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					                                                                                           HCCA Honors Industry Veteran Earl Flippo
                                                                                          The Heavy Construction Contractors               Richmond-Petersburg Turnpike
                                                                                          Association held a special                       Project in the late 1950’s.
                                                                                          membership dinner meeting on
Volume 10, Issue 9 & 10                                                                   Tuesday, September 19th at the                   Earl moved north to the Washington,
September/October, 2006
                                                                                          Belle Haven Country Club to honor                D.C. area in 1958 and went to work
                                                                                          the 2006 recipient of the HCCA                   as a construction crew foreman for
                                                                                          Lifetime Achievement Award, Mr.                  Circle Construction Company of
                                                                                          Earl Flippo.                                     Washington, D.C. He worked his way
                                                                                                                                           up the organization over a 13 year
                                                                                          Bernard                                                                      career
                                                                                          Earl                                                                         with
                                          HEAVY CONSTRUCTION CONTRACTORS ASSOCIATION
 DIG IT!

                                                                                          Flippo                                                                       Circle to
                                                                                          was born                                                                     attain the
                                                                                          in Bowie,                                                                    position
                                                                                          Maryland                                                                     of
                                                                                          in 1937,                                                                     Vice-
                                                                                          the oldest                                                                   President
                                                                                          of four                                                                      and
                  THE NEWSLETTER OF THE




                                                                                          children.                                                                    General
                                                                                          Earl was                                                                     Manager.
                                                                                          raised on
                                                                                          a farm in                                                                       The
                                                                                          the                                                                             1960’s
                                                                                          Frederick-                                                                      saw a
                                                                                          sburg,                                                                          huge
                                                                                          Virginia    HCCA President Jim Mitchell (L) and former HCCA Past-President Mike
                                                                                                      Holupka (R) present an engraved mantle clock to the 2006 HCCA
                                                                                                                                                                          boom in
                                                                                          area, and Lifetime Achievement Award winner Earl Flippo, founder of the Flippo construc-
                                                                                          later       Construction Company. The HCCA held a special membership dinner tion in the
                                                                                          moved       meeting on Tuesday, September 19th at the Belle Haven Country       D.C. area,
                                                                                          and         Club in Alexandria, Virginia to honor Mr. Flippo’s vision, industry and in
                                                                                          grew up in leadership, and his lifetime commitment of support to the HCCA.      1971 Earl
                                                                                          the                                                decided to venture out for himself. He
                                                                                          Richmond, Virginia area.                           founded the Flippo Construction
                                                                                                                                             Company with two small construction
                                                                                          Earl started his construction career               crews.
                                                                                          after graduating from Hermitage
                                                                                          High School in Richmond as a                       Flippo Construction was fortunate to
                                                                                          supervisor for the Parson’s                        procure a contract with the C&P
                                                                                          Brinkerhoff, Hall and McDonald                     Telephone Company to perform
                                                                                          Consulting Engineering firm on the                 maintenance (Continued on page 2)



                                                                                        Inside this issue:
                                                                                       HCCA Honors Lifetime Industry Award Winner Earl Flippo      1-4
                                                                                       National Waterworks Wins 2006 President’s Cup”              4-5

                                                                                       HCCA Fall Motorcycle Rally                                  6

                                                                                       Ricky L. Brown and Sons Wins 2006 Fall Clay Shoot           7
                                    HCCA Honor’s Earl Flippo
                                               (continued from page 1)

