Building_Entrepreneur_to print

Don’t be Unprepared for An Five Ways to Get Your First 

OSHA Inspection page 11 Federal Contract page 19 

The Ultimate Guide To Construction 

Cost Estimating page 7 

Building 

A MAGAZINE FOR 

CONSTRUCTION, ARCHITECTURE 

AND ENGINEERING FIRMS 

Entrepreneur 

November, 2016 

Premier Issue 

SHE’S THE WOMAN IN CHARGE 

OF OVERSEEING THE CITY OF 

CHICAGO’S $1.5 BILLION 

PROCUREMENT SPEND 

..see page 12

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Contents 

4 5 Ways to Brand Your 

Construction Company and 

Make More Sales 

7 The Ultimate Guide to 

Construction Cost Estimating 

14 The Different Ways Business 

Owners Can Pay Themselves 

19 Contracts: The Basics 

11 Don’t be Unprepared for An 

OSHA Inspection 

12 Construction Opportunities at 

the City of Chicago 

18 Five Ways to Get Your First 

Federal Contract 

20 Construction Management 

Software Pricing Guide 

26 Reasons Why to Get Certified as 

a Minority-Owned Business 

22 6 Ways Construction 

Technology Has Transformed 

the Industry 

28 The Top 20 LEED Green 

Associate Exam Preparation 

Resources 

30 Construction Firms Will Face 

Higher OSHA Fines of August 

BUILDING 

ENTREPRENEUR 

MAGAZINE 

VOLUME 1, November, 2016 

PUBLISHER 

SF Stantley 

MANAGING EDITOR 

EL Young 

CONTRIBUTING WRITERS 

Jamie Rhee 

Richard J. Hernandez 

David A. Ward Sr. 

Ayenew Biru 

Robert A. Shipley 

Jack Rubinger 

David Cheng 

Andrea Brennan 

Rachel Burger 

Steve Wright 

Kendall Jones 

DESIGNER 

Linea Art 

BUILDING ENTREPRENEUR IS 

PUBLISHED TWICE A YEAR 

SEND LETTERS TO 

BUILDING ENTREPRENEUR 

info@BuildingEntrepreneur.com 

OUR PURPOSE 

These business owners are 

motivated, self-directed and 

ambitious and have a sincere 

desire to move their businesses 

to the next level. Through the 

support and access provided, 

our readers will learn innovative 

strategies to help them grow 

and expand their businesses. 

Building Entrepreneur | 3

5 Ways to Brand Your 

Construction Company 

and Make More Sales 

A brand is the promise of an experience. 

WALK INTO A STARBUCKS AND YOU KNOW YOU’LL BE SURROUNDED BY HIPSTERS 

AND OVERPRICED BUT DELICIOUS COFFEE. GO TO DISNEY AND EXPECT TO 

EXPERIENCE “MAGIC.” SHOP AT WHOLE FOODS AND YOU CAN ANTICIPATE 

LOCALLY-GROWN OR ORGANIC PRODUCE—AND PRICES TO MATCH. 

But branding doesn’t stop at nationally 

recognized chains. Creating a construction 

brand prepares your potential clients 

for an experience they’re willing to pay 

for. 

1. SET A BUDGET. 

When you’re deciding how much money to 

spend on a brand, know that you get what 

you pay for. A home made logo probably 

won’t be of the same quality as a professional 

design. Professionals suggest that 

you spend 1%-10% of your overall revenue 

on marketing—and branding is only a part of 

that budget. But there are other ways to budget 

your firm’s brand. 

You could make a branding plan to be executed 

over the year and create a budget to solely 

meet those needs. But this method doesn’t 

have a lot of wiggle room if an unexpected 

opportunity comes up and you need collateral 

materials to promote your business. 

You could also try to determine how much 

your competition spends—and then match it 

(though figuring out what they are spending 

may be difficult if not impossible depending 

on your access points). 

No matter how you arrive at your numbers, 

looking into your company’s finances and 

determining what you can spend will directly 

affect how successful your branding campaign 

is. Setting a budget will also give you 

a clearer sense of guidelines as to what you 

are willing to invest in—and what you aren’t. 

2. DECIDE WHAT YOU WANT TO BE 

KNOWN FOR. 

You want to be known for being experienced 

and of high quality, but not necessarily 

cheap. Ron Roberts explains why: 

What should you hope your brand stands for? 

• yProfessional 

• yReliable 

4 | Building Entrepreneur 

• yTrustworthy 

• yFair 

• yWell managed 

• yGood quality 

Good value 

Note that I didn’t list low price. You really 

don’t want the reputation for being the low 

price provider as that reputation inevitably 

leads to low margins. You want to be selected 

for the reasons listed above. The last one, 

good value, covers the price angle. 

You want to work with people who understand 

value. You don’t want to work with 

people who only understand price. 

In other words, you want your brand to uphold 

the values of your company without 

cheapening your product. 

So how do you do that? 

MarketingDonut suggests that you should 

“think of your brand as a person.” You’re 

creating a character, a personality, a placeholder 

for your business as a whole—the 

approach should be as holistic as possible. 

MarketingDonut adds, “Our personality determines 

how we behave in different situations, 

how we dress and what we say.” That 

“personality” should be written down for 

all workers to see and adhere to, especially 

when working with a customer. 

You don’t want your business to act bipolar; 

consistent positive experiences are the key to 

getting repeat customers and quality online 

reviews. Once you have your business’ personality 

defined and written down, take the 

time to document “if-then” scenarios. How 

do you want your company to act in given 

situations, like a frustrating change order or 

with a new client that was referred to you 

by a previous one? The more you document 

expectations, the better your brand will stay 

predictable and uniform. 

Once you’ve defined your brand’s “personality,” 

move on to the visual aspect of branding. 

3. CHOOSE A LOGO THAT REPRESENTS 

YOU. 

Make it clear that you are a construction 

company and hint at the kind of construction 

you do. These are elements you want to be 

sure are included in your logo design. 

And choose colors that you will be comfortable 

working with for a long time—they will 

come in handy soon. 

Consider using lower cost options like Fiverr, 

99Designs, and ODesk for competitively-priced 

logos. For businesses with bigger 

budgets, you can look for a local branding or 

advertising firm. 

Your logo only does well if it actually gets 

people to call your firm or leads to recognition. 

Make sure to include your company 

name in your logo. Connecting your 

name with your logo will mean prominently 

pairing the two whenever you have the 

chance—on your stationary, on your trucks, 

and even on your work outfits. Make your 

brand synonymous with your name, and 

happy customers will start attributing great 

work to your firm. 

4. STORM THE INTERNET. 

Once you’ve figured out your brand, it’s time 

to build a website around your logo. Choose 

the same and complementary colors to further 

accentuate your brand. Set up social 

media to drive traffic to your site, and blog 

about construction to boost your company’s 

SEO. Your website will often be your first opportunity 

to make a good impression on a 

potential client, so invest well in it. 

Also, encourage your happy customers to review 

you on Yelp, especially for remodelers. 

Clients will be far more comfortable with a 

construction company that has a history of 

doing good work as opposed to one that is 

known for its terrible customer service. 

5. CHOOSE YOUR SUPERSTAR. 

After setting up your logo and your website, 

consider marketing your best team members. 

People want to hire experts, and they’re 

willing to pay for it. Having a branded expert 

on the team guarantees your customers they 

will have access to someone they trust. 

They write, “Being the expert in their industry 

is much more powerful than being a 

generalist in your field.” So take your best 

people and send them to trade shows, advertise 

them on flyers, and set up their own 

social media accounts for your business. As 

a bonus, it makes those team members feel 

important, leading to more job satisfaction. 

Originally appeared on Capterra, www.capterra.com, 

Article written by Rachel Burger

PUBLISHER'S STATEMENT 

WE ARE IN THE WORLD OF BUILDING. NOT JUST BRIDGES 

AND STRUCTURES, BUT THE BUILDING OF BUSINESSES. 

As a business owner in the building industry, 

you are faced with a profound 

number of challenges that can affect 

your ability to expand your business. You are 

working daily to keep up the pace of looking 

for new business, while at the same time, 

managing existing projects. So, when do 

you have time to keep up with new trends, 

innovations, opportunities, customer relations, 

team building, etc., etc.? Or, when do 

you have the time to seek out new business 

opportunities that are available from a cross 

section of government and private sector organizations 

and firms? 

Building Entrepreneur was conceived to be 

a resource for business owners and stakeholders 

who work within the construction, 

professional services and aligned industries. 

We serve as a valuable resource to provide 

information, insights, updates on new technologies, 

know-how and processes to guide 

business owners in managing and growing 

their businesses. 

We will provide industry resources, individual 

profiles, such as “Owner Spotlight” (see 

ad in this issue) and present specialty features 

like: 

• Customer Service 

• Making Your Job Easier 

• Digging Deep 

• Contracting Opportunities 

• Perfect Match 

• Insurance Matters 

• Industry Updates, Trends and Knowledge 

Each of these features is highly suited for 

sponsorship by an interested firm. 

We will offer perspectives that impact businesses 

nationally, regionally and in your local 

community. We will publish both online 

and in print and we will reach businesses 

nationally. 

LOOKING FOR DBEs? Building Entrepreneur 

presents a unique opportunity for contracting 

officers, project owners and primes 

to connect with emerging, small and midsized 

building industry businesses. We can 

expand your reach and offer access to businesses 

across the spectrum of trades that 

you could never reach on your own. Use this 

resource to promote your opportunities and 

connect with subs and strategic partners. 

LOOKING FOR CONTRACTS? Building Entrepreneur 

presents a unique opportunity 

for business owners to market your business 

and services to contract officers, primes or 

Tier I companies and professionals. We can 

expand your reach and offer access to industry 

decision makers and influencers you 

could never access on your own. 

LOOKING FOR CUSTOMERS? Building Entrepreneur 

presents a unique opportunity 

to reach business owners who not only 

purchase or lease materials, supplies, and 

equipment to operate their businesses, but 

these individuals consume a host of products 

and services like clothing, insurance, 

automobiles, trips…the list is endless. We 

can expand your reach and offer access to 

progressive consumers with disposable income 

to purchase goods and services sold or 

distributed by your company. 

This debut issue is but the 1 st of many more 

to come. My level of excitement is quite high. 

We are building something incredible and 

want you to ride along. 

