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					                              The Subcontractor Advocate
                              American Subcontractors Association of Ohio

                       Central Ohio Region,                                        February 2009
                       Cincinnati Region,                                          Volume 2
  Contact Us           Northern Ohio Region                                        Issue 2
  ASA of Ohio
  P.O. Box 2026
  Dublin, OH 43017
                       Guideline Helps Projects End on a Happy Note
  (614) 717-9499
                        If your company has          General Contractors of      extraneous items off
  Fax:                 ever experienced a            America, and the            punch lists,
  (614) 717-9606       disorganized project          Associated Specialty        subcontractors and their
                       closeout, you know that       Contractors have jointly    customers should
  r.vajda-asa-         it’s worth the time to        developed and               communicate “any known           discuss the closeout          published a tool that       issues throughout the life
                       process with a customer       helps wit planning a        of the project… to allow
  Website    well before any problems      smooth closeout.            early agreement and
                       arise. The problem is                                     corrections”. That will
                       that when a closeout          The “Guideline on           reduce punch list items.
                       doesn’t run smoothly,         Project Closeout”, one      It will also help ensure
                       issues escalate – multiple    of the AGC/ASA/ASC          workers are on the
                       punch lists lead to more      Guidelines for a            project to complete /
                       items being added to          Successful Construction     correct work, and reduce
President:             punch lists on an ad hoc      Project, features two       the likelihood of needing
Russell O’Rourke       basis, the need to re-        pages of ways to            to send crews back later.
                       mobilize crews, and new       improve the project         (The guideline suggests
Vice President:
                       scheduling issues that        closeout process,           that subcontractors and
Douglas McNames
                       lead to payment delays.       ranging from the proper     their customers make a
Secretary-Treasurer:   There’s no way around it:     timing of the substantial   point of developing a list
Tania Prestia          A disorganized closeout       inspection, to the proper   of items for completion or
Board of Directors:    is a draining and             handling of items that      correction before workers
Rick Cevasco           expensive process. By         are left off of a punch     leave the project.)
Jim Gauer              contrast, a smooth            list. Owners and            Another way to reduce
Gary Hammel            closeout perfectly caps a     managers of                 the punch list work is to
John Martin            project, making               subcontracting firms can    hold off making the
Sherry Pymer           subcontractors and their      use the guideline to        request for a substantial
Joe Urquhart           customers happier and         communicate with            completion inspection
                       wealthier!                    customers about             “until the designated
Executive Director:
Robert Vajda                                         performance and             portion of the work has in
                       When a closeout runs          payment issues before       fact reached substantial
                       smoothly, it’s because of     or during a project.        completion”.
                       planning and
                       communication. All            Performance Issues          Once a customer verifies
                       parties work to address                                   substantial completion,
                       issues early in the project   There’s an old adage:       the substantial
                       and steer work to timely      “An ounce of prevention     completion, inspection
                       completion, pay promptly      is worth a pound of         should be “prompt and
                       for completed work, and       cure”. It couldn’t be       thorough” and include a
                       use a single punch list.      truer than when closing     representative of the
                       ASA, the Associated           out a project. To keep      (Continued on Page 2)
                          Guideline Helps Projects End …..                               (from page 1)
                         subcontractor and its          of ASA’s Addendum to        withholding sufficient
                         customer, according to         Subcontract (2008):         money to complete the
                         the guideline. The punch       “Closeout                   punch list of omissions
                         list should present items      Documentation.              and deficiencies. Upon
When a closeout runs
                         to be resolved, including      Customer will not require   receipt of such
smoothly, it’s because   incomplete scope/finish        any contract closeout       payment, the general
of planning and          details. Disputes over         procedures or any forms     contractor should make
communication.           the contractual                that have not been          payment to each
                         requirements regarding         provided to and             subcontractor in the
                         punch list items “should       specifically accepted by    same manner”.
                         be reported immediately        Subcontractor prior to
                                                                                    “Release of withheld
                         in writing to the owner        signature of the
                                                                                    funds should be
                         and/or architect/engineer      subcontract”.
                                                                                    conditioned solely upon
                         as appropriate, seeking
                                                        Payment Issues              satisfaction of
                         an early resolution, “while
                                                                                    substantial completion
                         undisputed punch list          While the timing of
                                                                                    of punch list items”.
                         items should be corrected      payments, including the
                         and completed                  release of retainage        Taking the time to talk
The “Guideline on        expeditiously.                 and/or final payment,       with customers about
Project Closeout”,                                      depends on the specific     closeout procedures
                         Keeping the punch list
is one of the                                           contract language under     before starting work or
                         free from ad hoc
AGC/ASA/ASC                                             which the subcontractor     early in a project will
                         additions is important to
Guidelines for a                                        is working, the guideline   help improve project
                         subcontractors. To help
successful                                              recommends certain          coordination, reduce
                         with that common
                                                        practices.                  costs, increase timely
Construction             problem, the guideline
                                                        Subcontractors can cite     payment, and contribute
Project.                 notes that “omissions
                                                        the guideline and its       to a sense of a job well-
                         and/or deficiencies noted
                                                        recommendations when        done.
                         after the substantial
                                                        negotiating payment
                         completion punch list                                     Learn more about
                                                        terms and conditions with
                         should be treated as                                      making project closeout
Performance                                             customers. The guideline
                         warranty items and                                        run smoothly and
Issues                                                  recommends that:
                                                                                   efficiently. Download
                         therefore independent of
                         substantial completion,        General contractors and    the “Guideline on
                         the punch list, and the        subcontractors should      Project Closeout” at
                         final payment conditions”.     cooperate to provide       www.constructionguideli
                         It also notes that the final   subcontractors “a positive
Payment Issues           inspection should              incentive to complete
                         “determine only the            their work properly on or
                         satisfactory correction of     ahead of time by
                         the previously                 providing prompt and
                         documented substantial         proper payment for work
                         completion punch list          satisfactorily performed”.
                         items”.                    “Upon receipt of the
                         To prevent punch list and substantial completion
                         other surprises at the end punch list, the general
                         of the project,            contractor should request
                         subcontractors can         release of the final
                         negotiate a provision      payment, including
                         modeled on paragraph 12 retainage, less
                      ASA and Allies Campaign for Quick-Start Construction
                      Projects in Economic Stimulus Package
                      As the new Congress           in the definition of         “play an important role in
ASA and its allies    got to work, ASA and its      “infrastructure”” and        economic recovery by
sent a letter to      allies in the construction    highlighting the             encouraging private
lawmakers and the     industry sent a strong        economic benefits of         investment in building
then, President-      message to lawmakers          public construction          construction and leverage
Elect.                and the then President-       projects like government     other business
                      elect on the role of          buildings, schools,          investments in the
                      construction in any           military housing and         industry”. The letter
                      economic stimulus             prisons. The letter          suggested: an extension
                      package. Two                  suggested three criteria     of depreciated bonuses
                      coalitions of which ASA       for identifying priority     and expensing limit
                      is a member ran ads in        projects for the stimulus    increases for small
The message was       Roll Call, one of Capitol     package: “1) the project     businesses; repeal of the
the role of           Hill’s most read              must provide long-term       3 percent tax withholding
construction          publications, supporting      economic benefits to the     requirement for
projects to help      an investment in              community; 2) the            government contractors;
jump-start the U.S.   construction projects         project must be able to      energy-efficient
economy.              that would help jump-         be put out to bid quickly    improvement and workers
                      start the U.S. economy.       and projects that have       training credits; and an
                      In addition, ASA and its      been awarded but             investment tax credit.
                      allies mailed a letter to     stalled due to lack of
                      then President-Elect          funding should be            To take action and urge
Contact your
                      Barack Obama and              allowed to proceed; and      lawmakers to enact a
Congressional         congressional leaders         3) the project must          stimulus with quick-start
Representatives       asking them “not to           create and/or sustain        projects, visit the ASA
and Senators          overlook building             jobs”. ASA and its allies    Legislative Action Center
today.                construction,                 also sent a letter calling   at
                      alterations, and repairs      for tax relief that would

