02-2017 Bond Newsletter

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MOST TALKED ABOUT POLITICAL TOPIC… on both sides of the isle is “President Trump”.  My Leftist friends (yes I have some) constantly ask me if I am not bothered by Donald Trump’s lack of decorum.  Here is my answer:  We Right-thinking people have tried dignity.  There could not have been a man of more quiet dignity than George W. Bush.  We tried Statesmanship.  Could there be another human being on the earth who is so prized “Collegiality” as John McCain?  We tried Propriety – Has there been a nicer human being ever than Mitt Romney?  The results have always been the same.  This is because, while were playing by the rules of dignity, collegiality and propriety, the Left has been, for the past sixty (60) years, engaged in a knife fight where the only rules are those of Saul Alinsky and the Chicago Mob.

The Left has been engaged in a war against America since the rise of the children of the 60’s.  To them, it has been an all-out war where nothing has been held sacred.  It has been a war they fought with violence, the threat of violence and the violent take-over of the universities — still today.  The problem is that the Left has been the only side fighting this war.  While the Left has been taking a knife to anyone who stands in their way, the Right has continued to act (in most cases) with dignity and propriety.  To Donald Trump, this has all come to an end.  Donald Trump is America’s first wartime President in the “Culture War”.

During wartime, things like “dignity, collegiality and propriety” simply aren’t the most essential qualities one looks for in their warriors.  Ulysses Grant was a drunk whose behavior in peacetime might well have seen him drummed out of the Army for conduct unbecoming.  Had Abraham Lincoln applied the peacetime rules of propriety and booted Grant and maintained George B. McClellan as head of the Union Army, the Democrats might well still be holding their slaves today.  Lincoln rightly recognized that “I cannot spare this man.  He fights.”

General George Patton was a vulgar-talking, SOB.  In peacetime, this might have seen him stripped of rank.  But, had Franklin Roosevelt applied the normal rules of decorum then and appointed General Omar Bradley as Commander of the Third Army (a man with military and political skills, but not a fighter), Hitler and the Socialists would barely be five (5) decades into their thousand-year Reich.  Franklin Roosevelt could not spare the vulgar-talking, SOB because Patton “fights”.

Trump is fighting.  And what is particularly delicious about that, like Patton standing over the battlefield as his tanks obliterated Rommel’s, he was shouting, “You magnificent bastards, I read your book!”  As I said, “Trump is fighting” and he is defeating the Left using their own tactics.

Trump’s tweets may seem rash and ill advised, but in my opinion they have been very effective on a number of different levels.  Trump has managed to isolate CNN.  He has made it personal.  Then, just as Saul Alinsky suggests, he employs ridicule which Alinsky described as “the most powerful weapon of all”.  Most importantly, Trump tweets have put CNN in an untenable and unwinnable position.  They need to respond.  This leaves them with only two (2) choices.  They can either “go high” and begin to honestly and accurately report the news or they can double-down on their usual tactics and hope to defeat Trump with twice their usual hysteria and demagoguery.  The problem for CNN (et al) is that if they were to start honestly reporting the news, that would be the end of the Democratic Party they serve.

So, to all my friends on the Left and the “never Trumpers” as well, do I wish we lived in a time when our President could be “collegial” and “dignified”?  Of course I do.  These, however, are not those times.  This is war and it’s a war that the Left has been fighting without opposition for fifty (50) years.  So, say anything you want about this President — I get it.  He can be vulgar, he can be crude, and he can be undignified at times.  I DON’T CARE, I CANNOT SPARE THIS MAN.  HE FIGHTS FOR AMERICA!  GOD BLESS PRESIDENT TRUMP AND GOT BLESS AMERICA.  I FOR ONE SUPPORT PRESIDENT TRUMP WARTS AND ALL.

“To anger a Conservative, lie to him.  To anger a Liberal, tell him the truth.” – Theodore Roosevelt

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BECAUSE OF TRUMP’S UNORTHODOX STYLE AND LESS THAN DIGNIFIED APPROACH… I think his basic message gets lost.  In my opinion, Trump is hitting many if not most of the “hot buttons” of the Electorate, including me.  You have to listen to him and not be distracted by his showmanship and somewhat obnoxious behavior.