As we continue the ride, we will reshape, 

sharpen and retool our approach. We will 

add and delete those aspects of our offering 

that just don’t seem to work. We are all 

about engagement and connections. The 

prospects are endless. 

We appreciate the support of those advertisers 

and writers who have joined us on this 

journey. 

Visit our website for more information, to 

submit your request to write for us and your 

desire to advertise with us. 

More to come!! 

Best. 

SF Stantley 

Publisher 


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Our broad experience. 

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The Ultimate Guide 

to Construction Cost Estimating 

HOW MANY BOOKS ARE THERE ON ESTIMATING CONSTRUCTION PROJECT COSTS? HOW MANY MANUALS, 

PRICE INDEXES, SPREADSHEETS, TOOLS, RULES OF THUMB, AND OPINIONS? CONSTRUCTION COST ESTI- 

MATING SHOULD LEAD TO PROFITABLE BUSINESS AND SATISFIED CLIENTS. 

However, it can all too rapidly veer towards 

loss of money (estimates too 

low) or loss of customers (estimates 

too high). It’s no wonder that so many people 

want to add their two cents’ worth about the 

best way to do it. 

Yet the truth is there is no universal ultimate 

guide to construction cost estimating. The 

reason is simple. The best estimating you can 

do for your construction company depends 

on the following: 

• Efficient, accurate processes and tools 

• The construction project for which the 

cost estimate is to be made 

• Your cost estimating experience and 

judgment 

Even if processes can benefit from cost estimating 

standards and best practices, and a 

project sometimes allows the re-use of other 

successful cost estimates, experience differs 

in every case. No two estimators have 

worked on exactly the same projects. No two 

contractors have the same track record or 

the same internal organization, constraints, 

and capabilities. 

Most useful construction cost estimating advice 

will need to be specific to you and your 

business. 

Nevertheless, there are certain components 

that are likely to be part of every excellent 

estimator’s approach. 

Achieving the Cost Estimating Trifecta 

Construction cost estimating is essentially 

about three things: 

• Money: You calculate your cost, apply 

your markup, and present the total to 

your customer. 

• Accuracy: Your business will only 

prosper if your estimating is accurate, 

so you make a profit without giving your 

customers any unpleasant surprises between 

a pre-construction estimate and 

the final amount to be paid. 

• Speed: Customers want their estimates 

rapidly. For commercial and industrial 

projects, customers are unlikely 

to wait weeks for your cost 

estimate. For private building 

projects such as house renovations 

and extensions, customers may even 

simply accept the first estimate they get, 

as long as it looks reasonable to them. 

To meet all three criteria simultaneously, you 

might need a small army of estimators – or 

a suitable tool, such as construction estimating 

software. 

Software for Cost Estimating – Can 

You Really Live Without It? 

If you think that bringing software into the 

discussion this early is putting the cart before 

the horse, consider the following: Businesses 

make increasing use of computers and the 

software that runs on them, but too many 

construction cost estimators (over 55%, 

by one estimation) remain inefficient by 

failing to use proper tools. 

Suitable software solutions do not have to 

be complicated or expensive. Basic features 

may be enough, such as: 

• Takeoff tool, to assist in the process of 

taking measurements from paper or digital 

plans. 

• Integrated cost databases, which can 

use commercially available data, such 

as RS Means, and your own data for cost 

estimating. 

• Calculations for estimates, in worksheets 

generated by the application to 

layout requirements and estimates to 

various levels of detail, corresponding 

to traditional “squaring out” and “abstracting” 

activities of cost estimators. 

This functionality accelerates a large part 

of an estimator’s work. With software often 

driving other parts of a construction business 

too, a cost estimating program may also 

offer: 

• Interfaces with other applications. 

Examples include taking data directly 

from an architect’s or engineer’s CAD 

(computer-aided design) files to make 


estimates and sending estimate information 

directly to a program for procurement 

or integrating with your company’s 

accounting system. 

• Online collaboration. Comments, adjustments, 

and approvals can be done 

digitally, avoiding paper chases to find 

out which physical project file is still sitting 

in whose in-tray. 

Proper integration of construction management 

software can therefore speed up business 

as a whole, as well as the cost estimating 

activity itself. 

The Not-So-Smart Side of Applications 

for Cost Estimating 

Cost estimating software may be necessary 

in order to be responsive to customer 

requirements, but it is not sufficient on its 

own. In other words, it would be a mistake to 

just rely on software without any additional 

checks and balances. 

The quality of the results you obtain from estimating 

software depends on the quality of 

the information you put into it. Consider the 

cost data that it uses. Few if any commercially 

available cost databases use continually 

checked data, refreshed every year, item by 

item, locality by locality, because the effort 

required is enormous. The real costs you see 

for building materials or activities in your 

own projects may differ, and it is important 

to use this real data in your estimating process 

instead of dated information. 

Similarly, do not confuse purpose-built 

cost-estimating applications with spreadsheet 

applications. The latter do not offer 

“hard coded” formulas for meaningful calculation. 

The flexibility of spreadsheets is 

also their weakness: people can change the 

way a spreadsheet performs its calculations, 

destroying the relevance of the results and 

leading to errors. By comparison, construction 

estimating software, when given the 

right data to work with, can reliably calculate 

costs and related information by category 

(materials, labor, plant, time), and rapidly 

produce both summary and detailed cost 

estimates. 

The Added Value of the Human Cost 

Estimator 

Capable cost estimators can make intelligent 

use of software. They can leverage the power 

and speed of the cost-estimating application, 

at the same time applying their knowhow to 

confirm or improve the results. 

Characteristics of good cost estimators include: 


• Understanding of architectural and engineering 

drawings. 

• Knowledge of construction materials 

and methods. 

• Acquaintance with customs or preferences 

about how their own company 

executes its construction projects. 

• A systematic and organized approach. 

• Know how in preparing estimates that 

are accurate and clear for management 

and customers. 

• Competence in evaluating bids from 

subcontractors, not only on price, but 

also on scope and responsiveness with 

an eye on past performance as well. 

• Engineering skills to structure the estimate 

in a way that assists cost optimization, 

possibly with different construction 

methods and materials. 

• Sound judgment and ethics to ensure 

that cost estimating serves the business 

and customers properly and treats subcontractors 

fairly (no “bid shopping” as 

a prime contractor or “bid peddling” as 

a subcontractor.) 

• The continuing acquisition of experience 

and information to improve results further. 

This can include finding out why 

estimates for a project were accepted or 

rejected, how many contractors provided 

estimates for the project in question, 

and if the lowest bidder made any omissions 

in the estimate it provided. 

When a computer does the manual and repetitive 

work, a greater part of a cost estimator’s 

time can be spent on improving the 

process by improving the presentation of 

estimates. Applications may offer different 

reporting options from which to select cost 

breakdowns and proposals, including charts 

and graphics to enhance clarity. 

The experience and judgment of the cost estimator 

are still necessary to decide matters 

such as units of measurement for estimating. 

A cost estimator can shape the presentation 

of the costs by using units favored or 

recognized by the customer, or that yield 

quantities that are neither too big, nor too 

small. 

Potential Pitfalls for People Doing 

Cost Estimating 

Conversely, cost estimators should avoid the 

following estimating errors: 

• Failing to read relevant project documents. 

• Skipping the site visit. Another necessary 

reality check for the relevance of 

construction elements, measurements, 

and unit costs to be used. 

• Mistakes and omissions. A cost estimating 

software application is like a car. If 

a part is missing, expect a malfunction, 

and if you drive it without care, expect 

an accident. 

• Arbitrary cost adjustments. The final 

cost estimate from the application 

might not be the one you expected or 

that your customer wanted, but it might 

still be the right one. While applications 

often offer the possibility to adjust pricing 

manually, sound business justification 

is always a prerequisite. 

• Failure to check the final result. Figures 

from an application must always be 

checked for meaningfulness, possibly by 

comparing them with previous similar 

projects. Applications and computers 

are still “garbage in, garbage out” systems. 

If you feed them bad data or omit 

chunks of a project, you will get bad or 

incomplete results. Check, check, and 

check again. 

Are Programs or People Better for 

Construction Cost Estimating? 

From the lists above, it becomes clear that 

human beings and software applications 

are highly complementary when it comes to 

construction cost estimating. Most of the 

characteristics of a good cost estimator (as 

in a person) are not available in software, 

although artificial intelligence may lead to 

new software capabilities in the future. On 

the other hand, computers achieve levels 

of speed and reliability in resource calculations 

that are far beyond those of human 

beings. 

Finally, the Ultimate Guide to Construction 

Cost Estimating is… 

…you, as a competent, knowledgeable, conscientious 

cost estimator, supported by a 

suitable construction estimating software 

application. This person-technology combination 

is a key part of preserving and improving 

the profitability of a construction 

company, in ways that neither a person nor a 

computer can do alone. Moreover, the added 

value generated by this combination (detail, 

relevance, clarity of presentation) can make 

a favorable impression on the customer 

when it is most needed, meaning at the outset, 

and justify payment for the estimating 

work alone. 


Article written by Rachel Burger

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Don’t be Unprepared for 

an OSHA Inspection 

YOUR COMPANY SHOULD ALWAYS BE PREPARED 

FOR A SURPRISE VISIT FROM OSHA. 

DAVID A. WARD SR. AND JACK RUBINGER 

For the thousands of companies that have been 

through an OSHA inspection since OSHA’s inception 

in 1971, the experience has ranged from 

scary and nerve wracking to polite and professional. 

Each inspector typically has pet peeves based on past 

experience. Some are sticklers for electrical issues. 

Some are hyper aware of power tools. 

You actually can learn a lot about cooperation and 

collaboration through the experience. Having said 

that, there’s always a looming fear of discovery and 

paranoia surrounding an impending OSHA inspection 

– much like the fear and nervousness we face when 

we’re dealing with an IRS audit. 

In both cases, your company should always be prepared 

for a surprise visit. 

Given the fact that OSHA fines increased in some cases 

by about 80 percent in August – the first penalty 

increase since 1990 – that fear and paranoia is liable 

to escalate, but there are preparatory steps that can 

be taken to minimize the fear of discovery. Having the 

right attitude, understanding and expectation about 

an OSHA inspection is important. 

When supervisors demonstrate their commitment to 

safety by holding employees accountable for their actions, 

it makes safety a priority and not just another 

program. This perception of how safety is managed 

creates a positive attitude and sense of genuine concern 

– especially among new employees. 

