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Preparing for the Future

Initially, many engineers, architects, contractors, and owners thought the downturn in the economy would be a short transition period with a quick rebound. Comments such as “If I can just hold on for 2009, things will be okay” were prevalent throughout the construction market. Many construction businesses had record profits from 2004 through 2008 and had resources to hold on for one treacherous year.

Unfortunately, this downturn has lasted longer than a year, and forecasts are predicting a long climb out. Those without the financial resources to remain viable for more than a year of economic turmoil have been disappearing. Those still around are asking, “What do I do now?”

For the foreseeable future, all experts are predicting an extremely slow rise from the bottom. FMI’s Third Quarter Put in Place Forecast is predicting the residential markets to begin improving this year and the non-building construction market to show signs of life next year. The nonresidential building market will not begin improving until 2012, and it still will not have reached 2008 levels of spending by 2014.

FMI’s Nonresidential Construction Index (NRCI) Report is a quarterly report outlining the opinions of construction industry executives throughout the country. The 2010 third quarter index dropped from 71.6 to 53.7, showing a lack of optimism from the panelists on their overall outlook of the economy (see Figure 2). Stimulus spending has been exhausted, and banks have not yet loosened credit. In addition, backlogs are shrinking and the cost of labor is increasing.

Businesses cannot control the economy, but they can control how they approach the climate in which they find themselves. Comments from the FMI third quarter NRCI Report indicate the panelists are preparing for the economic condition called the new normal, which predicts slower growth, higher risk, and greater uncertainty. This is done by creating and implementing a strategic plan for the organization.

A strategic plan is a clearly defined direction for the business for the next 3 to 5 years. The first step to creating a good strategy is understanding the context in which the organization is operating. A helpful framework for understanding this context is what FMI calls the 4-C model (see Figure 3).

Understand the Climate

Understanding the climate involves understanding the drivers for the geographic areas and markets a company serves. While the economy as a whole is on a slow climb to recovery, that does not mean that all markets and all geographic areas are on a slow climb to recovery. To understand the climate, a company must gain a deep understanding of what opportunities are available in its specific geography. Questions to ask while investigating the climate data might include:

  • What is the future of the sector we serve?
  • What are the leading indicators of economic turnaround in our geographic area?
  • What markets are still doing well in our area?

Analyze Your Company

To create a good strategy, a thorough knowledge of the internal strengths and weaknesses of the organization is required. Questions include:

  • What level of talent does our organization have?
  • Do we execute projects consistently?
  • What are our strengths?
  • What are our weaknesses?

Know the Competition

The least-known contextual piece for most organizations is its competitors. Companies believe they know their competitors, but do they really? Some examples to consider are:

  • Did the company down the street really “buy” that project for nothing, or do they execute more efficiently?
  • Do you know how XYZ Contracting gets in the door before you?
  • Do you understand what the competitor’s market strategy is? What is its customer strategy?
  • Is everyone in the organization collecting competitor data as they run across it? Is it being collected in one place, or is it fragmented throughout the organization?
  • Is there a competitor your company should emulate? What do they do that your company should adopt?

    • Understanding what the competition does and does not do well helps an organization identify opportunities and threats.

    Delve into Customers’ Attitudes

    Most of FMI’s clients believe they have a thorough understanding of their customers. They send feedback forms out diligently asking for a review on how the company performed on the last project, while field staff and project managers tell management “the client loves us.”

    But FMI finds its clients have a very shallow understanding of their clients. Areas to explore include:

    • Does your organization know how the client really feels about your company?
    • Why exactly do they use you?
    • What do they think are your strengths and weaknesses?
    • What do they think of your competition?
    • What drives their buying behavior?

    Charting a Course

    Once a firm has a thorough understanding of the context in which it will be operating, it can craft a clearly defined direction. There are three areas to focus on: top line, middle line, and the bottom line.

    Top line strategies involve expanding revenue opportunities through new geographic areas, new services, and/or new customers. FMI cautions that focusing too much on top line growth without an equal focus on middle line management and bottom line growth can lead to failure.

    In today’s competitive environment, expected to continue for several years, focusing on the middle line will have the biggest impact on the organization. This is particularly true for labor- and equipment-intensive contractors with the highest risk exposure. Creating a strategy for middle line management means gaining a deeper understanding of and control over direct costs; organizational best practices for getting work, doing work, and keeping score; and improvements on evaluating self-performing versus subcontracting, productivity improvements, material procurement, equipment utilization, and planning. A focus on the middle line can make you more competitive, helping the top line, and more profitable, helping the bottom line.

    One of the most focused-on areas in a down economy is the bottom line. Companies are evaluating overhead, compensation packages, and training to see where they can cut costs. It is important not only to focus on bottom line management, but also to take into consideration the long-term effects of decisions, such as:

    • Where does sacrificing training now put us in 3 years?
    • What will happen to our best project managers if we continue to pile more and more work on them?

    In strategic planning, it is important to understand both the direction the organization is heading and how decisions affect this long-term direction.

    Plan for Success

    Successful contractors are using the downturn to refocus and redirect the business and to upgrade talent. Well-run companies trend independently of the economy, and there are still firms making money. These organizations have a thorough understanding of the context and shift their strategy to match this context. Creating a strategic plan can help your organization be successful now and prepare it for the future.

    Figure 1

    FMI Construction Put in Place Estimated for the United States in Millions of Current Dollars and Change from Prior Year–3rd Quarter 2010

    Figure 2
    Figure 3
    NIA Sites > Insulation Outlook Magazine > Global

    Legally Speaking: Tips for Avoiding Employment Litigation

    Employment litigation is exploding, and employers are searching for new ways to reduce the risk of being sued by their employees for such things as discrimination, wrongful termination, and harassment. From the initial pre-employment inquiry to the final termination notice, employers can minimize their exposures to liability by taking some basic preventive steps. The following is an outline of some helpful hints and costly mistakes.

    Hiring Employees

    • Exercise care in hiring. The single best way of avoiding employee lawsuits is careful hiring practices.
    • Know and follow your company’s hiring policies and procedures.
    • Do not rely too heavily on a resume. It is the employee’s best opportunity to cast their own credentials in a favorable light and hide past problems. A written employment application, a sound interview process, reference checking, and other techniques should be used to verify information on the resume.
    • Use proper interview techniques. Interviewers should avoid making representations concerning the job or the applicant’s long-term future with the company. To the extent that such representations become necessary, the interviewers should attempt to give a realistic impression of the company and the job duties. If interviewers create false impressions in the applicant, that person will become disenchanted rapidly once those expectations are left unfulfilled. If possible, conduct interviews in teams, and make and keep good interview notes. This will prove invaluable if the applicant subsequently makes claims arising out of the interview process.
    • In screening applicants, consider the candor and honesty displayed during the application and interview process. If an applicant has been less than honest, it is unlikely that they will make a trusted employee.
    • Always obtain a detailed employment history, including inclusive dates of employment and reasons for leaving each prior employer. Especially watch for frequent changes in employment, unaccounted-for gaps in employment, and reasons for leaving prior jobs.
    • Obtain and check references prior to hiring.
    • Consider conducting background checks. Don’t forget compliance with the Fair Credit Reporting Act, which regulates background checks.
    • Prior to hiring, consider the use of pre-employment testing, including drug screening, and skills, personality, honesty, and psychological testing.
    • Be courteous in rejecting applicants. Detailed reasons for rejection normally should not be given.

