GCAP: Governor’s Veto of Legislation that Provided COVID-19 Liability Protection for Employers is Disappointing

November 30, 2020, Harrisburg, PA – The General Contractors Association of Pennsylvania (GCAP) was one of eighty Pennsylvania associations who united, led by the Pennsylvania Chamber of Business & Industry, to support House Bill 1737.  This legislation included comprehensive, temporary, pandemic-related liability protections.  A statewide, collective sigh of rejection from the eighty organizations happened today when Governor Tom Wolf vetoed HB1737.

GCAP executive director Jon O’Brien issued the following statement in response to Governor Tom Wolf’s veto:

“Across Pennsylvania, during the COVID-19 pandemic, construction companies have been focused on keeping the workforce safe while trying to recover economically.  GCAP construction companies have been exemplary in abiding by Pennsylvania’s Construction Guidelines and we continue to share our best practices with Pennsylvania Departments of Community Economic Development and Labor & Industry.  Also, concerning the guidelines, I feel compelled to point that we assisted in creating them (Governor Wolf’s press release announcing the creation of Construction Guidelines).”

“This veto was deflating and comes at perhaps the worst time.  During these unprecedented times, many construction companies are working in good faith when it comes to arming our workers with the PPE to be safe on the jobsites, since these PPE costs were not part of the original estimate and no one foresaw what 2020 would bring.  Many clients are telling contractors that ‘they’ll settle up’ after the project on added PPE costs.  Additionally, backlog of future work is down since some clients are unsure of what the future holds so they are not willing to put work out to bid.  Our industry was hopeful that we could get some good news and some much-needed liability protections, instead construction companies have to keep their guard up against trial lawyers anxious to profit from the pandemic.”

“The construction industry will get through this pandemic stronger and smarter than before.  Our industry always learns from challenges that face us.  While the veto of HB1737 was definitely disappointing, we look forward to working with the General Assembly and groups like the Pennsylvania Chamber to improve our economy while keeping our workforce safe.”

ABOUT GCAP: Established in 1953, GCAP is an organization representing the memberships of General Building Contractors Association, Keystone Contractors Association, and Master Builders’ Association. Collectively, GCAP represents over 700-plus commercial construction companies based throughout the Commonwealth of Pennsylvania. For more information visit https://generalcontractorsofpa.com/.

## end ##

The Pennsylvania Races I’ll Be Tracking Election Day

Like most of the country I’ll be watching the presidential election this year, heck I watch it closely every four years. I hope it’s fair and, most of all, I hope after the winner is announced that the entire country gets behind and supports this individual. However, since my work is at the state level, this article is about races in the Pennsylvania legislature that I’ll be closely watching this year.

Here are the races that I find intriguing:

The Home Game

I’m a believer that citizens need to know who represents them and people should not blindly vote in elections. Get to know your elected officials and see how they vote on issues that affect your life. For the past few years, our family has lived in Dillsburg and here are our races:

Senate District 31 Race: Mike Regan, R (incumbent) v. Shanna Danielson, D

House District 92 Race: Dawn Keefer, R (incumbent) v. Doug Ross, D

As an advocate of businesses, especially small businesses, one factor I consider when gauging the performance of a legislator is how they treat businesses in their district and in turn how local businesses feel about their elected officials. I’ve yet to encounter a single business who is displeased by the two incumbents – Mike Regan and Dawn Keefer. Additionally, for Regan, I really like the effort he puts into helping our veterans – they served our country and he doesn’t forget about them as a Senator. As for Keefer, just ask her a question related to the state budget and tax dollar expenditures and get ready to hear a passionate and intelligent response.

As for their opponents, campaign staff from Danielson contacted me a few times the first week of August about the State Senate race (I think registered Independents get extra unwanted love come election time). The staff asked if I would accept a call from Shanna to hear directly from her about her priorities and I said “sure.” As of the publishing of this article, I never received that call. And for the House race, I have seen three Ross signs in Dillsburg and that is all that I know about this individual.

Will Flippers Get Flopped Out of Office

In September of 2020, a piece of legislation that allowed school districts to be in charge of attendance and safety protocols at sporting events passed in both the House and Senate with veto-proof numbers. Governor Wolf vetoed it. The Pennsylvania House tried to override the veto. 24 Representatives from the House flipped their votes and the House was unable to advance the override to the Senate. Nine of the 24 flippers have opponents in the General Election while the rest run unopposed. Of the nine, I’ll be watching these three:

House District 33 Race: Frank Dermody, D (incumbent) v. Carrie Delrosso, R

House District 143 Race: Wendy Ullman, D (incumbent) v. Wendy Labs, R

House District 163: Race Michael Zabel, D (incumbent) v. Michael McCollum, R

It’s tough to beat an incumbent. More info on these races:

I find the Dermody v. Delrosso race fascinating due to the labor support…for the Republican candidate. For a Democrat Leader in Harrisburg, it’s just kind of assumed that labor unions have your back, but not so much in this race. Delrosso has backing from numerous building trade unions like the Laborers District Council of Western PA, International Union of the Operating Engineers Local 66 and the Cement Masons Local Union 526.

A few weeks ago Wendy Ullman notoriously made national headlines when she jokingly said to Governor Wolf during a press conference that wearing a mask is ‘political theater’ and then laughter followed. It was a bad look for a politician.

For Michael Zabel, I found his comments on the House floor related to this legislation to be inappropriate in my opinion. Yes, COVID is real and yes COVID is scary, but our state has been impacted differently across the state and I don’t think we should have one rule to follow – science and data prove that rural areas have been hit less than Philadelphia yet a place like Elk County follows the same rules. By saying that people at high school sports to watch our kids is a “frivolous use of legislative resources” is a ….well I want to keep this article PG.

NOTE: Days after this article was written, the State House of Representatives attempted another veto override. This time it was in relations to capacity limits and mandates for restaurants and bars. The override of House Bill 2513 fell two votes short in the House because 12 Democrats flipped their vote; Mr. Zabel was once again one of the flippers.

Blue Targeting Some Senate Seats

It’s tough to beat an incumbent. Prior to the 2018 Elections, the Republicans had a healthy 18-seat lead in Pennsylvania’s upper chamber. After the 2018 Election, the Democrats picked up five seats to close the margin. Due to one sitting Senator allegedly questioning the direction of the Democrats in Harrisburg and switching to an Independent, the minority party now needs to flip four seats in 2020 to gain control. Here are four seats that Democrat politicos are talking about:

Senate District 15 Race: John DiSanto, R (incumbent) v. George Scott, D

Senate District 9 Race: Thomas Killion, R (incumbent) v. John Kane, D

Senate District 49 Race: Daniel Laughlin, R (incumbent) v. Julie Slomski, D

Senate District 13 Race: Scott Martin, R (incumbent) v. Janet Diaz, D 

I don’t think any of the incumbents have done anything to warrant a change and businesses in their district speak positively about each. But hey, it is 2020 and anything can happen, so I’ll be tracking the races.    

Other Important Senate Races

It’s tough to beat an incumbent. I keep hearing about the four seats listed directly above when it comes to flipping the Senate; however, this sentiment assumes all other incumbents win their race in the Senate. I don’t think Senate Districts 37 and 45 are slam dunks for the incumbents. While Pam Iovino has the upper hand and will be difficult to beat, this should be a competitive race. Not only do we have two veterans vying for this Senate seat, which I love to see, but since 1981 Republicans have held this seat for 35 of the past 39 years. As for District 45, with incumbent Brewster, a casual viewer might see it as an easy win for the Democrat, but in 2016 Trump performed way better than expected in this district and since Brewster has been running unopposed in the past, it’s unsure how things will play out in this race.