on their lines in Montgomery and Prince George’s                   recently completed infrastructure renovations to the
Counties, Maryland.                                                                            Georgetown area of
Over the years, the                                                                            Washington, D.C.
Flippo Construction
Company grew and                                                                                     Although a humble and
expanded into other                                                                                  soft spoken man, Earl
types of underground                                                                                 Flippo’s
utility work, concrete                                                                               accomplishments
structure work, and                                                                                  throughout his life in the
finally general                                                                                      heavy construction
contracting.                                                                                         industry have been
                                                                                                     anything but humble.
In 2000, Earl sold                                                                                   Earl has been a guiding
Flippo Construction                                                                                  force in the success of
Company to the                                                                                       his firm, the heavy
employees. As an                                                                                     construction industry,
employee owned              Current Flippo President Jim Wills (L) poses for a picture at the 2006   and the HCCA.
company (ESOP), the         HCCA Lifetime Achievement Awards Dinner with Lifetime Achievement
company continues to        honoree Earl Flippo (C) and former Flippo Construction President Mike    Earl’s firm has produced
grow with over 375          Holupka (R).                                                             two of the HCCA’s
employees working all                                                                                President’s (Mike Holupka
over the Washington                                                                                  and Jeff Flippo). In
D.C. and Baltimore                                                                                   addition, the work of
metropolitan areas.                                                                                  Flippo employee Bill
                                                                                                     Pridmore prior to Mike
Earl Flippo instilled in                                                                             and Jeff’s involvement in
his employees the                                                                                    the association was
importance of doing                                                                                  critical to the early
safe, quality work. He                                                                               success of many HCCA
also insisted that                                                                                   initiatives.
Flippo Construction
Company complete                                                                           It was a very fitting tribute
their projects on-time                                                                     to Mr. Flippo that some of
as promised. This                                                                          the first employees hired
philosophy of doing                                                                        by Flippo Construction
business has continued                                                                     and now retired returned
throughout the history                                                                     to honor their good friend
                         Members of the Flippo family pose for a picture prior to the Lifetime
of the firm and          Achievement Award dinner. Family Members include Flippo           and former employer.
continues today.         Construction Company Vice-President Brian Flippo and Daughter in  Three of the original
                          Law Lisa DeGrande, Sheran Flippo (Earl’s Wife), Earl Flippo, Son employees hired in 1971,
The scope of important Steve Flippo, Daughter-in-Law Rose Flippo (Jeff’s wife), and Flippo Mike Holupka, Wilbur (Pee
                                                                                was not
projects that the Flippo Vice-President Jeff Flippo. (Daughter Donna Downingthe ceremony). Wee) Danzler, and Melvin
                          available when the picture was taken but did attend
Construction Company                                                                       Holmes were on hand as
has completed is truly impressive. They have left               were many members of the firm (M.E. Green, O’Neal
their footprint on the new Capitol Hill visitors                Barnes, James Harvey) and others who worked or
center, the Redskins and Ravens football                        have worked for Flippo Construction for over 25
stadiums, Reagan National Airport, and they                     years. (continued on page 3)


                                                               2
                                    HCCA Honors Earl Flippo
                                                (continued from page 2)

Brian and Jeff Flippo have both worked over 30                     mitment to help his firm achieve the success that
years with the firm. They have worked their way                    it has enjoyed.
up from the field into
the office operations                                                                            HCCA President Jim
and continue to be                                                                               Mitchell presented Earl
very involved in the                                                                             with an engraved
firm as Vice-Presidents                                                                          mantle clock as a gift for
in Flippo’s                                                                                      Earl to remember the
management team.                                                                                 event as well as to
                                                                                                 recognize his inclusion in
A selected group of                                                                              a very short list of
industry veterans were                                                                           industry leaders.
asked to speak on
behalf of Earl and to                                                                                The HCCA will be
provide some insight as                                                                              celebrating its 50th
to his character and his                                                                             anniversary in 2007
personality. Perhaps                                                                                 and Earl Flippo is only
the most interesting                                                                                 the 15th individual to
observations were                                                                                    be so honored as a
given by Jim Anderson,     Present and past employees pose with Flippo Construction founder          Lifetime Achievement
President of the           Earl Flippo at the September dinner meeting. Standing (L to R) are Jim Award recipient by the
                           Wills, Flippo Construction President, Bill Clements, Flint Criley, O’Neal
Anderson Company, a                                                                                  association.
                           Barnes, Richard Wilson, and former Flippo President Mike Holupka.
firm that Earl helped      Seated (L to R) are Toby Swint, Earl Flippo, M.E. Green, and Melvin
launch in Gainesville,     Holmes. Melvin Holmes and Mike Holupka are two of the original          After receiving his gift
Virginia.                  seven Flippo Employees who started in business with Earl Flippo.        and a standing ovation
                           Another member of the original employees, Melvin Danzler also           from those in
                           attended the event.
Jim recalled the first                                                                             attendance, Earl Flippo
organizational                                                                                     deflected attention from
meeting in which he                                                                                himself and instead
met with Earl Flippo                                                                               focused the attention on
and Mike Holupka to                                                                                the employees of Flippo
talk about forming the                                                                             Construction Company.
new firm. Jim recalled                                                                             He said that his success
that “after about 30                                                                               was built on surrounding
minutes (or so) Earl                                                                               himself with quality
liked the idea, stood up                                                                           people. He thanked his
and shook hands (with                                                                              wife Sheran for her
Jim Anderson and Mike                                                                              support and love
Holupka), and the                                                                                  throughout their many
Anderson Company                                                                                   years of marriage. He
was born.”                                                                                         also recognized the
                                                                                                   HCCA for their part as an
Jim thanked Earl for his   Sam Wingo of All-Star Utilities, Flippo Executive Assistant Beth Brady,
                           Flippo Employee Bill Clements, Ferguson Waterworks Manager Jeff
                                                                                                   industry advocate and a
belief and support of      Shearman, and Flippo Employee Richard Wilson pose for a picture         representative of the
his firm as well as        during the reception prior to the dinner. Beth worked very hard to      industry on behalf of his
Earl’s unwavering com-     make the event a huge success. She created over 15 job posters to       firm (continued on page 4)
                           showcase some of Flippo Construction’s many past projects.