    Effectively Handling Problem Employees

    • Document, document, document!
    • Attempt to be fair and consistent. But avoid references to such words in dealing with employees. Other words to avoid include “just,” “good cause,” “company shall,” “employee will be granted,” “employee is entitled,” and “job security.”
    • Don’t represent to employees that they will be employed for a specific duration.
    • Follow the company’s policies and procedures.
    • Handle problems with employees expeditiously. Because handling problems with employees is distasteful to most managers, there is a tendency to ignore the problem and hope that it will go away. This not only has the effect of reinforcing the employee’s undesirable conduct, but also can cause resentment by other employees. Pointing out a deficiency too long after the fact loses impact and leaves more room for the employee to deny your observations. Also, implicitly, many employees feel that their transgressions have a very short “statute of limitations” and that it is unfair for you to point out such problems too long after the fact.
    • Administer discipline confidentially. If an employee feels publicly humiliated, they are more likely to take legal action to redeem themselves.
    • Conduct severe or sensitive disciplinary meetings in the presence of a company witness.
    • Provide the employee an opportunity to give his or her side, but maintain control over the time, place, duration, and participants in any meeting.
    • Document shortcomings and corrective action taken. It is one of your few opportunities to create evidence in support of your defense in the event that charges are filed.
    • Watch raises and bonuses. No matter what you tell a marginal employee, they may perceive the raise or bonus as being based on merit.
    • Do not enter into any written agreement or understanding with an employee without approval from the CEO.
    • Be accurate in the reasons given for disciplinary action. In most cases, a reason should be given. If no reason is given, the employee may assume that there is an illegal motive. Also, employees will often recognize an untrue reason and may assume that the real reason is discrimination. Once given, a reason is difficult to change.
    • Watch your comments. Ethnic or sexist jokes or remarks concerning an employee or a protected class can prompt discrimination charges.
    • Use progressive corrective discipline, but make the penalty fit the infraction.
    • Get the facts before taking disciplinary action. Give the employee the chance to give his or her side.
    • Watch performance evaluations. They are a double-edged sword; you may be creating evidence against yourself. Evaluate accurately or not at all.
    • Do not use performance evaluations as a substitute for employee counseling or disciplinary action.
    • Recognize when you are getting in over your head. Get help from your employment counsel before making a mistake.

    Terminating Employees

    • Lay the correct groundwork. Where possible, use progressive discipline prior to termination. Document deficiencies.
    • Seize the opportunity for a clear termination of a problem employee. Timing is everything!
    • Be careful of the reasons given for termination. In some cases, it may be best not to give any reason or explanation, although this is the exception rather than the rule. Employees who are not given any reason are more likely to assign an illegal reason. If a reason is given, it generally is best not to go into great detail. A broad description of the reason will leave the employer’s options open should litigation arise. On the other hand, if a limited reason is given, the employer may become locked into that reason, even if other factors were considered. Avoid expressly giving reasons that are inflammatory or cannot be supported, even if they are being considered, but make sure that the reason given does not preclude use of these other reasons should litigation arise. Don’t put the reasons in writing.
    • Where possible, have a company witness present.
    • Like all disciplinary actions, terminations should be handled confidentially. If an employee is publicly humiliated, they are more likely to take legal action to redeem themselves.
    • Where appropriate, offer the employee a chance to resign. Many employees file charges because they are primarily concerned with having a “black mark” on their record as a result of being terminated. Offering the employee the chance to resign, and thereby save face, may relieve these fears. Additionally, if the employee chooses to resign rather than be terminated, your case may be easier to defend.
    • Consult with the human resources or an employment attorney for especially high-risk or sensitive terminations. Any time a termination involves an employee in a protected class, consideration should be given to consulting an employment attorney. Also, if the employee has complained of discriminatory practices or threatened legal action, an attorney should be consulted in advance of termination. Employees with a known history of filing suit also are high risk. Employees with a common interest may serve as a mutual support group and induce one another to file a charge. Termination of pregnant or recently disabled employees always should be preceded by consultation with an employment attorney.
    • Conduct exit interviews of departing employees where feasible. Sometimes you can learn things about your operation and areas of needed improvement that have previously been undetected or unaddressed. This also can give the employee a needed opportunity to vent.
    • As a part of the exit process, collect keys, passes, employer identification cards, and any other company property, but do so without making the employee feel like a criminal.

    Disclaimer: This discussion is generalized in nature and should not be considered a substitute for professional advice. Readers are advised to contact counsel before embarking on any of the options discussed in this article.

    NIA Sites > Insulation Outlook Magazine > Global

    Find Out Where the Dollars Are Hiding in Your Facility

    Look around your facility. Are all the pipes, ducts, and process equipment properly insulated? Is the insulation damaged? Do you know what type and thickness will provide you with the best results? Do you implement a regular maintenance program?

    The National Insulation Association (NIA) estimates that about 30 percent of insulation on mechanical systems in commercial and industrial facilities are damaged or missing. Each section of un- or under-insulated piping, ductwork, or equipment costs you money every day in additional fuel, additional pollutants, energy lost, and unrealized equipment productivity. Recapture those dollars by finding out where the weak spots in your mechanical insulation systems are and see how quickly the fixes will pay for themselves.

    A Certified Insulation Energy Appraiser can evaluate the thermal performance of facility piping and equipment and show you how much you could be saving by installing, upgrading, or maintaining mechanical insulation on facility systems. The appraiser performs a facility walk-though to identify existing insulated and un-insulated process systems and determines areas where mechanical insulation can be installed or upgraded. Using U.S. Department of Energy-approved 3E Plus® software and data collected during the facility walk-through, the appraiser can determine the dollar value of Btu losses and even calculate the current system’s greenhouse gas emissions saved.

    The appraiser will recommend insulation solutions tailored to your facility to maximize return on investment while reducing fuel costs and greenhouse gas emissions. Further calculations compare the energy costs for the current system and the potential energy savings with an insulation upgrade. The appraiser can also compare the environmental impacts of your current system and one with properly installed mechanical insulation.