Senate District 37 Race: Pam Iovino, D (incumbent) v. Devlin Robinson, R

Senate District 45 Race: James Brewster, D (incumbent) v. Nicole Ziccarelli, R

The Metcalfe Watch

In 2002, as I was in the process of getting married and graduating from University of Pittsburgh,  I moved to Cranberry Township, PA (an area north of Pittsburgh). Shortly after moving there I called the offices of both the State Senator and Representative – I did this to get to know the people who represent me and it was not job related (I wasn’t hired in a government affairs position until a few years later). I never heard from the office of the Senator. As for the office of the Representative, they called to ask if I’d like to meet for a morning coffee and I said yes. I showed up not knowing what to expect and thinking maybe a staffer might show up to hand me a Metcalfe pen or sticker. I end up meeting with Daryl Metcalfe and it was an enjoyable conversation. I was impressed how he insisted on getting to know his constituents. A few years down the road, I started working in the union construction sector and every two years I hear this from Democrat supporters in Harrisburg: “this is the election that we finally get to take down Metcalfe.” But here we are, and Daryl is going for his 10th re-election term.

House District 12 Race: Race Daryl Metcalfe, R (incumbent) v. Daniel Smith, D

Tuesday, November 3 should be a fun night as results come in. I can’t wait. What races are you watching? I’d love to hear from you. To get in touch with me, email me at Jon@KeystoneContractors.com.

Building PA Podcast: Season 1 – Episode 6: CASPA Law Discussion

Back in 2016, when I moved back to central PA, I was welcomed with open arms by the KCA Board – awesome people, so thankful these amazing and friendly people are in my life and my family’s life. Outside of the KCA Board, I was fortunate to meet such great industry people like Michael Metz-Topodas. Michael’s an awesome dude and I’m glad to call him my friend. It’s crazy to think us two PA people could have met in 1990s when I was living in Norfolk, Va and he was living across the Bay-Bridge tunnel in Hampton Roads, VA. Regardless of when we met, I’m glad it happened.

Michael is a wealth of construction contract knowledge. Give this podcast a read below with this transcript or click to hear him educate Chris Martin and me:https://www.iheart.com/podcast/269-building-pa-podcast-61501833/episode/business-of-construction-caspa-law-61532373/

Chris Martin (00:00):

Hello and welcome to the latest edition of Building Pennsylvania Podcast. I’m Chris Martin with Atlas Marketing

Jon O’Brien:

And I’m Jon O’Brien from the Keystone Contractors Association.

Chris Martin:

And today we are going to be talking with Michael Metz-Topodas of Cohen Seglias, and we are going to be talking primarily and asking Michael’s input on CASPA law and how that affects contractors throughout the Commonwealth. Michael, thanks for being here. Yeah. Welcome Michael.

Michael Metz-Topodas (00:40):

Yeah, it was great to be here. Appreciate it guys.

Chris Martin (00:43):

Thank you. I know we have a lot of questions, so let’s dive in here. And Jon, I know you wanted to lead with the first one, so let’s go from there.

Jon O’Brien:

Yeah. Michael, how about we start real basic. And how about just kind of explaining what is CASPA? The Construction & Subcontractor Payment Act.

Michael Metz-Topodas (01:05):

Exactly. Jon said it best the Contractor & Subcontractor Payment Act. Generally speaking is a statute in Pennsylvania. It applies to private projects and it outlines a certain requirements regarding payment to both contractors and subcontractors. In particular, it allows for either contractors or subcontractors to obtain additional relief beyond what they might be able to get in the contract or under Pennsylvania contract law, additional relief where those contractors or subcontractors have not been paid under the terms and conditions of their contracts in particular. It allows for an additional 1% interest penalty per month or sorry, 1% yearly interest that’s calculated per month on any unpaid balance and as well, one of the most aggressive features of it is it allows for a contractor or subcontractor who has not been paid to recover its legal fees for any litigation or other legal action that needs to take to get itself paid. That’s generally what the statute does. There are a lot of details that it provides for us to how you go about that. But in essence, it was created to protect contractors and subcontractors to give a little extra ammunition for them to make sure that they’re paid for work performed on a project. And that should be work that is undisputed with respect to the amount of what is paid.

Jon O’Brien (02:40):

You lead us off here. We’re setting a nice foundation there, cause we’re talking a little CASPA today. Michael, did an awesome job there. And as both, you know, Chris and Michael, as you both know, KCA does a lot with politics in the Harrisburg state Capitol. And it seems as though with CASPA every few years, this issue pops up and there’s a movement of foot amongst the construction industry to kind of tweak CASPA a little bit and improve it. And one of those tweakings came along last session and House Bill 566 came, which passed through the legislature and Governor Wolf signed as Act 27. And are you you’re pretty well versed on that, on that piece of legislation. Aren’t you Michael, you want to touch on that for a little bit.

Michael Metz-Topodas (03:35):

Yeah, no doubt. As, as most of the construction bar was certainly well attuned to what was going on with the changes to CASPA we saw it coming and we all eagerly awaited back in October of 2018 when that bill became law after it was signed a few months earlier it was certainly an interesting and compelling change to how CASPA was structured. I believe it came out of you know, a push from some of the subcontractors to afford them the opportunity to recover and still enjoy the benefits of CASPA because there they were being pushed in certain instances to forego some of the rights that they may have otherwise had. There are several changes that the law created for CASPA, but I really will only focus on the three major ones that became the focus of a lot of the literature and a lot of the discussions that the bar had regarding the changes. The first one involved waiver essentially the statute provided that any contract that asks or purports to have an agreement by a contractor or a subcontractor to waive that entities rights under CASPA, that provision, no matter how many times people agreed to it, signed it initially at whatever is null and void and unenforceable under Pennsylvania law.

Michael Metz-Topodas (05:06):

So that was the first revision there and made it easy for contractors and subcontractors with regarding those provisions, because they could sign the contract and not have to worry about waiving their CASPA rights cause it’s unenforceable. And it’s one less thing to negotiate. You know, during the course of ramping up to getting started on a job the second provision, the second change that the Act amended CASPA render concerned on concern suspension of work for either contractors or subcontractors. And it outlined a schedule that was sort of the floor by which a contractor or subcontractor could effectively suspend work. Oftentimes construction contracts will have provisions that require a subcontractor or a contractor to keep on working despite disputes about payment. This change though, is to make sure that if it’s an undisputed amount then a subcontractor would not have to keep, you know, essentially working for free or, or financing a job.

Michael Metz-Topodas (06:10):

That’s sort of the complaint you hear often from those in the industry, you know, I keep working on financing the job. And so these provisions now allow for a contractor or subcontractor to walk away only a certain procedures are followed. So first you have to wait for the billing period and the payment due date to expire. So at 30 days past the payment due date, a contractor or subcontractor can send written notice to the owner or to the general contractor form it as an agreement notifying that entity that payment has not been received at that point. However, the contractor or subcontractor still has to keep on working and another 30 days needs to go by at which point a second notice would be sent. Now, I certainly recommend that those notices identify the amount owed and identify all the 30 days has passed, identify the statutory provisions.

Michael Metz-Topodas (07:08):

And then also remind you the contractor or the owner that if payment is not received that in accordance with CASPA, work would be suspended. So after the second 30 days, you send a second notice providing all of the information I talked about earlier, as well as notifying the recipient that after another 10 days of nonpayment the contract or subcontract will have a right to suspend work and we’ll exercise that route. Right. and importantly to that second notice must also go to the owner. That’s in particular for subcontractors, obviously the general contractor is already going to be notifying the owner, but for subcontractors, they make sure the owner gets a copy of that second notice for obvious reasons an owner doesn’t want to see its project appended or, or paused for any reason, especially if it can make sure that just by putting a little pressure on the general contractor can keep the project moving along.