Providing employees with a variety of activities like 

tool box talks, involvement in accident investigations, 

participation in safety committees, engagement in 

weekly and/or monthly inspections and assuming 

roles of responsibility, changes the focus from “them” 

to “us.” OSHA inspectors notice that attitude and employee 

involvement. 

grams like lockout/tagout, GHS, machine guarding 

and fall protection. 

Preparation could result in a reduced number of potential 

violations that could add up to hundreds of 

thousands of dollars. 

While we can’t delay or prevent OSHA from increasing 

their penalties and the surrounding fears these penalties 

create, we can all do a better job of understanding 

our roles, getting up to speed on current safety programs 

like lockout/tagout, and putting ourselves in 

the shoes of the OSHA inspector. 

David A. Ward Sr. 

is a former federal 

investigator for OSHA 

and is president of 

Safety By Design 

Consultant Services, 

which runs a program 

called “Preparation O” 

specifically to address 

concerns about 

OSHA and prepare 

companies for the 

unexpected OSHA visit. 

Jack Rubinger is a 

frequent contributor 

to industrial, 

workplace safety 

and manufacturing 

publications. 

PREPARATION IS KEY 

Communications in regards to safety should be delivered 

directly from the CEO to every staff member and 

not be diluted by other department heads who do not 

manage this critical component of every company – 

big or small. 

We’ve discovered that most companies really are unaware 

of their roles, administrative responsibilities 

and the significant deficiencies in their safety pro- 


Construction Opportunities at the City of Chicago 

Leveling the Playing Field 

BY JAMIE L. RHEE, Chief Procurement Officer, City of Chicago 

As the contracting 

authority for the 

City of Chicago, 

the Department of 

Procurement Services 

(DPS) administers 

an open bid and 

solicitation process 

that results in over 

2,500 contract awards 

and modifications 

while ensuring 

fairness, competition, 

and best value for all 

of Chicago’s taxpayers. 

We are tasked with 

exploring the best 

solutions for Chicago’s 

diverse needs. One 

of our key objectives 

is to bring greater 

diversity to the pool 

of businesses that 

bid on and earn City 

contracts. 

A 

thriving small, minority, and women-owned 

business community is essential to the success 

of a world-class city. We continually strive to 

develop ways to move these goals forward. 

Creating a Pipeline to Success 

Chicago will reach its full potential when its diverse 

population is represented at the business table— 

when every hardworking citizen with the drive to 

succeed has a path to become an entrepreneur. Our 

doors are open to the entire business community, 

whether they are just starting out, or already growing 

and succeeding. 

The City of Chicago is continually enhancing outreach 

and education to the entire vendor community, and 

there are many ways to work towards expanding our 

reach. We have a network of registered assist agencies 

that has grown to 30+ organizations in Chicago’s 

communities. Assist Agencies are comprised of notfor 

profit associations and/or chambers of commerce 

agencies that represent the interests of small, minority 

and/or women-owned business enterprises (M/ 

WBEs). Their role is to promote the M/WBE program 

to their members and communities, explain the certification 

process to applicant firms that reach out to 

them, and assist with completion of City of Chicago 

certification documents. 

We have created a pipeline to grow the pool of businesses 

that participate in the business of government. 

We have entered into Service Agreements with 

our local non-profit assist agencies to provide training 

directly to businesses in their communities. 

Agencies have provided hundreds of hours of training 

in dozens of unique training sessions. The topics covered 

in these sessions are critical to businesses interested 

in government contracting. They include core 

business skills such as business plans and financial 

management, to intensive assistance with the preparation 

and submittal of applications to become certified 

as M/WBEs. 

Small Business Initiative 

DPS created the Small Business Initiative (SBI), a 

program that creates jobs and opportunities in our 

neighborhoods. It provides a level playing field for 

small local businesses to compete in the construction 

realm, an area in which larger companies are often at 

an advantage. The program is race and gender neutral, 

exclusive to small and very small businesses, and 

limited to construction projects that are under a predetermined 

dollar amount. 

In response to feedback from the small business community, 

the program was divided into two tiers, SBI 

I and SBI II. This tiered system establishes standards 

that provide even greater opportunities for smaller 

businesses to compete for work. The first tier, SBI I, is 

for projects that are $3 million or less in total cost and 

can be bid by firms that do not exceed size standards 

of the Small Business Administration (SBA) per area 

of specialty. The second tier, SBI II, is for projects that 

are $2 million or less in total cost and can be bid on 

only by firms that do not exceed one half of the SBA 

size standards. Since the program began in 2012, we 

have awarded 38 contracts valued at over $67 million 

to small local businesses, where they are gaining experience 

as prime contractors. 

Mid-sized Business Initiative 

To encourage continued growth, DPS developed a 

new program, the Mid-sized Business Initiative (MBI). 

MBI is a race and gender-neutral construction program 

for medium-sized local businesses to be exclusive 

bidders on construction projects valued between 

$3 million (the project cost threshold for SBI) and $10 

million. A qualifying business must be a local business 

enterprise that is no larger than one and a half 

times the SBA’s size standard in the area of specialty. 

All SBI eligible businesses are also qualified to bid. 

MBI was designed to address concerns that opportunities 

for medium-sized local businesses were scarce, 

because these firms can neither qualify for SBI nor 

compete with large firms when bidding on projects. 

This program will complement the Phased Graduation 

program, which assists vendors that have become 

successful and are graduating from the M/WBE 

Program, to support their continued growth. 

We have heard the feedback, and continue to work to 

be responsive to our citizens and vendor community. 

12 | Building Entrepreneur

Programs such as the ones discussed are designed to 

have a positive impact on businesses of all sizes and 

at each stage of their lifecycle. The goal is to have a 

strategy in place for businesses that are emerging, established, 

or growing. 

Staying Involved: Training & Outreach 

Communication and outreach help to keep residents 

informed of new programs and innovations. In the 

last year, DPS has hosted or participated in nearly 

120 events and workshops to provide businesses with 

information on the City’s procurement process and 

business opportunities. 

We continually strive to increase access to resources 

and education to Chicago’s citizens. We relocated the 

City’s Bid & Bond Room to Room 103 of City Hall to be 

more easily accessible to the public. This move has 

made it easier for businesses to pick up or drop off 

bids and learn about upcoming opportunities to do 

business with the City. The build-out included some 

exciting new features to serve our citizens. The Bid 

& Bond Room has been outfitted with full video and 

livestreaming capabilities to allow anyone to view 

bid openings and workshops from their work, home 

computers, or mobile devices, providing even greater 

transparency and accessibility. 

DPS expanded its workshop roster to 18 different 

classes on procurement and certification related issues 

at no cost to the public. Through these classes, 

DPS shares knowledge on governmental contracting 

policies and procedures in order to increase the existing 

vendor pool and maintain transparency in contracting. 

In addition to the classes that are held at City 

Hall, DPS conducts meetings and gives educational 

presentations out in our communities. 

DPS will continue to implement outreach programs 

throughout Chicago’s business community 

in an effort to increase awareness of contracting 

opportunities for small, minority, and women-owned 

businesses and to provide information 

on certification and contract compliance. 

These events can be viewed on our newly created 

YouTube Channel (www.youtube.com/ChicagoDPS) 

which, in addition to the livestream 

events listed above, will feature educational 

videos about numerous topics related to doing 

business with the City of Chicago, the certification 

of minority, and women-owned businesses 

and business enterprises owned or operated 

by people with disabilities, and contract compliance. 

The series of 21 videos spans subjects 

ranging from procurement fundamentals to 

compliance documentation and innovative programs, 

such as the Veteran/Small Business Joint 

Venture and Project Area Subcontract Bid Incentive. 

We remain committed to providing competitive, 

fair, and transparent procurement services for 

the City of Chicago. We encourage everyone to 

go online and read about our programs, visit our 

offices, and use our resources. There is no better 

time than now for the citizens of Chicago to grow 

their businesses and build a better future. We 

look forward to supporting all who are working 

to make that future a reality. 

ABOUT THE CITY OF 

CHICAGO DEPARTMENT OF 

PROCUREMENT SERVICES 

(DPS) 

DPS is the contracting authority 

for the procurement of goods and 

services for the City of Chicago. 

We pledge to work together as 

a team and with our customers 

to guarantee an open, fair and 

timely process by establishing, 

communicating and enforcing 

superior business practices. 

Integrity, Public Trust and the Law 

are our guiding principles. 

City of Chicago Department of 

Procurement Services 

121 N. LaSalle Street, Room 806 

Chicago, IL 60602 

312-744-4900 

www.cityofchicago.org/dps 

www.facebook.com/ChicagoDPS 

www.twitter.com/ChicagoDPS 

www.youtube.com/ChicagoDPS 


The Different Ways 

Business Owners 

Can Pay Themselves 

BY: DAVID CHENG 

AS AN OWNER, YOU HAVE A LOT OF RESPONSIBILITIES. THAT’S WHY IT’S SO 

IMPORTANT TO PAY YOURSELF APPROPRIATELY FOR ALL THE WORK YOU DO. 

BUT DID YOU KNOW THERE ARE DIFFERENT TAX IMPLICATIONS ON THE DIF- 

FERENT WAYS YOU CAN PAY YOURSELF? IN THIS POST, WE’LL COVER SALA- 

RIES, DIVIDENDS, LOANS, AND OWNER’S DRAW. 

YOUR BUSINESS ENTITY MATTERS 

As a business owner, you can structure your 

business as a sole proprietorship, a partnership, 

cooperative, an LLC, an S-Corporation, 

or C-Corporation. 

The Sole Proprietorship is the most basic 

type of business entity. All the assets belong 

to the business owner, but also the liabilities. 

Because of this, your business is not taxed 

separately. Instead, your business’s income 

is your income, and you report it with a 

Schedule C and the standard Form 1040. 

If you are in a business with one or more 

partners, you could consider a Partnership. 

Unlike a sole proprietorship, a partnership 

needs to register with the IRS and state and 

local tax revenue agencies. A partnership 

does not pay income tax; instead, the profits 

pass through to the partners. A partnership 

files a Schedule K-1 and Form 1065. 

A Limited Liability Corporation (“LLC”) is 

a lightweight alternative to incorporate your 

business. It combines the tax pass throughs 

of a partnership and the limitations in lia- 

bilities of a corporation. An LLC is not taxed 

as a business entity. Rather, the profits are 

passed through to the LLC’s members and 

they are taxed as personal income. 