    Facilities that have benefited from appraisals include chemical, commercial, food processing, gas processing, government buildings, hospitals, institutional, oil refining, paper mills, petrochemical, universities, and utilities. The appraiser evaluates facility piping, boilers, ductwork, and air pollution equipment and reviews HVAC, hot and cold water, and steam processes. Typical returns on investment are less than 6 months—you would be hard pressed to find an energy efficiency investment with a faster payback time.

    Mechanical insulation also plays a critical role in protecting your employees from potential injuries from hot or cold processes, as well as providing acoustic benefits. Properly installed and maintained mechanical insulation can reduce or prevent condensation and resulting problems like mold and corrosion, which can be far more expensive than maintaining a properly insulated system.

    Certified appraisers are industry professionals who receive intensive training through the Insulation Energy Appraiser Program designed by NIA. You can find an appraiser in your area at www.insulation.org by clicking the “Find a Certified Insulation Energy Appraiser” link.

    It’s time to think about mechanical insulation in an energy efficiency capacity. Consider calling a Certified Insulation Energy Appraiser to find out how much you could be saving. In these challenging and competitive times, you can’t afford to let wasted dollars continue to hide in your facility!

    NIA Sites > Insulation Outlook Magazine > Global

    Banking in 2010: Dealing with New Realities

    The message banks are sending to construction executives—and to any other business owners who are looking for credit—is quite simple: Don’t take anything for granted. The loans and credit extensions that used to be almost automatic are no longer a sure thing.

    Operating in this economic landscape, businesses are looking for more help at a time when banks have become far more cautious about providing it. With federal regulators scrutinizing banks that have underperforming loan portfolios, lending officers are not only defending their existing portfolios, but also are looking more carefully at requests from prospective borrowers.

    For businesses, the harsh reality is that the sins of the banks that went overboard with careless lending are now affecting their clients: the borrowers. Getting credit had become too easy; in the wake of the excesses, the pendulum has swung back in the other direction.

    That swing has hurt smaller businesses, especially those that don’t have established relationships with local banks. According to the U.S. Small Business Administration, nearly 90 percent of the nation’s 26 million small businesses use some form of credit for operating costs and expansion. However, many small business owners cannot get traditional bank loans because they may not have a credit history. Instead, they are forced to rely on securing home equity loans, personal loans, auto title loans, and credit cards to obtain credit.

    For the construction industry, the credit crunch couldn’t have come at a worse time. With fewer jobs going out for bid, contractors must keep estimates as low as possible to secure new projects.

    Meanwhile, costs continue to rise. Although there is still little sign of inflation for the overall economy, construction is vulnerable to fluctuations in the global demand for raw materials that tend to have more volatile pricing than consumer prices. The U.S. Department of Labor’s producer price index showed the price of construction materials and supplies fell 0.9 percent in June after seven straight monthly increases. However, prices are still up 4.2 percent compared to June 2009.

    The Rules Have Changed

    If a company is profitable and well run, and has a positive cash flow and plenty of liquidity, there’s no reason to think it won’t get the financing it requests. But don’t be surprised to get requests for additional information, such as aging of accounts receivable and payables, job status reports, interim financial information, personal guarantees supported by tax returns, and a personal financial statement.

    Given the current banking situation, the best advice for construction executives is to tighten up operations and learn how to deal with the new realities.

    Don’t forget that before the banking and real estate bubbles burst, the construction industry enjoyed years of sustained prosperity—a period in which contractors could turn a decent profit even if they weren’t well managed. Also, remember that the prime reason a business is successful is because its leaders know construction; the challenge now is to understand finances as thoroughly as operations. A construction executive has to be a good manager, and must be able to prove it to the bank.

    Because the bank will be asking for more detailed information than in the past, contractors should take this opportunity to show how well they know their businesses. Be among the best at cash flow projections, which will help in securing financing and improving day-to-day operations. Carefully organize all records to show the company has the ability to repay.

    The bank wants to know it’s loaning money to someone who handles it wisely. If an executive is doing the right things to manage his business, the bank is more likely to reward the company with the financing it needs. Be prepared to report that the company has renegotiated its employee benefits package, reduced overtime, and cut spending on non-core items.

    Look for New Options

    If a request for financing is turned down, don’t take it personally. Remember, some banks are pulling back from lending now because of mistakes made in the past. As a result, a company may no longer be a good fit for the bank’s portfolio. Or, the bank may have set a floor on its prime rate at a level above the national prime—thus increasing the cost of borrowing.

    The realities of 2010 may dictate the need to find another lender that is more eager to do business. Don’t be afraid to check out the competition. Although the interest rate may be a little higher, some banks can offer financing backed by the U.S. Small Business Administration.

    Also, look into financing and grants offered by state
    economic development agencies. Options for construction companies may be limited, as contractors usually are looking for cash to buy supplies and equipment or meet payroll, while economic development offices tend to be boosting new or expanding companies. However, a company might consider seeking funding to own its own warehouse or garage space to help the business grow.

    Playing by the new rules will require some adjustments, but they’re adjustments contractors have little choice in making. To keep financials in order, communicate frequently with bankers and accountants, and don’t hesitate to ask for advice.

    Reprinted with permission from Construction Executive (August 2010), a publication of Associated Builders and Contractors Services Corp. Copyright 2010. All rights reserved.

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    An Eye on Independent Contractors: IRS Examines Worker Classification in the Construction Industry

    The Internal Revenue Service (IRS) has started a National Research Project to examine businesses’ practices of classifying workers as either employees or independent contractors. The agency is expected to check around 6,000 businesses, and the construction industry will get more than its share of scrutiny in the next 3 years.

    While only a small percentage of U.S. businesses will be affected, this particular research program may be just the tip of the iceberg. Since the IRS published the updated “Construction Industry Audit Technique Guide” in June 2009, regular income tax audits of contractors have been on the rise. Add to that the complexity of construction tax law and the IRS’ current emphasis on the completed contract method of accounting, and the industry could be facing a perfect storm for IRS audits.

    Other organizations have an interest in worker classification as well. The Department of Labor (DOL) wants to ensure workers and employers comply with the Fair Labor Standards Act and wage and hour laws. The DOL also is concerned with minimum wages, overtime, discrimination based on age or disability, medical leave, organizing, and
    collective bargaining.

    The Department of Health and Human Services has an interest in Medicare benefit payments for employees, and state agencies have concerns about unemployment taxes and benefits.

    Most importantly, the misclassification of workers is viewed as a factor in the tax gap: the difference between the estimated actual taxes that should go to the U.S. Treasury annually in the form of employment and income taxes, and the amount that actually is paid on a timely basis. Workers who are misclassified and treated as independent contractors contributed an estimated $1.6 billion to the tax gap in the last IRS study, conducted more than 25 years ago. That figure is estimated to be significantly larger today.

