Hurricane Harvey Disaster Contracting – Critical Things to Know
August 28, 2017 – The devastation being wrought by Hurricane Harvey in Texas is creating a tremendous need for emergency rescue, relief, and recovery services, likely resulting in contracting opportunities with state and local government agencies, as well as FEMA. But the storm will also likely be used as an excuse to circulate false information by companies peddling “priority vendor status” – for a hefty fee, of course – promising the “opportunity to help your community for disaster relief efforts and make profits at the same time.” Services offered in such solicitations often carry a price tag of hundreds or even thousands of dollars for a variety of services, including a “priority listing.” Be advised: FEMA does NOT have a “priority vendor” program. Please see our post, Contractors – Watch out for Disaster Opportunism, for more details on how FEMA really works.
What CAN you do to explore emergency contracting opportunities in the wake of Hurricane Harvey? See our post below, by Oklahoma Bid Assistance Network (PTAC) Program Manager Carter Merkle. Carter and his staff have extensive experience with devastating tornadoes; he has worked closely with FEMA officials for years, and his column reflects their best advice.
For specific strategies targeted to your particular business and circumstance, contact your local PTAC. Our PTAC network will be working closely to support the Texas PTACs – which will have the most accurate information on how disaster contracting is being handled in each affected community. So work with your PTAC counselor – at no cost to you – to develop the best plan for your business.
Natural Disasters can be a time of crisis or opportunity for small business government contractors.
The Thomas T. Stafford Disaster Relief and Emergency Assistance Act, passed in 2007, requires FEMA to contract with businesses located in the affected area when feasible and practicable, which brings unexpected and often substantial contracting opportunities in the wake of a disaster.
FEMA needs certain types of items most frequently following a disaster, such as office supplies, dumpsters, shredders and other disposal equipment, janitorial supplies, locks, portable toilets, hand washing stations and sometimes material moving equipment such as forklifts. In many areas they need certain services such as certified translators.
If the goods or services you provide are relevant to disaster response, the following steps can help you to position yourself to take advantage of such contracting opportunities when a disaster strikes.
Your local PTAC can assist you – most often free of charge – with any of the steps outlined above. And of course, don’t neglect to take the necessary steps to ensure that your business can “weather” the disaster in the first place; see my colleague Liz Kallen’s post on that topic.
For help in positioning yourself to take advantage of disaster response contracting opportunities, contact your local PTAC.
7/24/17: The FAR is now available for free in the Amazon Kindle bookstore.
This enables you to access the FAR from any device anywhere, in an easy-to-read responsive format. Users can highlight text, bookmark sections, and even send quotes via email. For more information on how to download the FAR on Amazon Kindle and Apple iBooks, please click: https://www.acquisition.gov/mobileaccess
Subcontracting: Both Sides of the Same Coin
By Jill Odom
Anyone who has been in the green industry for any time at all can tell you that there is a plethora of specialties your business can go into, but if you’re wanting to add extra services without having to learn a new skill set, this is where subcontractors come in.
By definition, a subcontractor is a business or a person who carries out work for a company as part of a larger project. They may be more expensive than regular employees at times, but their expertise is well worth the price.
Subcontractors are often hired as experts in their fields, and are generally more knowledgeable about their work than a jack-of-all-trades. They can also be used to free up a landscaping company’s regular staff.
“They help us when we have a lot of work during the peak season,” said Enzo Parilli, owner of TurfCreek, based in Loganville, Georgia. “When we have too many jobs, we use the subcontractors to fulfill demand and help us still create revenue and meet our customers’ needs.”
When subcontractors are used, landscapers can avoid all the costs associated with hiring and training typical employees as well as the need to outfit them with uniforms or vehicles to get them to the jobsite. Another benefit of hiring a subcontractor is it frees your company up from buying and maintaining specialized equipment.
“Anything good that a subcontractor does on a job on your behalf has positive ramifications for your reputation with your customer,” said Ken Thompson, director of quality and efficiency for the landscape construction division of Ruppert Landscape. “In many cases, the owner or general contractor sees the subcontractor as you. So good (or bad) work or interactions with your sub can help to enhance your reputation with your customer as competent, skilled, and responsive.”
Working with a Subcontractor
The tricky thing about starting a relationship with a subcontractor is first finding one, as most landscaping companies hire one that they already know. If you’re just getting started, this is more of a challenge because you know less about who is in the industry. You can reach out to associations like the American Subcontractors Association or suppliers and ask who they would recommend.
