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                                                                                Serving the Greater New York Metropolitan Area

 IN THIS ISSUE:                                                                                                  November 2007

                          1
 Proper Communication
                               PROPER COMMUNICATION,
 Grand Central Terminal   1    PLANNING AND ORGANIZATION
 Tunnel Progress               THE KEYS TO A SUCCESSFUL PROJECT
 President’s Message      2    By Gino Di Ciocco, Vice President, HDA Inc.

 What’s Happening         2    OVER TWENTY-FIVE YEARS OF EXPERIENCE IN PROVIDING
                               consulting services to the construction industry
 Legal Log                3    has demonstrated that one of the prime causes of
                               disputes on projects is due to the lack of proper
 Being an “Additional          communication between the main parties.
 Insured” Provides
 Invaluable Protection         More often than not, disputes can be traced back to
 for a Contractor         5    inadequately established lines of communication
                               at the start of the project and resultant
 STA Profiles             7    misunderstandings; or the failure of the parties to
                               clearly communicate the effects and consequences
 Working Without a             of unexpected changes and delays to their respective
 Signed Contract          9    businesses.

 FYI                      13   Planning and Scheduling
                               Although planning and scheduling are essential
 STA Launches                  to the successful completion of a project, proper
 Get Paid Campaign        14   communication is the sole means through which
                               such planning can be effectively carried out.
 Here They Go Again       15
                               We have encountered many situations where the
 New Members              16   respective parties’ scheduling risks and completion
                               concerns were not clearly expressed at the start of
                                                                 Continued on Page 11




                               Grand Central Terminal Tunnel Progress
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                                                                                                    Work has commenced on the
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                                                                                                    Metropolitan Transportation
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                                                                                                    Authority’s $6.3-billion East
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                                                                                                    Side Access project that is
                                                                                                    scheduled for completion in
                                                                                                    2010.

                                                                                                    The Long Island Rail Road’s
                                                                                                    (LIRR) current Manhattan
                                                                                                    termination point is at Penn
                                                                                                    Station on the West Side.
                                                                                                    The goal for the project is
                                                                                                    to bring the LIRR’s trains to
                                                                                                    Manhattan’s Grand Central
                                                                                                    Terminal, allowing up to 24
                                                                                                    trains with 160,000 commuters
                                                                                                    to access Manhattan’s East Side
                                                                                                    daily.
                                                                                                                Continued on page 15
  STA Subcontractors News                                                                                       November 2007
                                                                                                             November 2007                2


 President’s Message: Are You Prepared?
                                  Our feature article written by Gino DiCiocco of HAD Inc. stresses the importance of knowing the
                                  project you have contracted to do, and organizing it, so that you do not fall victim to hidden pitfalls
                                  that will become apparent as the work progresses.

                                  Demand to see the construction schedule developed by the Owner and his General Contractor (usu-
                                  ally without your input) before it creates a delay or an acceleration (both will prove costly to you).

                                  Know your rights if either occur.
        Fred LeVINSON
                                  When claims occur your contract usually will usually limit the time allowed for notification. If you
                                  fail to meet this provision you will lose your right to compensation no matter how strong your claim
                                  is. Are you prepared?

                                  ON ANOTHER NOTE, our meetings continue with the Public Agencies.

                                  We are trying to eliminate retainage, no damages for delay, get better plans and specifications, and
                                  make them more responsible for their actions.

                                  The SCA, the MTA, the City of New York are responding, although too slowly for my satisfaction.

                                  The Private Sector is meeting us on the Prompt Pay issue.

                                  We are in a unique position where they all need us more than ever before because of the construction
                                  boom, so they are finally listening to us rather than paying us lip service.

                                  To be continued.




                                                  What’s Happening
Consensus Contract Documents Released             will continue to publish its well-known stan-    SCA’s FID & QC/QA Unit on November 14,
 A diverse group of leading construction asso-    dard form contract documents. It should be       2007 the meeting was chaired by Vinicius
ciations representing owners, contractors,        noted that AIA is preparing for the release of   Castagnola, AIA, Vice President of Quality
subcontractors, designers and sureties has        its 2007 version of the A-201 (General Condi-    Control/Quality Assurance for the SCA. The
unveiled a new catalog of over 70 construc-       tions of the Contract) and the A-401 (Subcon-    meeting opened a real dialogue between the
tion contract documents designed to meet a        tract Document). The biggest change in the       parties and a better understanding of the
wide range of project delivery mechanisms         A-201 document is the removal of mandatory       problems each party is facing and an agree-
as well as to address emerging issues such        arbitration, which has been a provision since    ment that Vinny & Ron Berger will be meet-
as electronic communications and building         1888. Of more concern to contractors is a new    ing shortly with Chester Yee, Vice President of
information modeling (BMI).                       standard provision that requires contractors     Project Management and Operations for the
                                                  to name the owners, architect and the archi-     SCA to eliminate some of the current proce-
The release of ConsensusDOCS represents           tect’s consultants as additional insured under   dures that cause these problems. Stay tuned
the first time that broad industry represen-      the contractor’s general liability policy and    for the results of our meeting with Chester
tation has had an equal voice in collabora-       also limits the contractor’s right to request    Yee.
tively drafting construction contracts. STA’s     financial information from the owner after
national affiliate, the National Subcontrac-      work commences and events arise that cause       Last week our committees also met with
tors Alliance (NSA), is one of more than 20       worries about the owner’s ability to pay.        the Architects & Engineers Unit of the SCA
national associations that participated in and                                                     on November 15, 2007. This meeting was
endorse ConsensusDOCS. ConsensusDOCS              Because of our affiliation with NSA and their    chaired by E. Bruce Barrett, AIA and Vice
is unique because each document was drafted       affiliation with the Association of Specialty    President of the Architects & Engineer Unit
to reflect the project’s best interests rather    Contractors (ASC), our members can pur-          for the SCA. This meeting also resulted in
than a single party interest. These documents     chase copies of ConsensusDOCS at members         opening a dialogue between both parties and
help parties to focus on better project results   cost rather than retail.                         an agreement to meet again after the first of
rather than negotiating risk-shifting contract                                                     the year to clear up the problems caused by the
terms to assess fault. Notably absent from        Progress with the SCA                            bid documents. We will keep you informed of
the ConsensusDOCS collaboration was the           Our School Construction Authority (SCA)          the action that will be taken to clear up these
American Institute of Architects (AIA), which     Committee has had a busy week meeting with       problems.
 STA Subcontractors News                                                                           November 2007               3
LEGAL LOG

