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The Socio-economic Importance of Road Construction

By Krysten Jetson

Airoport

http://en.wikipedia.org/wiki/Airport

Excellent infrastructure is the backbone and chief driver of socio-economic development, which every country strives to achieve. In the US during the 1950s and 1960s, massive and strategic investment was made to build world-class interstate highway systems and transportation infrastructure. All this contributed in making our country the undisputed world leader and an economic superpower. Investment in surface transportation helps to connect people, drive commerce and maintain global competitiveness. At the aggregate level, efficient transport systems reduce costs in many economic sectors by providing better accessibility to markets, increasing employment, bringing in foreign investment and improving global presence of countries. Transport carries an important social, economic and environmental load, which can never be over-stated.

The socio-economic significance of infrastructure development is extensive. Let’s have a look into the impact of infrastructure development on our lives.

Economic effects of transportation infrastructure

In the US, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance of our infrastructure. Once the envy of the world, America’s critical infrastructure, including its roads, bridges, mass transit systems and systems for delivering energy, may soon find it difficult to meet society’s needs. Let’s see how the transport infrastructure affects the economy.

1)    Mobility and economic effects. Economies that possess greater mobility are often those with better opportunities to develop, than those with scarce mobility. Reduced mobility impedes development while greater mobility is a catalyst for development. According to recent reports, forty-two percent of America’s major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually. Better roads and connectivity can translate into massive savings, both for the state as well as citizens. Transportation also weaves a complex web of relationships between consumer, manufacturer and distributor. The productivity of space, capital and labor is enhanced with the efficiency of distribution and personal mobility.

  • Less cost. A more efficient distribution and procurement network directly results in lesser prices for consumers. This is because transportation costs form a major chunk of the total cost of each output in manufacturing.
  • Wider reach to business. With better transport facilities there is access to a wider market or consumer base which leads to better economies of scale in production, distribution and consumption.
  • Better and diverse products. Good infrastructures give access to larger and diverse base of quality inputs, and broader markets for diverse outputs. This is good for the consumer as well as the manufacturer.
  • Increased competition. When transportation is efficient, there is a wider market for goods and services, resulting in increased competition. A wider array of goods and services to choose from, reduced cost and improved quality are some of the benefits passed on to the consumers. Also, this promotes innovation and technological advancement.

2)    Mobility and economic opportunities. Transportation development and improvement that took place since industrial revolution has shaped and transformed economies and social geography of nations.

  • Attractive to foreign investors. Excellent infrastructure has always made the US an attractive destination for global corporations to invest and do business in. Good connectivity lowers transport costs, and contributes to reliable and cost-efficient supply chain management. A poor transport service level can negatively affect the competitiveness of regions and corporations, and thus have a negative impact on the brand value of our country.
  • Attractive to new-age businesses. Transport infrastructure is always important, but their relative importance in supporting the changing demands of economy  may evolve. When an economy shifts from being manufacturing-based to service-based, there is more orientation towards efficiency of logistics and urban transportation. An infrastructure that grows and evolves to support the changing needs of the economy is attractive to both businesses as well as stakeholders like new-age employees and students.
  • Increased employment opportunities. A growing economy opens up new and expanding range of employment potential as well. New businesses and sunrise industries are voracious creators of job opportunities. The ‘feel good’ vibe that they bring into ageing, developed economies can be quite rejuvenating and energizing. Transport systems need to evolve in time and space as they include the timing and the nature of the impact of transport on economic development.

Social effects of transportation infrastructure

Roads and bridges change the face of landscapes. Increased connectivity brings societies closer to the outside world, and brings in influences from far and wide. The societal and cultural impacts are many.

