Energy Efficient Tax Deduction Comes Back to Life

Last evening the Senate overwhelmingly passed the Tax Extenders Bill (HR.5771) which extends all expired tax provisions retroactively from 12/31/2013 through the end of 2014. The bill will now move onto the President to be formally signed into law. Presidential veto is not expected on the one year package.

Why should I care?

You should care if you are the owner, builder or designer of a commcercial or public building put into service in 2014.

It means a Federal 179D Tax Deduction of up to $1.80 per square foot will be available for all qualifying buildings. If your building’s energy performance exceeds a benchmark set in 2005, you may be able to claim this federal income tax deduction.

This applies to owners of commercial buildings and designers and/or builders of public buildings.

We recommend starting the process of certifying all 2014 EPAct 179D Tax Deduction projects as soon possible to ensure timely filing. It's easy.  Contact us to find out how.

Theft of a Sale (Bryant Wheeler)

I was drug up in the construction industry as my father was before me. I was tarring foundation walls as soon as a brush would fit in my hands. It was a time when your word carried more merit than a signature on a paper. When a contractor not only built a building he also built a reputation. A reputation of self-worth, value, character and honoring one’s word. This stood in life no matter if it were private or business affairs.

Polycrete USA still recognizes and lives by these values. Sure we get things in writing – but the word of a person or business still holds value to this day. We see and hear all too often in this ICF industry where an installer or distributor is working on a deal but the manufacture takes it in house because they are afraid to lose a truck load of forms. Maybe they think the person working the sale can't close it. Or maybe perhaps they just jumped the gun. Either way, if it’s your lead, it should be your sale.

When the manufacture takes your customer in house for whatever reason without your consent this is theft of a sale.

If you, the installer, contractor or manufactures rep, feel you can't close the deal on a PolycreteUSA lead you should call for help. I for one love to help close deals. But it’s still your sale. We are not going to sell direct without paying the rep, and we are not going to send another crew to the site to do the erection. That is your job.

We know how hard you work to make a sale -- so much goes into it. First you must get the lead from somewhere. If it’s by word of mouth this is because you have built a reputation with someone and that’s a beautiful thing.

If the contact comes from a lead source this costs hard earned money out of your pocket. Either way you put countless hours into working this sale. From convincing the customer that is the best way to build, to working with their architect and making suggestions to their engineer.

It could be a developer you have to pitch. Maybe you point out a tax incentive, insurance breaks, make site visits and general schmoozing -- most of the time it is all of the above including your reputation for doing good honest work.

Coming from the construction industry, later joining the Marine Corps then back into construction, acting honorably has been imbedded into me and this is why we do what we do. I would like to challenge ALL the manufacturers and installers to try to live by these values. To assert great character and build this industry on honesty and self-respect.

This industry has seen the bottom. Let’s all of us grab our boot straps now and pick it back up. Work together for the greater good. We need to do this with old values and new technologies. If we treat our partners, supply chains, and distribution channels ethically and honorably we can show America that ICF technology’s time has come.

Bryant Wheeler, Executive VP
PolycreteUSA
Richmond, Virginia

Sometimes the ICF industry is its own worst enemy.

A picture in a recent issue of Concrete Homes and Low Rise Construction is just one of many examples I see happening.

Forty-three feet off the ground, there are no hard hats, no guardrails on the scaffold, no safety line, no backup man on the pump nozzle, no internal vibration, walk board cantilevered dangerously off to one side, and another walk board appears to be a TJI! This sets a bad example for ICF in general – makes installers look irresponsible to GCs. Worse yet, the general public may think this is perfectly fine.

Recently, an ICF installer proudly posted a well-produced video of his pour on YouTube. Again, no hard hats, no safety rails and no internal vibration. There’s a guy on the ground, directly beneath the nozzle man banging on the wall with a 2x4! One commenter asked if that’s the manufacturer’s recommended way to vibrate the wall. Another mentioned that it did not look OSHA compliant. The installer replied that the job was “out in the middle of nowhere,” so OSHA was not likely to drop by.

Irresponsible installers and suppliers are damaging our industry. There is a debacle underway on a higher-education project  right now. An ICF manufacturer persuaded a large well-known GC that the ICF spec as written was too tight and if they allowed in the lower grade block and a cheaper installer, they’d save some money.

The result is a big mess -- walls out of plumb and straightness. The GC reportedly tried to find another installer to take over the job, but no reputable installer wants to go near it. I don’t know what the job’s status is now. The GC, who we’ve been working on for years, told us their ICF experiment is likely over. Fool me once, shame on you. Fool me twice, shame on me.