I would like to list some thirteen (13) things that I, as a senior American Citizen, want.  Trump is at least talking about issues that most Americans are concerned about.  My wish list is:

  1. Hillary: Held accountable for her previous wrongs!
  2. Put “GOD” back in America.
  3. Borders: Closed or tightly guarded.
  4. Congress: On the same retirement and healthcare plans as everybody else.
  5. Congress: Obey its own laws.
  6. Language: English only!
  7. Culture: Constitution and the Bill of Rights.
  8. Drug Free: Mandatory Drug Screening before and during any Welfare assistance.
  9. Freebies: None to illegals with any type of criminal record.
  10. Budget: Balance it
  11. Foreign Countries: Stop giving them our money and charge them for our help.
  12. Fix the TAX CODE
  13. Respect our Military and our Flag.

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OVER THE LAST 25 YEARS… Design/Build contracts have become more common in our marketplace for both public and private contracts.  As a Design/Build General Contractor, if you subcontract the design work on the design/build project to an architect, you are responsible to the owner for any damages the owner suffers because of design errors or omissions.

While there are a number of ways you can protect yourself from the consequences of an architect’s design errors, perhaps the easiest and most inexpensive way is to get the owner to agree to include a contract clause like the one written and used by Construction Attorney J. William Ernstrom, which he called the “skip-over clause”.  By executing the contract with this clause included, the owner agrees that it will “skip-over” you and go directly to the architect for any claims that it has that result from the architect’s professional services.  For those of you that are interested, I am including the Model Contract Clause that you might want to consider including in your contract the next time you have a design/build project, after consultation with your attorney.

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FOR THE FIRST TIME IN HUMAN HISTORY… obesity now affects more human beings on the planet than hunger.  New research reveals that as wealth and abundant food spread throughout the world, chronic over-eating has now reached epidemic proportions, putting millions of people at risk for heart attacks, strokes, cancer and other life threatening ailments.  Based on studies encompassing 186 countries, researchers found that the number of obese men have tripled since 1975, while the number of obese women has doubled.  Just 2.6% of the world’s population was classified as obese forty (40) years ago, but by 2014 that figure had climbed to 8.9%, roughly 640 million people.

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IF ANYONE IS HAVING A BAD DAY… remember that around this time in 1976 Ronald Wayne sold his 10% stake in Apple for $800.  It is now worth in excess of $58,000,000,000 (that’s right, over $58 billion).

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IN CHOAS THEORY… the “butterfly effect” is the name given to the sensitive connection between initial conditions in which an insignificant event in one state in non-linear systems can result in sometimes catastrophic events in the universal state.

In other words, although unlikely, it is possible for a butterfly flapping its wings in Texas to cause a typhoon in the Japanese sea.

Case in point:  In mid-20th century America, a loose 18-year old hippie female in a Honolulu college had sex with an older, alcoholic Kenyan man on a student visa, who had a wife and child back in Africa.  And this less than significant event started the collapse and dissolution of the Unites States of America.

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I AM FIRST TO ADMIT… that everything in the bond newsletter is useless, but I still feel inclined to include a section on useless facts:

  1. Each square inch of human skin consists of 60 hairs, 90 oil glands and 19,000 sensory cells.
  2. Edward III passed a law stopping people from eating more than two meals a day.
  3. Electricity doesn’t move through a wire, but through a field around the wire.
  4. Every Continent in the world contains a city called Rome.
  5. Every day more money is printed for Monopoly than the U.S. Treasury prints.
  6. For a while, Frederic Chopin, the great composer and pianist, wore a beard on only one side of his face. It does not matter, he explained.  My audience sees only my right side.
  7. Greece’s national anthem has 158 verses.
  8. It is believed that Shakespeare was 46 around the time that the King James Version of the Bible was written. In Psalms 46, the 46th word from the first word is “Shake” and the 46th word from the last word is “Spear”.
  9. It is physically impossible to sneeze and keep your eyes open at the same time.
  10. It takes 3,000 cows to supply the NFL with enough leather for a year’s supply of footballs.
  11. Since the year 2000 there has been 656 arrests of active NFL players for everything from murder to robbery (and we wonder why the NFL is hemorrhaging viewers).
  12. It takes 60 seconds for blood to make one complete circuit of the human body.
  13. Jimmy Carter was the first U.S. President to have been born in the hospital.
  14. It would require an average of 18 hummingbirds to tip the scale at one ounce.
  15. Pound for pound, earthworms make up half of all animal life.
  16. The highest point in Pennsylvania is lower than the lowest point in Colorado.
  17. The microwave was invented after a researcher walked by a radar tube and a chocolate bar melted in his pocket.
  18. The most common name in the world is “Muhammed”.
  19. The name “Jeep” came from the abbreviation used in the Army for the “General Purpose” vehicle…G.P.
  20. When the University of Nebraska Cornhuskers plays football at home to a sell-out crowd, the stadium becomes the state’s third largest city.
  21. All the clocks in the movie Pulp Fiction (one of my favorite movies) are stuck at 4:20.