                                                               3
                                  HCCA Honors Earl Flippo
                                               (continued from page 3)

The HCCA would like to thank all of the                        Beth coordinated the event with the HCCA staff and
member firms who                                                                         created a series of
sponsored the event                                                                      posters that detailed
by placing                                                                               some of the many
congratulatory ads in a                                                                  interesting projects that
special                                                                                  Flippo Construction have
commemorative book                                                                       been involved in around
that was given to every                                                                  the Washington, DC area.
attendee at the event.
                                                                                             The HCCA would finally
The HCCA would also                                                                          thank the entire Flippo
like to thank                                                                                organization for their past
Flippo Construction                                                                          and present support of
Vice-President                                                                               the HCCA.
Jeff Flippo and
Ms. Beth Brady,                                                                                 Thanks to the continued
Jeff’s Executive           Earl Flippo thanks the members of the association for his award as   support of its loyal
Assistant for their hard   the 2006 HCCA Lifetime Achievement recipient. He thanked the        member firms, the HCCA
work in helping to         employees of Flippo Construction for their hard work throughout the will continue to “Dig
make the event a huge      years. Many of the employees of the firm who spoke on Earl’s behalf Virginia” and pay tribute to
success.                   thanked him for his “hands-off” management style. They appreciated
                           his faith in allowing them to make their own decisions in order to
                                                                                               our heavy construction
                           achieve their daily tasks.                                          industry leaders.


      National Waterworks Team Wins Fall Golf Tourney
The National Waterworks Team shot a very                    the low gross score at Evergreen and the low gross
impressive score of 59                                                                     score at Dominion
(13 under par 72) and                                                                      Valley. National
defeated The Anderson                                                                      Waterworks had the low
Company Team to win                                                                        gross score at Dominion
the 2006 HCCA Fall                                                                         Valley (59) and The
“President’s Cup” golf                                                                     Anderson Company had
tournament. The                                                                            the low gross team
tournament was                                                                             score at Evergreen (60).
played at Evergreen                                                                        The play-off hole was a
Country Club and                                                                           par three and neither
Dominion Valley Golf                                                                       team made a birdie so
Club in Haymarket,                                                                         the tie was decided by
Virginia on Monday,                                                                        the closest ball to the
September 11th.                                                                            pin on the play-off hole.
                                                                                           The National Water-
The format of this                                                                         works team was 3
year’s best ball                                                                           inches closer and the
tournament was         National Waterworks teammates Frank and Mike Hopke (William B.
                                                                                          margin earned them the
                       Hopke Company, Johnny Williams (Griffin Pipe), and Bill Driskill
changed to allow a one (National Waterworks) hoist the championship trophy after the team winner’s trophy.
hole playoff between   defeated the Anderson Company team in a one hole play-off.         (continued on page 5)


                                                         4
               National Waterworks Team Wins Fall Golf
                                             (continued from page 4)


