ABC Supply Offers Building Products to Contractors at the Bowling Green Branch

ABC Supply Co. Inc. has opened a branch in Bowling Green, Ky., located at 125 Hunter Court. The location will offer steep-slope and low-slope roofing and other select building products that contractors need to run their businesses.

Jason Swigart will manage the branch. Prior to joining ABC Supply, Swigart worked for other building products distributors in the Louisville area in positions ranging from inside and outside sales to operations manager. In March 2016, he started at the Louisville branch located at 619 Industry Road as an outside sales associate. He graduated from the University of Louisville with a bachelor’s degree in business administration and marketing.

This is ABC Supply’s sixth location in Kentucky. “Our new location in Bowling Green will help contractors in south-central Kentucky have access to the products and services that they rely on for their businesses every day,” says Tom Kuchan, vice president of ABC Supply’s Northeast Region. “Whether it’s working with new or existing customers, Jason and his team look forward to continuing to build relationships with the area’s contractors.” 

Branch hours are 7 a.m. to 4:30 p.m. CDT, Monday through Friday and 7 a.m. to 11 a.m. CDT on Saturday. The phone number is (270) 782-8787. 

Three Types of Contracts Offer Different Benefits and Risks

For the first time in years, construction material costs are rising. In March, the Bureau of Labor Statistics reported numbers showing a 4.8 percent rise in material prices between February 2016 and February 2017.

For contractors who have been working on long-term projects, the price increases could mean lower profit margins, or even losses, as they complete their work. Contractors who are in the estimating, bidding, and contract negotiation stages for new projects will want to ensure profitability and manage risk where possible. In particular, selecting the best pricing system for a project and properly drafting the contract to reflect it is essential, especially during periods of material cost increases.

Three prevalent pricing mechanisms are fixed-price contracts, cost-plus contracts, and guaranteed maximum price contracts. Here’s the lowdown on each type and the benefits and risks with respect to cost changes.

FIXED-PRICE CONTRACTS

Fixed-price or lump-sum contracts are contracts where the parties, sometimes through extensive negotiation, agree upon a fixed sum for the labor and materials to be furnished. Typically, the contractor will prepare a schedule of values where portions of the work correspond with a certain percentage of completion, and pay applications are submitted for the appropriate percentages (often, minus an agreed-upon amount of retention). If the parties want to change the scope of work, a signed change order will be required, and the parties must negotiate and agree upon the change order pricing before signed.

Fixed-price contracts offer contractors limited protection—and in some cases, no protection—in the event of material price increases. Indeed, “the normal risk of a fixed-price contract is that the market price for subject goods or services will change.” (See Seaboard Lumber Co. v. U.S., a 2002 Federal Circuit Court opinion.) Many contracts contain force majeure provisions that excuse or absolve parties from performing their contractual duties in the event of unforeseeable circumstances that are beyond their control and that make performance impossible or commercially impracticable. Examples of such events include “acts of God” like floods, tornadoes, and earthquakes, as well as events such as riots, terrorist attacks, and labor strikes. However, force majeure clauses can be difficult to enforce, and most courts, like the Federal Circuit in Seaboard, view cost changes as a normal, foreseeable risk and not an event that will excuse contractors from further performance. Therefore, when negotiating a fixed price, contractors generally should plan to be held to that price.

However, properly drafted fixed-price contracts can give contractors options to mitigate potential losses arising from cost increases. One strategy is drafting the contract to read that the fixed price is based upon material prices as of the date of signing and that significant increases in material prices will or shall (not “may”) entitle the contractor to an equitable adjustment of the contract price through a signed change order.

Contractors should also be entitled to adjust the contract price or time of completion to account for other problems—like delays, material shortages, or other difficulties acquiring materials—that can occur when costs increase. Such provisions will have better chances of being enforced if the contract specifically defines what constitutes a “significant” percentage increase in price. Additionally, contracts should include provisions protecting contractors from liability associated with delays and shortages. Some fixed-price contracts also provide that in the event the parties cannot agree on a price for change orders, the change order work shall be paid for on a time-and-materials basis including overhead and profit. If contractors are unable to negotiate an equitable adjustment provision, a time-and-material measure for change orders can provide some protection.

