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Construction Tip: 12 Terms to Familiarize Yourself With

As with any industry, the commercial construction industry has its own set of acronyms and key terms. What’s the difference between a contingency and an allowance? When do OAC meetings start? Having a general understanding of these key terms helps alleviate confusion between an owner and the general contractor and/or designer. We believe specificity and clear communication are keys to providing our clients with a great construction experience.

12 Common Commercial Construction Terms

  1. Contingency: Money, often a percentage of the total project cost, reserved to cover unexpected project costs that arise during a project. For example, a contractor starts excavating a site and hits bedrock. To remove it, different equipment needs to be brought in and the excavation takes longer than originally estimated. Contingency funds would be used to pay for this unexpected cost.
  2. Allowance: Funds set aside to cover a known cost of an unknown amount. For example, an owner wants to use tile flooring in their front entryway so the contractor budgets for a standard tile material that costs $5 per sq/ft.  The owner ultimately selects an $8 per sq/ft option and agrees to pay the $3 per sq/ft amount by which the actual tile exceeded the allowance.
  3. Consequential Damages: Damages to an owner’s business indirectly resulting from a breach of contract and which are generally foreseeable but not defined at the start of a project. For example, delays in the completion of a project for a manufacturing company result in the company’s inability to complete contracts for its customers.
  4. Liquidated Damages: A sum of money the contractor agrees to pay the owner, typically for each day the contractor completes the project late. For example, a contractor pays the owner of an office building $1,000 per day for every day the office building is completed after the contractual completion date.  The amount cannot be so great that it would be considered a penalty.  Liquidated Damages are typically accompanied by an equal and opposite Early Completion Bonus.
  5. Punchlist: A list of scope items that must be completed before a construction project is declared complete. Examples might include: replacing a damaged ceiling tile, touching up paint or ensuring dirt in light fixtures is cleaned.
  6. Substantial Completion Date: The date an owner can occupy the building for its intended use. For example, if there’s a long lead time on carpet that isn’t available to install in a conference room, the lack of carpet in that room doesn’t prevent the office building from being used.
  7. Final Completion: The date the project is fully and satisfactorily complete, Including the completion of all punchlist items.   The contractor can receive final payment upon final completion.
  8. OAC (Owner, Architect, Contractor) Meetings: Periodic meetings between the owner, architect and contractor to discuss the progress of a project.
  9. Change Request: A contractor’s request of the owner to compensate for something that needs to be modified on the project.  For instance, the owner may be considering adding a door to a room. This change is made to the design documents and sent to the contractor for pricing. The contractor issues a Change Request for the additional door.
  10. Change Order: A formal change in a project’s scope, often also impacting construction costs and completion dates. In the Change Request example above, when the owner approves the Change Request for the additional door, a Change Order is issued which formally adds the door to the project for the agreed price and (if applicable) a completion date extension.
  11. RFP (Request for Proposal): A document created by a property owner that announces, describes and solicits cost proposals from qualified contractors for a specified project.  It’s common for public entities like schools or other government agencies to issue RFPs.
  12. RFI (Request for Information): A means to clarify ambiguities or fill in gaps in information that appear in the plans or specifications. For example, a concrete subcontractor needs more detail on rebar placement than was shown on the plans, so they submit an RFI to the contractor who either responds to the RFI or forwards it to the architect/engineer for a response.

Bush Announces 4 Employee Promotions

Studies show employees look for new employment opportunities when they become concerned about their career growth. As a result, career advancement paths are critical to employee retention and overall job satisfaction. At Bush, we offer career tracks across departments and continuously look for ways to grow and challenge every team member. Chris, Ryan, Patrick and Richard’s performance met every expectation, and we’re pleased to announce their promotions.

Bush Construction Employee Promotions

Chris Porter, Bush Construction SuperintendentChris Porter | Superintendent II

Chris has been promoted from Project Superintendent I to Project Superintendent II. Since joining the team, Chris spent a brief stint assisting in estimating where he reviewed his project’s information before moving on-site at the Wilson Building in Clinton. Chris has played a key role in successful job site management and his ability to facilitate solutions to challenges that pop up in historic restoration projects is impressive. We’re excited to have Chris take the next step in his career at Bush.

 

 

Ryan DeanRyan Dean | Preconstruction Manager II

Ryan began his career at Bush as a Project Engineer Intern. Since then, he’s risen from Project Engineer to Project Manager and most recently Preconstruction Manager I. Ryan has flourished in his role as Preconstruction Manager thus his promotion to Preconstruction Manager II. Ryan exemplifies Bush’s commitment to providing clients with a great construction experience and embodies what it means to be a great team player. Ryan’s career progression has been through his own willingness to grow and learn. Keep up the good work, Ryan!