The third place runner up was the Griffin Pipe team            Bank, Ferguson Waterworks, Flippo Construction,
who shot a score of 69.                                                                        Griffin Pipe Products,
the winning team in the                                                                        Hanson Pipe Products,
third flight was the                                                                           Insurance Associates
Rutherfoord Insurance                                                                          Agency, J.W. Burress,
team with a score of 69                                                                        Inc., James River
(Griffin Pipe won on a                                                                         Equipment Company,
match of scorecards).                                                                          James River Equipment
                                                                                               Company, Liberty
Runner-up in the second                                                                        Equipment Repair,
flight was the                                                                                 Loudoun Tunneling
BP/Castrol team who                                                                            Company (sponsored 2
shot a score of 65. The                                                                        holes), Mack Industries,
winners of the second                                                                          Mountaineer Pipe,
flight were the Flippo                                                                         Owens and Dove, Ridge
Construction Team who                                                                          Limited Company, Rish
also shot a team score                                                                         Equipment Company,
of 65 (Flippo                                                                                  Rutherfoord Insurance,
                          Mr. Scott Mayhugh, a golf professional on the Pinnacle
Construction won the                                                                         Superior Paving
                          long drive tour was the featured attraction at the long
flight on a match of                                                                         Corporation, The
                          drive hole at Evergreen Country Club. Scott qualified for
scorecards).                                                                                 Anderson Company,
                          the finals of the long drive tour and can regularly drive a
                                                                                             Virginia Paving Company,
                          ball in excess of 320 yards.
The HCCA hosted long                                                                          Vulcan Materials,
drive tour professional                                                                       Wasington Air Compres-
Scott Mayhugh, the                                                                            sor Rental, William A.
“Long Drive Guy.” Scott                                                                       Hazel, and The William
put on a long drive                                                                           B. Hopke Company.
demonstration at
Evergreen Country Club                                                                        The HCCA would also
and challenged                                                                                like to thank the
tournament participants                                                                       following volunteers who
to a “beat the pro”                                                                           contributed their time to
contest at the #6 long                                                                        make the tournament a
drive hole. Fellow long                                                                       success, Hans Miller and
drive tour professional                                                                       Lou Sutton of Western
Chris Ross challenged                                                                         Branch Diesel, Debbie
the tournament                                                                                Pence of Pence
participants at Dominion                                                                      Associates, Kathy Lane
Valley to a similar                                                                           of Eastern Supply, Anna
contest.                                                                                      allen, Caolina Guzman
                          Tournament team runner-up The Anderson Company missed the
                          championship trophy by a few inches and played outstanding golf at and Pete Compher of
The HCCA would like to the Evergreen Country Club Course. Team members are, Jim Van          Luck Stone, Sandi Tieri
thank the following       Deusen, Bob Ansel, Joe Schull, and Ed Wilbourn.                    and Tammy Waite of
member firms who                                                                             Watchcard (Foster Fuel),
contributed to the tournament as hole sponsors:                Johnna Jenkins of Total Development Solutions,
ACF Environmental, Allison Transmission, Angler                Amanda Ridge of Ridge Limited Company, Stuart
Construction, Castrol/BP Lubricants, Commerce                  McCuin of R.G. Griffith, Jo Ellen La Roe and Maura
                                                               Cliff of Commerce Bank, and Ken McIlvoy (HCCA).


                                                           5
                          HCCA “Two-Wheel Nation”
                         Rides in Fall Motorcycle Rally

Eighty five rider’s strapped on their helmets and
fired up their engines as the HCCA hosted its Fall
Motorcycle Rally on Saturday, September 30th. The
event was sponsored by HCCA member firm Total
Development Solutions in Gainesville, Virginia. .
Total Development Solutions sponsored the food
and beverage as well as the location for the ride’s
start and finish.
Riders rode a three stop circuit that took them west
on route 211 across the mountain and made a turn
around in Luray, Virginia.
Riders were treated to a hearty lunch of hamburg-
ers and hotdogs after the ride had concluded.
HCCA member firms were very generous in
contributing many valuable prizes that were
awarded in a “poker run” format for the event.

In spite of a few minor mechanical problems and a
couple of scrapes, the event went off without a
major accident and everyone had a great afternoon.