    Independent contractors can be easily employed, readily terminated, require less reporting and paperwork, and often are paid a smaller total compensation package compared to a similar employee. Workers frequently view the independent contractor status favorably because they can establish their own entities, set up their own pension plans, more effectively deduct tools and equipment, and lower their payroll taxes because their expenses are deducted before the self-employment tax calculation.

    But earning that classification is not easy. In IRS case
    history, it is nearly impossible to find an instance in which the IRS argues that an employee should be classified as an independent contractor—and not the reverse.

    How Will the New Program Work?

    The IRS audit program will start with the 941 form and work back to the employees and independent contractors for needed clarifications. It will look at classification as well as fringe benefits, non-filers, and officers’ compensation. All of these issues can be troublesome; if the IRS identifies problems in one area, it will certainly look at the others more closely.

    Be aware that companies may not know why they are selected for an audit. The IRS has indicated it may look at companies that issued 1099 forms of $25,000 or more to five or more workers who reported no other income on their personal returns. Companies suspecting they have independent contractors working solely for them may want to examine the propriety of those worker-employer relationships.

    Workers also may initiate an audit by filing an SS-4 form and an 8919 form (in which an individual claims he was an employee but that employment taxes were not withheld and paid) as a way to cut his taxes when he realizes he may owe more than he expected.

    A Brief History

    Congress included Section 530 in the Revenue Act of 1978 to address previous problems in which the IRS was charging employers for payroll taxes that the individuals also may have paid. Section 530 limited the power of the IRS to classify workers as employees if the employers could demonstrate a reasonable basis for treating the workers as independent contractors based on certain criteria. It also prevented the IRS from issuing regulations and rulings for worker classification. That law has not been updated since, and the IRS still operates under these restrictions.

    Employers can submit an SS-8 form to the IRS for a determination of an employee, but the Government Accountability Office has determined that the IRS’ response to the form is frequently delayed and inconsistent. Also, many employers are hesitant to file this form, as it could trigger an audit.

    In January 1987, the IRS issued Revenue Ruling 87-41, which listed 20 factors to consider for classifying a worker. None of the factors are controlling, and no weighting is assigned, so determinations with that ruling are still subjective. But, it added some considerations to the common law definition of an employee, which generally centers around how much an employer controls a worker.

    In February 2009, the Treasury Inspector General for Tax Administration issued a report recommending a program to re-address the worker classification issue, and Congress introduced a handful of bills aimed at protecting the rights of workers while raising revenues for the Treasury.

    Important Precautions

    Not only can a company be randomly chosen for the IRS study, but an investigation into the company’s employment practices could be initiated when an independent contractor applies for unemployment compensation and discovers he was never classified as an employee.

    A construction company also should be careful when paying for occasional “casual” labor: a non-business, non-routine service, such as refrigerator repair or grass cutting at a residence. Any further commitment may be considered domestic employment subject to payroll taxes.

    Correcting a situation could cause a problem, too. For example, if a company determines that a worker previously categorized as an independent contractor should actually be an employee, issuing a W-2 and a 1099 form in the same year could be a red flag. If a worker is borderline, the best plan might be to strengthen his position as an independent contractor rather than switch him to employee status. While workers can have dual status by performing more than one type of task for compensation, it might be best to switch an employee at the beginning of the next year so that both a W-2 and a 1099 form are not issued to the same individual in the same year.

    Although employees often cost the company more in payroll taxes and fringe benefits, some savings could be incurred. For example, independent contractors do not figure into the calculation of the Section 199 Domestic Production Activities Deduction (DPAD). Wages are a part of the calculation, but payments to independent contractors are not. A company may have a greater DPAD deduction with more employees and fewer independent contractors.

    Because the exposure for misclassification is higher now than in the past, construction companies should operate as if they will be audited. Take account of all workers, the tasks they perform, and the process for determining the correct classification. Review the rules and the application of those rules on a regular basis. If a worker still falls into the independent contractor category, be sure to strengthen the worker-employer relationship and the supporting documentation so the independent contractor status is beyond question.

    Companies also should ensure they have signed agreements with their independent contractors and that 1099 forms have been filed properly.
    With a basic understanding of the issues and the rules—and strong documentation—any contractor can survive a worker classification audit.

    Reprinted with permission from Construction Executive (August 2010), a publication of Associated Builders and Contractors Services Corp. Copyright 2010. All rights reserved.

    NIA Sites > Insulation Outlook Magazine > Global

    Legally Speaking: Wage-Hour Enforcement Escalates

    Employers beware! The Department of Labor’s (DOL’s) rule-making efforts and enhanced enforcement activities mean employers face a much greater risk of being found in violation of federal wage-hour laws.

    In late spring, the DOL announced an enhanced regulatory and enforcement strategy called “Plan, Prevent, Protect.” This program will require employers to take affirmative efforts to ensure compliance with federal wage and hour laws, as well as other laws such as the Occupational Safety and Health Act. To ensure regulatory compliance, the DOL is reallocating its resources and hiring 177 new investigators to perform employer audits. The DOL has also stopped issuing opinion letters, which used to be provided to give guidance to employers. But now employers will be left on their own to interpret the law as the DOL shifts its funds to field enforcement. DOL’s current budget is $116.5 billion.

    The new Plan/Prevent/Protect Program will place new requirements on employers to create compliance action plans and to identify and remediate violations of wage-hour laws. The DOL will require employees to have participation in the plan, and the plan will have to be made available to all the employees so they can monitor compliance. The plan must be vigorously implemented to prevent violations, and a component of prevention will be the auditing of wage-hour practices by the employer. Finally, the plan must protect employees from violations of their workplace rights. The program will soon be presented through the DOL rule-making process.

    Many employers already are concerned about efforts by the DOL to reclassify independent contractors to true employees, which attacks a longstanding problem of misclassification and is seen as a tax revenue-raising tactic for the federal government. Under the new program, an employer may be required to prepare a written explanation of why workers should be considered contractors rather than employees and provide the contractors with that explanation. Any employer that seeks to exclude workers from the Fair Labor Standards Act coverage of minimum wage and overtime would be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give the DOL investigators a head start on any investigation.

    Currently pending in Washington is the Employee Misclassification Prevention Act. Sherrod Brown (D-OH) has introduced legislation to amend the wage-hour laws to prevent misclassification of workers as independent contractors without regard to the DOL initiative. This proposed law would require that each worker be advised of his classification as an independent contractor, be directed to the DOL website that addresses employee rights, and be provided contact information for the local DOL office. The proposed law creates a rebuttable presumption that these individuals are employees and not independent contractors if the requirements of the Act are not met. Congressional hearings have occurred on this bill.