 

 

Patrick TurnerPatrick Turner | Project Manager II

Patrick re-joined our Team in May 2021 and jumped right into running successful projects. His keen eye for detail and ability to listen before acting has provided the opportunity to improve internal processes and strengthen relationships with owners and sub-contractors. Patrick’s drive, commitment to grow and ability to clearly communicate are just a few reasons why he’s been promoted from Project Manager I to Project Manager II. Patrick’s efforts will continue to make our construction team stronger and more efficient. Congratulations on a well-deserved promotion, Patrick!

 

 

Richard HenningRichard Henning | Project Manager I

Richard joined Bush Construction as a Project Engineer, and we’re delighted to announce his promotion to Project Manager I! Richard has taken the reigns and successfully been running a very large historic development project, the Clinton Culinary project and many others. He’s shown great drive and initiative in learning the ropes, and we couldn’t be more excited for Richard’s future at Bush.

Jon Davidshofer Begins New Chapter at Bush Construction

Bush Construction is pleased to welcome Jon Davidshofer to its leadership team as Director of Development. In this role, Davidshofer will lead the strategy for all development and redevelopment projects.

 

“Jon has hit the ground running, and he’s an exciting addition to our team,” said AJ Loss, Bush Construction President/CEO. “Jon’s experience in the financial and economic growth industries will help deliver a personalized customer experience to our investors, commercial real-estate agents and city officials. He’s keenly aware of every step that needs to be taken throughout each phase planning, development, design and construction. We’re fortunate to have Jon lead our development efforts.”

 

“I’m excited to join the Bush Construction team and be a part of their growing organization,” said Davidshofer. “Being able to work with the internal design team, while also having the luxury of working with the whole construction department will greatly benefit my role as Director of Development. The team shares a common desire to grow the development department and I feel the quality of work that people don’t see behind the scenes will be appreciated and respected by the communities in which we serve.”

Dena Waddell-Genz Joins As Executive Assistant

Bush Construction announced Dena Waddell-Genz has joined the team as Executive Assistant to the President and COO. Waddell-Genz joins Bush Construction from MoboTrex where she spent four years as the Executive Assistant to the President/CEO and replaces Erica Sellnau-Allan who has been promoted to Head of Employee Engagement.

“Dena’s former experience at MoboTrex and John Deere World Headquarters brings a powerful combination of organizational management and decision-making skills,” said AJ Loss, Bush Construction President/CEO. “We’re committed to challenging and growing our people so that they can provide customers with a great construction experience, and we couldn’t be luckier to have Dena help us get there.”

“I’m thrilled to join Bush Construction for so many reasons,” said Waddell-Genz. “The Executive Assistant position is a role that I’ve had a very deep passion for, and I look forward to working with such a fabulous array of team players! Additionally, what I love most about Bush Construction is the work-life balance and the feeling of being appreciated by my coworkers. This is definitely the business environment I have been searching for, and I look forward to many years of dedicated service.”

Self-Perform vs Sub-Contracting for Small Construction Projects

When a commercial general contractor is hired to “self-perform” work it means the project is completed directly by the contractor’s own skilled labor force. Typically, a contractor will self-perform activities such as demolition, carpentry, casework, doors, and hardware, framing drywall, masonry, and other specialty tasks.

When to Consider Self-Perform over Sub-Contracting

Self-perform works well for projects that are smaller in scope or those that require a fast turnaround. For example, a facility upgrade, a backlog of maintenance projects, or when the contractor is already on-site and asked to assist with an additional project.

While self-performing doesn’t work for every construction project, selecting a contractor with these capabilities brings many benefits to business owners, including:

  • Cost efficiencies – results in a more efficient and streamlined construction process, saves time, money and eliminates additional service fees.
  • Increased control – relies on the contractor’s thorough experience to create and maintain schedules and ensures the project is completed on time and on budget.
  • Faster project starts – takes advantage of the contractor’s speed and flexibility to directly assign its team to a job site.
  • Quality assurance – benefits from the contractor’s talented team of high-skilled laborers that have a history of working together on multiple project types across many industries.

Bush Construction’s Self-Perform Capabilities

With years of hands-on experience and training, our skilled workforce will deliver an exceptional outcome no matter how big or small your project is. Whether you need help installing new doors or cabinetry, replacing baseboard trim, changing the flow of your entryway or common area, our trained carpenters are dedicated to working with you, and with little disruption to your business.

If you’d like to learn more about Bush Construction’s self-perform capabilities or with assistance budgeting future projects, fill out the Contact Us form below.