This is a pattern we’ve seen repeatedly on Military bases. ICF manufacturers chase each other’s prices down to absurd levels. The manufacturer agrees to sell material direct to the GC at a cut-rate price and pressures the installer to bid a low, labor only price. What does this accomplish other than the sale of a few truckloads of material at little or no profit? Well, for one thing, it creates an impression in the commercial/government market that pricing SHOULD be $11 or $12 per sqft for a multi-story building at prevailing wage, which is nonsense.

There’s more: The manufacturer takes money out of his installer’s pocket by eliminating his margin on the product and encouraging him to cut his profit on the labor portion. Top installers won’t allow themselves to be pressured by suppliers, so you end up with a less qualified installer. It also creates bitterness on the installer’s part, reduces his margin of error and moves him to cut costs and corners. When something goes wrong, he’s more likely to walk away because he can get upside down very quickly.

Since ICF construction is relatively new to the commercial market, most GCs are still not knowledgeable about its vagaries.  Estimators are encouraged to buyout as aggressively as possible. When a less than ethical salesperson starts pushing a cut-rate price, the estimator lets himself get talked into believing there will be no difference in the final product -- even though common sense tells him otherwise. When you’ve got four subs bidding $15 a foot and one at $11, it’s probably not the $15 guys that are out in left field.

Far too often, these stories have ugly endings and when the finger pointing starts, it’s ICF construction in general that gets the blame. That big influential GC that we want on our side is left with a bad taste in its mouth. In the corporate world, new things that go bad rarely get a second chance.

When we raise these issues on various ICF forums, we are told to quit being negative and just say happy things – be supportive of our industry.

Well we’re happy to say that there are good products out here that are good for building houses and there are good products out here that work best in commercial. There are great installers doing terrific work all across the country. But every ICF is not the solution to every job and picking the installer’s pocket will not motivate him to do his best work.

I challenge the rest of the industry to increase installer training and standards, stop referring business to any sub willing to install your product and end this cannibalization so our industry can achieve the respect and credibility it deserves.

(This article was originally printed in Concrete Homes and Low Rise Construction Magazine September 2014)

ICF Industry Consolidation

ARXX Building Products filed bankruptcy at the end of December . In the beginning of the month, Reward Wall announced that it’s selling its assets to Airlite/Fox Blocks.  Here’s my take on the current consolidation in the insulated concrete forms market.

Nearly all the ICF products generally available in the marketplace are considered “residential grade” and are essentially identical. Two panels of Type II EPS joined by plastic cross ties. They’re all about the same size and shape and all have about the same baseline performance.

There are only three outliers of any substance: Polycrete, ARXX Steel and Nudura (I’m not sure if the ARXX Steel line is still available). Some might consider knock-down blocks in a separate category, but their steep installation labor costs ensure they will remain a niche product.

Since nearly all residential grade ICF products are alike, since they compete primarily on price, since there is a concerted price war in the market, we can expect to see more companies like ARXX and Reward Wall being absorbed and disappearing.  There are too many similar brands chasing too few jobs. If they can’t find anything to compete on except price, consolidation is the natural result.

In this pricing environment, the best managed, structured, positioned ICF suppliers will survive. The best structured are those that control their own manufacturing. If they have a diversified product line as well, they should be better positioned to survive reduced margins. Hopefully their other product lines are profitable and can finance their price war.

Those ICF brands that have real, tangible and provable differentiators should be fine over the long term as long as management  continues to sell the unique benefits and resists the urge to leap into the price war.

Recently we lost a job to Nudura. It was a small job. They came in at half of our price. When the contractor told us Nudura’s quote, we said, “Sorry, we don’t sell our product that cheap,” and walked away. We know our costs, we don’t sell below cost, and we’re always happy to let our competitors lose money.

It’s difficult to tell where this consolidation will end. Airlite/Fox seems to be the big dog in the fight. They have their own manufacturing, a diversified product line and the financial heft to hang in for a longer time.

This type of highly aggressive pricing can be a minefield for the entire industry. One danger is that small manufacturers and those that outsource will try to hang on by cutting costs and quality. More high profile failures by inadequate products will damage the entire industry.

A second hazard to the industry’s reputation is the habit of selling material directly to GC/Owner. This may aid the supplier’s margin, but it cuts out the installer’s profits. ICF suppliers that squeeze installers are slitting their own throats. It’s a habit that reduces the installer’s margin of error and increases the likelihood of him losing money or walking off the job. It happens and we all know it.

One more hazard is overselling product or aggressively selling into an inappropriate market, which causes troubled installations. This results in disappointed customers and leaves a lasting bad taste in the mouths of construction/A&E professionals.  