A Cooperative is similar to an LLC in that it is 

also a corporation and does not pay federal 

taxes. Rather, profits are passed through to 

the cooperative’s members. A cooperative 

is different from any other business entity 

because of its specific rules for membership 

and operations. Typically, a cooperative’s 

members must agree on matters like its bylaws 

and operations in a democratic fashion. 

If you’re looking to incorporate your business 

and have it taxed separately, an S 

Corporation is a popular choice amongst 

small businesses. Since the S Corp is taxed 

as its own entity, a business owner and its 

employees can see tax savings since they will 

only be taxed on their wages. An LLC has an 

option to file as an S Corp for tax purposes. 

It’s worth noting that not all states recognize 

the S Corp distinction from a C Corp. 

The last business entity option is the C Corp. 

C Corps are less popular amongst small 

businesses because it is more complicated 

than the other options and typically has 

costly administrative fees. One of the major 

drawbacks of the C Corp is the “double taxation.” 

A C Corp is taxed twice–once when 

it makes a profit and again when it distributes 

dividends to its stockholders. However, 

for many fast growing startups, the C Corp 

is popular because it can offer stock in exchange 

for an ownership stake. 

HOW TO PAY YOURSELF 

Now that you know about the different business 

entities, it’s time to understand all the 

different ways you can pay yourself, depending 

on your business entity. 

Many business owners are W-2 employees. 

The W-2 is issued by an employer if the 

employee earns $600 or more in wages or 

equivalent. W-2 employees are subject to 

withholding taxes, which are taken each pay 

period. A withholding tax is a pay-as-you-go 

tax to the IRS and can be calculated through 

the W-4 and their IRS withholding calculator. 

These three things determine how much you 

withhold from your employee: 

• Marital status 

• The number of allowances claimed on 

the W-4 

• Compensation (Note: This may depend 

on the State where your employee receives 

payroll.) 

Employees who anticipate a full refund may 

be exempt from withholding. This is different 

from employees who are exempt, like clergy 

or certain visa holders. The functionality 

of having your taxes withheld is one reason 

why some owners choose to be W-2 employees. 

The inverse is also true though. Some 

business owners who want to pay taxes separately 

may opt out of W-2 wages. The IRS 

may check on business owners who do not 

pay themselves a “reasonable compensation” 

to avoid paying withholding taxes. 

Business owners can also receive a dividend. 

Dividends are not taxed if it is a return 

of capital to the shareholder. Most dividends 

are paid out in cash, but you can also have a 

dividend of stock or other assets. 

Some owners may choose to loan themselves 

money through their business. A shareholder 

loan must have a stated interest rate, a 

maturity date, and covenants for non repayment. 

There is some risk though. If the loan 

is below-market, it will be treated as a gift, 

dividend, contribution to capital, payment 

of wages, or other payment, depending on 

the substance of the transaction. 

Finally, a business owner can choose to do 

an owner’s draw. Unlike W-2 wages, a draw 

is not taxed at the company level. If you are a 

sole proprietor or a partner in a partnership, 

your income is a draw. However, it’s also 

possible to do an owner’s draw as an LLC or 

even an S-Corp. 


Forming inspiring, 

personal relationships 

A partnership, like a building, is more than the sum of its parts. And 

both require true collaboration to grow. At Pepper, we’re always 

looking for responsive partners. Because we believe the relationships 

formed at the start of a project determine how it will finish. 

pepperconstruction.com 

312.266.4700

Starting a business takes great courage. The ability to 

operate successfully comes as a result of hardwork, 

dedication and innate traits that help define and shape 

the individual. 

“Owner Spotlight” will feature and highlight a business 

owner in construction, architecture or engineering who has 

demonstrated an ability to operate a successful business and 

who has a well-defined vision, not only for their organization, 

but for their community and their industry as well. 

We not only want to highlight this individual in the magazine, 

but we also want the winner to share some pearls of wisdom 

with other businesses that may assist them in achieving a 

greater level of success in a future issue. 

If you know someone who runs a successful construction, 

architecture or engineering business and has exhibited the 

characteristics listed below, we would like to feature him/her 

in “Owner Spotlight” starting with our next issue in 2017. 

Anyone can nominate an individual you feel is deserving, as 

long as they meet the criteria. 

Deadline for the next Issue is June 1, 2017. 

The nomination cannot be secret to the nominee because 

we will need to obtain a few items from them in order to complete 

their nomination. These are described in the operation 

section below. 

Nomination Criteria 

I. Leadership and Management Ability 

1. Honesty-Whatever ethical plane they operate on, when 

a business owner is responsible for a team of people, it is 

important to raise the bar high. His/her business and its 

employees are a reflection of him/her, and operating honestly 

and ethically is an important attribute to be possessed by an 

effective business owner. 

2. Delegation-One of the most important skills a good leader 

must possess in order to grow their business is having sufficient 

confidence to delegate tasks to the appropriate individual/s 

or departments. The nominee must have demonstrated 

this trait. 

3. Communication-Has the ability to clearly and succinctly 

describe the task at hand, the vision for the business, and 

successfully engage with others both inside and outside the 

business. 

4. Confidence-Have the confidence to be able to assure everyone 

on his/her team that setbacks are natural and that the 

important thing is to focus on the larger goal. As the leader, 

the nominee must possess the ability to remain calm and 

confident and help keep the team feeling the same. 

5. Creativity-Has demonstrated his/her ability to think 

outside the box and choose wisely which of two bad choices is 

the best option. 

6. Commitment-An individual who leads by example; who 

expects his/her team to deliver, and demonstrates his/her 

commitment not only to the work but to his/her promises. 

II. Operation 

1. Business has 1-50 employees. 

2. Has operated the same business five or more years. 

3. Can produce references from a minimum of three project 

owners or primes as to his/her follow-through and successful 

completion of projects and the reference must disclose 

the project amount. You must visit our website 

to obtain the Letter of Recommendation and give it 

to your nominee to submit with your nomination. 

4. The business has annual revenue of $1,000,000+ (this 

will be determined based on the cumulative value of the 

projects indicated by the references). 

The deadline to submit your nomination is 5:00 p.m. June 1, 

2017. Please use the nomination form on the next page or go 

to our website www.buildingentrepreneur.com, to submit your 

nomination online. If you encounter any difficulty submitting 

the form through this method, you can also make a copy and 

fax it to: 312-934-0116. Please include the following in the 

subject line: 

Owner Spotlight Nomination. 

Nominate someone for 

Owner Spotlight

FIVE WAYS to Get Your 

First Federal Contract 

Success Strategies for Small Businesses 

BY RICHARD J. HERNANDEZ 

November 10 2016 

THIS ARTICLE DISCUSSES FIVE STRATEGIES FOR SMALL BUSINESSES TO BE 

SUCCESSFUL IN THE FEDERAL CONTRACTING MARKET BASED ON THE EXPE- 

RIENCES OF THE AUTHOR, A FORMER US AIR FORCE CONTRACTING OFFICER 

(PCO), CERTIFIED PROFESSIONAL CONTRACTING MANAGER (CPCM), WITH 32 

YEARS OF FEDERAL AND CORPORATE PURCHASING EXPERIENCE. 

The Federal government is the largest 

single buyer in the United States. Each 

year it spends more than $500 billion 

dollars on goods and services. The Federal 

Acquisition Regulation (FAR) provides Contracting 

Officers with the policies and procedures 

for purchasing. The Federal fiscal year 

starts October 1 and ends on September 30 

of the following year. 

There are many advantages of being a Federal 

supplier which include timely payments, 

long-term contracts, protection against recessions 

in the commercial market, high-profile 

clients, ability to take advantage of 

mentor-protégé programs, and nationwide 

contract opportunities. The main disadvantage 

for small businesses is trying to understand 

the Federal procurement process. 

As a practical matter, it can take 18 to 24 

months for a small business to get its first 

contract with the Federal government. However, 

the reward for the wait can be worthwhile 

with a large dollar value and long-term 

contract. To be successful, Federal marketing 

requires focus, patience and knowledge 

of the FAR. 

SUCCESS STRATEGY 1 - BRANDING / 

DIFFERENTIATION. 

Contracting Officers are subject to a barrage 

of potential suppliers essentially all offering 

the same services. Not having a brand can 

leave your firm being considered a commodity 

that gets lost in the crowd. The most 

successful suppliers have developed a niche 

market focus and strong branding strategies. 

The niche strategy works well in the 

Federal market since it is easy to get overwhelmed 

in the vast number of contracts 

and competitors. The niche strategy fits the 

mental model of Agencies and large business 

prime contractors who generally consider 

small businesses to be niche players or “boutiques”. 

SUCCESS STRATEGY 2 – NICHE 

STRATEGY. 

Market niche and branding strategies are created. 

The author recommends the book “Differentiate 

or Die” by Jack Trout as a mustread 

for small businesses to help improve 

their branding skills. 

The importance of an effective combination 

of niche marketing and branding cannot be 

understated. Advantages include the following: 

1) makes it easier to get non-competitive 

8(a) set-aside contracts, 2) reduces 

marketing / sales time; 3) encourages repeat 

business (loyalty); 4) generates referrals, 5) 

lowers marketing expenses, and 6) lets you 

charge higher prices. 

The author recommends NOT using the following 

types of branding statements: 

We are a one-stop shop. 

We are a full-service contractor. 

We are a general contractor. 

We provide a turn-key solution. 

We can get you anybody you need. 

SUCCESS STRATEGY 3 – PROSPECT 

LIST. 

There are four ways to find Federal contracts. 

First, go to the Federal Business Opportunity 

online bid board known as www.FBO. 

gov to find current bid opportunities, usually 

due within the next 30 days. Second, is to 

use the Federal Procurement Data System to 

research (past) awarded contracts. Third, is 

to use advanced data mining software to find 

expiring (future) contracts in your commodity 

(NAICS) codes. Fourth, is to obtain agency 

forecasts of upcoming (future) contracts. 

Successful small businesses prospecting 

strategies tend to target 2 or 3 Federal agencies 

to focus their marketing efforts. From 

there they develop a “Prospect List” of expiring 

contracts (to be renewed) or new 

contracts. Having a specific list of contracts 

usually helps you connect with a Contracting 

Officer and get on their bid list. General presentations 

tend to get the “We’ll keep you in 

our supplier database and will call you if we 

need you”. 