COST-PLUS CONTRACTS

For contractors, while the above revisions to fixed-price contracts may be helpful, cost-plus contracts will provide the maximum protection against material cost increases. Cost-plus contracts—also known as time-and-material agreements—are agreements whereby contractors bill for the cost of the labor and materials, plus a fee that is either a percentage of the project costs or an agreed-upon flat fee. When invoicing, contractors include documentation of their payment to subcontractors, vendors, and material suppliers to provide proof of the cost. They then invoice for the cost plus the agreed-upon percentage of the cost.

Unlike fixed-price agreements, cost-plus agreements place the risk of cost overages and increases on the owner. If the contractor’s fee is a percentage of the labor and material costs, these arrangements also create potential for contractors to benefit from cost increases. However, they eliminate the need to negotiate a fixed price, they make change orders much simpler to implement, and in periods of cost decreases, they can benefit owners.

GUARANTEED MAXIMUM PRICE CONTRACTS

While some owners will be wary of cost-plus agreements—especially when material prices are on the rise—guaranteed maximum price (GMP) contracts may serve as a compromise that could help both contractors and owners mitigate risk. GMP contracts are a modified cost-plus option in that they function like cost-plus agreements—contractors invoice for the labor and material costs, plus their fee—but the contracts establish a maximum price for the entire project. Contractors invoice in the same manner they would for a cost-plus agreement, but once the owner has paid the maximum agreed-upon amount, the remaining costs are the contractor’s to bear.

Often, parties to GMP contracts also agree that if the sum of the cost of work and the contractor’s fee total less than the guaranteed maximum price, the difference in the cost and the agreed-upon maximum fee reverts to the owner or is split between the two parties. This makes some owners more amenable to these agreements than they would be to traditional cost-plus agreements, which can make project costs very unpredictable.

Whether parties decide that a fixed-price or cost-plus agreement is best for their needs, they should take care to draft the price terms clearly in order to avoid ambiguity and confusion. Generally, courts enforce contracts as written if they are clear and unambiguous, but if an ambiguity exists, courts will must look to extrinsic evidence to determine what the parties intended, leaving the fate of the dispute to a jury or fact finder. For example, in Rosa v. Long (a 2004 N.C. Court of Appeals opinion), a homeowner and contractor entered into a contract stating that the contractor would build a turnkey dwelling for the “sum of $193,662.60” but later stating that contractor would receive a commission in the amount of 10 percent of all materials, subcontracts, and labor obtained and expended by the contractor. Because these terms suggested that the contract was both fixed-price and cost-plus, a jury decided what the parties intended instead of a judge enforcing the terms as drafted. Clear, proper drafting is essential to increasing the parties’ chances of a predictable outcome in the event of a dispute.

Owens Corning Roofing and Asphalt Invites Contractors to Advisory Board

Owens Corning Roofing and Asphalt LLC has invited five contractors to join its Platinum Advisory Board. The honor is awarded to contractors who have demonstrated a commitment to excellence in all aspects of their business.

The newly announced Platinum Advisory Board members are Will Jones of Yellow Hammer Roofing (Athens, Ala.); Shannon Alberts of Security-Luebke Roofing Inc. (Kaukauna, Wis.); Jack Borba of Straight Line Construction (Shingle Springs, Calif.); Mark Franzoso of Franzoso Contracting Inc. (Corton on Hudson, N.Y.); and Clint Vaughn of Roofscapes Exteriors (Bixby, Okla). With the addition of these new members, the Board is comprised of 14 leading contractors from across the U.S.

The Owens Corning Platinum Advisory Board represents a group of contractors who share their market, product and technical expertise with the roofing manufacturer. Members bring a contractor’s perspective to studying and evaluating products and offering suggestions that support continuous improvement.

“We are excited to have these leaders’ voices and experience on our Advisory Board and we are honored they’ve committed to represent their fellow Owens Corning Platinum Contractors,” says Jason Lewinski, Owens Corning contractor network leader. “Every Platinum Advisory Board member has demonstrated market leadership and a commitment to achieving and sustaining high levels of customer loyalty and satisfaction. There is no substitute for the perspective and insights of our contractors.”

DECRA Roofing Systems Celebrates 60 Years

DECRA Roofing Systems Inc., the company that invented the stone-coated steel roofing category, is celebrating 60 years of protecting residential and light commercial projects.