    Recently, a DOL interpretation overturned the position it had adopted for 10 years with respect to mortgage loan officers, who were considered exempt from minimum wage and overtime. The DOL now claims that mortgage loan officers are production workers as opposed to administrative workers and not exempt under the white collar exemptions covering executives, administrative workers, and professionals.

    Then, on June 16, the DOL issued an opinion that the donning and doffing of protective equipment before and after the start of work is a compensable activity. In prior opinions, protective equipment worn by employees performing such things as meatpacking and poultry processing were not eligible for compensation as they put on and took off their protective equipment. Protective equipment includes such things as safety glasses, aprons, guards, sleeves, boots and gloves.

    In Ohio, employees are protected by state laws as well as the federal laws. Seldom discussed but often used is Ohio Revised Code § 4111.14(G), which permits third parties such as claimant attorneys to gain information about the pay practices of employers. Ohio voters caused this enactment through voting for a constitutional amendment. In addition, Ohio’s Prompt Pay Act, Ohio Revised Code § 4113.15, imposes penalties on employers for failing to properly pay employees. There has been a tremendous surge in class action wage-hour litigation in the recent past, and these state and federal laws have been used as effective tools for claimants.

    With Washington’s current campaign to enhance employees’ rights and impose additional obligations on employers through agency rule-making and legislation, it is obvious that employers must do their best to comply with state and federal wage-hour laws. Understand your obligations under the Fair Labor Standards Act and perform an audit as to your company’s pay practices.

    Remember, generally, that time and one-half must be paid for hours worked in excess of 40 in any 7 consecutive calendar day period. In addition, merely paying an employee a salary does not exempt that employee from the minimum wage and overtime provisions. Also, short term rest breaks are compensable.

    Your company cannot afford to sit back and wait to be caught by the DOL because the consequences will be too severe. Take affirmative efforts to ensure compliance now!

    NIA Sites > Insulation Outlook Magazine > Global

    Getting Mechanical Insulation into a Building Information Model

    Though things are beginning to change, today we still need to start an article about a building information model (BIM) by defining it: a digital representation of physical and functional characteristics of a facility. A BIM serves as a shared knowledge resource for information about a facility, forming a reliable basis for decisions during its life cycle from inception onward. This definition was included in the United States National BIM Standard™ Version 1, Part 1, which was issued in January 2008.

    While well over 50 percent of the industry now claims to use BIM, there are many quality levels of the BIMs in use today. Some firms are using BIM terminology for marketing purposes; others adopt BIM only for geometry; while truly transformed organizations have changed the way they do business and are implementing the full information and transformational aspects of BIM.

    A BIM should be used throughout the life of a facility, from earliest concept through demolition and beyond. It should be the complete information record of everything that is included and occurs throughout that facility’s life. A few projects have embraced this cradle-to-grave approach, but they are still rare. However, this will not be the case for long, because many owners are awakening to the fact that using a BIM to manage the information in their facility can help them control costs far better and ensure that the facility provides its function at the expected cost throughout its life.

    There are two major principles that, if applied, will guide your use of BIM in a project and help sustain the model throughout the life of the facility. The first is to gather information only once, at the point of creation of the information. Data should be entered into the model when it is created. From that point on, the information is used and re-used for various analysis tasks but is never re-collected. The second principle is to build the facility virtually first and, once all the issues are worked out, build it physically from the model. Having a visual as well as the embedded data in the model of the building will help the owner understand how to operate the facility. It will also allow the designer to see how the systems will function during the facility’s life in all situations.

    For example, thermal and environmental considerations can be modeled to include heating and cooling, natural ventilation, daylighting, acoustical transmission, and many other conditions. Every player on the construction team also participates in this effort—essentially performing the same function they always have, just earlier and more collaboratively—prior to construction starting. The BIM should be as complete as possible to include as many details as are realistic, such as thickness of equipment, piping, and ductwork insulation. By incorporating the insulation depth, adequate room can be provided for proper installation, eliminating the current issue of compromising quality due to lack of clearance. Approaching the construction this way will ensure the owner has a true as-built facility when completed, and the analysis and simulation of the facility before it was built can be validated on a continual basis, ensuring that the performance standards are maintained.

    BIM can help ensure the facility is as green as it can be, addressing environmental, sustainability, and security concerns without sacrificing occupant comfort. In addition, care must be taken to ensure that the facility is constructible and maintainable. This author recently heard of an example where a donor provided a financial gift to build a complex of facilities, with a stipulation that the facilities were to be sustainable for more than 100 years in a high-risk seismic zone. The team used BIM to design the structural system virtually so it could be assembled quickly in the field and fabrication of wall slabs could begin while the foundation and structural frame were being built. While the structural contractor initially expected the process to take significantly longer, assembly actually turned out to be much faster than anticipated. In the end, the approach saved time and money—plus, the heightened structural requirements for the seismic considerations added no additional expense over traditional methods of construction.

    There is a lot of discussion as to how complete a BIM should be. While one could potentially model down to each screw and nail, in most cases this would far exceed the level of common sense. However, if a BIM is too austere, then the analysis will not be accurate, nor will constructability and scheduling be realistic.

    Therefore, it is commonly accepted that all contractors and sub-contractors should be brought into the collaborative process and determine in pre-planning how deeply they need to be included in the model or, more accurately, what portion of their effort needs to be modeled.

    As the Associated General Contractors of America (AGC) now stipulates, if someone’s work is not represented in the BIM, then that activity needs to take place after everyone else has completed his or her work. Hence, it might be important for subcontractors to include the conduit they need to run cable, but not the cable or devices to be installed in final fit out. This could address insulation on piping as well as all other uses of insulation, including walls and ceilings. Insulation should be included to work out clearances and energy usage and simulate various operating conditions.

    The industry is still at the very early stages of implementing BIMs, and many issues remain. However, the value appears to be so significant that this author believes profound change will quickly come to the industry. BIM is a catalyst for the industry to make a significant change in thinking about how we do business. It should allow improved productivity and achieve new heights in energy and water management, all while delivering cost-effective and sustainable facilities for the duration of their existence.

    Indeed, not all contracting methods lend themselves to the optimum implementation of BIM. Adjustments will need to be made to the way owners do business and how they ask for information. There are many new contracting alternatives being tested; some will emerge as successful, while others will fade into the past.

    Change does not come easily to our industry (as is likely true for most industries). In the words of Peter Senge in the book Fifth Discipline, “People seek change, but don’t want to be changed.” Therefore, we need to keep the mood collaborative throughout the industry and with the owners. Members of the architecture, engineering, and construction industry have the opportunity to change themselves under their rules and use savings to make improvements and preserve profits. If the industry does not act and the owner catches on to the opportunity and takes on more of the risk of change, then the owners will mandate the change, and it will not be as desirable to the practitioner because the savings will manifest themselves in lower fees.