                                 The Right to Project Financing Information:
                                           ConsensusDOCS vs. AIA
ASA endorsed
ConsensusDOCS         Many construction             Be aware that, while         to surface. On the other
model contract        subcontractors have           many contract                hand, the 2007 American
documents             expressed concern about       documents contain            Institute of Architects
                      their customers’ ability to   project financing            documents, which ASA
provide access to
                      pay during the ongoing        disclosure terms, not all    does not endorse, restrict
owner financial       credit crisis. When credit    contracts are the same!      a contractor’s access to
information …         is tight, payment                                          owner financial
                      problems aren’t hard to       For example, the ASA-        information after work
                      predict for projects that     endorsed                     commences.
                      are under-financed.           ConsensusDOCS model
                      That’s why, when bidding      contract documents           The ConsensusDOCS
                      on projects                   provide access to owner      Form 200 Standard Form
                      subcontractors should         financial information not    of Agreement Between
                      consider whether they’ll      just before commencing       Owner and Contractor
                      have the contractual right    work, but also once work     states (at paragraph 4.2):
                      to obtain evidence of the     has begun – when             “FINANCIAL
                      owners’ ability to pay.       problems are most likely     (Continued on Page 4)
                           The Right to Project Financing Information: …. (from page 3)
Membership                 INFORMATION. Prior
                           to commencement of
                                                       In contrast, the A201-2007
                                                       General Conditions of the
                                                                                     Establishing the
                                                                                     contractual right to receive
ASA of Ohio is always      the Work and thereafter     Contract for Construction     project financing
looking for new            at the written request of   states (at paragraph 2.2.1)   information throughout the
members. If you know       the Contractor, the         that a subcontractor may      life of a project – not just
of any subcontractors,     Owner shall provide the     request such information “    at the project’s start – is
suppliers or service       Contractor with             only … if (1) the Owner       one step that
companies that we can      evidence of Project         fails to make payments to     subcontractors can take to
contact as a potential     financing. Evidence of      the Contractor as the         protect their companies’
member, please send        such financing shall be     Contract Documents            financial health during this
Executive Director, Rob    a condition precedent to    require; (2) a change in      economic downturn.
Vajda:                     the Contractor’s            the Work materially
    1) The Name of         commencing or               changes the Contract          To obtain
        the Company        continuing the Work.        Sum; or (3) the Contractor    ConsensusDOCS
    2) The Contact         The Contractor shall be     identifies in writing a       documents, see the “How
        Person’s name      notified prior to any       reasonable concern            To Order
    3) The Company’s       material change in          regarding the Owner’s         ConsensusDOCS” guide
        phone number       Project financing”.         ability to make payment       on the ASA Member
    4) The Contact         Paragraph 4.2.1 of the      when due”. These three        Resources page at
        Person’s e-mail    ConsensusDOCS Form          conditions, unique to the
        address (if        750 Standard Form of        AIA family of documents,
        known).            Agreement Between           could lead to
    5) The type of         Contractor and              disagreement about the
        business,          Subcontractor gives a       meaning of “changes” and
        subcontractor      subcontractor the right     “concerns” and the need
        (specialty),       to receive the same         for dispute resolution.
        supplier or a      information.