Michael Metz-Topodas (08:05):

And then as well as you can see, there’s an obvious benefit to the subcontractors too. So these are the procedures that somebody out in the field needs to follow in order to make sure that they can properly suspend work on a project for nonpayment of again, undisputed amounts. You can have this schedule short and I called it a floor earlier. You can have it shortened by way of contractual agreement, but you can not have it lengthened. So any contract that has terms and conditions that lengthen any of these periods for notice and suspension, they too would be null and void under CASPA. And therefore it would default to what is provided for the statute, the final major change that the admitted CASPA concerned with holding of amounts out an owner or a contractor can withhold amounts from the general contractor or a subcontractor for deficient work.

Michael Metz-Topodas (09:10):

However now under the new CASPA that owner or general contractor must provide a notice of the withholding and an explanation for the reason for the withholding and must do so from within 14 days of the decision to withhold, that applies irrespective of what other contracts or requirements might be. And also in terms of whatever payment schedule might be there. So once the decisions made about withholding there needs to be a notice provided if however, the owner or the general contractor fails to provide this notice then the right to withhold is waived and the payment must be made. So that’s a very important provision. It serves two functions, one, it allows the subcontractor or the general contractor, whomever it may apply whatever the case may be. It allows that entity to correct any work that might be deficient or address the reason for the withholding and as well it ensures that if an owner isn’t conscientious and just withholds the money, but it doesn’t have a good reason or cannot provide one.

Michael Metz-Topodas (10:23):

Then there, isn’t an unnecessary dispute over arbitrary withholdings and that the parties get a, that this isn’t used as leverage over a contractor or subcontractor for their work on the project. I know a lot of that gets, you know, down into the weeds as to how all of these things operate. And it’s really, we’ve given even a very you know precise recitation as to how these provisions operate. I think though that anybody out in the field can see that with all of these measures in place it changes the dynamic as to how a project would proceed. And it gives a great deal of advantage to contractors and subcontractors in the event that they are denied payment, that they are otherwise entitled to. And so it affords that, you know, money is flowing properly that there aren’t suspensions of payments you know, for reasons that aren’t justified and ensures that a project moves efficiently in a manner that’s beneficial to everyone.

Chris Martin (11:26):

Very, very thoroughly explained there. Thank you, Michael, for that, for the third item, though, the withholding that does that notice have to be written, or can that be an oral statement from the owner and or GC? I know that’s written notice written. Okay. Yeah. Just thoughts. I just wanted to make sure about that. And then as far as the suspension of work, there’s quite a few notices that you mentioned. So if you max out on all of those notices, you’re getting close to a hundred days, I believe, right.

Michael Metz-Topodas (12:02):

It could be that long, depending upon, you know, how the payment schedules are set up in the original agreement. Yes. And that was one of the critiques that was brought out. And some people said, well, wait a second. Yeah, that’s terrific. I can suspend work, but my goodness, you know, it’d be so long. I might already be done with my work. If you’re an excavator on a small project, you might be done by the time it comes time to suspend. So yeah, so the one hand there’s a certain benefit, but that practical consideration was noted that that said, Jon, there is a possibility that those who do have a shorter timeframe for work on a project could negotiate perhaps a more favorable schedule. It just depends upon whether it’s worth it to the subcontractor. And that really comes down to a business decision, but I’m glad you asked that question because it really gets down into the intersection as to what the law provides and then how it really operates for guys out in the field. Those sometimes can be two different things.

Jon O’Brien (12:57):

Yeah. You mentioned the site work. I was thinking that as well for the site work, but then also as far as the small, you know, mom and pop shops that get in there might do a little interior work and they’re done in a week or so, you know, their works long gone. And they’re the people that probably need this law the most. And they have to wait for a long amount of time like that. So I’m just thinking out loud here.

Michael Metz-Topodas (13:20):

Well, they might have to wait, but I think the other point is it just might not apply to them. And I think that’s what you’re getting at as well. And it’s a good point is okay, fine. Then they can suspend their work. They finish it and they move on all the other protections that cast before it’s remain. And so if there’s no dispute from the owner about that, the workers performing the money is owed, and for whatever reason that owner or general contractor doesn’t want to pay, they’re going to be subject to that 1% penalty among others. And as well, subject to attorney’s fees for the collection, if it’s a small enough amount, those attorney’s fees could be a substantial portion of the amount. You know, that entity is that business is seeking to get paid. And, that’s a great advantage to allow those small mom and pop shops, Jon, because you know, oftentimes those entities would forgo their rights and just say, well, I can’t go, I agree. You go for that money. It’ll cost me too much money to get what I’m seeking. Well, now, if you know that you’re protected by, but then you can go after the money you’re entitled to. So in that respect you know, cast was original provisions are the ones that are for some of the best protection.

Jon O’Brien (14:26):

Yeah. Good point. Good point there, Michael. Yeah. Also, I mean the law just recently went into effect this year. I believe. I don’t have the exact date, but it’s probably too early to tell any sort of actual feedback, you know, in the field feedback, have you heard anything at all?

Michael Metz-Topodas (14:43):

You know, we really haven’t, I’m kind of surprised by that. The issue of the suspension just hasn’t come up typically. We often advise our clients to continue to keep working on a project only because suspension and again, I mean, look, Jon, you got us right back to the, I think that the key point, which is the law can have its provisions, but what really happens in the field could be different. And that is that if a subcontractor or a contractor decides to suspend for nonpayment, if for whatever reason that entity, that business guesses wrong. And they did not have justification for suspending work, let’s say they were not entitled to the payment that that business was seeking. Then that entity would be liable for all the delay damages, the damages that flow from that suspension. So you gotta be careful now, granted, if it’s, you know, if it’s clear on the project that looked the work was done, there were no objections and then people moved on and, and accepted it then.

Michael Metz-Topodas (15:46):

Yes. I think go ahead and suspend it and not worry about any of the delays. But if there’s any dispute about that or any uncertainty, then you just need to calculate that risk. And the liability that could flow from that even so, you know a measured and calculated suspension you know, could be another way to make sure that payment properly flows. But again, as you point out with that kind of long period there, sometimes the work required it might be long gone long done and completed before that suspension period ever arises.

Jon O’Brien (16:19):

Yeah, that’s true. My favorite is whenever I find myself in the halls lobbying for bills like this and the various subgroups come up to me and they say, you know, if we could only work for your GCs all the time, we wouldn’t have to do measures like this, you know? And I’m like, yeah, but when we do measures like this, you know, we have to change the way we operate just to make sure we’re abiding by the new law and the new contract.

Michael Metz-Topodas (16:48):

Oh, that’s such a great point only because I don’t know, I know we, you and I have talked about this. Others may not know, but before becoming a lawyer, I was a teacher. And one of the things I learned as a teacher in terms of making rules or policy for people is you gotta make your rules for the worst kid in class, not the best kid in class, unfortunately. So good to see the same rule applies in legislation, right? Absolutely.

Chris Martin:

And that’s a good point, Michael. Michael, I have a question for you. So clearly you have a solid understanding of this law and really know how it, how it works, but if I’m a contractor or a subcontractor, what’s the process that I have to go through to actually make a claim or file under the, under the legislation. If I feel like I’m not being paid accordingly.

Michael Metz-Topodas (17:43):

That’s a great question Chris. And it’s actually a very pointed and almost obscure legal question. We have this debate in the hallways of our firm all the time. I’ll give you the short layman’s answer first, and then maybe we can get to some of the technicalities legally call your lawyer. And that started there. Quite honestly thankfully there, unlike the mechanics lien law, CASPA was a little more forgiving and doesn’t have quite the stringent requirements as to what you need to do to operate under it, separate apart from some of the withholding and suspension provisions. We already talked about any time we file, for example, our firm, we filed complaints against either general contractors or not paying our owners who are not paying we’ll include a breach of contract claim. We’ll include a casebook claim. And we’ll just do it as a matter of course assuming that there’s an undisputed amount for which payment is owed and I can get into later if you guys are curious to why I keep saying undisputed amount, but that’s, that’s a separate issue.