If you have a residential grade product, stick to houses. This is a sword that cuts  both ways. Polycrete products work best in a commercial environment. Many of our installers do residential work as well, and we always encourage them to use the right product for the job. When presented with an opportunity that’s not appropriate for Polycrete, we don’t hesitate to hand it off.

In my opinion, those ICF suppliers that cannot survive long term should read the handwriting on the wall and cut the best deal they can with a firm that has its own manufacturing capacity sooner rather than later. Alliances, equity deals and earn-outs are easy to structure if everyone’s serious and all can be winners. That will get the consolidation over with and our industry can go on to make some money.

Fix It Anyway

“If it ain’t broke, don’t fix it.” A time tested proverb, right?

Well, I came across an ad for GMC trucks the other day that talked about using a rolled steel process rather than the normal stamped steel for making the truck bed. Even though there’s nothing wrong with the stamped steel process, they found they could make truckbeds lighter, stronger and more durable using a different process. GMC calls this mind-set “an adamant desire to fix the unbroken.”

R-Stak inserts are a full eight feet long

That’s what we're doing with our R-Stak^TM inserts. Gluing and screwing EPS boards to the outside of an ICF wall is a perfectly fine way to add more insulation. It’s been done that way for a long time. Except it leaves the studs buried 2.5” from the outside surface so you need longer screws and a better aim with the screwgun to fasten your exterior finish.

Other ICF companies came up with the idea of moving the extra insulation to the inside of the cavity. They make 8 inch wide EPS inserts that slip between the cross ties inside the ICF where the concrete goes. That usually works ok, too. And then you don’t need such long screws to reach the studs because they’re right there near the surface.

We took that good idea and made it great with R-Stak^TM inserts.  Full 2 foot x 8 foot panels that drop into the concrete cavity in one motion and use only fraction of the labor. We make two standard thicknesses, but customization is a piece of cake so you can have just about whatever thickness you need.

Expander clip holds R-Stak firmly in place

Our flexible manufacturing lets us make the cavity up to 24” wide so you can easily add ridiculous amounts of insulation and have as thick a concrete wall as you want. Ingenious expander clips snap into place and secure the R-Stak^TM insert without need for glue or screws.

America wants energy efficient structures that stand up to Mother Nature. That doesn't have to be hard, and PolycreteUSA just keeps making it easier. 

Adding extra insulation to your ICF wall wasn't a broken process, but we fixed the hell out of it anyway. Call us today to learn how we can simplify your project. 

Stala system cuts time and labor on ICF doors and windows

We were in Louisville, Kentucky recently and had the pleasure of visiting with Adam Blair of Stala Integrated Framing. These guys have created a key component in commercial ICF construction that’s becoming an industry standard. They fit right in with our mania for simplifying energy efficient construction because their system eliminates steps and saves time and labor. 

Traditional wood window buck

Traditionally, block-outs for door and window openings  in ICF walls have been created with pressure treated framing lumber. The ICF installer has carpenters on the crew who spend their time building wood frames to create the rough openings for windows and doors. Cheap materials in a labor intensive process.

Those frames (called “bucks”) are set into the ICF wall and braced so they stay square and plumb when the concrete is pumped into the wall cavity. The wood bucks can be set inside the ICF cavity and left in place or wrapped around the opening and removed after the concrete cures to leave a finished concrete surface. 

Twenty-five yeas ago, vinyl products emerged that serve the same purpose. They have made-to-order widths and integrated bracing systems that are easier and faster to work with than wood. The materials cost a few dollars more, but save labor and present a prettier finished product.  These methods have worked just fine for residential construction for many years.

As ICFs moved into the realm commercial construction, it became clear that a commercial grade solution for door and window openings was needed. Stala has taken on the challenge and reinvented bucking systems.  

Stala IFA door frame braced on footing

Stala stands for “System To Assemble, Link and Align”. It’s the brainchild of the Atlas Companies. Since 1972, Atlas has been supplying hollow metal and wood doors and hardware to the commercial construction industry. 

Over the years they've added Division 6, 10, 12 and 17 items to their product line, but their claim to fame is doors, door frames and hardware. Some of their products are off the shelf and some are made to order. That’s why metal bucking systems were a natural step. They were already making them.

Stala’s pre-engineered steel door and window bucks incorporate the hollow metal door and window frames into the bucking system. They call it an Integrated Framing Assembly (IFA). The door frames can be designed to receive the door hinges, so no additional hollow metal components are required. Same for the windows.

These IFAs can be really basic or quite sophisticated – You can get them fire rated, blast resistant and even with thermal breaks. Normal steel thickness is 14 gauge, but you can get heavier gauges for secure applications. Stala IFAs are made to order in a mass customization process.

The red-primed material is the IFA component

The interior profile can include a return for sheet rock and that cuts the dry waller’s cost by saving money on labor and materials. The exterior profile can be configured to receive whatever exterior finish system you choose.