    Just because the only tool one has is a hammer, it does not mean every fastener is a nail. This author urges you to get involved now and become a member of the buildingSMART alliance as we work to create open BIM standards that will be the basis for collaboration. BIM standards are in your best interests because they will ensure that interoperability of information exists and that you will have the most flexibility to choose the tool that best meets your needs.

    The alliance needs you to become involved as a subject matter expert in the application and use of insulation, so you can ensure your interests are represented as the process moves forward. No one else can represent those needs. It can be accomplished on an individual basis or leveraged through the activities of the National Insulation Association. In any event, you need to ensure your voice is heard as the industry moves forward.
    The change is coming. The time to act is now.

    NIA Sites > Insulation Outlook Magazine > Global

    ASHRAE Standard 90.1-2010 Increases Minimum Pipe Insulation Thicknesses

    American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) Standard 90.1: Energy Standard for Buildings Except Low-Rise Residential Buildings and the International Energy Conservation Code (IECC) are the major energy design standards for new buildings in the United States. Most states or local jurisdictions have adopted some version of either Standard 90.1 or the IECC as their minimum design standard for all new commercial and high-rise residential buildings. The pattern has been for ASHRAE to update Standard 90.1 every few years and, more recently, to update it every three years. Therefore, its revision is of particular interest to those working with building energy efficiency technologies, including mechanical insulation.

    Many of the products and services of NIA member companies are used in insulating pipes and ducts in commercial and high-rise residential buildings. The energy efficiency of these buildings depends partly on limiting heat flow to or from pipes, ducts, and equipment, whether they operate above or below ambient temperature. When used for below-ambient service, the insulation systems help prevent moisture condensation on those pipes and ducts, further saving energy.

    The most recent published version of Standard 90.1 was adopted in 2007, following 2004 and 2001 versions. The newest version, 2010, will take effect later this year, probably by late October 2010.

    Overall, Standard 90.1-2010 will result in buildings designed to use 30 percent less energy than those designed in compliance with Standard 90.1-2007. How does this revised energy standard require building designers and mechanical system designers to reduce a building’s energy use by 30 percent? There many ways of accomplishing this, including:

    • Raising the system R-value (or lowering the U-value) of insulated exterior walls and roofs;
    • Limiting the solar heat gain through windows, while designing them to allow more visible light into the buildings for passive day-lighting;
    • Increasing the thermal efficiencies of heating and cooling systems;
    • Increasing the use of automatic lighting controls;
    • Increasing the use of air barriers to limit infiltration;
    • Orienting buildings for minimum energy use;
    • Increasing the use of energy recovery and economizers for building ventilation;
    • Tightening ducts to reduce leakage;
    • Increasing electric motor efficiencies;
    • Increasing fan and pump efficiencies; and
    • Increasing the thicknesses of pipe and duct insulation.

    Technologies exist for designing buildings that use 30 percent less energy. In most cases, however, achieving this requires greater coordination between a building’s architect and mechanical system designer than typically occurs.

    The old approach was for an architect to design a building without any input from mechanical designers, then pass building drawings on to the mechanical designer (or several designers, since the work would typically be competitively bid) to design the mechanical system within both a tight energy budget and a tight cost budget. The new approach requires the architect to understand how his or her decisions impact the mechanical system designer and involve the mechanical designer every step of the way to produce a truly energy efficient building. There is generally no room in this new process for “value engineering,” which leads to the failure of many buildings to meet basic criteria such as energy efficiency standards, maintenance budgets, and longevity goals.

    New Pipe Insulation Thicknesses

    What are the new pipe and duct insulation thickness requirements in Standard 90.1-2010? Pipe insulation thicknesses are greater than or equal to those in the 2007 standard, but duct insulation thicknesses have not changed. Overall, this is good news, giving mechanical insulation an opportunity to contribute to greater building energy efficiency.

    Standard 90.1-2010 contains two tables of minimum pipe insulation thicknesses: one for above-ambient and one for below-ambient systems. In each table, minimum insulation thicknesses are referenced for both pipe size and for operating temperature. The minimum pipe insulation thicknesses are given in two tables, 6.8.3A and 6.8.3B, in the standard; the values are in Figures 1 and 2, complete with the footnotes. In the new standard, these tables are also reproduced in metric units.

    For above-ambient service, the pipe insulation thicknesses in Figure 1 are significantly greater than those normally installed (as they have been in previous versions of Standard 90.1, but to a greater degree in the 2010 version). For many of the steam heating distribution pipes in buildings, with an operating temperature greater than 350°F, 5 in. of insulation (such as mineral wool, fiberglass, or calcium silicate) will be required on all pipes except those with a size less than 1 in. NPS. This will probably require double layering and hence greater labor to install. Mechanical designers will need to allow a pipe clearance greater than 10 in., which is often neglected. Even hot water pipes used for hydronic heating will require 2 in. of insulation on all pipe sizes equal to or greater than 1-1/2 in. NPS.

    For below-ambient service, by contrast, the new pipe insulation thicknesses are not particularly noteworthy. For example, 1 in. is sufficient thickness for all sizes on chilled water lines (with an assumed operating temperature in the 40°F to 60°F range). This is because these thicknesses were determined for energy conservation, not for condensation control, which often requires thicknesses greater than 1 in., particularly on pipes running through unconditioned spaces.

    It is also worth noting the equation for insulation materials with thermal conductivity values outside the stated range. For example, cellular glass has a thermal conductivity value, at 55°F mean, of about 0.32 Btu-in./hr-ft2-°F, which is greater than the given range. If the material of comparison is fiberglass, with a thermal conductivity value of about 0.23 Btu-in./hr-ft22-°F at 55° F mean, and 1 in. of fiberglass is required by the table for a 4 in. NPS pipe, then using the equation given in footnote a for both tables, we would need about 1-1/2 in. thick cellular glass for the same chilled water pipe. However, since 1-1/2 in. thick cellular glass would probably be used on a 4 in. NPS chilled water pipe anyway, this is not a major issue.

    It is difficult to imagine 5-in.-thick removable/reusable insulation blankets installed on valves, pressure regulators, strainers, and other difficult-to-insulate fittings. A major challenge for the mechanical insulation industry is that these components are frequently left either uninsulated or partially insulated in steam and hot water heat distribution systems.