Michael Metz-Topodas (18:43):

But there is this sort of a stylistic debate as to whether you even need to have a separate CASPA account, and you can just put the CASPA damages as part of the breach of contract either way. The way to bring in the way they get recovery under CASPA is to, by bringing legal action. You could arguably, if you have an owner or a general contractor who is not paying, you could just make a request or a demand letter, a demand for that payment and ask for the CASPA damages. But I can’t see to any owner to GCs, we’re going to cough up the interest in attorney’s fees, unless there’s a court order, making them do it. So going to courts the only way and very often to you know, you’ll follow that legal action and then find some sort of settlement you know, that will account for some of those costs, but damages, if you can, otherwise just their mere existence are enough to drive people, to finding a way of resolving a dispute.

Chris Martin (19:37):

Perfect. Thanks, Michael. Yep. No problem. And that’s good for, for our listeners so that they understand, and I kind of figured the first response was going to be call your lawyer cause that’s what I would be doing too. So another question for you in your experience, is there a typical contracting category for that that typically has to fight for this, this form of payment? You know, you mentioned an excavator earlier, you know, like maybe there’s a, is it, do you typically see this in like tile contractors or, you know, residential versus commercial, like help us understand where the, that typically happens.

Michael Metz-Topodas (20:24):

I haven’t made any formal study as to any sort of percentages of that would be a fascinating question to see you know, it’d be a twofold analysis. Who’s not getting paid and then who’s bringing CASPA claims and they’re not always coextensive with each other. That’s not always the same group of people. But certainly I think as we all know, they’re the pressure flows downhill, if you will. And so very often we see a lot of subcontractors, you know, guys who are sort of towards the bottom of the food chain, if you will. Well, I should say the contractual chain only by way of just their positioning on a project. They sometimes fail

Michael Metz-Topodas (21:03):

Certain amount of pressure in terms of, you know, not being able, not receiving the payments promptly or, or payments that are owed or an attempt to try to leverage negotiation from the original amount agreed upon for work perform. And so that, that tends to be yeah. How it will play out. I think really to give a full answer to that Chris would be the subject of a whole another podcast. We actually, as a firm, do a whole presentation on all the things that occur on a project where there are pressure points applied to subcontractors to trim if you will, the amount they otherwise expected to collect for the work performed based on the agreement they have. So it’s a really complicated dance that occurs throughout the life of project. I have also seen instances where owners sometimes just are paying or a dispute them an amount of work. I think also to CASPA tends to come into play on some of the smaller projects only because it’s such a great mechanism to help obtaining payment obtaining payment where there’s, you know, you otherwise might think twice about going down a legal Avenue to obtain recovery.

Michael Metz-Topodas (22:17):

I think the other thing to your point in all of this, I know we’re going a little bit of a tangent here, but because a lot of these issues arise throughout the life of a project. I do have to repeat my warning earlier as to calling your attorney early and often only because this case was definitely a situation or any kind of payment issue on a project where I announced that prevention is worth a pound of cure and early intervention can sometimes be very effective, even if your lawyer’s in the shadows and unknown to the other parties of the involvement. I can provide some effective advice on how to proceed, you know, through the course of a project little field from what you originally asked. But I think it was such a good question that it inspired a lot of that additional information. So thank you, Chris. I appreciate that. That’s good. That’ll help your listeners here in the Building Pennsylvania podcast. So that’s great.

Chris Martin (23:06):

There we go. Yeah. Yeah.

Michael Metz-Topodas (23:08):

I would I know we’ve had a rather technical and detailed discussion here about CASPA and some people might find it overwhelming. And maybe just a lot of detail. And I know certainly there’s a culture and an ethic of look, let’s just get the job done. And I don’t disagree with that. I think at the end of the day that’s what makes our industry great is that there’s that focus on you know rolling up our sleeves if you’ll permit the cliche and putting up buildings and structures that people can use and, things that workers take pride in. But that said it’s always a shame to me when I see people, businesses sometimes, you know, businesses that have been within families for years, generations, et cetera, being shortchanged, any amount of money. And so there are ways of doing both of our roll up our sleeves and getting the job done, but also making sure that you don’t get short changed.

Michael Metz-Topodas (24:06):

And that’s what I mean again, earlier about early intervention with your council. We take calls all the time at our firm from people who are, you know, midway through a project, Hey, what do I do? And we offer the guidance to say, okay, here’s the end game. Let’s see what we can do about today. So we can safeguard your rights for later on tomorrow. And you can go back to doing what you do best. And that is like I said getting the job done. So that’s our role and that’s our philosophy. And we’ve been doing it coincidentally us for, for 30 years. I’ve been honored to be a part of this firm for now since 2014. And I love every minute of it. For a lot of those reasons you guys know as well as I do, we have a great industry full of great people. It couldn’t be more fun.

Jon O’Brien (24:52):

Absolutely well said.

Chris Martin (24:54):

Well, well said, I agree with you. That’s a great way to end it. And thank you for your time and definitely the technical information. Very good information.

Jon O’Brien (25:07):

I just want to remind everyone out there. This is a new law. There’s going to be a lot more questions. This is just the tip of the iceberg. Michael is a resource. But Michael, you want to toss your, your contact info out real quick.

Michael Metz-Topodas (25:19):

Oh, Jon, thank you so much. As you can tell, I kind of like talking about this stuff and I see each other at a lot of KCA events and he probably has always seen me quartering poor guys, lecturing them about everything. So it’s all good. It’s all good. It’s over a cold beer. So it makes it even better, but no, in all seriousness my contact information is on the web at our website. www.cohenseglias.com. I invite anyone and everyone to reach out at any time with any questions, always happy to talk shop about this. I’m always happy to help people out in the industry. As you can probably tell I love our industry. I love being a lawyer and I love helping people.

Jon O’Brien (26:04):

Well, thanks for the education. And I look forward to seeing you at the next KCA event,

Michael Metz-Topodas (26:08):

Jon, thank you for the opportunity to speak to the industry.

Chris Martin (26:10):

Thanks, Mike. And thank you for listening to the Building Pennsylvania podcast more episodes to come and we will talk to you next time. Thank you very much.

Building PA Podcast: Season 1 – Episode 2: COVID-19 Impact on PA’s Construction Industry

NOTE: This COVID-19 conversation was recorded on April 1, 2020; a lot has changed since then. For more information visit Building PA Podcast.

Chris Martin (00:01):

Welcome to the Building PA Podcast, a podcast specifically for the construction industry and the Commonwealth of Pennsylvania. I am Co-Host Chris Martin with Atlas Marketing, where we tell stories for people who build things. And I’m with my partner, Jon O’Brien.

Jon O’Brien:

Hey everyone. How’s it going, Jon O’Brien from the Keystone Contractors Association based right here in good old central Pennsylvania. Hello, Chris.

Chris Martin:

Hello, Jon. Hey, I know that you have been a busy these days, and I know that, you know, our topic today is a very timely, special topic. We are going to be talking about, and Jon has been instrumental in this. So I get the tables are turned a little bit here. This isn’t our normal interview process, but today we’re going to talk about the Coronavirus and its impact on the construction industry. And like I said, Jon has been integral and very, very busy to say the least for the last few weeks. And even though this is not a typical Building PA Podcast topic, we want to start with this and share as much information as we can through the podcast platform. So, Jon, I know that the Keystone Contractors Association and GCAP, the General Contractors Association of Pennsylvania have been very, very instrumental in helping get the industry back to work these last few weeks, but can you explain for our listeners the difference between the KCA and the GCAP associations?

