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Associations Forming Links With New Congress

Mon January 22, 2007 - National Edition
Giles Lambertson

Builders join together in organizations for the same reasons dentists, farmers and senior citizens do: to increase their awareness and multiply their clout.

As 2007 gets underway, construction industry association executives across the country said becoming a member of an association remains a popular choice.

Part of the appeal is the simple joy of being among like-minded people with similar professional ambitions.

“I think the most gratifying thing is that I always find people who truly believe in what we are doing, and in the industry, and in the work the industry is doing,” said Richard A. Juliano, who is vice president of chapter relations and grassroots programs and manages the contractors division of the American Road and Transportation Builders Association (ARTBA). “I really enjoy working with people like that. They make it worthwhile for me. These are good people and the projects they build are very important to everybody.”

Juliano pretty well characterizes the motivation for most associations, of which there are a great many in the United States. The American Society of Association Executives (ASAE) puts the number of incorporated associations at approximately 150,000, some 20,000 of which are national organizations. Approximately 85,000 of them are trade or professional organizations — the first being a group organized around related products or services and the second around specialized skills. Ninety percent of Americans are said to belong to one association or another and many Americans belong to several.

The ASAE defines the purpose of an association as an organization existing “to promote the interest, welfare or common good of an industry, a profession, a field of interest or endeavor, or a group of members. To promote industry, provide education, foster professional conduct, gather and disseminate information, develop standards, etc.”

Construction industry associations do all the above, though the purposes vary somewhat from group to group and between state and national organizations. The view becomes more general the closer an organization’s headquarters is to a state or national capitol and the focus grows tighter, with lobbying for funding and regulatory relief an everyday priority.

Washington, D.C.-based associations are scrambling as a new congressional session convenes with Democratic majorities in each House. The party switch means new committee chairmanships, new operative political philosophies, new political agendas. All of that translates into a sense of urgency to get in touch with the new governing party and communicate the priorities of association members.

“We are a bipartisan association, unlike many,” Juliano said the week Democratic leadership took over in the Capitol. “We are built to last no matter who is controlling Congress or which party is in the White House. Obviously we have particular supporters on each side of the aisle, and elections do raise a lot of interest among membership and questions about how it will affect our interests — who are the new committee chairs?… what can we expect?

“Our job is to interpret that,” he said. “We also rely on members in state chapters to tell us about new members of Congress. They may know these people better than we do.”

Juliano’s association has approximately 3,000 members in eight different contractor divisions. They all look to the association to be their voice in any deliberation on Capitol Hill that touches on transportation infrastructure.

“Our main focus at ARTBA is expanding the transportation construction market by advocating for more federal investment,” Juliano said. “Because we are known for that, I think that a good number of our members believe in that mission and see the value in what we are doing here and see us as a bridge for what is going on in Washington generally. They rely on us to work with them to get them seated with the right people.”

The Washington office also is a point for networking between industry executives and federal officials, as well as for conversations among industry peers. All the conversations become more intense in the years leading up to reauthorization of six-year federal transportation bills. Funding for the bill is on this year’s agenda, a carryover item from the last Congress.

“When you talk about roughly a nine to 10 percent increase in federal investment for transportation, there is a parallel increase in market capacity,” Juliano said. With so many projects and jobs in the offing, communication between local and state association members grows exponentially.

“As we get closer to the end of the six-year cycles,” he said, “not only do we have to do more but you can tell that membership gets more focused on what we are doing here. Because of our mission, the reauthorizations draw attention.”

The nation’s oldest and largest construction organization is Associated General Contractors (AGC), which has 97 chapters across the United States. Its leadership also is busily interacting these days with congressional leaders to promote its members’ agenda. The association’s priorities as it sits down with members of Congress on behalf of some 32,000 companies are continued federal investment in highways, buildings and “environmental infrastructure” as well as sensible regulatory and tax policies to let U.S. contractors compete in the global marketplace.

“We believe that the U.S. must improve its basic infrastructure to ensure our economic edge,” the association’s CEO, Stephen Sandherr, declared after the AGC executive board drew up its priorities for the 110th Congress.

Growing Membership

So these are busy times for association officials and relatively flush times as well, with membership generally growing at state and national levels. Brian R. Holmes, executive director of the 170-member Maryland Highway Contractors Association, has seen leaner times.

“We went through a period when membership was dropping off and now it is growing again,” Holmes said.

Why the growth?