Small businesses can use a variety of tools to 

develop a prospect list, which include: www. 

FBO.gov. www.FPDS.gov, Agency Procurement 

Forecasts, Bid Match from Procurement 

Technical Assistance Centers (PTACs), Agency 

Strategic Plans, Newspaper / Trade Articles, 

Set-Aside Alert newsletter, and www.EzGov- 

Opps.com. Another excellent way to build 

a network in the Federal market is to ask for 

referrals and to participate in trade / professional 

organizations, e.g., the National Contract 

Management Association. 

SUCCESS STRATEGY 4 – 

UNDERSTANDING THE FEDERAL 

ACQUISITION REGULATION. 

The FAR provides policies and procedures for 

all Federal Contracting Officers. The FAR is 

available on the Internet at no cost. The FAR 

is approximately 2,000 pages. The key parts 

of the FAR small businesses need to know 

are: 

Part 14 – Sealed Bidding 

Part 15 – Contracting by Negotiation 

Part 19 – Small Business Programs 

Part 36 – Construction Contracting 

Part 37 – Service Contracting 

The author recommends taking classes on 

the FAR and/or using a consultant to help 

you. 

SUCCESS STRATEGY 5 – PARTNERING. 

There are many excellent reasons to work 

with partners when bidding on Federal contracts. 

Reasons for partnering include: 1) 

Federal Strategic Sourcing Initiative (FSSI). 

Contracts are becoming more complex; 2) 

Contract Bundling. Requirements being 

combined; 3) Capacity. Ability to meet all 

contract requirements; 4) Past Performance. 

Ability to use partner past performance; 5) 

Risk Share risk of contract performance; and 

5) Cost. Share bid & proposal and contract 

costs. 

SUMMARY. 

Federal contracting is not a game for amateurs. 

However, the rewards can be significant 

for small businesses who are patient, 

focused, and understand the FAR rules. This 

is why it is important for small businesses to 

use the above five success strategies. 

To contact the author: Call 312-404-2224 or 

email rhernandez@e-mbe.net if you have 

any questions about this article. 

©2016 Richard J. Hernandez 


I. INTRODUCTION 

A property owner wants to develop a parcel 

of land. The homeowner’s dream is to upgrade 

their home by remodeling or replacing 

old bathrooms and kitchens. The owners 

conduct their due diligence and find contractors 

they can hire for their projects. What is 

the next step? How can the property owner 

and contractor outline the specifics of the 

work and what has been agreed to? 

The answer to these questions is that a written 

contract is mandatory. The goal of this 

article is to discuss contract fundamentals 

so that the parties to a construction project 

gain an understanding as to how to protect 

their interests. 

II. WHAT IS A CONTRACT 

In its simplest terms a contract is a promise. 

In the construction arena, typically involving 

a promise to perform a certain scope of work, 

for agreed upon compensation, with a definitive 

completion date. 

A well drafted contract will contain certain 

basic elements, which are necessary requirements 

to create an enforceable agreement. 

To ensure the contract will be enforceable, 

it should contain the following information: 

1) Date of agreement 

2) Identification of the parties with contact 

information 

3) Description of the scope of work 

How the customer 

explained it 

How the proect was 

documentet 

CONTRACTS: THE BASICS 

BY ROBERT A. SHIPLEY 

How the project leader 

understood it 

What operatiors 

installed 

How the engineer 

designed it 

Haw the customer 

was billed 

4) Responsibilities regarding scope of work 

5) Dispute resolution procedures 

6) Insurance clauses 

7) Project cost (price) 

8) Project completion date 

A Contract is protection so that all parties 

are provided with a clear picture of the work 

that each contractor will be required to perform. 

The well written contract provides a 

description of the rights and responsibilities 

of the parties, providing protection to all contracting 

parties. While the goal of any project 

is always a successful completion, disputes 

do occur, and the contract will provide your 

framework for the resolution of any dispute. 

The following provides a graphic depiction of 

what can occur when confusion rather than 

clarity reigns. 

III. CHECK LIST 

The experienced construction attorney will 

be familiar with the contractual requirements 

discussed in this article. However, and 

while not recommended, in the event a form 

contract document is used instead of one 

prepared by a qualified construction attorney, 

it is important to have a checklist to assist 

in making sure the contract you choose 

contains the necessary information to protect 

your interests. 

In addition to the basic information described 

in Section II, your contract checklist should 

also include verification as to the following: 

How the programmer 

wrote it 

Haw the helpdesk 

supported it 

How the sales executive 

described it 

What the customer 

really needed 

1) Clear and precise description of the 

scope of work and the responsible party. 

2) Indemnification Clause 

3) Specific description of the contract 

documents, including the plans and 

specifications. 

4) All exhibits, such as descriptions of insurance 

coverage, must be referenced 

in the contract and included as part of 

the contract documents. 

IV. HIGHLIGHT OF IMPORTANT 

CLAUSES 

The properly documented contract should 

contain the following clauses which are contained 

in most construction agreements: 

1) The promise made by the contractor 

that they will perform their work in a 

good and workmanlike manner, as well 

as to return for a specified time period 

to repair or remediate defective work. 

Virtually all contracts will include these types 

of clauses. This type of clause should be included 

whether you are hired by the owner/ 

developer or as a sub-contractor by the general 

contractor. In all contractual, as well as 

business relationships, there is an expectation 

that you are competent and well qualified 

to perform the scope of work defined by 

the contract documents. 

2) A warranty clause, which is essentially 

an affirmation as to your qualifications 

to perform the work, as well as that the 

work will be performed in a quality manner, 

consistent with industry customs, 

practices and applicable standards. 

Most often warranty periods are for one 

year from the date of completion. The 

typical warranty clause will include the 

following elements: 

i) the equipment and materials will be 

of good quality and new unless otherwise 

specified 

ii) the work will be free from defects and 

iii) the work will conform to the contract 

documents. 

A warranty serves as motivation to the contractor 

to make certain that the work is performed 

in a quality fashion, consistent with 

the requirements of the contract documents. 

It helps the contractor to self-police the work, 

because there is a desire not to be called back 

to repair or replace defective work. 

3) Indemnity arises when one individual 

takes on the obligation to pay for any 

loss or damage that has been or might 

be incurred by another individual. The 

right to indemnity and the duty to indemnify 

ordinarily stem from a contractual 

agreement, which generally protects 

against liability, loss, or damage. 

Continued on page 21 


Construction Management Software Pricing Guide 

Construction Management software 

helps both residential and commercial 

builders manage their construction 

projects from start to finish, including 

features to allocate teams and equipment, 

manage workforce training and sub-contractors, 

and update managers on task 

progress through real-time reports and mobile 

alerts. 

BrickControl $25 Monthly Yes 

There are many available and pricing for 

construction management software can 

vary widely. Following are some of the available 

solutions. Visit their websites for details, 

product videos, and user reviews. 

Build In The Black $800 One-time Yes 

BuilderTREND $99 Monthly No 

BuildTools Construction Mgmt $149 Monthly No 

30 Day Money Back Guarantee. 

Training: Unlimited 

Canvas $30 Monthly Yes 

CM Fusion $99 Monthly No 

Paid plans include unlimited 

users, data, and storage. 

Co-construct $99 Monthly No 90-Day Money Back Guarantee 

Contractor’s Office $695 One-time No 

Corecon $40 Monthly Yes 

One user package starts 

at $40/month. Discounts 

available for multi-users. 

Fieldwire $20 Monthly Yes 

FINALCAD $59 Monthly Yes 

Fluid Contract Manager $99 Monthly No First 2 projects are free 

Jonas Enterprise $8,000 One-time No 

Kintone $24 Monthly Yes 5 User Minimum 

Knowify $68 Monthly No 

Kosmas $49 Monthly Yes 

Lessons Learned Database $60 Annually Yes 

Per tiers. With $68/mo you get 

access for 5 users. 

Per User / Per Month. Time 

clock access free. Some 

features additional. 

MarketSharp $70 Monthly Yes 

Premier $150 Monthly Yes 

Smartsheet $10 Monthly No 

Vital InSite $3,000 Annually No Unlimited Users & Projects 

“Originally appeared on Capterra, www.capterra.com” 

WorkflowMax $15 One-time Yes 


Continued from page 19 

The indemnity clause seeks to allocate risk 

between the parties to the contract. It is basically 

the shifting of a loss/potential loss from 

one party to another. In the construction setting, 

these risks relate to either bodily injury 

or property damage, that might occur, which 

arises from the scope of work defined by the 

contract documents. 

4) CGL (Commercial General Liability) 

which insures against the risk of bodily 

injury and/or property damage; including 

completed operations coverage. 

5) Builders Risk which insures against damage 

to the project or the project materials 

while the work is in progress. 

6) OCP (Owners and Contractors Protective 

Policy) which insures the owner from liability 

arising out of the contractor’s operations, 

with coverage typically being terminated 

once the project is completed. 

Construction, even in today’s world, remains 

a risky profession. All construction sites, regardless 

of their size, present a multitude of 

opportunities for accidents, damages and 

injuries. There are a variety of insurance policies 

which may be purchased, depending on 

the risk involved and the policies which have 

been identified represent the most common 

forms of protection. 

7) Safety provisions are incorporated into 

or should be incorporated into all contracts. 

Similar to the insurance provisions, they help 

to protect the contracting parties as well as 

clarify responsibilities relating to those who 

are performing the work. These provisions 

should include that the contractor performing 

the work is: i) solely responsible for the 

safety of its workers ii) responsibilities include 

supervision of the work to ensure the 

work performed in an appropriate and safe 

manner iii) all safety equipment shall be supplied 

iv) comply with all applicable federal 

and state laws, OSHA and comparable state 

and local safety statutes. 

8) Closely related to the safety provisions 

in a contract, are provisions which specify 

which contractor is ‘in control’ of the 

actual performance of the work. 

Control is an important issue because it 

defines the expertise that a contractor possesses 

regarding their scope of work. Each 

contractor should be solely responsible for 

all decisions regarding the performance of 

their scope of work, including how that work 

is performed. 

9) Request for additional compensation 

can only be made for work that has been 

pre-approved in writing by the Contractor 

or Owner. 

During the course of a project, especially a 

larger project, it is not unusual that there will 

be changes in the scope of work. Requiring a 

written Change Order, which will outline and 

confirm the change, including any alteration 

of the contract price, provides confirmation 

for the contractor that the change has been 

authorized. Should any questions arise regarding 

changes in the work, the contractor 

can rely upon the authorization extended by 

the Change Order. 