Jon O’Brien (01:50):

Yeah, absolutely. Yeah, that’s probably good because there does seem to be a lot of confusion with the two different groups. So yeah, KCA, the Keystone Contractors Association is a full service construction trade association. We offer typical services that contractor associations offer like labor relations, safety services, marketing, community service, you name it, we’re pretty busy, pretty active helping our members. That’s KCA. So, yeah, KCA was founded in 1940.  And as far as GCAP, which is the General Contractor Association of Pennsylvania, GCAP is an association of associations. So KCA is a member of GCAP. And our other level one members include the Master Builders Association in Pittsburgh and in Philadelphia, the General Building Contractors Association and GCAP’s primary and main purpose is to be the advocate for the commercial construction industry. Let me make that clear commercial construction industry, because that adds some confusion as well. When you mix in residential and people think we cover it all, but no, we’re busy enough just in the commercial world. Yeah.

Chris Martin (03:19):

That is more than enough time, effort and energy to be put toward one at one element.

Jon O’Brien (03:24):

Yeah. So, the for the staff, I double as the executive director of both KCA and GCAP, and I’m also the registered lobbyist for GCAP. So don’t hold that lobbyist thing against me, you know,

Chris Martin (03:40):

And, and more importantly you, that lobbyist hat has been in on your head for quite some time now for the last couple of weeks regarding the pandemic that we’re in, but can you give us an update on what GCAP is doing, but maybe some other associations are coming together to really work for the industry. Can you tell us what’s been going on?

Jon O’Brien (04:04):

Absolutely. If you like, why don’t I start with the work shut down. Governor Wolf posted the Executive Order on Thursday, March 19th, leading up to that Thursday afternoon, there was talk, you know, earlier in that week, and even the week before this might be coming, you know, once we heard NHL canceled and they’re not canceled, but postpone season of Major League Baseball, you know, all these big corporate events everything’s shutting down there is rumblings and a lot of rumors that construction might be shutting down as well. And out of the blue, out of nowhere on a Thursday evening governor Wolf just imposed a workstop of all nonessential businesses and per his administration’s classification, construction was listed as a non-essential classification. So being that, you know, I have a hundred members of KCA, and then you factor in GCAP with another 700 construction members….

Jon O’Brien (05:12):

So Thursday night, I think the Executive Order was issued around 4:00 PM or so an hour before the work day shut down. And from four o’clock till, probably two in the morning, I was on the phone all night, receiving text messages, emails. “What’s this mean” “what’s going on?” And there was no heads up that this was going to happen. As you could expect, because this was such a drastic measure, the communication did not stop Friday either. So it’s a Friday, yeah we had tons of questions Friday morning. About 7:00 AM I had a conference call with Labor & Industry. You know the while the Executive Order came in on Thursday, all work was to cease, I think, close the business that Friday, the 20th, and then it was extended to Monday the 23rd. But regardless of that time period, we got most of that and there were some issues with inspections because we already had counties that were getting hit pretty hard by the Coronavirus. So we had some issues and L&I was telling their inspectors, if there is any hesitation at all, and you don’t feel comfortable inspecting a job site, you know, do not go, just use your best judgment. From members they were saying the use of their best judgment meant none of them are showing up.

Jon O’Brien (06:48):

Yeah. So there were some major Philadelphia projects and they wanted to find out what was going on. So we scheduled this call first thing in the morning with Labor & Industry. And we’re, the call was just intent, designed to talk about inspections and how will the inspection process work during this, during this shutdown? And we were wondering, is it possible to do like virtual inspections? Is that even a possibility? And we’re still looking into that. But then at the same time with this shutdown and earlier in the week, other businesses were shuttering down. And this led to a, I think a five thousand unemployed, I got the numbers in my head. They’re all jumbled together, but there was something like 75,000 unemployment cases within the unemployment office in one day.

Jon O’Brien (07:47):

And then that just added up every day that first week. So Monday the 16th, 17th, 18th, I think by the end of the week, they were over 500,000. So that call that we just wanted to talk about inspections. We had tons of questions about unemployment compensation and, you know what should we be getting out to our members? What should employers be doing? What should their employees be doing? And, Oh, it was a crazy day that Friday. And then it did not ease up on Saturday, Saturday, the 21st, we had some good email exchanges and some good conference calls with GCAP and other government organizations. And now I was talking to a lot of labor leaders as well, and collectively amongst all of us, you know, labor-management, we decided that a good route to kick off our plan of action would be for GCAP and the Pennsylvania Construction Trades Council should send a joint letter signed by labor and management and send that Governor Wolf.

Jon O’Brien (08:54):

So Sunday the president of the Building Trades, my good buddy, Frank, Frank Sirianni. I hope you’re listening Frank. Frank and I swapped emails and texts and phone calls all day that Sunday, that would be what, I think March 22nd. We wanted to put together a nice communication to the governor and why we felt construction is essential to our economy and to our society and why we thought construction should keep working. So yeah, we finished late night, you know, midnight or so on Sunday, we had a product we were happy with. We sent it to the GCAP Board and were like there’s not a lot of time to review this, but let me know if you’re okay with this. Next thing, you know, Monday morning, March 23rd, some of the leaders on both sides, labor and management, weren’t quite sure if we should be reacting so fast to this shutdown order and, you know, there is talk about, should we let the dust settle a little?

Jon O’Brien (09:59):

I mean, we’re inside learning about this COVID-19 and the whole pandemic. We’re still learning about this. Are we really doing the right thing? You know, pushing the economy to move forward as if this doesn’t exist, you know, we should just ignore it and just keep working, you know, so there was a lot of questions internally, you know, and ultimately we couldn’t come to a decision. So we decided just to, just to sit back a little bit and let the dust settle. And when I say sit back, I mean, sit back on side of the lobbying. So while we were sitting out on the lobbying game, we kind of shifted our attention towards the area of safety and you know, through GCAP we’re rather fortunate to have that partnership with Master Builders and the General Building Contractors in Philadelphia. We’re fortunate to be partners with those two great associations. And we created within probably three, four days, maybe a week, we created the Pennsylvania COVID-19 Response Plan for Construction,

Chris Martin (11:19):

Excuse me, I know it’s good I’ve seen that plan. And not only is it thorough but it, it lays out a solid way for the industry to showcase not only how important this is to our industry, but more importantly, the level of intensity that we’re taking this as it should be.

Jon O’Brien (11:49):

Yeah. I mean, the plan is pretty awesome, you know, I mean, you saw it, but hopefully our audience as too. We’ve posted it online. It’s on our website. It’s kind of all over the place. I believe through the Master Builders and their Director of Safety Bob McCall. And I believe in Bob used a lot of connections and a lot of his relationships through the Associated General Contractors. He used those relationships to kind of form what I was calling the dream team of safety. I mean, they had safety professionals from across the country come together to really create this plan. And it’s awesome from details all the way down to making sure your autos and all sorts of transportation devices are cleaned daily make sure 24 hours a day, they were cleaned. You don’t see too many safety plans that go that into detail.

Chris Martin (12:49):

Yeah. That was one thing that I was shocked when I saw was just the level of detail that cleanliness comes into. And let’s be honest.

Jon O’Brien (12:58):

Yeah.

Chris Martin (12:58):

Our industry is not exactly the cleanest. So, you know well, Jon, let me ask you this, as far as the, you know, that process that you’ve gone through has there been any I mean, obviously there’s been a lot of progress since that initial announcement from Governor Wolf, but on the legislative front, can you explain a little bit about what not only the KCA and the GCAP is doing, but where things could potentially go as it relates to the industry?

Jon O’Brien (13:32):

Yeah, absolutely. Yeah. So early on when the shut down order came, there was a process that the governor allowed to have projects get waived, you know, and they could proceed. Yeah. So there is a lot of confusion with these projects cause you had similar projects submitted by contractors and some were approved, some were denied. You had elected officials, you know, state reps telling contractors if your project gets denied, resubmit it again, because a different set of eyes might see it a different way. And sure enough, you know, projects were getting submitted and approved the second time. So it was, it was crazy.