    Removable/reusable blankets 1 to 2 in. thick are often removed by maintenance personnel and not reinstalled. Removable/reusable blankets 5 in. thick would be even less likely to be reinstalled, since they would probably be heavy and not very flexible. The solution may be for the designer to show that the overall system heat loss is equivalent to having 5 in. of insulation overall and use thinner, more practical thicknesses for the removable/reusable blankets.

    Summary

    When ASHRAE Standard 90.1-2010 takes effect later this year, compliance will require greater pipe insulation thicknesses. On steam distribution pipes in buildings, those thicknesses will increase from 4 in. to 5 in. on most pipe sizes when using materials such as mineral wool, fiberglass, and calcium silicate. Lower-temperature, above-ambient pipes likewise will require greater thicknesses than those required in the previous Standard 90.1-2007. On below-ambient pipes, minimum insulation thicknesses will be only 1 in. for most insulation materials.

    New buildings designed and constructed in compliance with Standard 90.1-2010 will be designed to use 30 percent less energy than those in compliance with Standard 90.1-2007. These new minimum design requirements, when followed, will result in significant energy savings in new buildings. However, it will take time for the states to adopt this revised standard.

    Figure 1
    Figure 2
    NIA Sites > Insulation Outlook Magazine > Global

    U.S. Electric Power Generation: What Direction Will it Go?

    Coal-fired Generation

    When the 4,500 expected attendees arrive in Pittsburgh, Pennsylvania, for the 10th annual Coal-Gen Conference August 10–13, 2010, many will listen intently to the keynote address by the Environmental Protection Agency’s (EPA’s) Robert Wayland, Ph.D. Attendees will probably have a number of questions, including:

    • Who is going to regulate greenhouse gases (GHGs), the EPA or Congress?
    • Will the EPA integrate and coordinate the multiple rules that affect coal-fired boilers?
    • Will the EPA define what makes up maintenance, repair, and replacement?
    • Will the EPA give utilities more time to retrofit their older, coal-fired plants with flue gas cleaning equipment?
    • Will the EPA insulate the electric utilities from future changes in priorities of politicians?

    Attendees also will listen to James F. Woods, the Deputy Assistant Secretary for Clean Coal, Office of Fossil Energy in the U.S. Department of Energy (DOE), who will speak on DOE’s Carbon Sequestration Program, Clean Coal Power Initiative, and Recovery Act projects.1

    The Obama Administration’s goal is to have the United States lead the world in reducing GHG emissions. With over 50 percent of U.S. electric power generation coming from coal-fired units, and coal remaining both abundant and relatively inexpensive in the United States (about $2.30 per million Btus [MMBtus] for Northern Appalachian coal), however, it likely will be necessary to maintain coal-fired power generation while trying to get new plants to adopt GHG emission reduction technologies. As for existing coal-fired plants, retrofitting is likely to take a long time since the technology for GHG capture and sequestration is still in its infancy.

    Plants also have to meet existing Clean Air Act requirements to clean flue gas, reducing nitrogen oxides, sulfur oxides, mercury compounds, and fly ash. Coal-fired plants that have not already retrofitted Selective Catalytic Reducers (SCRs) to remove nitrogen oxide gases, scrubbers to remove sulfur oxide gases and mercury, and precipitators or bag-houses to remove fly ash will need to do so. Many NIA member companies have already supplied products and services to coal-fired plants’ flue gas cleaning equipment, and many will provide those products and services in the future.

    Natural Gas–fired Generation

    Natural gas prices continue to remain stable and relatively low compared to liquid fuels, wholesaling in the $4 to $5 per MMBtus range. While natural gas prices are about double that of coal on a dollar-per-MMBtu basis, the environmental permitting process for a natural gas turbine generator is much simpler and can be completed much faster than for a coal-fired steam plant. Another advantage is that a natural gas turbine generator can be designed and constructed much faster (about 2 years compared to 5 years) and at a lower first cost, on a dollar-per-kW basis (about $1,500 per kW versus $2,500 per kW), than a coal-fired power plant.

    A natural gas plant emits about half the carbon dioxide compared to a coal-fired plant on a per-kWh-of-generation basis. Further, there are no emissions of particulate, sulfur oxides, or mercury compounds, and the emissions of nitrogen oxides are significantly lower. Because of this, natural gas–fired generators are viewed by the EPA and the public as relatively benign. For electric utilities looking to construct new plants, the lower the public concern, the better.

    Nuclear Power Generation

    What about the renaissance of nuclear power? The U.S. Nuclear Regulatory Commission (NRC) has received applications for combined Construction and Operating Licenses (COLs) for 23 new nuclear units. The nuclear industry has not seen this much excitement in several decades. Further, in terms of reducing GHG emissions, nuclear power generation is attractive since it is carbon-free.

    On the down side, nuclear power plants are very expensive to construct (about $7 to $8 billion each for an approximately 1,000 MW plant, or about $7,000 to $8,000 per kW) and have, in the past, taken many years to construct—longer even than a coal-fired plant. With the high cost of nuclear plant construction and the lengthy permitting, design, and construction process, some of the 23 nuclear units seeking licenses may never get constructed.

    Some definitely will, however. The Obama Administration recently approved loan guarantees for two new nuclear units at Plant Vogtle, to be constructed by Southern Company in northeastern Georgia. Other utilities are trying to obtain similar loan guarantees, having already applied to the NRC for a combined COL. In addition to Plant Vogtle, those nuclear plants include:

    • Nine Mile Point in northern New York, 1 unit
    • Bell Bend in northern Pennsylvania, 1 unit
    • Fermi in southern Michigan, 1 unit
    • Calvert Cliffs in southern Maryland, 1 unit
    • North Anna in Virginia, 1 unit
    • Harris in central North Carolina, 2 units
    • William Lee in western North Carolina, 2 units
    • VC Summer in South Carolina, 2 units
    • Bellefonte in northern Alabama, 2 units
    • Turkey Point in southern Florida, 2 units
    • Levy County in western Florida, 2 units
    • South Texas, 2 units
    • Comanche Peak in northern Texas, 2 units.

    Several other new nuclear units are expected to be announced in Mississippi, Louisiana, and Texas.

    Base Load Generation

    Coal-, nuclear-, and natural gas–fueled units can provide base load generation: steady electrical power, day and night, week after week, month after month. Natural gas–fired turbine generators also can be run as partial load peaking units to provide extra power during times of high demand, as when large portions of the country are immersed in hot, humid weather.

    Generating units using fuel oil also can serve as base load units. However, with fuel oil wholesaling at around $15 per MMBtus (triple the price of natural gas), very little electricity is actually generated with fuel oil in the United States, perhaps about 2 percent. Crude oil prices are determined by supply and demand on a worldwide basis, whereas North American natural gas prices are primarily a function of supply and demand only in North America. With that supply abundant due to the new shale gas technology, it is difficult to imagine selection of fuel oil over natural gas for anything other than certain emergency back-up generators.