2004 Amendment To Lien Law Addresses Unique Problem of
Private Improvement on Public Land   By Jay Kushner, Esq. STA Legal Counsel




                                                                  “While a subcontractor and sup-
                                                                  plier still cannot file a mechanic’s lien
                                                                  against public lands, the new law has
                                                                  provided an alternative remedy, that
                                                                  is the payment bond, to guarantee
                                                                  and protect the right to payment.”
                         JAY KUSHNer

The New York Lien Law           Consequently the physi-           not by a public entity but        The Act took effect on
offers distinct and valu-       cal private improvement in        by the private developer.         November 18, 2004, one
able remedies to contrac-       New York was subject to a         Consequently a mechanics          hundred twenty days after
tors, subcontractors amd        mechanics lien, but not so        lien failed against the public    the law was passed.
material men who furnish        a public project. Only the        land on which the project
labor, materials and supplies   funds allocated to the public     was built since there were no     Consequently, while a
to both public and private      project, e.g. a police station,   public funds to which a lien      subcontractor and supplier
construction projects within    a municipal hospital, a pub-      could attach.                     still cannot file a mechanic’s
New York State.                 lic school, were subject to a                                       lien against public lands,
                                mechanic’s lien.                  Finally, in 2004, the prob-       the new law has provided an
Nevertheless the Lien Law                                         lem was addressed by an           alternative remedy, that is
produced various dilemmas       So what then was the case         amendment to section 5 of         the payment bond, to guar-
by virtue of the fundamen-      of a private improvement          the Lien Law.                     antee and protect the right
tal distinctions between        developed on public lands?                                          to payment.
public and private projects                                       The amendment to section
borrowed from the English       Some may remember back            5 of the Lien Law reads as        This bill was sponsored by
common law concept of           to various projects at Battery    follows:                          the STA.
Sovereign immunity, i.e. the    Park where private develop-
land of the sovereign (King,    ments were constructed on         “Where no public fund
Queen and yes, even the         public lands. As no public        has been established for
City and State of New York)     money was allocated for the       the financing of a public
was and is immune from the      private development of proj-      improvement with esti-
reach of the laborer or the     ects on public lands, neither     mated cost in excess of two
persons furnishing materials    a public or private lien could    hundred fifty-thousand            Jay Kushner is General Counsel
for the project.                attach to the private project     dollars, the chief financial      to the Subcontractor Trade
                                constructed on public land.       officer of the public owner       Association. He is Of Counsel with
So as the Lien Law devel-                                         shall require the private         the firm of Alvy & Tablante.
oped whereas private lands      This created a serious con-       entity for whom the pub-          He can be reached at 516-328-7181
were subject to the lien of     cern for contractors, sub-        lic improvement is being
the contractor, the sub-        contractors, material men         made to post, or cause to be
contractor, or persons who      and laborers. A mechanic’s        posted, a bond or other form
furnished materials for         lien attaching to the public      of undertaking guaranteeing
the project, public lands       land was not permitted. As        prompt payment of moneys
were not. Only the mon-         there were no public funds,       due to the contractor, his or
eys allocated for the public    only private funds allocated      her subcontractors and to all
improvements became sub-        to the project, a mechanic’s      persons furnishing labor or
ject to such liens but not so   lien could not prevail against    materials to the contractor
the physical public project.    public lands. The typical         or his or her subcontractors
                                case was a lease hold of a        in the prosecution of the
                                private developer on public       work on the public improve-
                                land with funds furnished         ment.”
STA Subcontractors News   November 2007   4
  STA Subcontractors News                                                                                          November 2007               5


Being an “Additional Insured” Provides Invaluable
Protection for a Contractor By Henry L. Goldberg, Esq. Goldberg & Connolly
                                                                           injured worker’s employer            valuable. The duty of an insur-
                                                                           required that they acquire com-      ance company to defend a per-
                                                                           mercial general liability (CGL)      sonal injury action is exceedingly
                                                                           insurance naming you as an ad-       broad. The insurance company
                                                                           ditional insured, you will have      will be required to provide and
                                                                           significant protection from the      pay for an attorney to defend the
                                                                           financial burdens of this situa-     action whenever the allegations
                                                                           tion. Indeed, a recent decision      of a complaint, “suggest a rea-
                                                                           of the highest court of New York     sonable possibility of coverage.”
                                                                           State has held that your subcon-     This duty to defend will be trig-
                                                                           tractor’s CGL policy is primary      gered even though the insurance
                                                                           to your policy. This means           company may ultimately not
                                                                           that your subcontractor’s CGL        have to pay any damages for the
                                                                           policy, on which you are named       losses claimed by the injured
                                                                           as an additional insured, must       worker.
                                                                           pay the legal fees and damages
                                                                           first. It does not matter that you   G&C Commentary:
                                                                           have your own policy that cov-       Additional insured coverage
                                                                           ers the types of accidents and       is quite important and use-
                                                                           damages at issue. Only if your       ful in avoiding the types of
                                                                           subcontractor’s policy either        legal fees and personal injury
                                                                           does not cover the particular        costs associated with job site
                       HeNrY L. GOLdberG                                   occurrence at issue or the legal     accidents. The terms of your
                                                                           fees or damages has exceeded         subcontract must unquestion-
 There are several mechanisms       tractor/higher tier subcontractor      the dollar amount limit of the       ably require the type and scope
by which a conTracTor     or        who is named as an additional         policy will your CGL policy have      of additional insured coverage
subcontractor can allocate the      insured have essentially the same     to pay. Since it is quite possible    necessary to protect you from
risks of personal and prop-         rights and coverage. They are         that neither of these events may      these costs. The policy contain-
erty damage on a job site to its    both insureds.                        ever happen, quite often your         ing your additional insured
subcontractors. One of the most                                           policy never has to pay anything.     coverage and the documentation
well-known and effective risk       Being an additional insured is an     Your subcontractor’s policy on        evidencing it must also be clear
management tools is to require      important and highly effective        which you are an additional           and proper to ensure you have
in the subcontract that the sub-    tool to ensure that you do not        insured pays first.                   received the coverage required
contractor procure insurance for    have to pay the legal fees and                                              in your subcontract. Be certain
these specific risks and include    damages that typically arise from     In addition, there is no require-     to contact an experienced at-
the contractor or higher tier       a job site accident. We are all fa-   ment that your subcontractor          torney and insurance broker to
subcontractor as an additional      miliar with the typical scenario.     must have an obligation to            have them review your subcon-
insured under the policy. This      A subcontractor’s employee is         indemnify you for the claimed         tract and your subcontractor’s
affords the contractor the same     hurt on the job. Because he           losses of the injured worker be-      insurance policy and certificate
rights as the policy holder under   cannot sue his subcontractor          fore your subcontractor’s policy      of insurance to make sure your
a commercial general liability      employer (the injured worker is       must cover you for the legal fees     subcontract gives you and your
policy (CGL).                       covered by workers compensa-          and potential damages. There          subcontractor’s insurance cover-
                                    tion for the claim he has against     is no need to determine the rel-      age the “additional insured”
Being named as an additional        his employer), he instead sues        evant faults of the various parties   status you need.
insured is exactly what it sounds   the owner, general contrac-           involved. It is simply enough
like – the policy is acquired in    tor/construction manager and          that your subcontract requires
the name of the lower tier sub-     the higher tier subcontractor         your subcontractor to provide         To contact Mr. Henry L. Goldberg,
contractor, as the insured party,   for whom his lower tier subcon-       insurance coverage for you as an      call (516) 764-2800 or e-mail him
and includes an endorsement         tractor/employer was working.         additional insured.                   directly at:
that names the contractor or        You, the higher tier subcontrac-                                            hlgoldberg@goldbergconnolly.com
higher tier subcontractor as an     tor, now are facing legal fees to     Even the simple obligation that
                                                                                                                Mitchell B. Reiter, a senior associate
additional insured party for the    defend the action and potential       your subcontractor’s policy must
                                                                                                                with Goldberg & Connolly assisted
risks covered by the policy. Both   damages for the worker’s per-         pay the legal fees involved in        with preparation of this article.
the subcontractor who buys the      sonal injuries and lost salary.       defending the injured worker’s
policy in its name and the con-     If your subcontract with the          personal injury action is highly
STA Subcontractors News                                                                                        November 2007                 6




