work to maximize efficiency.
“When we do large concrete pours for slabs, we may do 40,000 or 50,000 square feet in a night and we do them at night to avoid traffic problems with the concrete trucks,” said Michael Hozella, President of the QEI Construction Group, one of the divisions along with J. Vinton Schafer & Sons within Quandel Construction. QEI, he added, just posted its biggest year for warehouse construction, completing about 2.5 million square feet worth over $50 million. QEI’s current backlog of warehouse work almost matches that amount.
“The schedules are very intense and the subcontractors must have the horsepower to perform,” Hozella said. The upside is “the warehouses are so big that the subs, in turn, can start at one end of the building and race each other out of the building.”
NEW PRODUCTS, HIGHER TECH
The dramatic increase in e-commerce is not only fueling the need for distribution centers but driving the adoption of new building products and high-tech systems.
Robotics are becoming commonplace in large e-commerce centers. While some robots simply roll along the floor and require few special conditions, some advanced Automatic Storage and Retrieval Systems (ASRS) place robots on tracks above the storage racks. From there, they can pull up items from the racks below and assemble orders. Those systems require extremely level floors and, in some cases, require extra structural steel to hold ASRS tracks that hang from the ceiling.
Some large warehouses must accommodate a variety of materials-handling needs. The growth of meal kit delivery services has expanded the need for both cold-storage facilities and small cool- or cold-storage areas within larger distribution centers. Other specialized requirements within warehouses include hazardous materials rooms, aerosol cages to prevent widespread damage from aerosol cans in the case of a warehouse fire, buildings that meet Food and Drug Administration regulations for pharmaceutical companies, and additional security facilities/systems to safeguard high-value products.
Occasionally, warehouse developments turn into light-manufacturing facilities, requiring further upgrades. In Pennsylvania, QEI began working on a two-building spec project when a prospective tenant proposed turning it into a beverage manufacturing facility and distribution center. That change has required QEI to outfit one building with water supply capable of delivering one million gallons per day, a separate electrical substation, a small waste treatment plant, four railway spurs to tie into a local rail line, and a suspended, 450-foot-long tramway to move completed product from the manufacturing building to the distribution center.
The proliferation of e-commerce facilities, the high need for distribution center staff and general trends in the workplace are also prompting owners to include more varied spaces and additional amenities within warehouses.
“We’re seeing more mothers’ rooms and prayer rooms within new warehouse environments,” Enstice said.
Tenants request nicer, larger breakrooms with extensive and varied seating, big-screen televisions and high-end vending machines. Office space in some projects is tailored to meet current preferences in work styles and facilities include more open, flexible space for training sessions, company meetings or collaborative work efforts.
With no slowdown in warehouse construction evident on the horizon, builders, developers and market analysts say the construction industry should be ready for further changes in clients’ needs. Those will likely include last-mile facilities within urban centers that could include multi- story operations or rooftop parking in order to fit maximum operations into a smaller, city site.
Buoyed by a continuing strong economy and spared from major changes to the tax code, most construction companies are heading into a relatively routine tax season. But finance professionals stress there are tax opportunities, potential pitfalls and financial management issues that you should devote attention to.
Although Congress passed changes to the federal tax code two years ago, some contractors aren’t taking full advantage of credits included in the new law, said Michael Gentry, a Director and Co-Chair of the Construction Services Group at KatzAbosch.
For example, more S corporations could claim the 20 percent tax break on pass-through income. Contractors can also claim enhanced tax credits on equipment purchases
until the end of 2022. The revised tax code doubles deductible equipment and software purchases to $1 million a year, expands qualifying deductions to include such items as new roofs or HVAC upgrades, and allows contractors to claim 100 percent depreciation in the first year.
In addition, “Maryland has a lot of tax credits for businesses. It’s worth it for contractors to go through them to see which credits might apply to them,” Gentry said. The state, for example, offers credits for tractors that pull trailers and research and development tax credits that can apply to some work by specialty subcontractors and engineering firms.
CHANGES AND CHALLENGES
The 2018 federal tax law presented contractors with opportunities — and possible complications — related to accounting methods. The new law raised the ceiling for companies which can practice cash accounting, from $10 million to $25 million in annual gross receipts. For some companies, that change presented an opportunity to simplify their accounting … until they tried it.
“If you are using accrual or completed project or percentage completion accounting, it’s very easy to do tax planning because you can project what your profits are going to be,” said Don Hoffman, Managing Partner of The Hoffman Group.
With cash accounting, that predictability and financial control can be undermined by large payments or expenses at the end of the fiscal year. It also requires contractors’ accounting staff to complete “significant additional effort, typically between Christmas and New Year’s,” Hoffman
said. Those circumstances have prompted some contractors who switched to cash accounting, to ask if they could switch back.
Regardless of their accounting method, contractors need to calculate their alternative minimum tax, Gentry said. “We see a lot of contractors who are on the cash method or completed contract method, ignore that rule. ”That omission can lead to unpleasant surprises when companies file their tax returns.
Contractors also need to become informed about new regulations from the Financial Accounting Standards Board, which went into effect in December 2019, Hoffman said. The ASC 606 New Guidance aims to create a common framework for recognizing contract revenue and is expected to have a notable impact on the construction industry. The framework changes the way contractors recognize revenue from rework, warranty work, tasks outside project scope, and other items. For example, materials acquired for a project but not yet installed get classified as contractor inventory, not contract revenue.
