North Carolina Bar Association Construction Law Section/Carolinas AGC Joint Committee Meeting Minutes

Wednesday, December 3, 2008
Offices of Nelson Mullins, Raleigh, NC  

Attendees:
Bill Gammon, Nelson Mullins Riley & Scarborough, LLP
Susan Lewis, Beam Construction
Joe Hatcher, Resolute Building Co.
John Martin, Rentenbach Constructors
Bill Marshburn, D. J. Rose & Son, Inc.
Kay Lantrip, Skanska USA Building, Inc.
Pete Marino, Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP
Ricky Vick, S. T. Wooten Corporation
Bob Greene, Smith, Currie & Hancock, LLP
Hank Jarrett, Conner Gwyn Schenck, PLLC
Jeff Beam, Balfour Beatty Construction Co., LLC
Keith Coltrain, Elmoe & Wall, P.A.
Randy McNeely, Skanska USA Building, Inc.
Damon Jones, Daniels and Daniels Construction
Barry Gardner, Shelco, Inc.
George Freeman, Jr., Poyner & Spruill, LLP
John Muter, Barnhill Contracting Co.
Scott Dorney, NCMBC
Daily Derr, Daily J. Derr, P.A.
Theresa Rosenberg, Architect & Attorney
Riana Smith, Safran Law Offices
Perry Safran, Safran Law Offices
Berry Jenkins, CAGC
Dave Simpson, CAGC

Co-Chair Bill Gammon called the meeting to order at 10 a.m. on Wednesday, Dec. 3, 2008, noting that there was a solid turnout of 24 participants. The minutes were discussed from the last meeting, held May 8, 2008. Issues discussed included:
2008 NC MILCON Summit: Scott Dorney, North Carolina Military Business Center, said there were 520 registrants on Nov. 19 at the 2008 NC Military Construction Summit, co-hosted by the NC Military Business Center and the NC Military Foundation, and sponsored by Carolinas AGC.  With construction slowing in the Carolinas, a possible market could be Army and Navy construction work in eastern North Carolina, where an estimated $5 billion will be spent at military installations over the next five years. Participating in the Summit were over 40 construction and contracting officials from the U.S. Army Corps of Engineers, Naval Facilities Engineering Command, Fort Bragg, Camp Lejeune, Cherry Point, Seymour Johnson AFB and the U.S. Coast Guard.  In addition, attendees included general and specialty contractors, design firms and construction suppliers.
The Summit included presentations by Army and Navy construction agencies on construction work planned at military installations in North Carolina over the next five years. The Summit also included 18 breakout sessions on topics essential to winning and performing military construction contracts, “speed networking” among government agencies, prime and subcontractors and over 45 vendor booths. 
One breakout session involved CAGC members discussing military construction opportunities in eastern North Carolina. The 40-minute discussion, which drew about 60 attendees, was moderated by Bill Gammon and included panelists Damon Jones of Daniels and Daniels, Carlos Norris of Crowder Construction and Dan Estes of Weaver Cooke Construction. Mr. Gammon, focused on why the construction industry should enter the military-construction market now and in the future.
Mr. Dorney said he would work with CAGC to look at offering a seminar to increase military construction participation for NC-based companies. Mr. Gammon said: "There is a real passion about wanting to participate in federal construction work in North Carolina by N.C.-based companies. There are a lot of people who want their fair share of work – and that's positive."
Legislative Developments: Berry Jenkins and Dave Simpson discussed CAGC's continued emphasis on pushing for funding for transportation, building, and water and sewer needs after the N.C. General Assembly convenes on Jan. 28, 2009. Good news for construction is that Congress has reacted positively to $136 billion identified by the National Governors Association for specific transportation projects that could be ready to begin. Of that amount, North Carolina perhaps could get a total of $3 billion spread over three years.

A continuing cause of concern for the construction industry on the federal and state level involves moves by unions to push for collective bargaining, card check legislation and elimination of right-to-work laws. CAGC is working with a business coalition to encourage the North Carolina Congressional delegation, particularly U.S. Senator-elect Kay Hagan, to oppose so-called card check legislation that would allow unions to organize much easier. It was noted that CAGC is developing for its members a video concerning how to deal with union efforts. Jeff Beam said he had worked in the Northeast and that the anti-labor climate that has been in the Carolinas needs to be preserved.

It was noted that CAGC has testified before a legislative committee about the importance of the state requiring on state projects mandatory flood and wind coverage for construction work in tier-one counties that mostly are on the coast.

Other issues discussed included tough new crane standards that will be in place (see related link at: http://newsletters.agc.org/safety/2008/10/09/c-dac-published-in-federal-register-for-public-comment). Issues state lawmakers likely will face next year will include will involve immigration and illegal aliens, the environment, Historically Underutilized Business (HUB) participation, and the N.C. Department of Revenue recently beginning to impose a franchise tax on overbillings – money received by contractors but not paid out in that calendar year, a development CAGC believes is unfair. Bill Gammon said there could be additional lien legislation sought by the N.C. Bar Association that again might involve a joint venture in moving with CAGC.

John Muter noted that legislation approved this year by lawmakers will allow the N.C. Department of Insurance to begin regulating bonding companies, a good development, he said, in that more risky bond companies that might not be able to provide adequate bonding will face more governmental scrutiny.

Keith Coltrain said that legislation might be sought next year by title insurer companies that the construction industry and bar association should oppose. The issue could involve removing from lien laws the relation-back doctrine. If that were to happen, he said, contractors’ lien rights could be lost at any time the original owner decides to sell the property. Thus, the only way for contractors to protect their lien rights would be to file a claim of lien each and every time that a payment was even one day late.

ConsensusDOCS: Dave Simpson said that efforts continue by CAGC to encourage use of the documents with public owners. John Muter noted that a group of contractors, subcontractors and attorneys recently met at the CAGC office in Charlotte to look at crafting a stand-alone subcontractor document.

Committee Developments: CAGC, in its N.C. Prison Construction/CAGC Joint Committee, is working in a joint venture with DOC to try to place skilled former inmates in the construction industry. Contractor-subcontractor meetings have been held this year in Raleigh, Charlotte and Columbia to improve relations. That effort is likely to be expanded next year.

State Construction Conference: The next conference is scheduled for March 24-25.

Blue Sky, Market Conditions: Bill Gammon distributed information by AGC of America and other sources about market conditions. While it was noted that the economy is causing severe concerns in the construction industry in the Carolinas, there could be positive developments next year concerning additional infrastructure funding from the state and federal levels.

Before adjourning, the committee set the next meeting for 10 a.m. on Wednesday, June 24, 2009, in Bill Gammon's office.

Respectfullysubmitted,

Dave Simpson, CAE
NC Building Director, CAGC