“We have a couple deals on products, but the main benefit is they get a staff that is dedicated to their well-being. When they have a problem, we work to solve it, lobbying for them in Annapolis and Washington.

“We worked very, very hard to support the most recent revenue increase for transportation construction in Maryland, for example, wearing out shoes going to doors and talking to legislators,” said Holmes, who has been at his Maryland desk for six years but for 13 years prior to that held a similar job in Connecticut. “I think members feel they have the benefit of our capability to help them with problems and issues, in addition to our general efforts on behalf of the industry as a whole.”

The work is a joint effort of associated contractor executives serving on committees and paid staff members directed by Holmes.

“I rely on my guys [contractors] to make sure that I am saying the right things. They know the business. We have technical committees and we have some really good discussions.”

Holmes said the joint system works.

“We have victories and we have defeats but the point is that the association does a lot of things that contractors want done, that they don’t have time to do themselves… lobbying, calling, researching. We’ll do whatever they want. We are here to help.”

Membership growth in the Maryland association includes large and small contracting firms. A company that recently signed on is Sandora Construction, a 12-employee highway, commercial and residential construction firm operating from Greenbelt, Md.

The two-year-old company’s Executive Vice President Saeed Milani-Nia previously worked with the state highway administration and knew the value of staying on top of information emanating from that agency, including district budgets and legal issues. Milani-Nia and other company officials now lean on association membership to get them inside the information loop.

A second company that joined the association last year, Kinsley Construction, is a family-owned and Pennsylvania-based full-service general contractor with a sizeable presence along the mid-Atlantic region of the East Coast. The company has an office in Timonium, Md., so joining the Maryland association is a logical extension of its involvement in the state.

Holmes said that 80 percent of the large firms in the group are active members, interacting with other members and generally supporting the work of the association. Smaller companies frequently are less active.

“For the smaller ones, some of them join and don’t take advantage,” Holmes said with evident regret. “The benefit of belonging to an association is to participate, get on the committees, go to the functions. I think associations are great, but particularly if people use them.

“I activate when someone calls me and says, ’I have a problem.’ It is my job to do the best I can to help the guy out so he can go back to work and make money — and continue to pay us dues.”

Associated Builders & Contractors (ABC) also is growing as a national organization. The association has 24,000 members in 79 chapters and offers the same range of services and lobbying as other national offices, with a special emphasis on merit shop and labor issues.

“Our top service would be labor and government relations,” said Tim Welsh, vice president of member services, “but we’re a full-service organization that people join for various reasons. We offer a wide array of training programs, including apprenticeship, training, and employee benefit programs.”

Welsh attributes ABC’s growth to the fact that, “basically, people find value in the benefits that we offer. They want to join and want to remain members. All organizations are affected positively or negatively by the economy, but I cannot say with a certainty that there are certain things that trigger growth. We’ve had growth before in bad times.”

The largest ABC chapter — in Mississippi — also is that state’s largest contractors association with approximately 1,200 members. Association president C.J. “Buddy” Edens said it is “the quality of services that we offer our members” that translates into steady growth.

“All are looking for services and most are small contractors,” Edens said, defining an average association member as a contractor doing three-quarters of a million to a million dollars in annual business. “We provide the service they can’t provide for themselves… training, education, safety, plan rooms, good rates on health insurance — all those make us an attractive association.”

Networking is another large benefit, one that Edens terms “probably the best return on investment.” The association is divided into six regions with at least one membership meeting in each region per quarter. The association president called the meetings “an opportunity to build a relationship, and we all know the success of a business is built on relationships.”

Not All Contractors Join

But even with the popularity of Edens’ association, membership does not represent 100 percent of contractors in the state. Mississippi has approximately 5,000 registered contractors, and obviously not all of them belong to one of the contractor organizations.

Some are Mom-and-Pop firms that operate on a shoestring; association dues are not part of their budgets, nor are services offered by the associations deemed essential to their business plans. Edens — who has been in construction for 35 years and in association work the last 15 years — also knows of large contractors that are registered in the state, but have their headquarters elsewhere and do not believe association membership is a necessity.

Something less than total industry representation is the rule among associations. In California, the industry percentage is even smaller. Associated General Contractors of California has 1,200 members, which is a significant number, yet one that pales beside another one: 280,000. That is the number of licensed contractors in 43 classifications that constitute California’s construction industry, according to Contractors State License Board.

The state AGC membership is “holding steady,” said the organization’s Vice President of Government Relations John Hakel, “and we believe we will have a nice up-tick this year with all the bond money that was passed — $30 billion worth of work.”