The HCCA thanks the following member firms who
participated in the event as sponsors.
Major Event Sponsors
J.G. Miller, Inc.
Waterworks Supply Company
Owens and Dove, Inc.
Stop Sponsors
Godwin Pumps
ACF Environmental
Americast, Inc.
Flippo Construction
Luck Stone
Valley Supply and Equipment
Washington Air Compressor, Inc.
Raffle Prize Sponsors
Tysons Service Corporation
Valley Supply and Equipment

Thanks to your support the HCCA Motorcycle                 Some scenes from the start of the 2006 HCCA Fall
Committee was able to raise $2,200.00 for the              Motorcycle Rally that began at the office of HCCA member
“Biker’s Relief fund to help HCCA members in need.         firm Total Development Solutions office in Gainesville, VA.



                                                       6
              Ricky L. Brown Team Wins Fall Clay Shoot

The HCCA and the HCCA Legislative Committee
hosted the 2006 Fall “Broken-Pigeon” Clay shoot on
Saturday, October 9th, at the Shady Grove Shooting
facility in Remington, Virginia.
Fifteen teams from the association participated in
the 100 shot competition. When the smoke cleared
and the final shot was spent, the Ricky L. Brown
and Son Team claimed top team prize for total
(gross) shots with an impressive 396 clays out of a
possible 500 The members of the winning team
were: Ricky Brown, Mike (Hambone) Hamm, John
Boger, Jerry Harris, and Chuck Walker.
                                                              Overall Champion (gross Score) Ricky L. Brown and Sons
The General Excavating Team that won the 2006
                                                               team pose proudly during the HCCA clay pigeon shoot.
Spring Clay shoot finished a very close second with
a score of 392 clay birds out of a possible 500
shots. Team members were: Richard Fincham,
Robert Hetzer, Barry Preddy, Clive Watson, and
Doug Waynewright.
The S.W. Rodgers Team finished in 3rd place with a
score of 391 clay birds out of a possible 500 shots.
Team members were: Bill Lachman, Chuck Rodgers,
T.J. Rodgers, Ronnie Shifflett, and Randy Whiting.

This year a net trophy was given to the top shooting
team. The William A. Hazel Team #2 won top net
honors. Team members were: Roy Crane, Larry
Deal, Burl Prater, Earl Prater, and Bobby Sheffield.
The HCCA would like to acknowledge the sponsors
                                                            Net Team Champions William A. Hazel (team 2) pose with the
of the tournament:
                                                                     net trophy for best score (with handicap).
Major Event Sponsors
The Anderson Company
Blind Sponsors:
Ricky L. Brown & Sons
Superior Paving Corporation

Door Prize Sponsors
Quarles Energy Services
Thanks to the support of our participating member
firms the HCCA was able to add funds to its Political
Action Committee that helps provide valuable
financial support to industry friendly candidates
seeking election to the Virginia General Assembly.          Third place team S. W. Rodgers strike a pose during a break