V. CONCLUSION 

The goal of all construction projects is timely 

completion for the agreed upon price. The 

project which has a well written contract, 

providing clarity for the contracting parties, 

is an excellent beginning to a successful relationship 

and achieving that goal. 

Written by Robert A. Shipley, Principal, 

Shipley Law Group, Ltd., Chicago, IL. Construction 

Law Specialists. Email: robert. 

shipley@shipleylawgroup.com, Phone: 

312- 312-527-4545 Website: www.shipleylawgroup.com 

BUILDING INNOVATION INTO EVERY PROJECT 

Interiors t Education t Healthcare 

Retail t Industrial t Rail 

250 250 S S Northwest Highway s Park Ridge, IL IL 60068 

(847) 698-4900 s www.ragnarbenson.com 


6 Ways Construction 

Technology Has Transformed 

the Industry 

FROM USING YOUR SMARTPHONE AT WORK TO AERIAL DRONES MAPPING 

AND SURVEYING THE JOB SITE, THE CONSTRUCTION INDUSTRY IS EXPLOD- 

ING INTO NEW REALMS WITH THE TECHNOLOGY OF TODAY. 

Digital blueprint apps and cutting-edge 

software manage every facet of a project 

without having to lay a brick, while 

3D imaging and gadgets have lent a whole 

new perspective to the design and building 

of a project, not to mention the likely advent 

of robots taking on a larger role. 

We have revolutionized one of the biggest 

industries in the U.S, and indeed around 

the globe, turning it from one of the slowest-growing 

sectors (compared to say, the 

manufacturing industry) into one of the most 

exciting, with a steady onslaught of technological 

wizardry. 

1. The Internet 

We can’t talk technological growth without 

paying homage to the Internet. It has completely 

transformed how we design, build, 

and monitor construction projects, and has 

proved to be a basic foundation for many of 

today’s innovations. 

Construction management software, GPS, 

laser-based survey equipment, and laser-guided 

excavation and tunneling 

equipment have meant better precision in 

foundations, perimeters, and corners. The 

automation of a previously very manual activity 

has meant there is far less room for error, 

having a domino effect on time, resources 

and ultimately, money. 

This technology further manages risk, as 

well. By using available software solutions 

to design and analyze structures before construction 

even begins, engineers and contractors 

can pinpoint areas of high risk for 

worker injury, improve maintenance access, 

and maintain a safer job site. 

2. Construction Management Software 

Today’s task management software is designed 

to increase productivity and keep everything 

on schedule, proving an invaluable 

resource to construction companies to monitor 

progress and keep all members of the 

project fully informed, in real time, of actual 

progress versus scheduled goals. 

Budgeting, billing processes, and time 

management tools streamline the entire 

process from start to finish. Companies offer 

top-of the range, constantly evolving software 

to match the ever changing and demanding 

needs of this sector. 

Building Information Management, or BIM, 

contains most of these solutions and more 

to provide the ability to create a 3D building 

plan and combine it with a construction 

schedule. Such all-encompassing software is 

thoroughly integrated and can pave the way 

for prefabrication. With part of construction 

taking place in a manufacturing environment, 

fewer workers are needed at the jobsite. 

Safety is also enhanced with less work 

needed at height and less manual handling 

of supplies. 

3. Computer Aided Design 

CAD has enabled construction to begin before 

the design is fully complete, allowing 


for fast-track construction and reduced interference. 

It improves procurement and performance 

systems, allowing a host of possible 

issues to be tackled before physical work begins, 

significantly reducing the risk of errors 

and thus reducing the risk of going off-budget 

or off-schedule. 

CAD has resulted in several major changes in 

construction technology, such as the move 

toward engineering workstations that are 

dedicated to the CAD process. CAD systems 

can store large numbers of civil, structural, 

and electrical schematics. Furthermore, 

compatible solutions to integrate into CAD 

software have emerged and continue to be 

updated. 

4. Blueprint Apps 

Gone are the days of offices on site overflowing 

with documents – now, the main player 

is the application-ridden tablet. A device as 

useable in the field as in the office, these 

planning apps have given us the ability to 

oversee plans and make changes digitally. 

Possible obstacles can be accounted for and 

tweaked before beginning physical work 

and then having to change them (usually at 

great cost) due to an oversight. These apps 

allow for direct communication, in real time, 

between the owner, project managers, and 

other staff, so everyone is kept in the loop, 24 

hours a day. 

5. Drones 

The introduction of drones in the past decade 

has changed the face of the construction industry, 

and is likely to continue its trajectory 

into the next one. 

• In surveying and mapping out the specified 

area, their value lies in being able 

to go where humans and heavy machinery 

can’t, monitoring progress in real 

time and the ability to make changes to 

the plan according to the drone footage. 

This footage can then be compared to 

blueprint plans and deviations noted 

and dealt with accordingly, saving time, 

money, and resources. 

• Companies using them have reported 

increased efficiency, helped in part by 

more accurate maps and data, allowing 

for a highly quantitative means of measuring 

progress versus schedule. These 

remotely controlled devices enable the 

surveillance of large-scale projects from 

remote locations – so project managers/ 

owners do not have to physically be on 

site to control operations, thus making 

them a valuable investment for largescale, 

high dollar projects. 

• Legal Issues: Although the legality of 

larger drones is currently tricky, it’s likely 

only a matter of time before the use of 

drones on site is a common occurrence. 

6. Health and Safety 

The importance of the health and safety of 

workers has grown exponentially and now 

safety on site is of paramount importance, 

helped in part by the legal regulations that 

have sprouted up around every industry. 

• Headsets, halo lights, safety glasses, and 

responsive clothing are but a few of the 

safety gadgets having undergone modernization, 

turning outdated and often 

un-adhered-to health and safety regulations 

into routine, standard on-site precautions. 

• Drones can also play a role in the monitoring 

and promoting of safety practices, 

as the surveillance shows whether best 

practice regulations are being adhered 

to, regardless of whether a health and 

safety official is on site. And as drones 

can reach places that may be unsuitable 

for humans, they are soon to be the 

project manager’s best friend. They also 

help defer on-site theft – there’s nothing 

like being on camera to deter robbery, 

after all. 

There is no doubt about it: the future is 

bright, and the future is mobile. Technology 

has brought the industry speeding into the 

21st century. 


Article written by Steve Wright in 

Construction Management 

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The Tollway remains focused on promoting, assisting and ensuring diverse participation in the 

Move Illinois Program and all aspects of its operations, including contracting, consulting and the 

supply of goods and services.The Tollway remains focused on promoting, assisting and ensuring 

diverse participation in the Move Illinois Program and all aspects of its operations, including 

contracting, consulting and the supply of goods and services.The Tollway remains focused on 

promoting, assisting and ensuring diverse participation in the Move Illinois Program and all 

aspects of its operations, including contracting, consulting and the supply of goods and 

services.The Tollway remains focused on promoting, assisting and ensuring diverse participation 

in the Move Illinois Program and all aspects of its operations, including contracting, consulting 

and the supply of goods and services.The Tollway remains focused on promoting, assisting and 

ensuring diverse participation in the Move Illinois Program and all aspects of its operations, 

including contracting, consulting and the supply of goods and services.The Tollway remains 

focused on promoting, assisting and ensuring diverse participation in the Move Illinois Program 

and all aspects of its operations, including contracting, consulting and the supply of goods and 





















The Illinois Tollway remains focused on 

promoting, assisting and ensuring diverse 

participation in aspects of operations— 

including contracting, consulting and 

the supply of goods and services. 

We are committed to increasing access to 

contract opportunities for certified 

disadvantaged, minority- and 

women-owned business enterprise 

(D/M/WBE) firms as well as veteran-owned 

and small businesses. 

For more information on the Illinois 

Tollway’s diversity programs, please visit 

www.illinoistollway.com 

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Reasons Why to Get Certified as a 

Minority-Owned Business 

HAVING A MBE/WBE/DBE/ACDBE, VETERAN/DISABLED OWNED BUSINESS CERTIFICATION CAN HELP YOU 

TAP INTO A BEVY OF PUBLIC AND PRIVATE SECTOR PROGRAMS. HERE’S HOW TO APPLY. 

The ongoing growth of supplier diversity 

programs in both the public and private 

sectors suggests that for eligible 

companies, becoming certified is no longer 

a luxury - it’s a necessity. By the time you’ve 

finished reading this, I hope you have a general 

understanding of how supplier diversity 

programs work as well as the competitive advantages 

that certification offers to eligible 

companies. 

Corporations, the federal government, state, 

city and county agencies all want to do business 

with MBE/WBE/DBE/ACDBE, Veteran/ 

Disabled companies. The Department of 

Transportation, for example, requires that recipients 

of its funding award a percentage of 

contracts to MBE/WBE/DBE/ACDBE, Veteran/ 

Disabled owned businesses and many large 

companies have goals for buying from MBE/ 

WBE owned suppliers. 

The reason for such mandates is twofold. 

First, contracting with MBE/WBE owned businesses 

is important to customers: Corporate 

America understands that to do business 

with MBE/WBE firms makes sense for their 

bottom-line because they cannot expect 

people to purchase goods and services from 

them if they haven’t done business with 

MBE/WBE. Makes sense, right? Second, it’s 

responsible: Government has an obligation 

to ensure that all firms interested and capable 

of doing business with them have the opportunity 

to participate in contracts that are 

paid for with tax payer dollars. 

To meet their objectives, private and public 

sector firms search for MBE/WBE/DBE/ 

ACDBE, Veteran/Disabled suppliers through 

programs that have formal certification processes. 

If you’re not certified, you can miss 

out on business ranging from a marketing 

opportunity to reduced-competition access 

to a public contract. 

Certification should 

be viewed like any 

other investment that 

a business owner 

makes in an effort to 

drive growth. 

SUPPLIER DIVERSITY LANDSCAPE 

Most local, state and federal government 

procurement regulations nationwide require 

a certain percentage of contracts, typically 

between 5%-35%, be subcontracted to MBE/ 

WBE certified firms. The City of Chicago has 

recently increased these requirements for 

construction contracts to 26% for MBEs and 

6% for WBEs. City of Chicago contracts advertised 

as “target market” opportunities are required 

to be awarded 100% to certified firms. 