     david marino
     President
     Allied North America Insurance
     Brokerage of New York, LLC




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     technically-savvy, service-focused and results-driven. Maybe that’s why this industry’s biggest names bring their most complex risk
     management challenges to our insurance and surety professionals – and why you should, too. Because wherever you are, whatever
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ALLI2007_David_7.5x9.5_SCN_4C.in1 1                                                                                                 10/1/07 3:54:19 PM
  STA Subcontractors News                                                                                                          November 2007               7




                                                              Successful Contractors
                                                               Share Best Business Practices
      If you have best practices to share,
      please contact Ron Berger, STA’s Executive
                                                               Our members are at the heart of the STA. As an ongoing feature in our
      Director, at 212 398-6220 and we will try
      to include them in one of our upcoming                   monthly newsletter, we will introduce you to several of our members each
      issues.                                                  month.




                              OMC, Inc.                                                      Aalco Transport and Storage
                                                                                                                                 The Secrets of Their Success
                                            of operating and maintaining a facil-                                                Jeff believes that Aalco’s success can
                                            ity to fabricate most or all of the ma-                                              be attributed to establishing a strong
                                            terial installed on the jobsite, rather                                              relationship with the client, “realizing
                                            than being able to purchase it from a                                                our customer is part of a team.” He
                                            supply house.”                                                                       also states that attention to prepa-
                                                                                                                                 ration, proper execution of servic-
                                            However, the STA and its Prompt                                                      es—“matching the right equipment
                                            Payment Committee is continuing                                                      for the project”—and good commu-
                                            to work toward implementing bet-                                                     nication are also instrumental to the
Michael Checchi, president and sole         ter payment practices and payment          Jeff Krevat is president of Aalco         company’s success.
owner of OMC, Inc., operates one of         terms for the entire industry. “We are     Transport and Storage, a third gen-
the largest sheet metal fabrication         working vigorously to change the way       eration master rigger securing New        Getting Paid on Time
and installation companies in the           we get paid on jobs. This continues        York, New Jersey and Connecticut.         As the issue of timely payment re-
New York metropolitan area.                 to be the hardest and most frustrating     Specializing in turn-key engineered       mains a paramount concern for sub-
                                            aspect of running a construction com-      rigging of mechanical and electrical      contractors, the Aalco team believes
Founded in 1986, the firm designs,          pany in the city of New York.”             equipment, Aalco brings its expertise     the first step in receiving prompt pay-
fabricates and installs HVAC duct                                                      to the areas of design-build services     ment is establishing a strong relation-
work in the commercial market, op-          The Benefits of Membership                 and value engineering for the rigging     ship with their customers, which pro-
erating from a 25,000 sq ft facility in     Michael, who is a member of the STA’s      of emergency generators, paralleling      vides a means of communicating with
the Bronx. With a staff that includes       Prompt Payment Committee, believes         switchgear, switchgear, cooling tow-      the client in an open manner.
approximately 125 Local #28 sheet           that STA membership has been in-           ers, chillers, fans and other HVAC
metal workers, handlers and #282            credibly beneficial, even though he        equipment.                                Their advice for subcontractors new
Teamster drivers, OMC works pri-            has been a member of the STA for just                                                to the industry is threefold: Request
marily as an airside direct contrac-        one year. “In that short time I have       Established in 1973, Aalco has devel-     payment schedules and purchase
tor in the alteration field performing      found a group of subcontractors with       oped a reputation for completing work     order prior to work, submit invoices
sheet metal ductwork.                       the same values and goals that I have:     on time or ahead of schedule. Aalco’s     promptly, adhere to customer pay-
                                            to operate a profitable and success-       experienced project management and        ment requisition schedules and com-
The firm’s current projects include         ful business in the greatest city in the   generator technical staff has complet-    plete projects on time.
work for Bank of America at 1111            world—New York.”                           ed work on a number of projects that
Sixth Avenue, the Gucci flagship store                                                 have required equipment transport         The Benefits of Membership
on Fifth Avenue, Dechert LLP at 1096        In addition to the camaraderie that        and staging, derrick construction and     Aalco strives to be more than just a
Sixth Avenue and the Lehman Broth-          he finds with his fellow subcontrac-       operation, helicopter heavy lifts and     member of STA but an active par-
ers offices at the Time and Life Build-     tors, Michael also values the STA’s        crane assembly/disassembly.               ticipant in meetings, according to
ing.                                        advocacy and support system: “They                                                   Charles Cottitta, Aalco’s Director of
                                            give a superior effort to help us in all   The firm’s current projects include the   Business Development. He states that
Success Strategies                          of the most difficult issues with the      Queens Midtown Tunnel (MTA B&T)           Aalco values the opportunity to en-
Michael attributes OMC’s success            support needed by all. My only regret      infrastructure replacement of the en-     gage other members of the industry:
to one word: excellence. “You have          is that I didn’t join this organization    tire tunnel exhaust fan system, 1301      “It provides us a forum to meet and
to service your customers and never         a lot sooner.”                             Avenue of the America’s 1000KW            network with our peer group, to lobby
substitute quality for a lower price,”                                                 generators and switchgear via an          local government or trade unions is-
says Michael. Being a successful busi-      Michael graduated from Passaic             elevator shaft, 51 Madison Avenue         sues that are vital to be heard as our
ness requires that customers always         School of Drafting with a degree in        cooling towers to 35th floor, 375 Park    industry changes in response to the
receive the contractor’s full attention.    Mechanical Drafting. After gradua-         Ave 2500KW genset and mechanical          current economy.”
Michael believes in being a “hands on       tion, he became an apprentice with         equipment with rooftop derricks.
owner.”                                     Local Union #28, Sheet Metal Work-                                                   Jeff concurs, believing that STA is
                                            ers Union. Michael worked as a lay-        Other noteworthy projects were JP         instrumental in establishing a stan-
Getting Paid On Time                        out designer and foreman for several       Morgan Chase/Bank One N+2 Mis-            dard that the rest of the industry will
One of the problems that continues          shops before deciding to open OMC.         sion Critical Data Center’s 1500          follow: “STA provides Aalco and ev-
to be a concern for subcontractors is                                                  pieces of electrical switchgear and       ery other subcontractor a voice to be
getting paid on time. Michael believes                                                 (12) 2000KW gensets, Atlantic             amplified to the local construction
the issue is an even more pressing one                                                 City Harrah’s two cooling towers to       industry. Bottom line, STA provides
for sheet metal contractors as they                                                    the roof and Yonkers Raceway’s (3)        the benchmark for all subcontractors
“face a more difficult task of getting                                                 2500KW gensets with medium volt-          to be accountable and ethical to our
paid as [they] have an enormous cost                                                   age switchgear and transformers.          customers and the membership.”
STA Subcontractors News   November 2007   8
  STA Subcontractors News                                                                                              November 2007                   9

