Industry Game-Changers

Typically, disruption in the workplace is counterintuitive to productivity. But in terms of creating innovative ways to manage people, processes and technology, the concept of “disruption” isn’t such a bad thing for the construction industry. Change is stirring whether contractors are ready for it or not, and firms that have adopted new ways of managing scheduling and workflows are seeing stellar results—earning the accolades of repeat projects for key clients, as well as happy project partners.

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AccountingMore Like This

The Internal Revenue Service (IRS) has issued new, comprehensive guidance on a fundamental tax issue: Is an expenditure a current repair or supply deduction, or must it be capitalized and depreciated over many years? For the most part, the regulations—under discussion since 2004—are nearly complete, with only minor changes anticipated before they become final in 2013. They apply to virtually every business that incurs repair and maintenance costs and owns tangible property. Continue »

EthicsMore Like This

This is the first of a three-part series of articles that will address bribery schemes in the construction industry. Each article will discuss the different types of transactions involving bribery and methods of prevention and detection.

Wendell Walters, a former assistant commissioner at the New York City Department of Housing Preservation and Development, pleaded guilty in March 2012 to accepting $2.5 million in bribes. He was arrested in October 2011 on racketeering charges and accused of taking kickbacks from real estate developers in exchange for directing contracts exceeding $22 million to them. In his statement, Walters admitted to helping developers and contractors “get on the approval list” for city contracts in exchange for “cash payments and other benefits.” The Brooklyn U.S. attorney in this case also charged six developers with bribing Walters and demanding kickbacks from contractors. In addition, they have been accused of increasing invoice amounts to absorb the costs of the bribes.

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Best PracticesMore Like This

Thorough planning is the most effective way to save time, trouble and money on a construction project. It establishes a baseline for the direction of the project and helps it continue on a straightforward path. Poor planning can negatively impact the project’s scope, schedule and communication, and ultimately drive up costs.

Once a project plan is established—including schedule, cost, scope, quality, procurement, safety, risk and communication plans—it must be revisited frequently to determine if team members are still aligned with objectives or if the plan needs to be recalibrated. A good communication system among the project team is critical to gathering this information regularly.   Continue »

ContractsMore Like This

A general contractor approached a management consultant with concerns about a two-building apartment project the firm was pursuing. The pre-construction services contract had dragged on for six months and the architect was pushing for final budget figures even though it had not submitted plans for the second building. The contractor wanted to know if the company should sign a $14 million contract for the project. Continue »

EthicsMore Like This

On Sept. 21, 2012, New York State Attorney General Eric Schneiderman announced Joseph Sdao, a Long Island resident, had been found guilty and convicted on bribery charges. As a former project manager for the New York City Department of Parks and Recreation, Sdao was accused of accepting bribes in connection with contracts for three playgrounds in the Bronx. In August, he pleaded guilty to the top charge of felony bribe-receiving in the second degree. Sdao had agreed to provide a contractor with copies of the engineer’s project estimates (a document not intended for distribution to bidders before they submitted their bids) in exchange for a kickback of a percentage of the contract price if the vendor was awarded the contract. Additionally, Sdao made a deal with the contractor’s employees to process the contractor’s requests for payments for overruns in exchange for bribes. Continue »

TaxesMore Like This

The Internal Revenue Service (IRS) recently updated the temporary regulations guiding taxpayers on how to treat expenses related to the acquisition, renovation or improvement of tangible property. According to the notice, which was distributed on Nov. 20, 2012,  permanent rules should be expected in 2013, with an effective date of Jan. 1, 2014.

Taxpayers can apply the temporary rules or wait for further clarification for conclusive guidance on whether an expenditure can be classified as a deductible repair or is required to be capitalized as an improvement. Continue »

Best PracticesMore Like This

Encouraging employees to report unsafe practices and conditions is the best way to prevent a serious injury or fatality. Contractors that put the brakes on such reporting may gain a day or two on the schedule in the near term, but operate at a high risk of injury (or worse) in the long term, with potential schedule disruptions and an elevated experience modification rate. Last March, Richard Fairfax, deputy assistant secretary of the Occupational Safety and Health Administration (OSHA), sent a memorandum to regional OSHA administrators and whistleblower program managers on employer safety policies and practices that act as incentives and disincentives. Continue »