 

Meet the Team: Colin Freese

We are so excited to welcome Colin Freese to our team. Prior to joining Bush Construction, Colin was a Senior Designer/Mechanical Engineer, proficient in using CAD and a multitude of other programs to design products for clients. We held a rapid-fire with Colin and learned a lot!

Where did you grow up?

I grew up in Ida Grove, Iowa.

What high school & college did you attend?

I graduated from Odebolt-Arthur/Battle Creek-Ida Grove High School(OA-BCIG High School) and after that attended the University of Iowa.

What are your hobbies?

I like to play golf, pick-up basketball, and league sports like softball and volleyball.

How do you feel about working for Bush?

I’m excited about working for Bush and ready to contribute.

What are you most excited about?

I’m most excited to be able to see the projects I’m working on progress in real-time with my own eyes, something that I didn’t get the opportunity to see at my previous job.

How do you feel about the slight shift in your career path? 

I’m feeling more enthusiastic about construction than I did about manufacturing, and that makes me feel more confident about my choice to pursue this opportunity with Bush.

Technology & Construction: Have you Overlooked the Power of a CRM?

Evaluating sales and marketing software is like redesigning a website – no one wants to do it; however, every few years the process is necessary to stay current, evolve with customer needs and support a company’s growth strategy. One widely overlooked software purchase in the construction industry is an integrated sales and marketing automation platform, or a customer relationship management (CRM) platform. An integrated CRM serves as an organization’s single source of truth for customers, prospects, opportunity data, and more. It’s a marketer’s dream for understanding the customer journey and has the power to create higher producing customer-first teams.

Why CRM’s Bring Significant Value

If you work in construction management and would like to understand the benefits of a CRM, software review websites like Capterra or G2Crowd are great places to start. These websites offer insight from real-life users and the ability to compare multiple platforms.

Another resource is our podcast episode on Technology & Construction: Have You Overlooked the Power of a CRM?. Here are the top five highlights:

  1. Operations vs Sales vs Marketing – Construction companies tend to focus heavily on their operations. As a result, software purchases center around estimating and workload tracking. The last thing leadership, commonly made up of engineers, may think about is how to grow their business through an integrated sales and marketing approach. While the great divide between sales and marketing exists across almost every industry, in construction, it’s important to be mindful that the gap between operations and sales and marketing can be even more significant.
  2. Digital Marketing is “New” – In construction, a small-to-mid-size marketing department may be made up of one or two individuals who are typically responsible for providing logos, planning events, posting social media updates, and coordinating RFPs. While these tasks are important, engaging with customers based on their digital preferences and preferred frequency to push them further down the sales funnel is a new way of thinking. And may require a lot of internal education.
  3. Find a Champion – Find an executive or high-level manager that understands the importance of an integrated sales and marketing automation software and will champion your efforts. Work together to gain the support of your leadership team.
  4. Show the Cost Savings – Yes, that’s right, an integrated CRM will save you money. Not only will your financial projections be more accurate, but you may also be able to hold off on hiring the business development rep (BDR) you’ve been thinking about. When you compare the cost of an integrated CRM to a BDR, the software is much less expensive. The “smaller” investment will yield a much higher, more immediate result. When your team references one system of record, it’s easier to see where the bottlenecks are and act. Now, everyone feels responsible for helping clients achieve their construction goals.
  5. Determine Success Benchmarks – Define measurable goals and create a detailed plan (with timelines) on how you will achieve them. Is it to replace an outdated CRM or do away with Excel documents used to currently track your opportunities? Is it to send customer emails on topics they consented to receive updates on? Or would you like 100% usage by a certain date and time? Either you or your CRM onboarding partner can help you outline a plan and not only meet but exceed your goals.

Meet the Team: Ryan Welborn

Ryan pictured with his wife and three little girls

Continuing our “Meet the Team” series, we’re kicking off this week profiling Ryan Welborn, Director of Construction. Ryan is a highly respected problem-solving machine with a sense of humor and a genuine love for his family.

Where do you live?

Orion, IL

What do you do at Bush Construction? 

I manage projects under construction and provide guidance/support to fellow associates who are managing projects of their own.

Who has influenced you most when it comes to how you approach your work? 

My father.  If you work hard, more often than not, good things will happen.

How do you prefer to start your day? 

I like to start really early in the morning before the family gets up with a cup of coffee organizing for the day to come.  By the time they are awake, I have typically caught up on the random things from the previous day and can spend time focusing on getting them ready for school and daycare.

How do you prefer to end your day? 

Hanging out with my wife and three little girls.

Bush Construction Interns: Where Are They Now?