Help us get new
members for your ASA      Upcoming Member Meetings in Your City

                          Cincinnati                   Columbus                      Cleveland
YOUR CALENDARS!!!         February 19th – Lunch    February 10th – Dinner            February 23rd – Meeting
                          Meeting at the           Meeting at the                    will be held at 3 Summit
ASA OF OHIO, WILL         Montgomery Inn at the    Confluence Park                   Park Dr., Independence,
HOLD ITS 2009             Boathouse. The program   Restaurant. The                   OH. The program,
ANNUAL MEETING IN         will on Successive Work  program will be a focus           “Ohio Mechanic’s
MAY. THE MEETING          coming up at “The        on “Why Contractors               Liens Law in One
IS BEING PLANNED          Banks”.                  Fail? and Warning                 Hour” will be held in the
BY OUR CINCINNATI                                  Signs that a Contractor           auditorium in the lower
REGION. THE               March 19th – A Luncheon is in Trouble”.                    level. The program is
MEETING DATE AND          Meeting is scheduled. A                                    free for ASA members.
PROGRAM DETAILS           GC panel will be invited March 10th – Dinner               You should receive a
WILL FOLLOW.              to talk about upcoming   Meeting at the                    post card with
PLAN TO ATTEND.           projects in the Greater  Confluence Park                   registration information.
                          Cincinnati area.         Restaurant. The
                                                   scheduled program will
                                                   be an “Industry

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