  • Mobility benefits. Though societies on the whole reap benefits of growing and improved connectivity, some people enjoy it more than the others. Higher the income, the more the opportunity to benefit from infrastructure growth and economic opportunities. They also have increased ability to afford travel. Inclusive growth, by promoting connectivity in rural, under-developed and poorer regions can help all sections of society benefit.
  • Rising land value. With roads and highways linking vast areas of land with cities and towns, land prices also show a trickle-down effect from those in urban locations. There has been quite marked and sharp increase in land prices observed once infrastructure improves.
  • Improved quality of life. When transportation facilities increase, especially in far-flung and land-locked areas, prices of goods and services come down drastically. A wider array of products is available at reasonable prices. This helps to improve household finance and savings.
  • Congestion and accidents. A growing population and ageing infrastructure leads to overcrowding and congestion in urban areas. Serpentine traffic-jams lead to wastage of time, fuel and energy. Accidents also become common. Environmental pollution used to be a major issue, but with strict emission laws there is a continued effort to curb the menace.

Conclusion

Infrastructure determines the longevity and success of a nation. A good, upgraded and efficient transport infrastructure is essential for a strong and thriving economy. According to the American Society of Civil Engineers, an investment of $3.6 trillion will be needed by 2020 for the repair, upgrade and development of infrastructure. But the available funds are nowhere near this gigantic figure. Experts say that while it is important to have more money because the needs are so great, there is also a need to cut spending on shiny new projects in places with insufficient demand. The authorities need to spend on maintaining and improving infrastructure in the places with some of the greatest need.

Author Bio:

Krysten Jetson is a freelance writer specializing in the construction industry. She loves sharing her expertise on various aspects of the construction industry, especially safety, such as fall protection, workers safety etc. She has many years of professional experience including working with clients to build their business and brand through internet marketing strategies.

OSHA Combustible Dust Standard on the Horizon – What Every Industry Should Know

This article appeared in the November issue of Dixie Contractor

By Nicole F. Soto

Combustible dust, it is not the most glamorous of topics but it is an important one. Why is it important? It is important because between 1980 and 2005, combustible dust incidents claimed the lives of 119 workers and injured another 718.

There is a common misconception that combustible dust hazards primarily affect the grain handling industry. That is simply untrue. Combustible dust hazards exist in many industries and manufacturing processes including: food (e.g., candy, starch, flour, feed), plastics, wood, rubber, furniture, textiles, pesticides, pharmaceuticals, dyes, coal, metal (e.g., aluminum, chromium, iron, magnesium, and zinc), and fossil fuel power generation. The handling and processing of these materials can generate very small particles.  These small particles are so light that they easily become airborne.  Once airborne, the particles settle on surfaces, inside crevices, and even inside the ventilation system.  It takes a little more than 1/32 of an inch of accumulation over five percent of a room’s surface area to create a combustible dust explosion hazard.  If disturbed, the accumulation can create a potentially explosive dust cloud.

The elements of a combustible dust explosion are fairly straight forward.  You start with the traditional fire triangle of fuel, heat, and oxygen. The combustible dust acts as the fuel source. Heat generated from equipment can provide the ignition source. And the oxygen comes from the air around us.  Now if you take the fire triangle and you add to it a dust cloud in a confined space, you have a recipe for a potentially catastrophic combustible dust explosion.  More information concerning facility dust hazard assessment, dust control, ignition control, damage control, and training can be found on the OSHA website in its Safety and Health Information Bulletin on Combustible Dust in Industry: Preventing and Mitigating the Effects of Fire and Explosions.

Currently, OSHA does not have a comprehensive standard that addresses combustible dust hazard. However, that is about to change. OSHA has initiated rulemaking to create a comprehensive standard to control the risk of combustible dust explosions industry wide.  Beginning this month, OSHA will begin its small business review of a combustible dust standard.  The purpose of the small business review is to estimate the proposed rule’s economic impact on small businesses.