Over time, as you build up your network, you’ll soon know former co-workers and people from other trades whose work you trust that you can reach out to for help on a job.
“By treating our subcontractors like they are part of our team (and not their own separate company), we often get referrals of other quality-oriented subcontractors through sphere of influence,” Thompson said. “Subs often refer each other to our organization.”
While a time crunch may tempt you to hire just about any subcontractor, it’s important to remember that your reputation is directly affected by their work. Before hiring any subcontractor, check their references and their work. Thompson advises not to just look at the most recent job as they need to prove they have a track record of success.
Other ways to make sure you are hiring a reputable sub is to visit their work in person, check their accreditation, and test their skills. If you’re still trying to feel out their abilities, hire them for smaller projects first before trusting them on bigger jobs.
Once you are satisfied with their credentials, it is crucial to have a signed contract that specifies the scope of work, payment rate, and deadlines. Including quality standards can also circumvent any corner cutting in materials and workmanship.
“It’s also important to include a provision allowing your company or the subcontractor to terminate the contact upon giving a certain amount of notice,” Thompson said. “Also, check to see if the subcontractor carries an appropriate license for his/her field as well as liability insurance, workers comp insurance, auto insurance, and if they are bondable.”
After the agreement has been signed, make sure you have quality control measures in place to ensure the work is done accurately and in a timely manner. For Parilli, he hires someone to supervise the sub on site and make sure that they are doing everything that is outlined in the work order.
Without having communicated your standards beforehand, some subcontractors will opt to use cheaper materials or produce substandard work by rushing. One way to avoid the issue with low-quality materials is to buy the materials they will need, saving them the expenses and giving you control over the matter.
The greatest challenge of working with subcontractors is probably scheduling, as they have their own business, and trying to match up their availability with the needs of the client.
“It’s worth it,” Parilli said. “When you have a lot of business, a customer may like to get things done sooner, but you have to work with the subcontractor’s availability.”
While scheduling can be a challenge, there are ways to keep it from derailing your timetable. As you work more regularly with a sub, they are more likely to work to meet your deadlines, and paying them promptly can also incentivize them. Smaller subcontractors depend on the cash flow more and will jump at the chance to be paid promptly by a company that respects their work.
After finding subcontractors from each trade that you need, with whom you work well, make a point to keep this relationship strong.
“While it’s a balancing act between trying to get the best value for the work being done, it’s usually worth paying a little bit more to build a long-term relationship with a subcontractor who aligns well with your company values,” Thompson said. “Hiring an untested contractor who doesn’t live up to your customer’s expectations could end up costing you far more in the long run.”
Having focused on the benefits of hiring subcontractors and the ins and outs of working with one, now it’s time to flip to the B-side and see what it’s like to actually be a subcontractor.
Working as a Subcontractor
Many landscaping companies will turn to subcontractors to help them on a project that features an element that is out of their depth. Likewise, general contractors can often turn to your landscaping company when they are in need of someone with your expertise.
Similar to hiring subcontractors, finding work as a subcontractor depends a lot on who you know in the industry. TurfCreek, based in Loganville, Georgia, not only employs subcontractors, but also often serves as a sub to general contractors.
“We work our way up so that we get referred,” said Enzo Parilli, owner of TurfCreek. “You also get referred because you do a quality job and they know they’re getting quality so they don’t have to worry as much.”
Aside from standing out from the competition with quality craftsmanship, you can also find subcontracting jobs by bidding on projects that have already been contracted through a general contractor. When these relationships are cultivated, they can soon become a dependable source of revenue.
“We work with them on future projects, almost becoming an arm of their company,” said Taylor Boyle, general manager for Purlieu Landscape Design + Build, based in San Luis Obispo, California.
According to Boyle, one of the biggest benefits of working as a subcontractor is the fact that the general contractor is the company that handles all the marketing and is the lead for the client relationship.
“Your team is just responsible for the success of the project,” Boyle said.
Parilli’s favorite aspect of subcontracting is how the projects are generally very large, providing months of work.
Yet it’s not all roses as a subcontractor, as scheduling and pay are the two common challenges landscaping businesses face. Aside from having to schedule around your regular customers’ needs, working for a general contractor can mean having to cooperate with a number of other subcontractors all trying to finish their own jobs.
“You could be grading and getting ready to install sod, but there’s people working outside on the house doing brickwork or concrete or painting, so you have to work with the other contractors,” Parilli said. “Schedules interfere a lot.”