The new regulations “take much of the flexibility out of what accountants do in reporting income…because in some cases in the past, income recognition has been overstated,” Hoffman said. “These new standards are a very, very, very big deal… If accountants are doing their job, they will have more conversations with contractors about what is really happening with each contract.”
In the midst of this strong economy, finance professionals insist that now is the time for contractors to exercise prudent financial management.
“There is a really horrible disease out there called tunnel vision,” Hoffman said. “People do things without thinking through how it could impact them.”
Contractors, Gentry said, should bank enough money to cover any potential tax obligation before buying new equipment. Companies and individuals should work now, while interest rates are low and work backlogs are large, to eliminate their debt, Hoffman said.
Finally, contractors need to closely track their expenses, adjust their prices and resist the urge to grow quickly, Hoffman said. “There have been bankruptcies of big construction companies in the past two years. All of those companies grew too quickly because the economy was so good.”
A development trend is prompting project teams to use an established building system in a new way.
John Stahl, Vice President of Swirnow Building Systems, points to the cluster of tower cranes in downtown Towson to illustrate the point. More developers are looking to build mid-rise and taller structures on urban and suburban sites. Constructing those projects, however, presents a challenge. Wood framing can only support a structure up to five stories. Poured concrete will support a taller building but at a significant cost.
So one Towson project – the 14-story, mixed-use Circle East building – opted to use a different structural system, specifically a combination of prefabricated metal-stud structural panels and composite floor joists.
The method of construction has been used for years in low-rise residential developments.
“It’s a really good system for senior living, mixed-use facilities, and student housing.” said Ted Bowes, President of Excell Concrete Construction which has installed the floor joists and slab on numerous projects. “The Hambro composite floor joists are lighter structural members making it easier to set them in place. The joists are also able to span longer distances.”
Multiple manufacturers, however, now produce the structural metal studs in a variety of gauges, Stahl said. That is enabling project teams to install heavier studs on lower floors and use the system for buildings as tall as 11 stories.
“It’s an efficient, effective way to build in the current market,” he said.
Composite floor joists may cost more than wood framing, but less than formed in place concrete. The metal stud panels which are produced in a factory, arrive at the construction site with the exterior sheathing attached so construction requires less laydown space “and you close in your building as you erect the structure,” Stahl said.
Similarly, the composite floor joists “don’t take up a lot of area,” Bowes said. “You can fit roughly 20,000 square feet of joists on one tractor trailer…and the system goes together really fast.”
After setting the joists on the metal studs, workers use reusable forms to pour a thin (2.75-inch) concrete slab. Bowes estimates his crews can complete 10,000 square feet within five days.
“The structure goes up extremely fast. A lot of people say it’s like working with an erector set,” Stahl said.
The combination of the metal studs and composite floor joists deliver a few other benefits, Stahl said. The system is not combustible, weighs significantly less than poured concrete structures (in part by reducing the thickness of floor slabs from 6 or 8 inches to 2.75 inches), and provides more space between floors to run mechanicals, eliminating the need for bulkheads of drop ceilings.
Careful pre-construction planning is required to properly design the installation.
“One misconception we hear is that this system is only good for a rectangular building,” Stahl said. “But with front-end input, you can make it work well and efficiently on a wide variety of designs.” At Circle East, for example, the structural system created an irregularly shaped building. By reducing weight, it helped the developer erect a 14-story structure consisting of eight stories of residential space sitting on top of six stories of poured-in-place retail and parking.
An uncommon partnership between a Harford County nonprofit and an electrical contractor is helping at-risk teenagers become construction professionals.
“A few years ago, I had kids in my program that weren’t making it in the traditional school setting,” said Melynda Velez, Executive Director of Linking All So Others Succeed (LASOS), a nonprofit that helps non-English speakers with language training, workforce training, financial literacy and assistance with life challenges. “These kids were going to drop out. They had no plans. Their future was ending… Without mentorship, support or future goals, it’s easy for kids to spiral.”
Benfield Electric Co. President Greg Benfield had already become a generous supporter of LASOS, so Velez proposed a partnership. The conversation resulted in Benfield Electric becoming a sponsor of Aspire, a LASOS program designed to help at-risk youth complete alternative high school education and land an internship. Participants work during the day and attend classes at night to complete their high school diploma, GED or job training. In addition, mentors help participants address barriers to success.
So far, Benfield Electric has hired half a dozen people through LASOS, who are now working their way through the electrical apprenticeship program.
“LASOS has provided dedicated employees to our company, “Benfield said. “We are happy to sponsor Aspire and support LASOS. We are trying to help people out while also solving our workforce problems.”
Noting that the construction industry has a long tradition of employing immigrants, Benfield said he would like to see more opportunities for his company and other contractors to get involved with helping immigrants build successful careers in construction.
“There are a lot of people who would love to do this work and could do a great job. But sometimes they are exploited because they can’t work legally or they live in fear or they are stigmatized by the media and politics, “he said. “We end up competing with other companies over the few electricians out there… We could be more welcoming and build our workforce.”