                                                        7
                       Change Orders Can Be Hazardous
                        To Your Firm’s Financial Health
Editor’s Note: The following article was provided by            For unapproved or un-priced change orders, the
Mr. Mark Noble, CPA, Audit Manager at Pease &                   construction company typically hasn’t obtained
Associates, a Cleveland accounting firm. He can be              written authorizations from a customer
contacted at mnoble@peasecpa.com or by phone at                 representative as of the audit fieldwork, which
(216) 348-0600 JMS                                              means that these other forms of documentation will
                                                                be necessary to support the change order to the
Trusting in over-optimistic change orders and claims            auditor.
can lead to significant problems in the construction
industry. Companies that continually realize less               From an accounting perspective, the additional
profit from jobs than they originally estimate can see          $100,000 of revenue (and related asset) that the
their ability to bid on larger jobs hindered due to             contractor puts on their books needs to be solid.
bonding issues, and their financial stability potentially       However, many times the construction company is
adversely affected.                                             too optimistic saying, “Don’t worry, we’ll get it.”
                                                                They assume they’ll get it but historically
Because of the risks associated with them, change               construction change orders aren’t always “good as
orders can be dangerous areas for contractors. When             gold.” Often, considerably less than what is
a change order is unpriced or otherwise unapproved,             expected is realized and the company incurs a profit
careful evaluation of the specific facts and                    fade on that job.
circumstances is required prior to inclusion of the
change order in estimated contract revenues.                    The bonding companies (sureties) that back
                                                                construction companies don’t like to see profit
For example, if a contractor has to use more yards of           fades – the reduction of the estimated gross profit
concrete or a different machine on a particular job,            over the life of a contract. Subsequently, the
they will likely have to do a change order and often            bonding company may reduce the amount of the
the change order is not fully approved by the                   bond they’re willing to issue for the construction
customer. Subsequently, documentation of change                 contractor. For example, a company’s working
orders is very important because when the                       capital (current assets minus liabilities) may be
construction company is audited, the auditor will               $1 million. The bonding company may bond the
need to evaluate the propriety and the collectibility           construction company for ten times their working
of unapproved change orders that are the basis for              capital or $10 million. That means the
significant additional contract revenues (for example,          construction company can bid jobs up to the $10
an original contract of $1 million may be treated as            million bonding capacity. If, because of the
$1.1 million if the auditor can verify that the change          contractor’s history of having profit fades, the
orders are recoverable).                                        bonding company identifies assets that they do not
                                                                consider recoverable, they subtract or
The auditor may be able to confirm the amounts of               discount them from the balance sheet, limiting the
unapproved change orders with customers; however,               surety’s bonding capacity and the construction
if confirmation is not possible, the auditor will need to       company’s ability to bid higher priced jobs.
obtain evidence to evaluate the likelihood of
settlement on satisfactory terms and the collectibility         Another pitfall for contractors who don’t document
of the recorded amounts. The auditor also needs to              change orders is having more time spent on their
consider how the contractor has historically collected          audits which can result in adjustments to the books
on its unapproved change orders. If historically the            as well as higher cost, as well as longer time-frames
contractor does not get the ultimate approval for a             to complete financial statements resulting in less
change order, or if it is approved for an amount less           timely financial information for the contractor’s bank
than what is expected by management, the auditor                and surety.
needs to consider this when determining the
reasonableness of the current and pending change                The following is an overview of the accounting
orders.                                                         principles of change (continued on page 9)

                                                            8
                        Change Orders Can Be Hazardous
                         To Your Firm’s Financial Health
orders and claims based on the criteria of Statement          change orders should              be deferred as contract
of Position (SOP) 81-1, Accounting for Performance of         costs if it is probable                    that aggregate
Construction-Type and Certain Production-Type                 contract costs, including costs
Contracts.                                                             attributable to change orders, will be recov-
                                                              ered              from contract revenues. Some of the
CHANGE ORDERS                                                 factors to                 consider in evaluating whether
                                                              recovery                          is probable are the
Change orders are modifications of an original contract       customer's written approval                of the scope of
that effectively change the provisions of the contract        the change order, separate
without adding new provisions.                                         documentation for change order costs that are
                                                                                identifiable and reasonable, and the
They may be initiated by either the contractor or the         entity's                          favorable experience in
customer                                                      negotiating change                         orders.

They include changes in:                                                    b) Under the percentage-of-
                                                              completion method:
     •   Specifications
     •   Design                                                                 i) Costs attributable to unpriced
     •   Method or manner of performance                      change                                            orders
     •   Facilities                                           should be treated as costs of
     •   Equipment                                                              contract performance in the period in
                                                                                                which the costs are
     •   Materials
                                                              incurred if it is NOT
     •   Sites                                                         probable that the costs will be recovered
     •   Period for completion of the work                                             through a change in the con-
                                                              tract price.                                      (No
There are three types of change orders:                       change in contract revenue and per
                                                                                centage complete while costs are in-
1. Approved – the change order is priced and both             curred                            and recognized).
   parties have approved the scope and price
                                                                                ii) If it is probable that the costs will
2.   Unpriced - the work to be performed is defined,          be                                           recovered
        but the adjustment to the contract price is to        through a change in the contract
        be negotiated late                                             price, the costs should be deferred (as an
                                                                                           asset) (excluded from the cost
3. Unapproved as to both scope and price                      of contract                                  performance)
                                                              until the parties have agreed
Accounting for change orders depends on these                          on the change in contract price, or,
characteristics and the underlying circumstances in                                                alternatively, they
which they occur.                                             should be treated as
                                                                       costs of contract performance in the period
1. Approved change order - contract revenue and                                 in which they are incurred, and con-
      costs should be adjusted to reflect change              tract                                        revenue should
      orders approved by the customer and the                 be recognized to the extent                           of the
      contractor regarding both scope and price.              costs incurred.
2.  Unpriced change order:                                                     iii) If it is probable that the contract
         a) Under the completed-contract method,              price will                          be adjusted by an
costs                   attributable to unpriced