    Renewable, Carbon-free Generation

    What about renewable forms of electricity generation? Earlier this summer, there was great excitement in Massachusetts following Interior Secretary Ken Salazar’s approval for the owners of Cape Wind to construct 130 wind turbines in the Nantucket Sound, south of Cape Cod and north of Martha’s Vineyard and Nantucket. This approval process took 9 years, the 130 wind turbines will generate only 182 MW of power collectively, and they are expected to cost about $1 billion to construct (about $5,500 per kW). Meanwhile, the aging Pilgrim Nuclear Plant nearby, just north of Cape Cod, has quietly and reliably generated 690 MW of carbon-free power in Massachusetts for the past 38 years.

    Once constructed, the 130 Cape Wind turbines will generate electricity only when the wind is blowing above a threshold speed. However, this power will be both renewable and carbon-free, and its approval is already spurring announcements of new wind projects, such as one in the nearby Long Island Sound to provide electricity to New York City.

    To find large solar projects, one generally has to go where the sun shines far more days per year than in New England. On July 6, 2010, Spain’s Abengoa Solar announced that it secured $1.45 billion of loan guarantees from the U.S. government to construct a 250 MW solar generating station in Arizona ($5,800 per kW). Abound Solar Manufacturing, which is building equipment for two new solar projects in California and Colorado, also will receive U.S. government loan guarantees. BrightSource Energy, Inc., has a total of 2,200 MW of power from seven planned solar plants at locations in California and Arizona. The 5-square-mile Ivanpah Solar Power Complex in the Mojave Desert near Needles, California, will house the first 100-MW “solar tower.” The company also plans to start a 200-MW solar tower at the same location, and a new one every 2 years. Around each 300-ft tower, an array of 50,000 flat heliostat mirror pairs will focus sunlight on a boiler at the top of the tower to heat water in the closed system as high as 1,100°F steam to power a turbine. That is a surprisingly high temperature for solar power and will require 1,200°F thermal insulation for the pipes.

    The oldest form of such electric power is hydroelectric, but no new projects are underway in the United States. In New England, small, aging hydroelectric plants are being dismantled, usually due to concerns over dam safety and a desire to return the affected rivers to their natural state.

    What Is the Future?

    Natural gas prices are expected to stay below $6 per MMBtu due to the success of drilling for shale gas with the new technology known as hydraulic fracturing (“fracking”). With the other financial and environmental advantages of natural gas turbine generators, this may be the technology of choice for new electric U.S. power generating capacity in the near future. There certainly will be some new generating capacity from a mix of nuclear power plants, coal-fired power plants (possibly with carbon dioxide sequestration), wind turbines, and high-temperature solar plants; but natural gas turbine generation likely will dominate.

    Note

    1. Robynn Andracsek, “Five Questions for EPA,” Power Engineering, June 2010.

    NIA Sites > Insulation Outlook Magazine > Global

    Social Media Marketing for Engineers

    Imagine setting a new trend within a matter of hours just because you thought something was possible, interesting, and/or beneficial. The combination of social media and the influence power of engineers within the mechanical and specialty insulation industry are in one word breathtaking, and in another downright crazy.

    Some key statistics: according to the Insulation Outlook circulation demographics, the majority of the people reading this magazine are engineers of some sort, and a large percentage are Mechanical Engineers. I assume a lot of readers reference the Mechanical Insulation Design Guide (MIDG) or the National Insulation Association’s (NIA’s) website at www.insulation.org.

    Let’s combine these details with the fact that out of an estimated 224,749,695* websites in existence, Alexa.com ranks NIA’s website at 1,438,313. That’s a great ranking: 0.64 of the top 1 percent of all sites! (For our engineer readers, the true number is 0.639962158791806000 percent.)

    If you have not seen the opportunity yet, let me open your eyes. Through the use of bookmarking, search, professional, and forum social media, you can turn your knowledge into the reliable source for the industry.

    Bookmarking with Results

    Social bookmarking is all about discovering and collaborating, and it works on the principle that what one member of an online community finds interesting and useful is likely to be of value to others. This is an especially powerful principle when the people who make up the community are all experts in their field. Therefore, while typically sites like Furl, Delicious, Digg, and Stumble Upon are the leading social bookmarking sites, I would recommend engineers check out IET Discover because this site is exclusively for people within the engineering and technology sectors.

    Every bookmark in IET Discover contains information about the other people and groups who find it interesting. Being able to trace the sphere of interest in a particular resource provides invaluable qualitative information about its importance and popularity in a particular professional field. Traceability also fosters the process of discovery, leading you to other people, groups, and resources in your area of interest.

    Serious Search Solutions

    For most people conducting research I would recommend Dogpile; however, for the engineer I would once again recommend IET Discover. This is because the site combines traditional keyword search with social search, also known as a cloud. This powerful pairing of search technologies provides the optimum combination of depth and relevance.

    The keyword search option in IET Discover provides deep penetration of the content in the directory. When you perform a keyword search, you are searching the full source content of the documents in the directory.

    Social search uses data applied by people to optimize the precision of search results. When members add bookmarks to the directory, they categorize them using “tags.” These tags enable the search engine to understand exactly what each bookmark is about, providing results of optimum accuracy and relevance.

    Professional Forums

    Professional sites such as LinkedIn allow people to join specific groups with industry experts. Engineers can create groups and provide access to an industry guru for most connections who do not have time to dig around and find information for themselves. I suggest you integrate your LinkedIn account with Twitter and Facebook so you can send a tweet (a Twitter message) to someone or put a message on Facebook and get the assistance you otherwise wouldn’t have through a LinkedIn connection.

    Distributing Information in Forums

    Let us assume someone is curious about the formula for estimating heat loss/heat gain. You remember seeing the MIDG link on www.insulation.org, so you conduct a search that takes you to the National Institute of Building Sciences’ Mechanical Insulation Design Guide. Under “Design Data” on the left navigation, you discover the information your social media bookmarking friend needs. So, you copy the URL www.wbdg.org/design/midg_data.php from your browser and paste it into the forum. Other members will police the site to ensure your information is the best resource and will rank it to provide your tips as the most highly bookmarked. The system interprets this behavior as “perceived utility” and enables the resources to be ranked accordingly.

    Conclusion

    With more and more information online, it can be difficult to find good information on any topic. As an engineer, you can help the next generation or engineers with less expertise in your area by providing and ranking good information. Social media offer you enormous scope to impact your industry in a positive way with very little time or effort.

    Resources

    1. www.insulationoutlook.com/io/pdf/2010_Circulation_Data.pdf
    2. http://discover.theiet.org
    3. www.wbdg.org/design/midg_data.php