   Subcontractors Performing Work Without A Signed Contract In place
     May Be Without A Claim For Relief (In Contract or Common Law).
                                                                                                                             By Mark Cermele

many       subconTracTors      have     sheet that: 1) required Jordan to     contract, and no such document
been puT in The uncomforTable           sign the subcontract; 2) allows       had ever been drafted or signed.
posiTion    of   proceeding    wiTh     Turner a stated period of time        Jordan conceded the meaning
work aT a general conTracTor’s          to execute the subcontract; and       of the term sheet, but argued
requesT before having a fully           3) excludes Turner from being         that Turner’s conduct after issu-
execuTed      subconTracT.       The    obligated under the subcontract       ing the term sheet (namely the
obvious advice from a lawyer            or have any liability for work per-   oral notification to Jordan that
would be to not perform the work        formed by Jordan, or for antici-      it was awarded the job, the oral
until a fully executed contract is      pated profits, if Turner does not     agreement on price and Turner’s
in place. However, the stiff com-       sign the subcontract.                 directive to start work) formed
petition for work and the realities                                           a separate oral agreement that
of construction make that advice        As alleged, the principals of both    superseded the term sheet, or
impractical. Proceeding without         parties met and verbally agreed       alternatively waived the term
a contract can be extremely risky       upon all material terms of the        sheet’s limitations and impliedly
for the subcontractor, especially       subcontract, including price.         accepted the subcontract, or                     MArK CerMeLe
if the general contractor explic-       Again verbally, Turner advised        at the very least put Jordan on
itly states at the outset, with plain   Jordan that it has been awarded       notice that it should expect pay-     offer advice on how to best avoid
and unequivocal terms, that the         the subcontract, and directed         ment for the provided work.           pitfalls such as this. A carefully
subcontractor’s entitlement to          Jordan to proceed with its design                                           drafted letter to Turner con-
payment is predicated on the            development work in order to          The trial court granted Turner’s      firming the existence of a con-
general contractor’s execution of       accommodate the project’s “fast       motion to dismiss, which was          tract would have prompted a
the subcontract.                        track schedule” while the formal      affirmed by a majority of the sit-    response by Turner that would
                                        subcontract gets drawn up. Jor-       ting judges in the appellate court.   have offered the subcontractor
The Supreme Court, Appel-               dan, being the quintesential team     Jordan, slip op. 06767, 2007 Wl       guidance on how to proceed. At
late Division, First Department,        player, immediately commenced         2701901. In affirming the dis-        the very least, with a better read
recently affirmed the dismissal         design work with its manufactur-      missal, the majority reasoned         on Turner’s conduct, Jordan may
of a subcontractor’s complaint          ers and engineers. All seemed         that Turner’s conduct after the       have chosen to refrain from shar-
as a matter of law, because the         to be going well – Jordan was         issuance of the term sheet did        ing its design developments with
subcontractor failed to demon-          invited to Turner’s headquarters      not waive or modify the terms         Turner; at least not until Jordan
strate the general contractor’s         for a kickoff meeting and Jordan      therein, nor did they act as an       received Turner’s executed sub-
intent was to alter, waive or agree     shared its designs with Turner        implied acceptance of the under-      contract or a writing expressly
to relax the terms of acceptance        while more designing and coor-        lying subcontract. Rather, Turn-      waiving the term sheet’s require-
contained within the written            dinating was provided. Then,          er’s conduct simply describes         ments and promising payment
“term sheet” provided to the sub-       two days later, Jordan is told by     a scenario that falls within the      in accordance with the parties
contractor by the general con-          Turner that it will not be awarded    express terms of the term sheet,      understanding.
tractor. Jordan Panel Systems,          the subcontract, a letter is subse-   and is one under which Turner
Corp. v. Turner Const. Co., Slip        quently sent confirming Jordan’s      would not become bound and
                                                                                                                    Mark Cermele is an Associate at Welby,
op. 06767, 2007 Wl 2701901              termination from the project and      reserved the right to terminate       Brady & Greenblatt, LLP.
(N.Y.A.D. 1 Dept.Sept. 18, 2007)        awarding the project to the other     Jordan. The appellate court saw
(Hereinafter “Jordan”). Subcon-         subcontractor. Now, Jordan is out     the term sheet as Turner’s pre-       He received a Bachelor of Science Degree
tractors should be aware of the         of pocket for design and potential    contractual notice to Jordan of       in Mechanical Engineering Natural
                                                                                                                    from Tufts University and a Juris Doc-
Jordan decision and the facts it        manufacturing costs along with        what would constitute Turner’s        tor Degree from Cardozo Law School. He
was predicated on so that they          lost profits. All the while, Turner   “manifestation of mutual assent.”     is admitted to practice law in the states of
may better navigate through a           and its new subcontractor have        The majority’s decision did           New York and Connecticut, and is admit-
difficult business decision.            gained the benefit of Jordan’s        draw the dissent of one justice,      ted to the U.S. District Court for the South-
                                                                                                                    ern and Eastern Districts of New York.
                                        design without expense.               but unless the court of appeals
In Jordan, the general contrac-                                               reverses, if application is even      Prior to embarking on a career in law,
tor, Turner Construction Com-           Jordan’s complaint claimed, inter     made, or if the appellate division    Mark participated as an engineer/drafts-
pany (“Turner”) solicited bids          alia, breach of contract, promis-     reverses itself, subcontractors       man with one of the largest mechanical
from various subcontractors to          sory estoppel and sought recovery     must act cautiously if, and when,     contractors in the metropolitan area.
                                                                                                                    Mark was also an associate at JP Morgan
design and build a hangar at            in quasi contract. In response to     they face a similar situation.        where he was a trader’s assistant partici-
JFK International Airport (the          Jordan’s complaint, Turner filed a                                          pating in trading bonds and derivatives.
“work”). Jordan Panel Systems,          motion to dismiss. Turner argued      If anything, the appellate court’s
Corp. (“Jordan”), submitted a           that it was entitled to terminate     decision in Jordan demonstrates       During law school and prior to joining
                                                                                                                    Welby, Brady & Greenblatt, LLP, Mark
competitive bid for the work,           Jordan from the project because       the importance of having a con-       worked on various large complex com-
which prompted negotiations             it had clearly stated its inten-      struction attorney review your        mercial litigation matters, including pat-
with Turner for the work. Turner        tion to become bound only upon        contracts and related documents       ent, trademark, antitrust, and surety law.
provided Jordan with a term             signing a written formal sub-         from the outset so that they can
STA Subcontractors News
STA_fullpage:Layout 19/11/07         5:06 PM     Page 1
                                                                                                       November 2007                  10