                                                          9
                        Change Orders Can Be Hazardous
                         To Your Firm’s Financial Health
amount that exceeds                                                   have a trial date set by the courts. If legal pro-
        the costs attributable to the change order                    ceedings are not complete, the          contractor
                                 and the amount of                    should obtain representation from counsel that
(continued on page 10)                                                there is a reasonable basis for the claim. If a rea-
                                                                      sonable basis for the claim does not exist, it is
However, since the substantiation of the amount                       unnecessary to go any further.)
of future revenue is difficult, revenue in excess of
the costs attributable to unpriced change orders                      b. Additional costs are caused by             cir-
should only be recorded in circumstances in which                     cumstances that were unforeseen at the contract
realization is assured beyond a reasonable doubt,                     date and are not the result of      deficiencies
such as      circumstances in which an entity's his-                  in the contractor's          performance. (Work
torical        experience provides such (continued                    must be outside the scope of the original con-
on page 10) assurance or in which an entity has                       tract.)
received a bona fide pricing offer from a customer
and      records only the amount of the offer as                      c. Costs associated with the claim are
revenue.                                                              identifiable or otherwise determinable and are
                                                                      reasonable in view of the work performed.
    3) If change orders are in dispute or are                         (Must have underlying invoices, time records,
       unapproved in regard to both scope and                         and similar documentation.)
       price, they should be evaluated as claims.
                                                                      d. The evidence supporting the claim is
CLAIMS                                                                objective and verifiable, not based on
                                                                      management's "feel" for the situation or on
Claims are amounts in excess of the agreed                            unsupported representations. (Need to have a
contract price (or amounts not included in the                        history of positive results of resolving similar
original contract price) that a contractor seeks to                   unapproved/disputed change orders in the past.)
collect from customers or others for customer-
caused delays, errors in specifications and                    If the foregoing requirements are met, revenue from a
designs, contract terminations, change orders in               claim should be recorded only to the extent that contract
dispute or unapproved as to both scope and price,              costs relating to the claim have been incurred.
or other causes of unanticipated additional costs.
                                                               The amounts recorded, if material, should be disclosed in
Recognition of amounts of additional contract                  the notes to the financial statements.
revenue relating to claims is appropriate only if it
is probable that the claim will result in additional           Costs attributable to claims should be treated as costs of
contract revenue and if the amount can be                      contract performance as incurred.
reliably estimated.
                                                               However, a practice such as recording revenues from
Those two requirements are satisfied by the                    claims only when the amounts have been received or
existence of all the following conditions:                     awarded may be used. If that practice is followed, the
                                                               amounts                                   should be dis-
         a.The contract or other evidence                      closed in the                             notes to the
         provides a legal basis for the claim; or legal        financial                                 statements.
         opinion has been obtained, stating that
         under the circumstances there is a                    If the four                               requirements
         reasonable basis to support the claim.                are not met                               or if those
         (Work must be outside the scope of the                require-                                  ments are met
         original contract. If the customer has                but the                                   claim exceeds
         rejected the claim, it would be helpful to            the                                       recorded con-