The small business review panel will evaluate comments from small business representatives, review the proposed rule, and review the analysis prepared by OSHA.  Thereafter, the proposed rule will be published along with the panel’s report in the Federal Register.  Once the proposed rule is published in the Federal Register, it will be open for comments from the general public.  Any comments submitted must be considered by OSHA.  In this regard, if you believe that your small business may be adversely impacted by the proposed regulation, it is important that you file a comment with the Small Business Administration Ombudsman.  For more information on commenting on enforcement action, please visit the OSHA website on the Small Business Regulatory Enforcement Fairness Act (SBREFA).

Although beyond the scope of this article, it is important to note that despite the lack of a specific OSHA combustible dust hazard, OSHA may nevertheless cite employers for combustible dust hazards under the General Duty Clause, Section 5(a)(1) of the Occupational Safety and Health Act of 1970. In fact, OSHA has issued citations for combustible dust hazards in over 200 inspections since 1980. Unfortunately, enforcement under the General Duty Clause is reactive in that the citations are issued in response to an accident. Conversely, the impending proposed combustible dust standard will be aimed at prevention. A similar preventative standard established for the grain handling industry has significantly reduced the occurrence of explosions within the grain industry and has significantly mitigated their effects.

This article relied heavily on the U.S. Chemical Safety and Hazard Investigation Board (“CSB”) Investigation Report, Report No. 2006-H-1, Combustible Dust Hazard Study. The Combustible Dust Hazard Study contains a wealth of information on dust explosions basics, the CSB investigations of dust explosions, combustible dust incident data, and hazard communication and prevention.  The Combustible Dust Hazard Study also contains information on the National Fire Protection Association’s two principal voluntary consensus standards to prevent and control dust explosion risks, which are NFPA 654 (Standard for the Prevention of Fire and Dust Explosions from the Manufacturing, Processing, and Handling of Combustible Particulate Solids–2006) and NFPA 484 (Standard for Combustible Metals–2006).

 

Nicole Soto is an attorney in the Tampa office of Burr & Forman LLP.

Reducing the Cost Per Mile of Remote,Rocky Road Construction

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It’s Not the Heat, It’s the Humidity

This article appeared in the October issue of Dixie Contractor

By Peter C. Vilmos

When you live in Florida, you tend to hear that expression for far too many months of the year. Even during the winter, weather reports often include information on the “sun index” indicating the level of sunscreen you might need in order to survive your next trip to the local grocery store. Visitors from the southwest, where temperatures in July reached over 100 degrees, are quick to inform Floridians that it’s hot in Phoenix, “but it’s a dry heat.”

Well, if you’re looking for things other than the weather to make you sweat, you might take a look at your company’s policy on whether or not a departing employee can go to work for a competitor. Presumably, your direct competitor will now reap the benefit of the many hours and significant financial commitment your business expended. And as a business owner, you might ask: “What can I do?” In many circumstances, your best business move is to protect your businesses’ interests with a carefully crafted non-competition agreement.

The rules for non-competition agreements vary from state to state. Some states basically do not allow them (or greatly disfavor them). Other states have no legislation concerning non-competition agreements, choosing instead to allow the legal system to define the issue on a case-by-case basis. Indiana, for instance, recently allowed a five-year non-competition agreement, concluding that both the length of time (five years), and the restriction (a two county area) were reasonable. See Mayne v. O’Bannon Publishing Co. d/b/a Corydon Instant Press. In Florida, the legislature has created a statute that specifically defines the basic structure of contracts that Florida law allows to validly restrain trade. Key among the allowed restraints of trade are non-competition agreements and limitations on the use of a company’s trade secrets after an employee leaves the company.

Although defined in the statutes, Florida law also requires that the courts interpret non-competition agreements in favor of the employee in those circumstances when the agreement is vague or missing terms. Even when parties are careful to define terms in a non-competition agreement, the contract cannot confine future employment beyond the statutory guidelines, nor are non-competition agreements immune from legal challenges regarding their breadth, their validity, or their applicability to particular circumstances.