Since 1957, DECRA roofing products have combined durability with classic style and design versatility to withstand some of the harshest climates worldwide. DECRA panels feature an interlocking design to withstand high winds and to add strength.

“We’re proud to celebrate six decades since the first DECRA panel was installed on a roof,” says Bobby Bloom, president of DECRA Roofing Systems Americas. “In those 60 years, DECRA has delivered advancements in manufacturing and production to provide a product that meets the standard for sustainability, quality and innovative product design.”

2017 Brings Slew of Programs and Promotions

DECRA kicked off its 60th year with a focus on the roofing contractor. For example, the company’s JUMPSTART program gives contractors who are new to using DECRA up to $5,000 over three installations, just for trying the product.

DECRA recently hosted a group of contractors and distributors at the company’s Corona-based manufacturing facility to gather feedback directly from those on the front line.

“Customers are very clear with the subjects that concern them for the future and we want to provide solutions that sell more DECRA products, help them create more brand equity in the market and give them training for their crews,” says Chad Colton, vice president of Sales. “While the DECRA sales team has doubled in the past year, we wouldn’t have the growth we are experiencing without the assistance of distribution partners. We intend to provide them with better service, marketing and solutions.”

DECRA Roofing Systems is owned by Fletcher Building Products. DECRA products are manufactured in Corona “by a dedicated team of workers who take pride in their quality and know that each panel manufactured is being installed to protect homes and buildings of customers throughout North and South America,” Bloom states.

Roofing Sponsorship Secures Contractors More Jobs

An exclusive roofing category sponsorship between IKO and HomeAdvisor, members of IKO’s contractor programs now have access to project leads in their local regions to help them land additional jobs.

“In addition to offering a full suite of roofing products and accessories, one of the best ways to help our contractors close more sales is to connect them directly with people who are looking for a new roof or repairs in their area,” says Jeff Williams, brand director, IKO North America. “That’s what our partnership with HomeAdvisor is intended to do, help our contractors secure more leads to close more jobs locally.”

Current and new members who enroll in IKO’s contractor programs, IKO ShieldPRO plus+ (SPP) and IKO Shield, can enjoy exclusive membership perks and special benefits on HomeAdvisor, including discounts and rebates on real-time leads, a customizable profile, and verified ratings and reviews, among other benefits. When an owner searches for a roofing project, IKO is presented as the exclusive roofing sponsor in the initial category results on the HomeAdvisor website, giving the brand increased awareness among a number of consumers seeking local contractor professionals.

“HomeAdvisor offers pros the ability to reach project-ready owners via mobile, smart phone devices and Facebook,” says Scott Weigel, vice president of business development for HomeAdvisor. “And, by using HomeAdvisor’s on-demand scheduling tools, owners can speak with pros or book appointments directly on their calendars, providing value for IKO and its members.”

The sponsorship is expected to help build IKO’s brand and product awareness through a custom content hub where homeowners can view photos, watch videos, learn about products or redeem special offers. Additionally, IKO branding will also be featured in HomeAdvisor’s home and building partner network, including sites such as Build.com, 1800Contractor, Realtor.com, ImproveNet.com and more. 

MRA Adds Two New Manufacturer Members

The Metal Roofing Alliance (MRA) has announced the addition of two new manufacturer members to the organization.  CertainTeed joins the MRA to promote a line of architectural metal roofing products.  Also joining the MRA is DECRA, an innovator and leader in the stone coated metal roofing market.

After more than 18 years of growth, the MRA has proven success as a market-building organization. With an initial investment of $24 million in marketing programs, the MRA has tripled the roofing market share, from three percent in 1998 to 11 percent today.

“CertainTeed recognizes the importance of partnering with industry associations that support its membership in the promotion of their products and services,” says Dale Walton, product manager for CertainTeed Roofing.  “For this reason we are pleased to join the Metal Roofing Alliance, and we look forward to participating with the MRA to further strengthen our presence and position in the metal roofing sector.”

