Surety

When Grover Simpson asked to hear from the banking community on their willingness to provide credit and on their depth of expertise, Terry Dunn responded, "The best credit people in this industry are sitting at this end of the table." The "end" in question is where the insurance executives were sitting. The surety companies, Dunn inferred, dictate "what is acceptable financial stability for contractors." He added without obvious resentment or irony, "You have our attention."

Dennis Thompson affirmed the need to pay heed. "We have to create partnerships," he commented to the surety people, "and look to your advice." He then added a comment whose implications escaped everyone in the room. "You not only have our attention," he said softly, "but you might have a better hold on some other places you might not imagine."

Jim Pateidl then provided a useful summary on the state of the surety business. For 15 years, he noted, the surety industry had more capital than they knew what to do with. They turned bonds into a product with little attention to underwriting, but in the years 2000 and 2001, the reinsurance industry decided the surety business was taking way too many losses. Most sureties are typically a small part of big company, usually representing no more than 3 percent or so of the company's business, and when that 3 percent "started shaking the entire company's bottom line," some real turmoil racked the companies and surety clientele "started seeing a lot of conservatism."

"This is a time to be communicating with the insurance industry to make sure they understand your business plan," said Pateidl. He expects the situation is going to stay as is for 12 to 24 months "before we see lots of relaxation."

Skilled Labor

"Skilled labor is always going to be an issue," said Rosie Biondo. Given the lack of work, and the availability of skilled union labor, it was much less of an issue than in past sessions, but it remains an issue nonetheless.

"We don't want warm bodies," said Dennis Thompson, summing up the issue tersely, "We want talented people." Thompson argued that now is the best time to do skill development, "when you have extra time."

Garry Kemp did not disagree. "I am consistently told," he said, 'We don't need more applicants. What we need are higher quality applicants.'" Despite the lack of enthusiasm in union halls during down cycles, he sees the need to continue emphasis on skilled training."

Kemp spoke in impressive detail about the creation of the Center for Construction Excellence under the direction of UMKC and its ongoing projects. During one recent project, some 3000 middle school students participated in a six-week design competition that gave the class practical application of math, geometry, science and communication skills. "The thing we haven't done," said Kemp, "is introduce students to the industry early." This project will have gone a long way towards correcting that, and it is just one initiative out of many.

Design/Build

Grover Simpson acknowledged that the whole session could have been devoted to the emergence of design-build and other alternative methods of project delivery, but that even in the short time allotted, these methodologies deserved attention nonetheless. (We agreed and added a section).

Greg Carlson, a member of the Design Build Institute of America and a supporter of the concept observed that he has seen significant increases in its employment recently. Plus, he noted. We see more and more opportunity for design/build in this market."

Ernie Straub also spoke highly of design/build as "great for end users." What is more, "You don't have to get a shotgun and go to court to retrieve damages." Kris Roberts likes it because "it is a lot easier to build a team... when everyone is involved from the very beginning." Rosie Biondo argued that it was not only a "big plus to the owner," but also that "jobs go much smoother" for the sub-contractor.

Only Jim Calcara demurred, admittedly "at the risk of being the dinosaur in the group." The problem he saw is that all the information comes from one source. There is no dialogue, no balance, "The owner loses a valuable ally."

Marty Hoffey made a likely observation, saying "Whatever delivery method the owner feels most comfortable with is usually the best route to go." The problem he saw is that owners are not always educated as to what those choices are.

A conciliatory note was struck by Dennis Thompson, who observed that "you are only as good as your partner"—no matter the nature of the partnership. Greg Nook agreed. "There is no substitute," he said, in words that well summed up the essence of the meeting, "for the people you trust."