The Stala IFAs, fully assembled and primed arrive at your jobsite on a flatbed truck. The ICF installer’s only work is setting the IFA in the correct spot in the wall and bracing it. 

The ICF panels fit into slots (called alignment flanges) in the frame which keeps the ICF properly aligned at the door/window opening – it’s simple. Flanges welded to the inside surface of the assembly extend into the cavity and become embedded in the concrete. That makes it super solid.

Everybody wins when this system is used. In a nutshell, the Stala Integrated Framing system cuts labor and materials for:

•          ICF Installer
•          Drywaller
•          Door Installer
•          Window Installer / Glazer
•          Mason
•          Architect/Engineer
•          General Contractor

The key to success of this system is for the architect to know that it requires a collaborative effort. The Stala system needs to be designed in partnership between the architect and the Stala folks. It must be drawn into the plans and speced in the spec book so that the sub-trades that are impacted know they are impacted and can bid accordingly.

Stala door frame assembly configured to
receive hinge and standard 4" clay brick

Stala Integrated Framing Assemblies have been used on US Military projects throughout the country and have also been used on many K-12 projects, including Richardsville Elementary School in Warren County, Kentucky -- the nation’s first net zero energy public school.

One other good reason to use Stala Framing: Stala IFAs are made right here in the USA using sophisticated state of the art manufacturing equipment and processes. They provide plenty of good manufacturing jobs which support American families.

PolycreteUSA reps have samples of the Stala Integrated Framing Assemblies and include them in all of our architect and general contractor presentations. Contact us today to set up an appointment or call Adam Blair at Stala directly: (502) 779-2127.

PolycreteUSA’s new website makes it easier for architects, contractors and building owners to learn about a better way to build...

PolycreteUSA’s mission is to make it easy to design, build and own energy efficient structures that stand up to Mother Nature. We took another big step in that direction recently with the launch of a new website, PolycreteUSA.com.

We want to get our story across more clearly. Who we are, what we do and how we do it. We think the new format accomplishes that. Our technology has been used in Canada, Europe, Asia and even here in the US since 1988, but a lot of people here still think of it as new and mysterious. We want everyone in the construction community to see how cool it is and to realize that this technology really will make their project easier to complete.

Polycrete’s technology is a system for constructing commercial buildings with highly insulated concrete walls. Conventionally formed concrete walls involve a labor-intensive process of constructing a wood or metal formwork structure, filling it with concrete, then dis-assembling all the formwork after the concrete hardens. 

The Polycrete formwork is set up in a fraction of the time and does not have to be dis-assembled. It’s made from expanded polystyrene panels that contain a steel reinforcing structure which makes it strong enough to contain the concrete. Since the formwork becomes the insulation for the building, it also eliminates the insulating step in the construction process.

The Polycrete system eliminates several other steps, too. Four or more. Normally you would have to build a wood or steel stud wall inside the masonry wall to hold your insulation and sheetrock. That all goes away with this system because you can attach sheetrock directly to the Polycrete wall by means of its built-in steel fastening strips.

The new website includes useful information for architects, contractors and building owners.

Architects will be pleased to see CAD files that can be downloaded to make their design work easier and detailed information on how doors, windows, floors and roofs are incorporated.

Contractors will find complete information on assembling  Polycrete walls and how it works with electrical, plumbing and other building systems.  

Building owners can learn about operating costs savings and even how they can benefit from Federal tax credits and deductions from using the Polycrete system.  

Building products like the Polycrete Big Block ICF system have to undergo a thorough series of tests before they are approved by the International Code Council. The ICC sets the rules that most local building codes are based on. Polycrete makes all of its ICC test results available on the website for download.

Intertek testing service ran all of our ICC tests. They’re the number one building materials testing service on earth, and I can tell you their results prove Polycrete Big Block is the strongest ICF on the market. Fastener withdrawal, shear tests, fire ratings, you name it. Some other ICFs are close to us in one or two areas, but overall, The Big Block is tops. That’s why we put all the data on the web for the world to see. This is not just a salesman making up stories, it’s the real deal.

We want to hear from construction professionals after you look over the site. It’s an evolution. We’re currently working to develop more resources for installers. In the meantime, we really want to hear what the community thinks of what we’re presenting and what you like and dislike about the site. It’s not about us, it’s about you. We’re going to continue to improve our usefulness. If there‘s other info or services you’re looking for, tell us and we’ll figure out how we can get it for you. 

The new website is at www.PolycreteUSA.com. We’re also on Facebook. There’s more pictures on the Facebook page. Contractors send them to us as their jobs progress and we just throw them up on Facebook.