Private sector purchasing with MBE/WBE 

certified firms also continues to climb. In 

just 10 years, the number of companies that 

annually spend more than $1 billion dollars 

with diverse firms has doubled, with household 

names such as AT&T ($16 billion) and 

Walmart ($13.5 billion) leading the pack. 

These figures include expenditures for any 

and all goods/services, from professional 

services to construction, office supplies, 

shipping/freight, janitorial services and everything 

in between. 

CERTIFICATION AND COMPETITIVE 

ADVANTAGE 

Competitive advantage, in broad terms, refers 

to any characteristic or quality that gives 


a company an edge or superiority over its 

competitors. 

The first competitive advantage that certification 

provides is that it drastically limits the 

number of potential competitors for those 

contracts that contain MBE/WBE participation 

requirements. Because these public 

and private sector opportunities can only 

be awarded to certified businesses, companies 

with non-diverse owners or companies 

whose annual sales preclude eligibility for 

certification, are not able to access these 

contracts. Rather than competing with every 

company in the Chicagoland region that provides 

the same goods/services, you are now 

only competing against those companies 

that are also certified. 

The second competitive edge is referred to as 

differentiation – the added benefit or value 

(beyond the good or service that your company 

supplies) that you can provide. In highly 

competitive industries such as construction, 

certification status can be the deciding factor 

in situations where two otherwise similarly 

situated companies are being considered for 

a contract. 

Never forget that the benefits of certification 

are not one-sided. Your certification provides 

your partners the mechanism by which they 

fulfill their own supplier diversity obligations. 

1) The prime/general contractor on a multi-faceted 

construction project that must meet 

MBE/WBE subcontracting goals. 

2) The corporate purchasing officer seeking 

to meet his/her company’s increasing commitment 

to a diverse supplier base. 

3) Large, established companies entering 

into Joint Venture agreements with certified 

firms. 

4) Private sector companies utilizing certified 

firms in order to be eligible for substantial 

bid incentives on public sector contracts. 

These are tangible and valuable benefits 

that non-certified firms cannot offer. 

Having established the potential benefits of 

certification, it is also important for business 

owners to understand that becoming certified 

is no guarantee of future contracts. Cer- 

tification should be viewed like any other investment 

that a business owner makes in an 

effort to drive growth. Investing in a website 

to market your products to a wider audience, 

or updating your equipment to increase productivity 

– these are arguably sound business 

decisions, but there is no guarantee that they 

will be profitable. Certification is just one aspect 

of what should be a comprehensive effort 

at marketing your company. 

ELIGIBILITY REQUIREMENTS 

Ideally you’re now convinced that you should 

pursue certification, but are you actually eligible? 

If you can answer affirmatively to the 

following questions, you are a candidate for 

certification: 

1. You are a minority, woman or otherwise 

socially/economically disadvantaged 

and at least 51% owner of the company 

seeking certification 

2. You are the full time, day to day manager 

of the company 

3. You have the knowledge and proven 

experience to operate a business in the 

type of work you are seeking certification 

4. Your company does not exceed the size 

limitations imposed by the certifying 

agency in the type of work in which you 

are seeking certification 

Typically the certification process will require 

you to submit corporate documents (articles 

of incorporation, by laws, stock certificates), 

financial documents (tax returns, corporate 

financials, corporate bank statements), and 

demonstrate that the owner seeking certification 

exercises independent control over 

the management of the company. This process 

will usually take between 60-90 days 

after a complete application has been submitted. 

Horizon Consulting is a participant in the 

2016 Construction Industry Conference. 

Please visit our exhibitor table or attend 

the “Ask the Expert” session on Certification 

where I will address any additional questions 

you may have regarding the MBE/WBE/DBE 

certification process. 

About the Author: 

Ayenew Biru is the founder and President 

of Horizon Consulting, a company 

that provides comprehensive 

certification assistance, from initial 

certification, recertifications, expansion 

of commodity codes, annual no 

change reporting requirements to appeals 

of denials. Ayenew has assisted 

clients nationwide with MBE/WBE/ 

DBE/ACDBE, Veteran/Disabled Owned, 

HubZone and SBA 8(a) certifications. 

Horizon also provides various business 

services, including business plan 

development, corporate formation, 

licensing, website design and MBE/ 

WBE/DBE compliance. 

Ayenew previously served as a Certification/Compliance 

Officer with the 

City of Chicago Dept. of Procurement 

Services where he was responsible 

for reviewing certification applications, 

representing the City at various 

vendor outreach events and was instrumental 

in developing policies designed 

to streamline the certification 

process. 

Ayenew can be reached at ayenew@ 

horizonmwdbe.com or 312-888-1063. 

IS YOUR FIRM LOOKING FOR CUSTOMERS FOR YOUR CONSTRUCTION 

MATERIALS, VEHICLES, INSURANCE OR SOFTWARE BUSINESS? 

OR PERHAPS YOU HAVE CONTRACTING OR PARTNERING OPPORTUNITIES FOR UPCOMING BUILDING 

PROJECTS. OR, MAYBE, YOU WANT TO SELL OR LEASE EQUIPMENT. 

No matter what you have to promote, market or sell, BE Magazine will deliver your advertising 

message to our target business owners and industry stakeholders in the building industry digitally 

(mobile, tablet or online) and in print. 

You can get all of the details and more at www.BuildingEntrepreneur.com. 


The Top 20 LEED 

Green Associate 

Exam Preparation Resources 

MCGRAW HILL CONSTRUCTION ESTIMATED THAT UP TO 48% OF NONRESI- 

DENTIAL CONSTRUCTION PROJECTS WOULD BE GREEN IN 2015. FOR THOSE 

IN THE CONSTRUCTION INDUSTRY THAT WANT TO TAKE ADVANTAGE OF 

THE WEALTH OF GREEN BUILDING OPPORTUNITY THAT BOTH EXISTS NOW 

AND WILL GROW IN THE FUTURE, BECOMING A LEED GREEN ASSOCIATE IS A 

GREAT STEP IN THE RIGHT DIRECTION. 

LEED Green Associates must demonstrate 

that they understand green design, 

operations, and construction through 

the LEED Green Associate Exam. The exam 

has 100 questions and takes about two hours 

to complete. It covers how LEED grading 

works, LEED processes, key green construction 

terminology, and sustainability concepts. 

Each certification requires a $50 application 

fee, a $200 exam fee for USGBC members or 

students or a $250 exam fee for professionals. 

Biennially, USGBC charges $50 for CMP 

renewal. 

With that said, it’s clear that the LEED Green 

Associate Exam is a costly, challenging endeavor. 

Construction professionals should 

take care to prep for the exam. Below are the 

20 stand-out Green Associate Exam resources 

for professionals readying themselves for 

the test. 

BOOKS 

LEED Core Concepts Guide 

Any LEED Green Associate hopeful should 

pick up the USGBC’s fundamental guide 

to LEED concepts. The guide covers what 

USGBC and LEED are and acts as a primer for 

those interested in green building. While this 

guide is available both as a hard copy and 

as an e-book, reviewers have noted that the 

e-book is currently not printable. 

Price: $90. The e-book is available for $85. 

LEED v4 Green Associate Exam 

Guide (LEED GA) 

This well-reviewed guide provides study materials 

and study questions in addition to 

suggestions for where to find more resources 

online (for example, the author offers in his 

product description to check out “The Treatment 

by LEED of the Environmental Impact 

of HVAC Refrigerants” because he doesn’t 

cover it in the book). Don’t let its smaller 

page count fool you—this book is chock full 

of information for any serious test-taker. 

Price: $49.98 

LEED Green Associate Exam Preparation 

Guide, LEED v4 Edition 

Available in both a hard copy and an e-book, 

this guide was prepared by the makers of 

the LEED Green Associate Exam themselves. 

The book covers the test process and critical 

information relating to the exam. It also provides 

practice questions and an answer key 

along with a plethora of additional online 

resources. 

Price: $99 for non-members, $89 for members. 

The e-book is available for $95. 

NEW LEED v4 GREEN ASSOCIATE 

GUARANTEED: Updated with NEW 

LEED v4! 

In spite of the bombastic title, this e-book is 

a great resource for individuals who want to 

closely pair practice tests with learned material. 

At the end of every chapter, the author 

includes practice questions that one might 

see on the exam. The e-book also comes with 

a full final practice exam as well. 

Price: $5.99 

Online Courses 


Everblue: LEED Green Associate 

Online Training Webinar 

Need to take your time while studying for 

your exam? Need on-demand access for 

your online education? Everblue’s course offers 

full access for a year after purchase. The 

course offers 120 questions in each category

and is available on all systems, including mobile. 

Price: $299 

Green Building Education Services: 

LEED v4 Exam Prep – LEED Green 

Associate Exam Prep On Demand 

Webinar 

Claiming to be the “#1 Selling Online LEED 

Exam Preparation Course,” Green Building 

Education Service’s Webinar series is a staple 

in LEED GA prep. This on-demand webinar 

offers 600 practice questions, nine hours of 

instruction, and unlimited use for 120 days 

after purchase. The webinar can also be 

packaged with other preparation materials 

for a discounted cost. 

Price: $149 

GreenCE: LEED® Green Associate 

Exam Prep 

Offering both live webinars with a dedicated 

instructor or “online anytime” options, 

GreenCE has programs that are great for any 

kind of distance learner. The courses cover 

the tip to tail aspects of the LEED Green Associate 

Exam, from the process of becoming 

a GA to specific exam topics like indoor environmental 

quality to exam-taking skills. 

Price: Participants who register earlier for 

the live prep pay $169, whereas the regular 

cost is $199. There is a flat rate of $1,600 for 

groups larger than ten people. 

Green Training USA: LEED Green 

Associate Exam Prep 

Green Training USA doesn’t shy away from 

bragging a little; its instructors claim that 

their courses have a “90% first time pass rate 

for certification exams.” From everyone who 

wants to review existing projects and who 

wants to learn how to use the new LEED v4 

system to newbies in the industry, this course 

is great for professionals with all levels of experience. 

Price: $299 

RMC Green Building Training: LEED 

Green Associate Instructor-Led 

Live Online Courses 

For those with three days that they can dedicate 

to an instructor-led, live online class, 

RMC’s Green Associate training offers one of 

the most hands-on online courses available. 

