The economic downturn has only heightened the need for contractors to look for ways to save money and increase revenues. A top-to-bottom review of your operations may reveal some surprising areas where significant savings can be found.

Manage Equipment
Use More Efficiently
Fuel is probably a major expense for you, especially if you are involved in road, bridge, and other types of heavy construction. You can reduce fuel consumption by monitoring equipment idle times and managing fuel efficiency.

Remote asset management technology uses GPS hardware attached to each piece of field equipment to send data via a server or cell tower to a desktop computer in your main office. Your office staff gets real-time data on the equipments precise location, run times, idle times, and speed. Armed with this information, you can see how much fuel is being used and take steps to establish procedures that reduce idling times. Reducing idle times for equipment not only saves fuel, it often translates into increased job site productivity.

Using remote asset management technology can also save money on maintenance. For example, the system can automate the process of monitoring equipment maintenance schedules and help in scheduling timely maintenance on heavy equipment. Better scheduling reduces wear and tear and helps prevent equipment breakdowns.

Charge for Every Change Order
Tracking and charging for every change order lowers your cost of doing business. For every change your customer asks for, break down the costs and present the estimate before you begin any work. For each change order, use a standardized cost template. Be sure to capture all extra costs, including:

• Additional time to process paperwork, supervise the work, and complete additional accounting
• Costs associated with the use of equipment, tools, utilities, and temporary protection, such as fencing and barricades
• Gas and oil
• Insurance
• Clean-up

Record every change order in a log created for this purpose. Change orders should be identified by serial number, subject, and date received. Obtain the signatures of all parties involved before work begins.

Improve Material Handling
You can improve productivity by reducing the unnecessary handling of materials on the job. Implementing a measurement program that allows you to determine how many times material is double handled on a job is a critical first step in this process. Once you have the data, specific situations and conditions that create a high likelihood that material, supplies, and equipment will be double handled should be easier to identify.

Consider preparing a map of your job sites and designating specific locations for storing materials where they will be safe from theft or damage. It makes sense to locate these sites as close as possible to where the bulk of the projects work is being done and only move materials and equipment from the storage locations to places on the site where they will be used immediately.

This past Wednesday,  a U.S. District Court issued a long-awaited decision in the Chamber of Commerce of the United States of America v. Napolitano case. A number of groups including U.S. Chamber of Commerce, Society of Human Resource Management (SHRM),  and Associated Builders and Contractors, Inc., challenged the legality of an Executive Order requiring that federal contractors use E-Verify to check the employment eligibility of all newly hired employees, as well as all current employees directly working on a contract.

The groups challenged the legality of Executive Order 13464 and its implementing regulations arguing that it was neither legally justified nor practical for federal contractors to implement.  Unfortunately, the court discounted the group’s arguments deciding the case in favor of the government and ruling that the regulation should go forward.

The rule is scheduled to go into effect on September 8, 2009.  This deadline means that most federal contracts awarded, as well as solicitations issued after September 8, 2009, must include a clause mandating use of E-Verify for all employees hired during the contract period and all existing employees assigned to perform work under the contract. 

The United States Citizenship and Immigration Services (USCIS) has published information and on its website regarding application of the rule. To access the page the addresses frequently asked questions please click here.

If you have any additional questions in regard to this ruling, please contact me at (330) 572-8049 or jim.krosky@bcgcompany.com

WASHINGON – The Internal Revenue Service today reminded individual and business taxpayers that many energy-saving steps taken this year may result in bigger tax savings next year.

The recently enacted American Recovery and Reinvestment (ARRA) of 2009 contained a number of either new or expanded tax benefits on expenditures to reduce energy use or create new energy sources.The IRS encouraged individuals and businesses to explore whether they are eligible for any of the new energy tax provisions.

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On April 3, Finance Committee member Olympia J. Snowe (R-ME) and Committee Chair Max Baucus (D-MT) introduced S. 823, the “Net Operating Loss (NOL) Carryback Act,” which would allow businesses of any size to carryback losses incurred in 2008 and 2009 for five years. Senator Snowe said, “While the recently enacted economic stimulus bill included a modest NOL carryback provision to assist smaller firms, this legislation will help any company that has losses from 2008 or 2009 carry back those losses to offset taxes paid in the previous five years when they were profitable. This will go a long way in helping to keep more workers on payroll and stabilize overall operations.” Snowe was referring to the recently enacted American Recovery and Reinvestment Act of 2009 which allows qualifying small businesses (whose average annual gross receipts in a test period are $15 million or less) to choose a three- four-or five-year net operating loss (NOL) carryback period for certain losses instead of the usual two-year period.  Snowe had previously attempted to establish such a liberal five year carryback for NOLs in the Senate-passed stimulus bill but the provision was cut back in the House-Senate Conference negotiations and instead capped for businesses with gross receipts of $15 million and less.

The bill would also block companies that receive cash from the Trouble Asset Relief Program (TARP) from utilizing this tax incentive.