In the real world, employees leave for new positions every day. They pursue opportunities at other companies. They perceive opportunities to start companies of their own. They move on. Nonetheless, thoughtfully crafted non-competition agreements can significantly help a business retain key employees, or – at the very least – make it far more difficult for departing employees to immediately join a competitor or start a competing business. As in most contracts, the more specific the limitation (and the more reasonable the limitation relative to the possible damage a departing employee might cause your business), the more likely a court will uphold the contract. If, for instance, your business is confined to a particular county, then restricting a departing employee from working in an entirely different State makes little sense. After all, how would that departure negatively impact your business? So take care to have your attorney tailor your non-competition agreement in a manner that reflects your business and that provides you the protection you deserve for those inevitable situations when an employee critical to your bottom line decides to see if the grass is greener elsewhere.

Which takes us back to the heat and the humidity. While it’s tough to argue that the humidity can turn your Florida summer from a sauna to a steam bath, it’s also tough to deny that – if nothing else – the rain and the humidity do an excellent job of keeping our lawns green year-round. If keeping critical employees around makes sense to the financial health of your company, consider hiring an attorney familiar with drafting non-competition agreements. Under certain circumstances, it could literally save your business.

 

Peter C. Vilmos is a partner at Burr & Forman LLP.

No Choice in the Matter

This article appeared in the August 2013 of Dixie Contractor

By Zack Rippeon

A common provision in many construction contracts involves the parties’ election to resolve disputes (should they arise, of course) in a particular geographic location or with a specific state’s law.  These “choice of forum” and “choice of law” clauses are typically enforceable as courts are reluctant to interfere with the parties’ explicit agreements.  However, some states have enacted laws prohibiting outbound choice of forum or choice of law provisions – that is, those providing for the venue of any dispute resolution to be outside the home state or for a law other than the home state’s to govern.  Tennessee Code Annotated 66-11-208, for example, precludes parties to a construction contract to apply any state’s law other than Tennessee or to elect another state as the forum for their dispute resolution.

Imagine the situation where a Florida general contractor is building a project in Memphis, Tennessee, and hires an Alabama subcontractor.  The parties agree that Florida law governs their agreement and select Destin, Florida, as the venue for any dispute that may arise.  The Alabama subcontractor obtains materials from a Tennessee supplier, which are later alleged to be defective.  The Florida general contractor files a lawsuit against the Alabama subcontractor in Destin under Florida law.  The Alabama subcontractor files a third-party claim against its Tennessee supplier in that same lawsuit.  Tennessee law could be interpreted to allow that Tennessee supplier to drag everyone from Destin, Florida, to Memphis, Tennessee, to resolve the claims and force Tennessee law to apply to the dispute.

While such an example is not likely to exist in such a simple form, contractors should be sure to investigate the applicability of local laws when performing work out of state.  A “foreign” contractor working in Tennessee will likely hire Tennessee subcontractors and find itself in a similar predicament if/when a dispute arises.  It should be noted that the Tennessee law appears to have originally been intended to protect Tennessee residents dealing with out-of-state residential builders.  It was, however, drafted broad enough to encompass commercial projects as well.

One potential caveat to the application of such legal prohibitions on outbound forum selection clauses involves arbitrations.  There is a wealth of law on the Federal Arbitration Act’s (FAA) preemption of conflicting state law in constraining parties’ ability to arbitrate their dispute.  FAA preemption has been raised in cases dealing with laws similar to Tennessee’s, particularly when a particular locale is identified within the parties’ arbitration provision.  In such cases, any attempt by a state law to limit the parties’ arbitration agreement, including where the arbitration is to occur, can be viewed as conflicting with the FAA’s intent to promote alternative dispute resolution.  A similar argument could be made if the parties include a choice of law within their agreement to arbitrate.

In conclusion, it is recommended to carefully craft the independent arbitration agreement within the contract documents in order to ensure that the parties’ wishes are enforceable in states with prohibitions on outbound selection.

 

Zack Rippeon is an attorney in the Atlanta office of Burr & Forman LLP.