                                     J O E TO RRE O N T H E A RT O F M A NAG I N G


              “Team chemistry isn’t confined to the diamond.”




                               J.H. Cohn Welcomes Marden, Harrison & Kreuter
                           to its Construction Industry Practice. An Ideal Teammate.
       A combination of industry expertise and a dedicated team of 70-plus professionals, enhanced by partner-level involvement,
     make J.H. Cohn’s Construction Industry Practice an ideal teammate for any construction business. Along with an 88-year track
      record of technical competency in its own field, J.H. Cohn enjoys well-established relationships with the industry’s bonding,
       banking, surety and legal professionals. As long-standing and proactive supporters of industry associations, J.H. Cohn and
        Marden, Harrison & Kreuter have earned the confidence and trust of their more than 200 NY/NJ area contractor clients.
            As the largest regional accounting and consulting firm headquartered in the Northeast, we have room for more.
                                                                                                       How Are You Managing?         SM




           Offices in New York, California, Connecticut and throughout New Jersey www.jhcohn.com 1-877-704-3500
  STA Subcontractors News                                                                                   November 2007              11

Continued from Cover Page




                                                   “Overt and comprehensible communication
                                                   between the parties promotes and encourages
                                                   team play and increases the likelihood that the
                                                   project will be successful, both on time and on
                                                   budget.”

                                                the hard costs and not enough on the more         The contractual notice requirements are
                                                important time related indirect costs, often      especially important to ensure that the
                                                resulting in major disputes later in the          contractor’s rights for recovery are not
                                                project.                                          waived. It is imperative that the time
                                                                                                  frames (and other specific requirements)
                                                Through the power of dialogue, the                set out in the contract pertaining to
                                                parties can timely resolve any important          the prompt issuance of written notices
                                                scheduling or cost issue without taking           for delay, request for time extension or
the project. Moreover, when changes or
                                                a hard contract stance or resorting to            compensation and the timely submittal of
unforeseen conditions occurred, the effects
                                                advocate positions and tactics.                   claims be strictly adhered to.
to the schedule or possible mitigation
alternatives were not thoroughly discussed
                                                For instance, in the event of a delay, it can     Furthermore, when attending job meetings,
or adequately addressed in contract change
                                                be determined that it would be more cost          it is important that the parties be fully
orders.
                                                effective, and in the interest of both parties,   prepared (with appropriate support
                                                that the project be accelerated instead of        documentation, if necessary), so as to
Risk
                                                extending the scheduled completion date.          timely address and resolve critical issues,
The contractor’s (and subtrades’)
                                                Such mitigation efforts or other solutions        thus avoiding potential impacts to the
anticipated risk in performing the
                                                can only be advanced through open and             project.
scope of work and the owner’s business
                                                frank dialogue between the owner, A/E,
concerns must be explicitly understood
                                                construction manager and the subtrades,           Conclusion
before the start of a project, thus avoiding
                                                hence benefiting the project as a whole.          It is evident that proper dialogue between
any surprises during construction. It is
                                                Moreover, should a subcontractor be               the parties is vital to the successful
often assumed that the other party fully
                                                experiencing labor inefficiencies, it is best     completion of any project, especially in
comprehends the critical nature of selected
                                                to promptly notify the project manager,           light of the human psyche and its need to
work activities and other factors necessary
                                                so as to permit an opportunity that any           be right or on the winning side. Clearly,
in achieving the contractual milestones and
                                                disruptive site condition may be quickly          overt and comprehensible communication
budgeted cost when, in fact, it is not the
                                                addressed with the intent of substantially        between the parties promotes and
case. Leaving such important elements to
                                                reducing, or even eliminating, future losses      encourages team play and increases
chance is essentially ensuring the likelihood
                                                of productivity.                                  the likelihood that the project will be
of a dispute sometime during the course of
                                                                                                  successful, both on time and on budget.
the job.
                                                Organization and Preparation
                                                Obviously, organization and preparation
Contract Change Orders
                                                are essential elements for the successful         Gino Di Ciocco and Carl Hepworth are
As for unexpected events (such as: design
                                                performance of the work to occur on any           principals of Hepworth, Di Ciocco and
changes, extras, delays and disruptions),
                                                construction project. Owner representatives       Associates, Inc. (HDA), a construction
the consequences and effects to the
                                                and project managers (for both the general        consulting firm specializing in construction
project schedule and cost must be fully
                                                contractor and all subtrades) must fully          disputes on projects throughout North
and clearly articulated by the contractor
                                                comprehend the contract provisions and            America and abroad. HDA can be reached
and subcontractors, such that they can
                                                appreciate their respective responsibilities      at (514) 634-7636 or hda@qc.aibn.com
be explicitly addressed by change order
                                                and duties, including those of the design
for both time and money, with any
                                                consultants.
qualification unambiguously delineated.
Sometimes the parties focus too much on
STA Subcontractors News   November 2007   12
  STA Subcontractors News                                                                                              November 2007                   13