Internships have the ability to make a lasting impact on both the student and the employer. While we may not stay in touch with all interns that have participated in our program, we have and will continue to remain strong supporters. Today is National Intern Day and we thought it would be fun to provide you with a “where are they now” update!

Jake Storjohann | 2015

I was an intern back in 2015, I worked with Ryan Welborn and the crew at the Davenport Fire Department. Since my internship, I graduated from the University of Northern Iowa with a construction management degree and accepted a job at Allied Construction Services as an estimator/project manager. I’ve enjoyed my time at Allied, it’s been very challenging and rewarding.

Evan Spurgetis | 2016

I interned at Bush Construction the summer after my sophomore year in undergrad (2016). The summer after my junior year I interned at Larson Engineering in their St. Louis office and worked there part-time throughout my senior year as well. After graduating from Southern Illinois University Edwardsville in 2018, they hired me full-time. I worked in their St. Louis office for one year. I then transferred to the New York City office in the summer of 2019 where I have been for the past two years.

Jacob Rockey | 2017

I graduated from Iowa State University in December 2019 and currently work for Beck Group in Dallas, Texas. My project experience since interning at Bush started with building Dickies Sports Arena in Fort Worth. I am currently working as a Project Engineer on a Hospitality Center at American Airlines Headquarters as well as working on the preconstruction/construction for a project on the University of Texas at Arlington’s Campus. I loved my experience at Bush Construction and learned a lot working under Ryan Welborn. He helped jumpstart my passion for building!

Courtney McClaine | 2018

After interning at Bush Construction, I graduated in May 2020 with a B.S. in Construction Management from the University of Northern Iowa. I am currently at Streamline Architecture and Artisans as a Design Intern – however, I do a lot as a Project Manager for our Artisans team and a Marketing Coordinator for our coffee shop, Iron + Grain. This fall, I will be attending Kirkwood Community College in their Interior Design + Architecture program. I am really grateful for my time at Bush Construction and in the construction industry in general because it will help me in my future career as an Interior Designer.

Kyle Jecks | 2019

I interned at Bush Construction the second semester of my senior year at North Scott High School through the summer leading up to my first year at Iowa State University. It was an awesome experience!

This summer I have been interning at Power Construction in Chicago, IL. The project I’ve been working is One Chicago, which is a $500M development set to be the sixth tallest building in Chicago upon completion early next year. My time working on this project and living in the city has been wonderful—a life-changing experience!

I am heading into my junior year at ISU and absolutely love the atmosphere and culture. I’m involved with American General Contractors, the ASC commercial team competition, playing trumpet in the band, and extra roles I have taken on as a resident assistant. I like to stay busy and there are plenty of great opportunities to do so!

The Cause and Effect of Construction Material Shortages and Price Increases

The Associated General Contractors (AGC) published its latest Construction Inflation Alert that offers insight on the most recent construction material shortages and price increases. There’s a lot to unpack in the edition, so we’ve highlighted some of the most important key points for you.

Seismic Pricing Fluctuations

This isn’t the first time that the construction industry has faced rapid material shortages and increased costs. In 2004, materials rose from 3.6% to 10.0% and “remained above a 5% annual rate for a total of 31 months, before subsiding to a 3.2% rate in October 2006.” Other dramatic increases came in 2008 and 2017, however, COVID-19, natural disasters, and transportation issues have caused the most significant disruptions.

From May 2020 to May 2021, the price of:

  • materials and services used in construction skyrocketed 24.3%.
  • lumber and plywood rose 111%.
  • steel mill products climbed 76%.

While some material prices have come down since mid-May, they are still higher than what prices were a year ago.

If Only Construction Projects Were Like Buying a Car

When you buy a car, the cost to build it is already factored into the total price. In construction, the cost of work isn’t realized until after material purchases are made or the work is completed. This presents a huge risk to commercial general contractors and business owners, especially when large material price increases happen after committing to a project.

If you are an owner considering a new build, addition, or renovation, here are some things to keep in mind:

  • reserve funds for additions or modifications to your project’s scope of work to mitigate risk. This can be accomplished through an owner contingency fund.
  • ask your GC about an early procurement strategy for materials such as structural steel, reinforcing, and roofing.
  • be mindful of oil prices as oil and its by-products are used in manufacturing steel, PVC pipe, roofing material, and more. When oil prices go up, so do materials and the cost to transport them.

While we cannot control the global supply chain, we can ensure your experience remains positive through open, honest, and transparent communication. Our team strives to keep clients informed of fluctuations in pricing due to forces beyond our control.

If you have any questions on how today’s pricing fluctuations might impact your project, feel free to contact us using the form below.

To read AGC’s report, click here.

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