As for payment, it is a common complaint from subcontractors that they do not get paid in a timely manner.
“We have a weekly payment system for our subcontractors, we pay as we go, but when we’re subcontracting it could be a thirty- to sixty-day turnaround when working with a large builder,” Parilli said. “I wish it was the same way on both ends. It doesn’t matter how big you get, you still want to get paid as soon as possible.”
Boyle agreed that timely compensation is the hardest part and it is important to find good general contractors where this is not a problem. Jobs can often go to the lowest bidder, but by becoming exceptional in certain areas, your company can be a more expensive, but trustworthy option.
For example, TurfCreek has worked for a number of different builders and is known for its drainage work, and it is the reason why many businesses seek them out.
“We’re a very custom company and we have three levels of supervision,” Parilli said. “I’m on site making sure it’s done right. I want to make sure every person is doing their job right.”
Purlieu Landscape Design + Build focuses on offering incredible customer service to the client and being responsive to the general contractor as its method to stand out from the competition.
“These two things build the reputation of the general and makes the general’s job easier, which creates a team environment and helps encourage peaceful dealings and future projects,” Boyle said.
Jill Odom is editor for Total Landscape Care, a Randall-Reilly brand based in Tuscaloosa, Alabama. Odom graduated from Troy University with a degree in English and a minor in journalism.
A Great Time for MWBEs in Construction
Click for bid opportunitiesBy Natasha of NRP
For many years, labor market analysts have been perplexed by the lack of minority and woman-owned enterprises in the construction industry. In spite of many incentives—federally mandated diversity quotas on government projects, educational advances of both groups, competitive wages for new workers, and exemplary return on investment for entrepreneurs in this industry—minorities and women remain underrepresented in the management and ownership of construction companies, especially roofing contracting.
“It’s not for lack of trying,” noted Dale Tyler, president of National Roofing Partners (NRP), a company dedicated to diversity in its workforce and partnerships. “There are several, historical reasons for this underrepresentation of women and minorities in the roofing contracting industry and it’s a little complicated, but it is solvable.”George Harms 6
Part of the reason for this lack of diversity in the building trades has to do with the sheer number of women and minorities involved in construction in the United States. According to the United States Bureau of Labor Statistics, the construction industry is composed of 5.9 percent black or African American, 8.9 percent women, 1.8 percent Asian, 27.3 percent Hispanic, and 56.1 percent white.
George Harms 4
In industries such as construction, where skills are learned from apprenticeships and mentoring, and promotions to management often come from on-the-job experience, there are simply not as many blacks, women, Hispanics and Asians working in the industry to start, much less fill, a pipeline to ownership or upper management.
George Harms 4
“We are constantly recruiting smart, able-bodied minorities and women for our projects,” Tyler noted. “All of our partners have aggressive, often bilingual, training programs to teach young people the building trades. Those who show resourcefulness and ability are promoted to management.”
“However, there are more systemic reasons why the construction industry has fewer minorities and women than, say, the manufacturing or retail,” he said. “There is a lack of minority ownership of construction companies. This is not due to ambition or skill or intelligence. It’s a simple lack of capital.”NRP MWBE
“Financial leaders such as Eugene Cornelius are trying to change this access to capital for minority and woman-owned enterprises, but it is a very slow process,” he said. “Until banks see the potential for investing in minority-owned construction companies, it will be up to those of us who are already in the industry to build partnerships with these minority firms.”
“This is exactly what National Roofing Partners is doing now,” Tyler said. “We are actively looking for qualified companies, which are scalable, to help themselves and us win more business.”
Dale Tyler and his team are very positive about the prospects for growth with a diverse workforce. Why?
“Local, state, and the federal governments have specifically stipulated that public contracts have a reasonable (somewhere between twenty and forty percent) spend with minority contractors,” he said. “This mandate will allow minority-owned companies and companies such as NRP, who partner with minority and woman-owned companies, the opportunity to compete for large projects.”
“Let’s say there is a new airport that is receiving federal funding to be built,” he notes. “There will be twenty to forty percent of the construction contract dedicated to minority subcontractors. Our objective is to find these qualified, scalable minority companies for a joint-venture with NRP.”
“We will use our financial resources, construction expertise, and our national footprint to aggressively pursue these opportunities,” he said. “Where some minority construction companies are not licensed, bonded, and insured, we are. This can make a big difference in pursuing public projects.”