                                                                           FYI
A construction team including Skanska Civil          Mayor Michael Bloomberg recently unveiled a           “We’re disappointed by the mayor’s
USA, Schiavone Construction Co. and J. F. Shea       rezoning plan for Coney Island that would create      presentations, but are optimistic that a deal can
Construction Co. Inc. has been awarded a $1.145      a 15-acre outdoor amusement park and edge out         be reached between the city, the landowners and
billion contract to build a new 1.5 mile extension   property owner Thor Equities, which wants to          the community to make Coney Island an even
of the Number 7 subway line to the west side of      build hotels and timeshares-a $1.5 billion project    greater place to live and visit,” Mr. Sitt said in a
Manhattan. The contract with the New York            that would also require rezoning.                     statement.
Metropolitan Transportation Authority gives the
team 57 months to complete the project, which        Mr. Bloomberg’s 46-acre rezoning would divide         City planners will start a public review process
will include boring a 21.5 foot diameter tunnel      Coney Island into three development zones             next year and anticipate that construction could
through mostly hard rock.                            surrounding KeySpan Park. Coney Island                start by mid-year 2009. Construction would
                                                     North would contain 1,800 residential units           take up to 20 years to complete.
The New York City Council approved rezoning          and 100,000 square feet of retail space, while
206 blocks of Bedford-Stuyvesant, moving to          Coney Island West would include 2,700 units of        “Just imagine the economic impact on this
protect the historic charm of our side streets       housing and up to 360,000 square feet of retail.      community if a new, revitalized Coney Island,
while encouraging economic development and                                                                 with its exciting new attractions, could hold just
the construction of low-cost housing along           The real changes lie in Coney Island East, a 21       a fraction of our city’s 44 million annual visitors,”
the major arteries. The council also granted         acre segment of land owned primarily by Joseph        Mr. Bloomberg said during a speech before
landmark status to Sunnyside Gardens, a 1920s        Sitt’s Thor Equities. The City’s plan would           the Brooklyn Chamber of Commerce at Coney
housing development in Queens considered a           zone Coney East for amusements, hotels and            Island’s Gargiulo’s Restaurant.
model for innovative urban design.                   restaurants, potentially thwarting Mr. Sitt’s plans
                                                     to build hotels that include more than 400 time-      Mr. Sitt’s development plans were never without
Hotel developer Tyler Hospitality has purchased      share units.                                          controversy. An original blueprint that included
a development site in Brooklyn, N.Y., for $11.9                                                            a 40-story tower on the boardwalk, as well
million and on which it plans to build a 14-         But Mr. Bloomberg will have to get approval           as hundreds of rental apartments and luxury
story, 250 room Holiday Inn. The company is          from the state legislature, and acquire land from     condominiums, was lambasted by city officials
currently building a 300-room hotel in Times         Mr. Sitt through a cash or land swap deal. Only       and local leaders. Although Mr. Sitt dressed
Square and another close to JFK airport.             then could the city issue its request to developers   down the development plan in June, eliminating
                                                     for proposals to build the amusement park. If         the tower and the apartments, community
Debate on renewing the terrorism insurance           Mr. Sitt doesn’t cooperate, he would be entitled      leaders have still said his design for an enclosed
bill and issues related to homeowners insurance      to rebuild his lots according to present zoning       amusement park seemed more like a shopping
demonstrate the muscle of New York’s                 rules, which prohibit condo or time-share             mall, and claim there is little difference between
Congressional delegation. The large delegation       developments.                                         residential apartments and the proposed time-
key insurance oversight positions in both the                                                              shares.
House and Senate.
 STA Subcontractors
Continued from Cover Page                           News                                                                                                                               November 2007                                                                14


    AN OLD PROBLEM, NEW SOLUTIONS
    STA LAUNCHES GET PAID CAMPAIGN TO
    PUBLIC AND PRIVATE OWNERS
     IT’S NOT ONLY OUR PROBLEM, IT’S THE OWNERS’ PROBLEM TOO!


    Controlling the cost of construction is on everyone’s mind today.
    STA maintains that prompt payment practices is the key to
    increasing competition and reducing construction costs. Late
    payments today have resulted in subcontractors adding in the cost
    of the risk they take when they work for owners or builders who do
    not pay on time.

    To address the issue, STA, under the leadership of Robert Samela,
    STA’s vice president and chair of its Prompt Pay Committee, has
    embarked on an aggressive communication program to get the STA’s
    message out to the industry about the crippling ramifications of low
    and delayed payment.

    “The problem is rampant”, says Samela. “STA’s program of position
    papers, public relations and strategic meetings will ensure that
    our message is heard. It is our first step in the process of achieving
    what is due to subcontractors – timely payment for our work.”

