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Focus - Misclassified labor

image L-R: Randy Bradshaw, Executive Vice President, MIINC, LP and President, Mechanical Contractors Associations of Texas, Dallas, TX and Glenn Rex, ➤ Executive Vice President Mechanical Contractors Associations of Texas Houston, TX

HOUSTON - Randy Bradshaw has 46 years’ experience in the mechanical/industrial contracting field, beginning his career as an apprentice in 1972 in the United Association. Working his way through the craft positions, he began his management career in 1980 and was included in the formation of Miinc LP.

 

 

 

 

 

    Glenn Rex has served the Mechanical Contractors Association of Texas as executive vice president since 1977.

 How would you describe the state of the construction industry in general terms?
    Generally healthy, although in need of qualified additions to our existing skilled labor forces to meet the demand for our services in various parts of the State.
 
Has your company experienced an increase or a slowdown in business? What is driving this increase/slowdown? 
    Our commercial mechanical construction and service industry is cyclical.  The North and Central Texas areas are quite busy with projects.  The Houston and Southeast Texas area is slowing down after several years of strong growth.  Texas appeals to many companies because of the business friendly attitudes of the State.  Our population has grown consistently for more than 25 years.  With growth comes the need for roads and bridges, houses and schools, and hospitals and healthcare related facilities.  Population growth drives the demand for construction. On the Industrial side, the oil and gas industry has added opportunities for expansion on several fronts.
 
As a mechanical contractor, what is your biggest challenge and how are you dealing with it?
    Misclassified labor is a big issue in our industry.  There is a growing practice of contractors who are really nothing more than labor brokers employing “independent contractors”.  In theory, an independent contractor is truly independent and sets his own schedule, and is responsible for his continuing education, safety, payroll taxes and benefits.  In practice, in our industry, there are more and more contractors who misclassify their employees to be independent contractors so as to avoid the responsibility for payroll taxes, workers compensation insurance and the like, while still directing them like employees.  This creates quite an un-level playing field for the mechanical contractor who cares about his or her employees.
 
How has the recent steel tariffs affected your industry? As a business owner, how are you dealing with these effects?     
    Today, material cost escalations are a big challenge. Most all of our member contractors are shortening the time period that their project estimates are good for, due to the concern of locking in material prices only to see the material costs increase repeatedly.  While a bid price may have been good for thirty days in the past, today the price is quoted for seven days or less, so as to not be caught up in a material price increase.  The mechanical contractor has no control over these price escalations.
 
What is the most rewarding aspect of the type of work you do? 
    There has always been a sense of pride in the construction industry, for the craftsman to say “I built that” or for the company, which has a resume of projects that generates the sense of identity of the company.  That is certainly present today.  That said there are many external pressures on mechanical contractors, as well as all of the specialty craft contractors today. In certain markets, the low bid process is the predominant method of allocating work.  Almost always the lowest price comes at a cost to the quality of the construction. And this can make it hard to be proud of the work performed.
 
 What has been your key to success?      Our member contractors are known for employing the highest skilled plumbers, pipe fitters, welders and sheet metal workers in the commercial construction and service industry in Texas.  Too, we are known for our ability to deliver projects with professional project management, within the project schedule.  When quality of construction counts, our mechanical contractor members are the preferred contractors of Texas’ construction users.
 
Please feel free to add information relating to this industry that we would not think to ask. 
    Prefabrication is a growing practice in construction.  Our member mechanical contractors are on the leading edge of developing prefabrication.  Coupled with Building Information Modeling (BIM), mechanical contractors are leaders in applying prefabrication and advancing the technology employed by the construction industry for the sake of gains in productivity.

Miinc LP is a full-service provider of HVAC, commercial plumbing and mechanical solutions in Dallas, TX.

Mechanical Contractors Associations of Texas is a non-profit mechanical trade association. -cmw


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Carol Wiatrek meditor@constructionnews.net