Jon O’Brien (14:21):

Yeah. And then further confusing the matter was this past Friday. So that would have been what I forget what the, my phone’s a little slow…the 27th. So Friday the 27th in the evening people within the governor’s office were sending emails out to the industry saying that K-12 school construction work is now allowed to proceed assuming they get approval at the local level. So school districts would have to approve this process. And we had that added another layer of confusion because there’s a lot of contractors that submitted waivers for projects

Jon O’Brien (15:12):

You know, they were denied in some cases, in most cases, I think all school was denied up until the 27th. So they were denied and then schools, we had schools out in the Pittsburgh area, tell contractors, just keep working. You don’t have to worry about that waiver process. And we’re like, what? And then you get this one line statement from the governor’s office that Friday night saying, you know you’re allowed to proceed if approved at the local level. And we’re like do we need more proof than just this little email? I don’t know. It’s not even that the top official, you know, it’s like, you know, a couple levels down, they sending this email.

Chris Martin (15:50):

You know you have been working your tail off here along with so many others that are in the industry. And, I want to emphasize how much I appreciate not only what you’re doing, but what everybody is doing to help move this along. But are you, you mentioned earlier there was a, a little bit of a, you know, some contractors say, “hey, wait a second are we doing the right thing here?” Are you seeing that there is a I don’t want to say a separation if you will, between the industry one being, “Hey, let’s get back to work.” The others, “maybe we shouldn’t be doing this.”

Jon O’Brien (16:40):

Yeah, I’m seeing that, but I think a good thing for our cause was creating that safety plan and we had some legislators in both the Senate and the House that want to legislate the industry returning to work, which I personally, I don’t believe that’s the right route to take. I think that would take too long. I think the better approach would be leaders in both chambers and industry leaders sit down with the governor and his staff and, you know, talk their way through. Cause we keep saying, you know, along with a safety plan

Jon O’Brien (17:21):

Much like the schools can work because you know, schools are shut down for who knows how long, at least until the end of April. So those projects can proceed because, you know, there’s a trust that the industry knows how to operate safely and there’s no students and there’s no faculty within those schools. And I think that same logic should be applied to the entire industry. And if projects are currently halted, you know, halfway through the project and the business has shut down, there’s going to be no harm to the community or the occupants, so the industry should be able to get in there assuming they have a good safety plan, which is part of the K through 12, the school districts approach, the plan at the local level was okay, the governor’s office is giving us the authority to proceed. Our only requirement is we want to see your social distancing safety plan and we want to approve it. And I actually heard just yesterday, there was a handful of contractors that submitted our GCAP safety plan as their company safety plan. And it was approved every time. So that was always good to hear when you spend time creating something and knowing it’s getting used within the industry.

Chris Martin (18:39):

Yeah, absolutely. Especially with such a quick turnaround. Well, let’s just get this because this is a thought that’s been kind of percolating in my head, but potentially when we are back to a, some level of normalcy, not only within the industry, but you know in society as a whole, has there been any talk about what are the steps when we get back to that normalcy? In other words you know, Governor Wolf said, okay we’re going to start off with no big groups of 200. Then it went down to a hundred, then it went to 50 then to 10 and then everybody stay at home. Is there a ramping up? Have you heard that there’s a ramping up process or are we still too early in this process to figure out how we’re going to get back to work?

Jon O’Brien (19:35):

Well they are letting some highway projects resume. I thought that was a no brainer because they’re outside. And when you drive by a highway project, I’m not a highway construction expert by any means, but when you drive by, you don’t see people on top of each other, they’re pretty spread out in the field. So there’s the social distance aspect is covered there. So yeah, let’s approve some projects to proceed. I believe they letting 61 this week and I’m hearing there’s going to be more as far as like I said, the school districts, they’re now in the process of approving projects to proceed. We’ve actually approached the administration and leaders in both the House and the Senate and said, projects are, like I said earlier, if a location doesn’t have any occupants in it, the industry should be able to proceed. I heard word from some legislators that we should legislate, you know, only 10 people on a project at one time, and I don’t know how you quite do that. You know, it sounds like, kind of Russia to me, you know, like how many people can go inside a building and I think that decision’s up to the GC and the subcontractors to manage their workforce.

Chris Martin (20:59):

Yeah. And obviously with a safety plan in place, or at least maybe it’s not GCAP plans that people are using, but their own individual plans. Yeah. There is a policy, but has there also been talks with more on the legal side cause this, that was my first concern when we started talking about job sites, getting shut down and those type of things, we have that with our clients too. But has there been any conversation from a standpoint of contracts and, you know, a start date is now let’s, let’s say this, the pandemic goes into May. That’s my stating this for the conversation. I’m not saying that’s what it is. But if it goes into May and there are job sites that were, or jobs that were supposed to be completed in May, what would be the impact to the actual completion of that project?

Jon O’Brien (22:02):

Yeah. I mean those questions are coming in. It’s just going to be a legal nightmare to answer your questions. It’s going to be, you’re listening to our podcasts. I mean, you have worries about the supply chain and, you know, is the material pricing gonna increase, contract and might’ve estimated steel at X. And now with all the, the issues when the industry comes out full tilt, you know, that price might be jacked up a little bit and, how’s that going to be adjusted? And you mentioned the schedules, how are the schedules going to be adjusted? And then, manpower within the unions I’m hearing now that the unions are creating two lists, a list of people that want to work during the pandemic and people that do not want to work.

Jon O’Brien (23:03):

So now as more projects go, there is a contractor able to work, but do they have enough people and as more projects come out, you’re going to need more people. Yeah. And then plus factor in the projects that can proceed now, the healthcare emergency repairs, the waiver approved projects, the PennDOT projects, there’s more and more projects. And I’m getting word this week that some subs’ workers just aren’t showing up. There was a project in a Harrisburg area where the whole subcontractor team didn’t show up. And they said, we feel as if we’re putting our family at risk by working at this time. And so I mean, legally, what do you do there? I mean, yeah, yeah.

Chris Martin (23:54):

It definitely kind of adds a whole different level to contract management and contract administration. Yeah. Cause I know I’ve talked with other business owners who have said, you know we’re leaving it up to our employees and if they feel like they’re putting themselves in danger or harming their family, you know, there’s also that element. And I know we’re not really gonna talk about this now, cause we’re focusing on the industry, but you know, the element of pay over periods of time, I’ve had people ask me about, you know, our business at Atlas Marketing and how is the pandemic impacting our business? And fortunately for us, for me, my response is, well, you know, it’s impacting us, but it’s not impacting us as much as it is the industries that we work in.

Chris Martin (24:50):

And so, you know, but it’s interesting to hear how other business owners are addressing it. And that comes back to the whole contract administration aspect because that’s going to change the way that things are. Jon, let me ask you this, where do you see this going, like from again from your efforts on the working with the administration with Governor Wolf and his team and other association leaders as well as trade and industry leaders, where do you see this going? Like what do you think are the next steps here?

Jon O’Brien (25:26):

So we had a GCAP call, I think that was about a week ago or so. And you know, they asked where do I see it going? And I said, well let me get out my crystal ball here, let’s see what’s going on here. So I’m kinda off a few days: I thought all highway work would start this past Monday, but it started today I guess. Okay. So I was off a day or two. And then I thought the sixth, this upcoming Monday, I thought that would be a full two week for the shutdown and all projects construction would resume. And then I that all construction would resume Monday the sixth. So I thought it would be highway the first week and then commercial building the next week. But now that these numbers are coming in and Governor Wolf does seem pretty firm in his stance, which is good. You know, he’s trying to do what he thinks his best for the health of Pennsylvania. Sure. It might’ve been a knee jerk reaction at first. Maybe we could have eased into it a little bit more, but, but still, I mean, he has the right intentions.