    STA’s program is aptly titled, “GET PAID” and includes a series
    of position papers, white papers, forums and strategic meetings
    that will boldly communicate the message that must be sent to
    improve the economic conditions of hundreds of subcontractors
    that must maintain their financial health if they are to complete
    the aggressive construction agenda projected for New York over
    the next decade.



           Select position papers and white papers are available from STA
                                                                 (Contact ron berger at 212.398.6220 or via email at berger.stanyc@verizon.net)

            7 Best Practices for                                                         How Can You Really Control                                                                      Can You Really Get
             Prompt Payment                                                                 Construction Costs?                                                                          Your Projects Built
     This guide overviews Best Practices for                                             This publication is directed to Owners                                                    This Publication is directed to Public
                 Subcontractors.                                                        and Builder-Developers of Real Estate.                                                     Sector Owners with Capital Budgets.

              A PUBLICATION OF THE SUBCONTRACTORS TRADE ASSOCIATION                                           A PUBLICATION OF THE SUBCONTRACTORS TRADE ASSOCIATION                            A PUBLICATION OF THE SUBCONTRACTORS TRADE ASSOCIATION




                                                                                         F o r O w n e r s A n d B u i l d e r- D e v e l o p e r s O f R e a l E s t a t e        For Public Sector Owners with Capital Budgets




              BEST PRACTICES          FOR


              PROMPT PAYMENT
                                                                                                                                            If you’re happy with today’s                                                     If you’re happy with today’s
                                                                                                                                               high construction bids and                                                       high construction bids and
                         If you’re getting paid on time
                                                                                                                                                you have enough bidders,                                                         you have enough bidders,
              and if no one owes you money for a change order,                                                                                            read no further.                                                                 read no further.
                                read no further.

                               If not, read on…

                                                                                                                                                                If not, read on…                                                                 If not, read on…
 STA Subcontractors
Continued from Cover Page   News                                                                               November 2007               15
Continued from Cover Page
                                                 A 640-Ton Colossus Begins Its Earth-               According to the MTA, the East Side Access
Work began last month at the East 63rd           Eating Journey                                     project will reduce Penn Station train
Street and Second Avenue tunnel. The bi-         Pieces of the tunnel boring machine were           arrivals while increasing LIRR Manhattan
level tunnel was built in 1969 as a subway       transported to a “launch box” under 63rd           arrivals by 41 percent, improve the
link to Manhattan to alleviate congestion        Street and 2nd Avenue in June; workers             reliability of train service and reduce daily
on the Queens Boulevard line. However            completed assembling the machine in                vehicle miles of travel in the region and
funding issues prevented the route from          October. Referred to as the “earth eating”         improve air quality.
being completed on the Queens side.              machine by MTA Capital Construction
                                                 President Mysore L. Nagaraja, the 640-ton
Often referred to as the “tunnel to nowhere”     Italian-made machine crossed the Atlantic
because it terminated one stop into Queens,      in May, making landfall at the port in
                                                                                                          STA SUBCONTRACTOR
according to The New York Times. The             Newark later that month.                                 POWERS THE PROJECT
tunnel’s top level remained unused until                                                              Five Star Electric Feeds Power for
1989. At that point, F trains were routed        With 45 steel blades, the machine will                         Tunnel Project
through the tunnel’s upper level to 63rd         burrow into the granite with the force
Street and Lexington Avenue. However,            of 70,000 pounds, moving southwest to              According to Lou Grady, Five Star’s Project
ridership in Queens was small given its          Park Avenue and then south to Grand                Executive for the job, Five Star provided five
limited connection.                              Central Terminal. The 360-foot long                15 KVA substations which fed 3750 KVA
                                                 boring machine is imposing, containing a           transformers. These transformers fed 15
It was not until 2001 that a connector was       lunchroom for the 14 workers who operate           KVA switchgear which provided the power
built to link the tunnel to subway lines         it. A second machine will begin boring later       for the two tunnel boring machines. Grady
that run along Queens Boulevard. The             this month, digging a parallel tunnel under        added “we dropped high voltage feeds down
tunnel’s lower portion, built to carry LIRR      Manhattan.                                         to the tunnel level which fed tunnel boring
trains to Manhattan’s East Side, was never                                                          machines, one by Seli from Italy and the
connected to anything, remaining a literal       Grinding through the rock at an average of         other manufactured by Robins of Cleveland,
and financial dead end.                          50 feet per day, the $428-million phase of         Ohio” . Five Star also provided all light
                                                 the $6.3-billion East Side Access project          & power, auxiliary equipment, fire alarm
The new route will run via new soft              has a projected completion date of 2010.           and communication systems as well as the
ground tunnels in Queens below Northern          Train service is expected to be speeding           maintenance for the duration of the project.
Boulevard, through the bottom two cells          through the tunnels by 2013, one tunnel for
of the existing four-celled 63rd Street          Manhattan-bound trains and the other for           “It was imperative,” said Gary Segal,
immersed tube tunnel and into Grand              trains headed to Long Island. Connecting           President of Five Star Electric “to get these
Central Terminal through new rock tunnels        tunnels will be completed in Queens to link        substations energized and on-line with Con
built beneath the existing rail tunnels          the tunnel to LIRR’s main line and Port            Edison in the aggressive six-month time
under Park Avenue.                               Washington branch.                                 frame so the TBM’s could start boring… and
                                                                                                    I’m proud to say we did”.



Here They Go Again:
Contractors Attempt to Shift Risk of Non-Payment to Subcontractors
                                                                 Terence J. Burke, Legal Counsel Empire State Subcontrators Association