Hakel said that bonds seem to spark association growth, regardless of which party holds power in Sacramento. What’s more, membership retention year by year in the state chapter stays in the 90 percent range. “In this day and age, that’s pretty good,” Hakel said. “We’ve been lucky.”

The AGC executive said that lobbying is “one of our top three or four services for association members. This state seems to see a preponderance of bills that people try to put in the hopper and get passed and we have to continually monitor to see what is in there. We do have a legislative committee made up of members and associates in certain classifications — CPAs, lawyers, and so on — so when we view a piece of legislation, we look at it from all angles to dissect it, to see where it is going and whether we need to push to veto it or what.

“If you look at our track record, for the most part we have done a good job in looking at legislation, then meeting with the author of a bill or with the governor to see if a bill needs a full court press,” he said. “Our members are pleased. We have done a very good job at meeting with legislators at the grassroots level, making sure they hear our footsteps in the hallway.”

Associations vary in how much they campaign to attract new members or to hold old ones. Some “campaigns” are ongoing; some are staged for a few months at different times of the year. For the most part, the feeling seems to be that the work speaks for itself.

“We don’t do a lot of that stuff,” Hakel said. “We haven’t raised dues in quite some time. We’re doing what the market wants us to do.”

Some industry associations are specialized enough that membership potential is smaller and more completely realized. The Portland Cement Association (PCA), for example, specifically represents cement companies in the United States and Canada. Its membership of a few dozen companies accounts for 98 percent of cement manufacturing capacity in this country and 100 percent in Canada.

It also partners with other associations — such as the American Concrete Pavement Association (ACPA) — to advance the industry’s manufacturing and contracting opportunities.

“We try to keep ourselves tightly focused on two services — promotion and advocacy,” said Bruce McIntosh, PCA’s vice president of communication, “promotion being increased concrete use, and advocacy occurring through the Washington government affairs side of things.”

The organization is headquartered in Skokie, Ill. (the Chicago metropolitan area is the second most popular location for associations, behind Washington) and works to develop new markets and expand the industry’s share of the existing market. In D.C., McIntosh said, “ the association conducts government affairs work and tries to increase funding for infrastructure projects. We work on regulatory issues with EPA out of our Washington office, and we would work closely with other groups there, such as AGC and ABC.”

Some Association Challenges

Despite the steady attraction of contractors to these organizations, association growth and influence is not inevitable. New communication technologies, especially the Internet, and worldwide companies that can be a player in any local project make problematic the continued need for state and national associations. Association executives acknowledge the possibility of a shrinking demand for their services in an era of hyper-communication and globalization.

“The Internet definitely is a doubled-edged sword,” said Juliano, the Road and Transportation Builders executive. “It is easier to communicate with members, a lot easier than it used to be, but on the other hand there is more chatter out there and more competition for attention.

“Our members have businesses to run and projects to run and they have limited amount of time to spend on association work and it is harder to get through to them,” he said. “They are getting hundreds of e-mails a day and may not always take time to read it. So on the one hand, it is more convenient; on the other hand, if a message is truly important, we have to send more than one e-mail and in multiple formats to get their attention.”

John Hakel of California AGC said his organization hasn’t “seen any Internet impact, but we certainly know that it is there. We continually upgrade our systems to accommodate those folks who are more of the computer generation.” The association wants to make its Web site “touch-and-go” friendly to its members.

Hakel conceded that “there is a point in time when a lot of folks” are going to be accessing information without having to go through an association. “But I don’t see [impact] in the close-up future. As long as we keep providing what they are looking for, then they can turn to us and get it.”

Consolidation of companies is another downward pressure on membership. Members might be larger on average as a consequence of these mergers, but they also are fewer, association executives acknowledge. And despite circumstantial variation, in most cases the strength and durability of an economy has immediate impact on association membership. Weak economies always are a threat to them.

“Membership definitely is more appealing when business is great,” said Holmes of Maryland Highway Contractors. “When times start to go bad and people don’t have work, the issue of paying dues to the association kind of hits the high-water mark. Or you have a guy from out of state that has been taking work here, but then the work dries up. He might love us, but he has no presence in the state any more.”

But Holmes believes the work of the associations will remain a valid part of the mix.

“Very much so,” he said. “First of all, when I call up, I don’t just speak for one guy. I’m speaking for the industry as a whole.”

And, he added, “It also is convenient for the state to have someone like me. I can get the word out to people about stuff and find people the state needs to address a certain issue.” CEG

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