Jon O’Brien (26:44):

I’m thinking now maybe like the 13th, I think we might need another solid week, you know, of all workers coming back. Okay. Just so you know, as you hear every day in the news, as we needed another week to flatten the curve. So we couldn’t have an interview on the coronavirus without talking about the curve.

Chris Martin (27:05):

That is true. I honestly never heard of that phrase until you know, March of 2020, so

Jon O’Brien (27:12):

Yes, absolutely. Yeah. But still our stance, I mean, that’s me personally, that’s my opinion personally, but within GCAP, you know, the stance is if a project’s unoccupied right now, the industry should be in there finishing the project.

Chris Martin (27:31):

Well on behalf of everyone who works in the construction industry. I thank you for your efforts. I know that you and other association and Building Trades and industry leaders have been working extremely long hours and dedicating yourselves to moving our industry to where it was just a few weeks ago. But thank you. And thank you for sharing this information with us. And as we continue, we’ll provide updates but you know, feel free to download more episodes. We have other episodes of Building PA Podcast available and thank you for listening. And Jon, thank you again for all your efforts.

Jon O’Brien (28:18):

You bet. And if anyone out there has any questions, concerns, comments, and wants to reach me. My email is Jon@keystonecontractors.com or give me a call. Either way, I’m here for you.

Chris Martin (28:33):

Perfect. And then I can attest that he is there. We’ve had so many calls just between he and I just on podcast related information that have been rescheduled or pushed to another day. And I can attest to Jon’s effort for the industry. So again well done and thank you.

Chris Martin (28:54):

Private Sector Can Help Our Government

During the Coronavirus Pandemic, Governor Wolf issued an Executive Order to shutdown all non-life sustaining businesses in Pennsylvania. The General Contractors Association of Pennsylvania (GCAP) was torn internally, with one faction thinking that this shutdown was necessary and another group that thought it was too excessive and businesses should still operate. Despite this conflict among our leadership and members, we had complete consensus that the health and safety of our workforce is our top priority.

Instead of advocating for construction to reopen, GCAP got to work on what we agreed on and in late March we published the Construction Industry’s COVID-19 Response Plan. It was a comprehensive safety plan with proper social distancing, PPE requirements, sanitizing, etc. I believe we were the only construction-related organization in Pennsylvania that did not lobby to reopen.  Because the health and safety of the worker was extremely important to us, I believe we gained the trust of Governor Wolf and that’s why I believe he used our safety plan to create his construction guidelines. (Governor Wolf’s press release.)

Heading into 2020 no one could have foreseen the conditions that we find our Commonwealth in. Unemployment went through the roof. Tax coffers are projecting shortages in the BILLIONS. Yes, it’s true, COVID-19 has steered us into uncharted times.

Citizens in this Commonwealth need public services now more than ever. From the nursing home residents to the young school kids looking for their next meal and to every age in between, Pennsylvanians are hurting. We cannot leave our neighbors stranded and simply chop out needed services in this year’s 2020/2021 budget negotiations when they resume after the short-term budget gets us through the fall elections.

However, what can happen is that a thorough review of all expenditures can make sure tax dollars are efficiently spent. Our Commonwealth is fortunate to have dedicated and intelligent legislators from both sides of the aisle involved in this review process. Additionally, much like Governor Wolf turned to the private sector in creating the Commonwealth’s safety guidelines, the legislature should continue to look to the private sector to incorporate proven best practices to improve the way our government operates. Each industry sector should join the process to help our Commonwealth.

When it comes to construction, Senate Bill 823 is a vehicle that can address construction procurement reform. This legislation, which has a diverse coalition and also has labor support, can save our Commonwealth 10% on public construction. Pennsylvania is the only state in the country that mandates an inefficient process known as the multiple prime delivery method (THE ONLY STATE IN THE COUNTRY – LET THAT SINK IN). Now is the ideal time to address inefficiencies in our procurement process on behalf of taxpayers.

Our Students Deserve Better – Support House Bill 163 & Senate Bill 823

Bravo to Governor Tom Wolf and to Sen. Vincent Hughes for raising awareness and wanting to address the dangerous lead and asbestos contamination in structures and water systems across Pennsylvania. Concerning the school buildings, our students deserve better than current conditions (if you have not seen the videos on Sen. Hughes’ website click here: https://www.senatorhughes.com/toxicschools/).

Wanting our children to be educated in 21st century schools is commendable; however, constructing and renovating the schools with a procurement law enacted in 1913 is foolish and wasteful. Over a hundred years ago, Pennsylvania legislature enacted the Separations Act. This Act mandates that public construction projects be delivered by multiple prime contractors. Every time you drive by a public construction project just think to yourself: this project has (at least) four companies in charge. This process often leads to delays, lawsuits, conflicts, etc., and it averages about 10% more than contracting methods that the rest of the country utilizes. Because of the inefficiencies of the multiple prime contracting method, Pennsylvania is the only state left to require such a cumbersome construction delivery process. 49 states join the federal government and the private sector in allowing choice in project delivery. It’s time for Pennsylvania to do so as well.

There are two pieces of legislation that can modernize the Separations Act: House Bill 163 and Senate Bill 823. These bills can allow for savings in public construction. Tax dollars do not grow on trees and with that in mind we should be stewards of tax dollars to assure construction projects are built efficiently. Additionally, it’s a big election year so we’ll likely hear a lot about education and jobs. Just think if the $1 billion that Governor Wolf is suggesting for public infrastructure comes to fruition and the Separations Act is modernized, we can spend it wisely resulting in more school projects, which results in more construction jobs.

Separations Act Legislation Advances in the PA House: Does Dan Jalboot know about this?

Pennsylvania is one step closer to making it easier to construct high-performance public buildings with the passage of House Bill 163 in the House State Government Committee.

With a passage vote of 15-10, this Separations Act legislation will now move to the Pennsylvania House Floor. Enacted in 1913 the Separations Act is a requirement that mandates the public sector must bid and award to at least four prime contractors for one project. The named primes in the Act are: General Trades, Plumbing, HVAC, and Electrical. When enacted over a century ago, there were payment concerns from Contractors to their Subcontractors, so the major Subcontractors were made Primes. Over the years the General Assembly has enacted many important pieces of legislation to ensure payment is made to all firms that provide construction services, rending the Separations Act needless.

Pennsylvania is the only state left in the country that abides by a multiple prime delivery system and after the recent HB163 vote we’re one step closer to ending that unwanted title. It’s exciting news for Pennsylvania’s construction industry as we can now work towards educating the public sector on all the many great advancements of the industry on topics like: Construction Management At Risk, Design Build, Design Assist, Lean Construction, to name a few. Through legislation enactment, different delivery options can be considered by the public that offer different entry points for the construction team which allows for collaboration to commence at various phases of the construction project.

When it comes to the Separations Act, my journey began in 2005. I was hired by a construction trade association and my boss at the time asked me if I had any government affairs experience. I said: “No but I’m willing to learn and work on whatever.” He returned with a stack of file folders that was around eight inches thick, dropped them on my desk, and said: “here’s some info on our top issue, the Separations Act. Study this stuff and keep in mind there’s a lot more info in our file cabinets: letters, studies, articles, you name it so read up on this stuff I’m giving you and grab more when you’re ready.”

I remember studying this information and thinking to myself: no one in the world builds multiple prime and I highly doubt an entire private sector would use a method that costs more so why does our state keep a law on the books that results in taxpayers overpaying for public construction due to an archaic law? This should be easy to repeal – I think people want government to spend less which means potentially we all could pay less in taxes. People want to pay less taxes, right? This was my ‘welcome to politics’ moment. Just because an issue may appear obvious, don’t fool yourself into thinking it can easily be changed. That thought was in 2005 and today, fourteen years later, a vote finally happened on the Separations Act.