                                                 thus returning the risk of an owner’s non-         statutory lien rights against the contractor
                                                 payment under such clauses from the                and the surety under Section 24 and 41.
                                                 subcontractor to the contractor, contractors       As a practical matter, the time it takes to
                                                 have sought new contract provisions to             exhaust lien remedies will exceed the one
                                                 shift the risk back to the subcontractor.          year statute of limitations for commencing
                                                 Such a contract provision is the conditional       an action on the surety’s payment bond, thus
                                                 provision, which requires the subcontractor        releasing the surety and the contractor on
                                                 to exhaust its lien remedies and all other legal   the surety bond from liability for the owner’s
                                                 remedies as a condition to bringing an action      non-payment and shifting the liability to the
                                                 against the contractor and its surety company.     subcontractor. This is exactly the contractor
                                                                                                    and Surety Company’s intended purpose for
                                                 While such a provision may not be violative        this conditional provision, and it is exactly
                                                 of the West Fair case, it is clearly against       this intended shift of non-payment liability
                                                 public policy in that it is violative of Section   which the courts have held to be against
              TereNCe J. bUrKe                   24 and 41 of the Lien Law which sections           public policy. Hopefully, the courts and/or
                                                 grant a subcontractor the right to enforce a       the New York State Legislature will have an
ever since The new york sTaTe courT of           mechanics lien against property and against        opportunity in the near future to address this
appeals decision in West Fair Electrical         any person (such as the contractor or surety)      issue and declare such provisions as void and
Contractors vs. Aetna Casualty and Surety        liable for the debt upon which the lien is         unenforceable.
Co.,N.Y. 2d. 148, holding contingent payment     founded. Certainly, this conditional provision
or pay if paid clauses void and unenforceable,   constitutes a wavier of the subcontractor’s
   STA Subcontractors News                                                                                        November 2007       16


                  GET iNVoLVED
                   STA commiTTEES
 Business Practice Interchange                Public Agencies
 robert Samela      201-939-6866              Larry roman          914-776-8000

 Insurance & Bonding                          Program & Education
 William Hass      914-769-2220               Monet Milad       917-767-8057

 Dinner Dance & Journal                       School Construction Authority             SPECIALIZING IN CONSTRUCTION LAW FOR OVER 40 YEARS
 Fred Levinson     718-961-9600               Fred Levinson      718-961-9600

 Membership Committee                         Architects & Engineers
 Greg Fricke     212-244-8878                 ron berger         718-398-6220

 Legislative                                  Business Development
 Arthur rubinstein 718-417-0600               Jerry Liss       718-728-0600




            STA’s New members
Matthew Clarke                David Burgos                Dolores Laganas
Knightsbridge Security        Excel Electric Co., Inc.    ABLE Equipment Rental, Inc.
111 John Street, 16th Floor   207 W 25th Street, 9th Fl   21 Dixon Avenue
New York, NY 10038            New York, NY 10001          Copiague, NY 11726
Tel: 212-227-7700             Tel: 718-701-0417           Tel: 631-841-3333
Fax: 212-227-7795             Fax: 718-701-3442           Fax: 631-841-3089
matthew@kbsurety.com          dburgos@excelectric.net     dlaganas@ableequipment.com
Bonding/Insurance (BON)       Electrical (ELE)            Supplier (SUP)
www.kbsurety.com              www.excelectric.net         www.ableequipment.com
STA Subcontractors News                                           November 2007   17




                     COST FOR PERFORMING WORK AT:
                              -   87 Schools
                              -   8 Different DEP sites
                              -   Time Warner
                              -   Mayflower
                              -   Goldman Sachs
                              -   NY Hospital
                              -   Einstein Hospital
                              -   1 Hanson Place
                              -   Bellevue Hospital
                              -   John Jay College
                              -   325 5 th Street
                              -   East River Repowering
                              -   7 WTC
                              -   Ravenswood Reheat
                              -   Bronx Zoo
                              -   Corona Shops
                              -   Building “O”



                                          :      $1,000,000,000


        Able to COMPLETE Plumbing & Heating projects ON TIME, SAFELY
        and with INTEGRITY.
STA Subcontractors News   November 2007   18
STA Subcontractors News                                     November 2007                 19




                           STA Launches New Website
                          STA has redesigned its website.

                          For more information, please visit the site that now includes several
                          special features:

                                    • A searchable Members Directory

                                    • Archived STA Newsletter

                                    • Current Calendar Events

                                    • Monthly Updated Homepage

                          Vist and find out more at
                          http://www.stanyc.com
   STA Subcontractors News                                                                                               November 2007            20


     GRASSI & CO - CPA’S & SUCCESS CONSULTANTS




                                                            CREATIVITY
                                                     “You can never solve a problem on
                                                      the level on which it was created.”
                                                                                           ALBERT EINSTEIN




                                                                                                            Creativity...Grassi & Co.

                             GRASSI & CO.
                                                                                                       HEADQUARTERS:    OTHER OFFICES:
                                                                                                       LAKE SUCCESS     MANHATTAN, WESTCHESTER,
                             CPAs & SUCCESS CONSULTANTSTM                                              516-256-3500 OTHER OFFICES: NC
                                                                                                                        CHARLOTTE,
                                                                                                                      MANHATTAN, WESTCH-
                             WWW.GRASSICPAS.COM                            AN INDEPENDENT MEMBER FIRM OF MOORE STEPHENS INTERNATIONAL LIMITED
                                                                           WITH OFFICES IN PRINCIPAL CITIES WORLDWIDE




SUBCONTRACTORS NEWS                       Board of Directors:
1430 Broadway • Suite 1600                 - NEWSLETTER - CREATIVITY- E=MC- NOV-07
                                       STA ROBERT ANSBRO
New York, NY 10018
                                       7.5X4.5
                                           The New York Roofing Company
T: 212.398.6220                           JOSEPH AZARA
F: 212.398.6224                           C.D.E. Air Conditioning
e-mail: subcontractorstrade@verizon.net   MICHAEL D. CHAFETZ
website: www.stanyc.com                   MDC Construction Management

Officers                                  JOHN A. FINAMORE
                                          Jordan Panel Systems Corp.
Fred Levinson, President                  BENEDETTO GIAMBRONE
Robert Samela, Vice President             B.G. National Plumbing & Heating, Inc.
Gary Segal, Vice President
W. Scott Rives, Treasurer                 CRAIG GILSTON
Jerry Liss, Secretary                     Gilston Electrical Contracting
Ronald S. Berger, Executive Director      HENRY L. GOLDBERG
                                          Goldberg & Connolly
Upcoming Events
                                          DAVID HARRON
Executive Committee Meeting               A/C Electric
Thursday, December 6, 2007 – 8:00 AM      MITCHELL MERDINGER
                                          C.D.E. Air Conditioning
Board of Directors Meeting
Tuesday, December 11, 2007 – 5:30 PM      MONET MILAD
                                          Milad Contracting Corp.
                                          RANDY RIFELLI
                                          United Iron
                                          GUY VANDEVAARST
                                          Empire System Solutions
                                          JOHN VILLAFANE
                                          Eldor Electric, LLC
                                          ROBERT WEISS
                                          A.J. McNulty & Co., Inc.

				
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