The classes run during normal working hours 

and provide all the fundamental materials 

needed to pass the exam. In addition to the 

course itself, registration includes an e-book 

and reference guide to passing the LEED 

Green Associate Exam. It also includes FAS- 

Track Exam simulation software that “contains 

more than 500 questions and five testing 

modes.” Using this, students can create 

an unlimited number of practice exams. 

Price: $299.99 

In-person courses 

Everblue: LEED Green Associate v4 

Everblue might offer its LEED Green Associate 

program from coast-to-coast, but the 

thrust of the program is the same no matter 

where you take it: get certified. The program 

comes with Everblue’s unique Green 

Associate Handbook, 120 practice questions 

per category, two full practice exams, study 

sheets, and a certificate of completion. 

Price: Varies by location and sign-up date. 

Green Education Services: LEED 

Green Associate Exam Prep Courses 

With over 500, 5-star student reviews and 

46 different training sites, Green Education 

Services probably serves your area, both in 

the United States and abroad. The course includes 

hundreds of practice questions along 

with supplementary readings and study 

sheets. Instructors provide their services and 

support until the student passes the exam. 

Price: Varies by location. 

Green Training USA: LEED Green 

Associate Exam Prep 

Green Training USA offers the same LEED 

Green Associate Prep online as it does in 

person. The courses are offered across the 

United States in major urban areas including 

Washington, DC, New York City, Chicago, Los 

Angeles, San Francisco, and Denver. 

Price: $399 

Poplar Education: LEED Green Associate 

Two-Day Training (v4) 

Also offering courses across the country, 

Poplar’s LEED Green Associate program is 

approved by the American Institute of Architecture 

for 14 continuing education credits. 

The course comes with a certificate of completion, 

200 practice questions in addition 

to 120 practice questions per category, and 

a handbook for soon-to-be Green Associates. 

Price: $595 

Free guides and resources: 

If the resources above aren’t helpful 

enough, check out these free online resources 

for the aspiring Green Associate. 

These practice exams, handbooks, and 

guides are a great primer for anyone just 

getting started in LEED. 

• A Guide To Becoming A LEED Green 

Associate 

• LEED v4 Green Associate FREE Practice 

Exam 

• Should I take the LEED Green Associate 

exam, or a LEED AP specialty 

exam? 

• USGBC: LEED Green Associate Candidate 

Handbook 

• USGBC: The essential LEED Green Associate 

cheat sheet 

• What EXACTLY is the Credential Maintenance 

Program for LEED? 

• What are the LEED AP specialty exams 

all about? 


Article written by Rachel Burger in 

Construction Management 


CONSTRUCTION FIRMS 

Will Face Higher OSHA Fines in August 

CONSTRUCTION 

COMPANIES WHO ARE 

ISSUED CITATIONS 

FOR VIOLATING 

OSHA’S REGULATIONS 

AND STANDARDS 

ARE GOING TO FEEL A 

BIGGER PAIN IN THEIR 

WALLETS BEGINNING 

AUGUST 1ST. FOR 

THE FIRST TIME IN 

OVER 25 YEARS, 

THE MAXIMUM CIVIL 

PENALTIES FOR OSHA 

VIOLATIONS ARE SET 

TO INCREASE BY 78%. 

AN EXEMPTION IN 

THE FEDERAL CIVIL 

PENALTIES INFLATION 

ADJUSTMENT ACT 

OF 1990 PROHIBITED 

OSHA AND OTHER 

AGENCIES FROM 

INCREASING CIVIL 

PENALTIES DUE TO 

INFLATION. 

That all changed when the Bipartisan Budget 

Act of 2015 was passed by Congress and signed 

into law last November. The bill included the 

Federal Civil Penalties Inflation Adjustment Act Improvements 

Act of 2015, a provision that would allow 

a one-time catch-up adjustment for federal agencies 

to adjust their civil penalties based on inflation since 

their last increase. Subsequent increases will be tied 

to year-over-year inflation increases. 

For OSHA, the catch-up adjustment will be based on 

the percentage increase in the Consumer Price Index 

(CPI) from October 1990 to October 2015 which was 

roughly 78.16%. As required by the Inflation Adjustment 

Act, the Department of Labor issued an interim 

final rule on June 30, 2016, regarding the new penalties 

for a number of its agencies, including OSHA, that 

took into effect on August 1, 2016. 

The current maximum penalty for a willful violation 

or a repeat violation will increase from $70,000 to 

$124,709. The minimum penalty for willful and repeat 

violations is set to increase from $5,000 to $8,908. Maximum 

penalties for serious violations and other than 

serious violations will increase from $7,000 to $12,471. 

Type of OSHA Violation 

Min. Penalty Max. Penalty Min. Penalty Max. Penalty 

Prior to 8/1/16 Prior to 8/1/16 After 8/1/16 After 8/1/16 

Serious Violation N/A $7,000 N/A $12,471 

Other Than Serious N/A $7,000 N/A $12,471 

Willful or Repeated $5,000 $70,000 $8,908 $124,709 

Posting Requirement N/A $7,000 N/A $12,471 

Failure to Abate N/A $7,000 N/A $12,471 

Here’s a brief rundown of each type of violation according 

to OSHA: 

• Other-Than-Serious Violation – A violation that 

has a direct relationship to job safety and health, 

but probably would not cause death or serious 

physical harm. 

• Serious Violation – A violation where there is 

a substantial probability that death or serious 

physical harm could result. 

• Willful Violation – A violation that the employer 

intentionally and knowingly commits. The employer 

is aware that a hazardous condition exists, 

knows that the condition violates a standard or 

other obligation of the Act, and makes no reasonable 

effort to eliminate it. 

• Repeated Violation – A violation of any standard, 

regulation, rule, or order where, upon reinspection, 

a substantially similar violation is found and 

the original citation has become a final order. Violations 

can bring the maximum penalty for each 

such violation within the previous three years. 

• Failure to Abate – Failure to correct a prior violation 

may bring a civil penalty of up to the maximum 

for each day that the violation continues 

beyond the prescribed abatement date. 

The increased fines apply to all penalties assessed after 

August 1, 2016, and will cover all violations that occurred 

after November 1, 2015. Companies that have 

been issued citations after November 2, 2015, but 

have yet to be assessed a penalty are probably keeping 

their fingers crossed that whatever fines they are 

facing get handed down prior to the end of the month 

to avoid the new higher rates. 

OSHA is also requiring that the 22 states and territories 

with their OSHA-approved State Plans covering 

state and local government employees and the 

private sector increase their penalties to match the 

increases being made by OSHA. According to OSHA, 

“State Plans must provide sanctions as effective as 

those set forth in the OSH Act.” 

It should be noted that OSHA often is willing to reduce 

penalties based on an employer’s good faith, history 

of prior violations and size of business. Employers 

who willingly work with OSHA are often able to negotiate 

settlements for reduced penalties. OSHA’s main 

goal is to abate the hazard as quickly as possible rather 

than getting embroiled in lengthy legal disputes. 

For subsequent years, adjustments must be made by 

mid-January. OSHA had the option of adjusting penalties 

to an amount less than the maximum allowed 

amount if they felt it would have had a negative economic 

impact and if the Office of Management and 

Budget was in agreement. That scenario seemed unlikely 

given the fact that penalties had remained unchanged 

for over a quarter of a century and the agency 

has been pushing to increase penalties for years. 

The increase in maximum penalties may seem excessive, 

but had OSHA been allowed to increase fines 

each year based on inflation, the agency would have 

been making those incremental increases annually. 

Instead of focusing on the increases, construction 

firms should be focusing on implementing and enforcing 

safety programs that will prevent them from 

facing fines when inspection time comes around. 

Originally appeared on Construct Connect http://www.constructconnect.com/blog, 

Article written by Kendall Jones 


ADVERTISE 

A Commanding Resource with Discerning 

Stories, Information and Insights. 

Increase Your Business... Grow Your Customers 

Building Entrepreneur provides Advertisers the opportunity 

to capture the attention of our readers online and 

in print. 

Building Entrepreneur presents a unique opportunity 

to connect with your core professional customer of 

prospect. 

Building Entrepreneur will be distributed nationally 

to Tier I, Small, Mid-sized, Emerging, MBEs, DBEs, 

Women and Veteran firms; Primes, Contracting/Procurement 

Officers and Other Industry Stakeholders. 

June issue closing date, May 1, 2017. 

Building Entrepreneur 

is an effective vehicle to: 

• Market your product and services 

to business owners, professionals, 

executives, industry leaders, 

decision makers and influencers. 

• Promote your interest in 

becoming a business partner. 

• Identify businesses to satisfy 

contracting goals by promoting 

upcoming procurement 

opportunities. 

• Identify business partners, 

suppliers and subs. 

• Establish your position as a 

market leader. 

Circulation 

Building Entrepreneur will be distributed to: 

MORE THAN 

30,000 

construction, architect 

and engineering 

business owners and 

key employees 

MORE THAN 

30,000 

Certified MBE, 

DBE & WBE 

firms 

MORE THAN 

5,000 

Verified 

Veteran 

firms 

• Construction supply and improvement 

stores 

• Government and private sector 

contracting agencies 

• Industry executives and procurement 

managers 

• Prime contractors 

Issue Frequency 

Twice A Year—Next Issue, June, 2017 

Advertising Rates 

Full Page $ 2,776.80 

Half Page $ 1,794.00 

Quarter Page $ 966.00 

Eighth Page $ 318.00 

CONTACT INFORMATION 

Building Entrepreneur Magazine 

www.buildingentrepreneur.com 

Publisher & Advertising Director: SF Stantley 

Email: advertising@buildingentrepreneur.com 

Phone: 312-436-0301 


Long 

live your 

design tm 

4050 

Ultra Pure White ® 

We’re more than just 

a paint company 

From inception to execution, you’ve been there to ensure 

your vision is realized. Next, you need to specify a coating 

that will uphold its integrity and perform as promised. 

We offer coatings that meet stringent GREENGUARD® 

Gold and MPI® certification standards and earn points 

toward LEED®* Certification. 

And to meet all your project needs, our team of Behr 

Architectural Reps provide professional support 

you can rely on. We invite you to discover what the 

Behr National Architectural Program can do for you. 

behr.com/architect 

To receive your complimentary state-of-the-art, limitedsupply 

Architectural Color Box, visit BehrColorBox.com 

GREENGUARD is a registered trademark of UL LLC. MPI is a registered 

trademark of Master Painters Institute.® *See usgbc.org/LEED for details.

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