Over the past years working on this issue, I’ve been fortunate to meet so many great construction professionals – both for and against a modernization of the Act. I could probably make this a series and discuss so many people that care about their construction industry, and who knows maybe I will revisit this topic and focus on a different person as this issue moves through the legislature. But today I’d like to focus on an architect who addressed this issue like no one else back in my early days of learning about the Separations Act. And honestly no one since has addressed the issue quite like him.

While I was learning about the Separations Act, my old work first suggested we form a coalition. We had so many public owner organizations that wanted this law changed as well as other contractor, engineer and architect organizations. I remember that AIA Pennsylvania was interested in joining the coalition, but first its executive director Caroline Boyce wanted to talk. We spoke, great conversation, super person, and she suggested I reach out to a Philadelphia architect named Dan Jalboot.

Up until I spoke with Dan, all of the feedback from everyone was something along the lines of Pennsylvania can save money if we repeal this Act. I called Dan and he told me that the Separations Act impedes green construction in our state – THIS WAS IN 2005, BEFORE IT WAS HIP TO BE ON THE GREEN BANDWAGON. Dan would say that yes, our state can save money by repealing the Act, but more importantly we can improve the chances of constructing environmentally-friendly buildings if we did not have to abide by a multiple prime delivery system. We should want our children to receive education in green buildings – it will bring out the best in them.

Dan sent me a few articles, stuff that was over my head back then. This helped to educate me. We had a few public hearings in those days and there were a lot of blank stares from legislators when he spoke, since green construction was not the norm back in mid 2000s like it is today. He would say stuff like: we need to look at the lifecycle of a building and stop looking only at construction costs; a building should be thought of as a single being with all systems working together and we can’t do that when an architect has to break a project into four pieces that must be meshed back together by strangers; construction needs collaboration from pre-construction through project closeout to truly benefit the environment, end users, and occupants. He would say how it’s very difficult to achieve collaboration in the multiple prime world since the architect is getting zero input from the builders when the design is being finalized and the public sector could benefit so much more if constructors could add their expertise during the design phase. (I just wish I would have hung on to his written testimonies that accompanied the hearings when he spoke. I’m just going off of memory and I’m sure he would sound so much better if I wrote it in his own exact words.)

A few years ago the U.S. Green Building Council rolled out its updated certification – LEEDv4. I saw that pre-construction meetings from the design and construction teams is now encouraged and points are achieved when it happens. This is what Dan was preaching about a decade earlier and a decade later it is still difficult to achieve in the Pennsylvania public construction market due to the Separations Act. Now that the Separations Act issue is moving in the General Assembly, and a vote on this issue was actually held for the first time in decades, I thought I’d jot down my thoughts and let Dan Jalboot know I thought about him today. Not sure if he’ll see this article, but with today’s vote I think our state is moving in the right direction to improve the quality of public buildings that are constructed.

 

NOTE: If you’d like to stay informed about the modernization effects of the Separations Act, please let me know. Jon@KeystoneContractors.com.

2018 PA Budget Hearings with DGS

As was the case the last year, the Separations Act was a discussed topic during the Budget Appropriation Hearings with the Department of General Services.

In the Senate, DGS Secretary Topper was asked questions about the Act by Senator Folmer. The gist of the Secretary’s comments related around DGS experiencing increased administrative costs, but they are unsure if total cost is more. DGS would like to continue to study the issue more.

As for the House, Representative Everett led the way with the questioning. Topper echoed his comments from the Senate – increased administrative overhead in the norm for a Separations Act project, but he felt there was a need for more studying of the issue. Everett countered with hints about a new legislative strategy that allows for the current multiple prime delivery system to be used if that’s what the public owner chooses; however, the public owner can also select from other delivery options too.

Personally, I think if the DGS was serious about wanting to study the issue more they should make three phone calls to Pitt, PSU & Temple. When these schools receive state funds they have to abide by the Separations Act and build as the school’s call it: ‘the DGS way’ but when these schools build with their own money they build using Design-Bid-Build with Single Prime; Design Build; Construction Management At Risk; and PSU is even trying IPD. All DGS would have to do is review projects built on these campuses using multiple prime compared to using a variety of single prime. End of ‘we need data’ story.

Click here to hear DGS Topper answer questions from Senator Folmer: https://pasen.wistia.com/medias/6d6hud1x5z

Open Door Policy

In life I’ve heard this line many times: “I have an open-door policy.” Teachers, coaches, employers, politicians, etc.  Many like to throw this line around, but do they mean it? Here’s an example of one individual who meant it, and as a result the rest of us (at least those in Pennsylvania) are better off because of it. Thanks Mike Turzai. Here’s the story:

During the summer of 2016, while living with my family in the suburbs of Pittsburgh, in the McCandless area, I was offered a job in the central PA area. After much thought and discussion with my wife and daughters, we decided to accept the position and move away from an area that has treated us great. We listed our Pittsburgh home for sale and began looking for a home in central PA.

13718711_10210116936505814_3209318682083209466_n
It’s signed! During the summer of 2016, we accepted the position of Executive Director for the Keystone Contractors Association. From this moment on, it was time to start the relocation process. 

We had three offers the first day our home was on the market (McCandless is an awesome place to raise a family and Michelle Petty is a great realtor). We accepted an offer that was best for us, but the buyers could not close on the purchase for at least two months, which turned out to be good for us in that we could live in the home for longer than we expected to, and it gave us time to find the perfect place to live in central PA.

While we were living in the McCandless home, the buyers continued to prepare to buy it and an inspection was part of this process. More than a week after the home inspection was conducted, we received an email from the buyer’s real estate agent that contained the results of the inspection. I remember it like it was yesterday. It was a Sunday evening when the email arrived; it was a lengthy, 50-plus page report with bold, red-highlighted items that the inspector deemed as important; and a few pages into the report I saw a line that made my heart sink: “GAS LEAK detected not safe to live in.” Since I was living in the home, with the four people who are my world, I was speechless…wait WTF did I just read?!?!?! We left right away and spent the night at my aunt’s home, a few miles down the road.

The next morning, I was busy on the phone. I called the gas company first (Peoples Natural Gas was amazing as they arrived right away, and they had the gas leak issue resolved within the hour). Then I proceeded to speak to my realtor and an attorney friend of mine. I wanted to know why, if my family was in harm’s danger, did the home inspector not alert us. The response I received was that home inspectors are not legally obligated to notify anyone of unsafe conditions, like gas leaks. My first thought was that you would think a member of a society/country would feel morally obligated to let someone know about this, but unfortunately this was not the case. Then I called my Pennsylvania State Representative Mike Turzai.

Turzai is a friendly guy who you speak with at the North Allegheny High School Football games or you see walking down the streets in your neighborhood. He told me a few times over the years, while living in the district he represents, to not hesitate to contact him if I encounter any issues: “my door is open let me know if I can help.” So, I thought I’d take him up on the offer to see if he could help. Yes, my issue was resolved when I called him, and my family moved back in our home after the gas leak was fixed, but I do not want any other family to have to go through what I went through and fortunately for the rest of Pennsylvania, Turzai agreed and did not want anyone else to go through this serious issue either.

After thoroughly understanding the issue, Turzai and his staff were able to assist in modifying a home inspection piece of legislation that at the time was moving through the 2015/2016 Pennsylvania legislative session. Time ran out on this piece of legislation and when the session ended on December 31, 2016, the home inspection legislation died.

When the new year arrived, the Pennsylvania legislature introduced a new home inspection bill for the 2017/2018 session and the provision that we inserted requiring home inspectors to notify residents immediately if they are living in unsafe conditions carried forward to the next session as well. House Bill 1001 recently passed in the House of Representatives and it is now in the State Senate. While it’s a comprehensive bill that affects many aspects of the home inspection process, I for one am glad that it spells out how home inspectors are to act when encountering threats to health and safety.

One would think that a home inspector would notify a homeowner if they were living in an unsafe condition, but I found out that is not the case. It’s a good thing Mike Turzai has an open door policy and listens to the people he represents.