The MRA was formed to educate both homeowners and roofing contractors on the many benefits of metal roofing.  For the past 18 years, the MRA has been able to more than triple metal roofing’s market share by offering investment grade product that provides decades of protection for homes

“In 2017, DECRA will celebrate its 60th anniversary and as the original stone coated metal roof tile manufacturer, it is critical that we have a voice in the industry. We are happy to be re-joining the MRA and look forward to assisting the market and industry in the years ahead,” states Bobby Bloom, president, DECRA Americas.

 “The addition of CertainTeed and DECRA is an important development for the MRA, as it adds two manufacturers of building and roofing materials to our organization,” states Bill Hippard, executive director of the Metal Roofing Alliance.  “Our goal is to reach 20 percent market share by 2020 and manufacturers such as CertainTeed and DECRA are going to help us reach that milestone.  All segments of the metal roofing supply chain can benefit from additional growth, from raw materials suppliers and coil coaters to manufacturers and contractors.”

As new manufacturer members, CertainTeed and DECRA will participate in the MRA’s national consumer and contractor education campaigns. In addition, CertainTeed and DECRA’s metal roofing contractors are now able to join the MRA and begin benefitting from the leads generated by the alliance’s national consumer marketing campaign.

OMG RhinoBond Projects Are Being Completed Across Europe

OMG Roofing’s RhinoBond System has left marks across Europe with more than 125 completed projects and more in the pipeline. Collectively, these projects represent more than 300,000 square meters (3.2 million square feet) of single-ply roofing.

“In last two years, the RhinoBond System has started to take off across Europe, as more roofing contractors have seen the roof performance benefits that the system can offer,” states Web Shaffer, vice president of marketing for OMG Roofing Products. “We have completed projects across Europe and we are expanding to new countries in the region, most recently, into South East Europe.”

RhinoBond is a method for installing thermoplastic and now also clean EPDM membrane. The system consists of a stand-up induction welding tool and magnetic cooling clamps. Contractors install roofing insulation using fasteners and specially coated plates designed specifically for the type of membrane being installed – PVC, TPO or Clean EPDM. Each plate is then bonded to the roof membrane installed over the top with the RhinoBond plate welding tool. The result is a roofing system that can provide wind performance with fewer fasteners, fewer membrane seams and zero penetrations of the new membrane.

The RhinoBond System is approved for use in Europe by many roof system providers, including Bauder, Carlisle/Hertalan, Danosa, Fatra, FDT, Firestone, GAF, IcoPal, IKO, Renolit, Sika, Siplast, and Soprema/Flag.

Headquartered in Agawam, Mass., OMG Roofing Products is a supplier of commercial roofing products including specialty fasteners, insulation adhesives, roof drains, pipe supports, emergency roof repair tape as well as productivity tools such as RhinoBond. The company’s focus is delivering products and services that improve contractor productivity and enhance roof system performance. For additional information, please contact OMG Roofing Products at (413)789-0252 or visit the OMG Roofing website.

Tool Makes Curved, Straight Cuts in Flat or Corrugated Steel

The KL-2030 Long Neck Electric Nibbler provides contractors flexibility for making straight and curved cuts in flat or corrugated steel.

The KL-2030 Long Neck Electric Nibbler provides contractors flexibility for making straight and curved cuts in flat or corrugated steel.

Kett Tool’s KL-2030 Long Neck Electric Nibbler provides contractors flexibility for making straight and curved cuts in flat or corrugated steel. The tool’s elongated neck and one-handed maneuverability allow clean and burr-free cuts. The KL-2030 features a 4-amp, 2500 rpm straight handle electric motor to cut 18-gauge cold rolled mild steel and most grades of stainless steel (up to 20 gauge). The long neck allows easy cutting of corrugated sheet and flat sheet at more than 80 inches per minute. Weighing 4 1/2 pounds, the nibbler creates a 1/4-inch-wide cut and has a cutting radius of 1 1/2 inches.