                                                          10
Association Bulletin Board
New Members                       Brief description of business:
                                  mobile concrete/rock crushing
                                  operations, concrete recycling
                                  facility.
Elliot Wilson Capitol
Trucks, LLC                       HCCA member firm
7701 General McClellan Road       The Anderson Company                   year’s event will be held at the
Manassas, Virginia 20109          has relocated to their new             Washington-Dulles Hilton Hotel in
Phone: (703) 656-4600             headquarters. Their new                Chantilly, Virginia on Friday,
Fax: (703) 656-4601               address is:                            December 1st. Proceeds from the
Website: www.ewtrucks.com         12150 TAC Court                        HCCA Silent Auction are used to
Primary Member:                   Manassas, Virginia 20109               directly benefit local non-profit
Mr. Al Bryant                     The firm has retained their            organizations that help those in
abryant@capitoltrucks.com         original telephone numbers as          need in our area. Last year’s event
Alternate Member:                 published in the HCCA                  raised over twenty three thousand
Mr. George Wilson, III            membership directory.                  dollars thanks to the generosity of
gwilson@capitoltrucks.com                                                our members . Members of the
Brief description of business:    HCCA member firm                       HCCA Public Relations Committee
Heavy/Medium Truck Dealer-        A&M Concrete Corporation               will be in contact with you soon to
ship, New and Used Trucks,        has changed their location and         solicit any item of value for the
Parts, & Service                  their telephone numbers. Their new     auction. Please consider a donation
                                  address and phone numbers are:         to this very worthy cause.
National Asphalt                  43760 Trade Center Place
                                  Suite 160                              HCCA member firms are reminded
Manufacturing                     Dulles, VA 20166                       that members of the HCCA Board
Corporation                       Phone: (703) 544-0850                  of Directors are selling tickets for
PO Box 327                        Fax: (703) 544-0897                    the upcoming
Merrifield, VA 22116              Web Site: www.amconcrete.net           2006 Johnston Trust Raffle.
Phone: (703) 273-2536                                                    First place prize is $10,000.00.
Fax: (703) 352-1386                                                      There will also be five,
Primary Member:                   Congratulations are extended to
                                  HCCA member firm R.J. Smith            second-place prizes of $1,000.00
Mr. Tim Boone                                                            awarded. The raffle will be held
timboone@nationalasphalt.net      Construction Company in
                                  recognition of their recognition       after dinner at the annual HCCA
Brief description of business:                                           Holiday Party on Friday,
Manufacturer of hot mix           as a 2006 “First Choice
                                  Business of the Year” award from       December 1st. Proceeds from the
asphalt                                                                  raffle will be used to provide
HCCA Member Sponsor: Mr. Jim      Chesterfield County, Virginia. The
                                  award recognizes firms that            college scholarships to deserving
Mitchell, Superior Paving Corp.
                                  contribute to the County through       young men and women who will
                                  job growth, community service,         be graduating seniors in the
Process Demolition,               innovative products/services,          Spring of 2007.
Incorporated                      employee values and ethical
19490 Hickory Drive               standards.
                                                                         Congratulations are extended to
Culpeper, VA 22701                                                       long-time HCCA member firm
Phone: (703) 585-9058                                                    R.L. Rider and Company
Fax: (703) 830-5048               All HCCA member firms are
                                  reminded of the upcoming HCCA          on the occasion of their
Primary Member:
                                  Silent Auction. The Silent Auction     60th anniversary of doing
Mr. Ron Feather
                                  will be held in conjunction with the   business in the Northern Virginia
ron_feather@yahoo.com
                                  annual HCCA Holiday Party. This        heavy construction industry.
Alternate Member:
Mr. Scott Reiter

                                                   11
2006/7 Calendar of Events                        (Dates, Locations, & Times Subject To Change)


November                             January, 2007                        February, 2007
Tuesday, November 16th               Tuesday, January 16th                Tuesday, February 20th
HCCA Membership Dinner Meeting       HCCA Membership Dinner Meeting       HCCA Membership Dinner Meeting
Annual Business Meeting              Special Guest Speaker TBA            Special Guest Speaker TBA
Election of New Members of the       Country Club of Fairfax              Country Club of Fairfax
HCCA Board of Directors              Fairfax, Virginia                    Fairfax, Virginia
Country Club of Fairfax              6:00 PM                              6:00 PM
Fairfax, Virginia                    Wednesday and Thursday,              Wednesday, February 7th
6:00 PM                              January 31st and February 1st        Fredericksburg Quarterly
                                     CONEX METRO DC Construction          Dinner Meeting
                                     Exhibition and Trade Show            Fredericksburg
                                     Dulles Expo Center
December                             Chantilly, Virginia
                                                                          Fraternal Order of Police Lodge #15
                                                                          Spotsylvania, Virginia
Friday, December 1                                                        6:00 PM
HCCA Holiday Party
Johnston Trust Raffle
HCCA Silent Auction
Dulles-Washington Hilton Hotel
                                                                          March, 2007
6:00—11:30 PM                                                             Tuesday, March 20th
Chantilly, Virginia                                                       HCCA Membership Dinner Meeting
                                                                          Focus On Safety
                                                                          Country Club of Fairfax
                                                                          Fairfax, Virginia
                                                                          6:00 PM




The Heavy Construction Contractors Association
10756-B Ambassador Drive, Suite 201
Manassas, VA 20109
(703) 392-7410, Fax (703) 392-7249
www.hcca.net

				
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