The government-funded projects are not the only areas where the NRP/minority-owned joint ventures can result in profitable business. Many large companies have seen the benefit of a diverse supply chain and have committed to buying goods and services from minority and woman-owned suppliers.
“The Billion Dollar Roundtable is a group of twenty-one companies that have committed to spend at least $1 billion every year with minority suppliers,” Tyler noted. “Companies such as Walmart, Proctor and Gamble, Toyota, and others are actively looking for qualified companies to do business with. Since National Roofing Partners is interested in working with the Tier 1 suppliers and works with some of these companies now, it is important that we find joint venture partners among minority, woman, and veteran-owned businesses to complete these jobs,” he said.
If you own a minority, woman, or veteran-owned company and work in the construction industry, National Roofing Partners wants to talk with you. Contact Byron Stallworth at NRP for a no-obligation discussion about the opportunities for your company in the construction industry.
What Cities Should Be Doing for Small Business
They're a major engine of job growth. Yet most economic-development strategies focus on big businesses.
BY JANIS BOWDLER, KIM ZEULI | NOVEMBER 8, 2016
Small businesses are the backbone of urban economies: They play a critical role in creating jobs for local residents. Yet too often city leaders and economic developers are not prioritizing small businesses when allocating resources to drive growth, focusing their strategies instead on the attraction and retention of large businesses.
A new report by the Initiative for a Competitive Inner City may make public officials consider shifting these priorities. The report provides compelling evidence that small businesses rival, and often exceed, the impact of large businesses when it comes to job creation.
The research, conducted with the support of JPMorgan Chase, was released on the heels of the bank's announcement that it was committing an additional $75 million to its Small Business Forward initiative, recognizing the contribution of small businesses to economic opportunity and reducing unemployment, especially for women, minorities and veterans.
ICIC's report measures the current state of small business jobs in five cities: Chicago, Dallas, Detroit, Los Angeles, and Washington, D.C., and identifies key findings regarding small businesses and urban job growth.
In all five cities, the distribution of small businesses and large businesses is similar, with small businesses -- those with 250 employees or fewer -- representing at least 99 percent of all businesses in the city. Despite this parallel, small-business job creation varies across the cities ICIC studied, ranging from 48 percent in Dallas to 74 percent in Los Angeles.
• In four of the five cities, small businesses create most of the jobs: 58 percent in Chicago, 53 percent in Detroit, 74 percent in Los Angeles and 62 percent in D.C. In Dallas, small businesses provide slightly less than half of all jobs. Although "micro" businesses (those with one to five employees) make up the largest share of businesses in the cities ICIC studied, medium-sized businesses (those with five to 249 employees) are driving job creation.
• The importance of small business jobs is greater in the inner city. In four of the five cities, small businesses create a greater share of jobs in distressed inner-city neighborhoods than in the city overall: 70 percent in Chicago, 64 percent in Detroit, 77 percent in Los Angeles and 74 percent in D.C. Dallas is distinct in that large businesses employ more inner-city residents than small businesses, which only account for 38 percent of jobs.
• Inner-city unemployment is not insurmountable, and small businesses can play a key role in creating opportunities. In these five cities, a modest increase in small-business jobs could create enough employment opportunities for all unemployed inner-city residents. In four of the five cities, this growth translates to only about one additional employee per small business. Of course, this is not to suggest this growth will come easily for these small businesses, many of which have fewer than five employees. With relatively higher unemployment, Detroit would also require more aggressive small-business growth, just over three jobs per small business.
City job-creation chart
Despite the big impact small businesses can have on job creation, small-business support in most cities is an uncoordinated set of programs that focus only on the business owner's education rather than on the larger business environment. City leaders will need to leverage new tools to maximize small-business job creation in their cities. ICIC offers five critical strategies:
• Create a comprehensive small business plan connected to regional and city economic assets.
• Expand contracting opportunities for small businesses so that they can compete on procurement contracts with government and anchor institutions.
• Design workforce programs for small businesses, since many do not have the resources or capacity to recruit and train new employees (especially those with barriers to employment).
• Coordinate resources and ease burdensome regulations by mapping and making more accessible the resources that already exist.
• Upgrade the inner-city business environment by improving infrastructure and neighborhood amenities to support small-business growth.
Big tax-revenue gains and economy of scale continue to shape how many economic-development professionals think about job creation. Yet ICIC's report makes a strong case for city leaders to support the growth of small businesses with the same resources and intentionality as they do with their efforts to attract and retain large businesses.
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