MCA Reports Top Drivers in the Construction Industry

The Metal Construction Association (MCA) has released a report identifying the top 11 drivers in the nonresidential construction industry. The report, based on data analysis, surveys, and interviews with industry leaders, was prepared by FMI, a management consulting and investment banking firm dedicated to engineering and construction, infrastructure, and the built environment. The top trends in the industry trends were identified as follows:

  • Talent Shortages and Management Succession Challenges
    At the height of the recession, 30 percent of the commercial construction industry lost their jobs causing a lack of skilled workers as business picks up. The need to recruit and retain employees is key to attract the next-generation of millennials to the construction business.
  • Use of New Technologies
    With more prefabrication and modularization, use of robotics and 3-D printing, construction is becoming more standardized and computerized. BIM models are playing a role in all aspects of the construction process.
  • Productivity Improvements Needed for Profitability
    While use of BIM, prefabrication, modularization and green construction are necessary in construction manufacturing, at the contractor level, technology and planning are paramount to being profitable.
  • Changes in Construction Delivery Systems
    A slow shift is being seen from the traditional design-bid-build or hard-bid approach to more collaborative or alternative delivery methods that were gaining popularity before the recession.
  • Owner Transition
    As baby boomer leaders are getting to retirement age, the industry is facing a change in ownership among 50 percent of construction firms.
  • International Debt Problems
    Although the U.S. has experienced a resurgent economy, European countries like Greece, Italy, Spain and Portugal are struggling. After years of growth, China is also experiencing a slowdown in its economy, threatening the savings and investments made in the last few years.
  • Forming Partnerships with Customers
    A more customer-centric orientation is returning. Manufacturers and suppliers must match their marketing and delivery methods to the needs of the contractor and become partners in the process.
  • Healthier Companies
    In order to survive the recession, companies had to get to positive cash flow (or at least neutral) in the new demand reality of the 2009-2011 period. This focus on efficiency created reduced cost structures.
  • Growth Through Acquisition
    The demand for attractive building product companies to purchase is high. Industry stakeholders are looking to realize overhead efficiencies and maximize nontraditional margin enhancements (risk management, technology, self-perform). Those companies realizing profitability in this way are positioned to prosper as the construction market improves.
  • Consolidation
    On the manufacturing distribution side, 2015 was a year of company consolidation. Market conditions led to unprecedented merger activity among large players. Today, a seller can receive what the company deems a fair price, while a buyer feels there is still enough business ahead to make a return on the investment.
  • Mergers and Acquisitions Activity Benefit Buyers & Sellers
    Pace and scale of activity are both up with both strategic and financial buyers. With demand high and the supply of attractive companies low, one would expect prices to increase, and they have.

These trends are expected to play a role in shaping the nonresidential construction industry in the coming years and are part of considerations as companies make their plans. The full report is available to MCA members at www.metalconstruction.org.

The Metal Construction Association (MCA) promotes and expands the use of metal in construction through marketing, research, technology and education. MCA members include metal roof and wall panel manufacturers. Trade associations serving the metal construction industry partnered with MCA in this study. The participants are The American Iron & Steel Institute (AISI), The Aluminum Association (AA), Metal Roofing Alliance, National Frame Builders Association (NFBA), and the National Coil Coaters Association (NCCA).

OMG Roofing Launches Webpage Designed To Provide System Resources

OMG Roofing Products of Agawam, Mass. has launched a new webpage designed to provide RhinoBond users with access to system resources that they may need while on the jobsite.

The web page, www.RhinoBondResources.com, includes access to the RhinoBond operating manual and the RhinoBond Best Practice tip sheet, both are provided in English and Spanish. In addition, six videos are accessible from the site, including three videos about the system, wind performance and use over standing seam metal roofs, and three “how to” videos covering start-up requirements, tool calibration and magnet rotation.

RhinoBond, designed for use with thermoplastic PVC and TPO roofing systems, uses induction welding technology to bond the membrane directly to coated plates that are used to secure the insulation to the deck, all without penetrating the roofing membrane. The result is a roofing system with wind performance that requires up to 50 percent fewer fasteners and plates and up to 30 percent fewer membrane seams to weld on the roof.

“Roofers have a challenge of keeping crew-members up-to-date when it comes to training and best practices,” said David Allor, RhinoBond product manager for OMG Roofing Products. “Therefore we’ve made the information available from anywhere by going to the website, or by scanning a QR Code that is displayed on a yellow sticker on the inside of the RhinoBond tool case.”

Roofing contractors who want to add yellow reminder stickers to the inside of their existing RhinoBond tool cases, should contact their local OMG Field Service Representative or order stickers directly at the website.

For additional information, please contact OMG Roofing Products at (800) 633-3800 or visit OMGRoofing.com or RhinoBondResources.com.