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USELESS IMPORTANT FACTS TO REMEMBER… as you grow older:

  1. Death is the number one killer in the world.
  2. Life is sexually transmitted.
  3. Good health is merely the slowest possible rate at which you can die.
  4. Give a person a fish and you feed him for a day.
  5. Teach a person to use the internet and they won’t bother you for weeks, months and maybe years.
  6. Health nuts are going to feel stupid someday, laying the hospital, dying of nothing.
  7. All of us could take a lesson from the weather. It pays no attention to criticism.
  8. In the 60’s, people took acid to make the world weird. Now the world is weird and people take Prozac to make it normal.
  9. Don’t worry about old age, it doesn’t last that long.

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THERE IS TREMENDOUS CONCERN AND DISAGREEMENT OVER… the regulation of firearms and the mass shootings that we have had in this country in the last couple of years.  The Democrats, as a party, believe that gun control is at least a partial answer to controlling and/or eliminating these horrible events.  The NRA on the other hand make a good case for the fact that gun control, particularly in areas where there is the tightest gun control, has had little effect on mass shootings or crimes where a gun is involved.  Chicago, Illinois is a perfect example.

It is interesting to note that –

The Orlando shooter

Charleston club shooter

Fort Hood shooter

Columbine shooter (parents)

Virginia Tech shooter

Colorado Theater shooter

Connecticut school shooter

Congresswoman Gifford shooter

Note: I am not aware at this point in time of the Las Vegas shooter’s political affiliation.

All of these individuals were registered Democrats and by the way, none of them were members of the NRA.

“Status quo, you know, is Latin for “the mess we are in” – Ronald Reagan

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THERE ARE TWO STATE STATUES AND ONE FEDERAL STATUTE… that apply to Payment Bonds in the State of Florida.  713.23/713.245 are the Lien Law Bonds and pertain only to Payment Bonds.  255.05 is the State of Florida Statute regulating Payment Bonds on State and Municipal projects in the State of Florida.  It is also applicable only to Payment Bonds.  The third statute relating to Payment Bonds is the Miller Act.  There are no State Statues regulating Performance Bonds.  Performance Bonds are all Common Law Bonds as are all Subcontract Performance and Payment Bonds.  Only entities in privity with the owner in the case of a Lien Law Bond or in privity with the governmental agency can provide either a 713.23 or a 255.05 Payment Bond.  All other Payment Bonds and Performance Bonds are common law instruments.

In the case of a Miller Act Bond, the Federal Miller Act is the authority for Payment and Performance Bonds on projects owned by the Federal Government.  The Miller Act requires a contractor to furnish Performance and Payment Bonds before any contract of more than $100,000 is awarded for the construction, alteration or repair of any public building owned by the Federal Government.  The Miller Act provides that every person who has furnished labor or materials under a contract for which a Payment Bond was issued, but who has not been paid within ninety (90) days of their last day of work, may bring a civil action against the Payment Bond for the unpaid amount.  However, any such action must be brought no later than one year after the last day on which work was performed by the person bringing the action.  No Federal Miller Act case can be adjudicated in State Court.  Federal Courts have exclusive jurisdiction over Miller Act claims.  Actions on Federal Miller Act Bonds must be brought in Federal Court under the Miller Act, which has sole jurisdiction to hear such claims.

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THERE HAS BEEN A TREMENDOUS AMOUNT OF ATTENTION… focused on the NFL and what many feel is a lack of patriotism by many of the football players who choose to kneel rather than stand for the National Anthem.  I, for one, have absolutely no sympathy for the NFL or its overpaid, egotistical, narcissistic emotional children that try to entertain us on Sunday.  As far as I am concerned, the football players enjoy, like the rest of us, the freedom we have to express under appropriate conditions, their political views, but not on a national stage where their actions take on a greater significance than they have the right to.  I do not know in what universe the NFL players think that their political and social views could possibly be of any interest to the NFL fan base.  On the other hand, their disrespecting our country’s flag pisses me and most of the country off.  The next time I need a group of idiots to influence my political views, I’ll start listening to George Clooney and the progressives in Hollywood that somehow think that citizens of this country give a f—t about what they think.

Not all NFL players are criminals and not all NFL players are unpatriotic, but as a group, they are a rough bunch to say the least.  Since 2000, there has been 656 arrests for everything from murder to rape.  It is no wonder that the NFL is currently hemorrhaging viewers.

I have never been an enthusiastic sports fan, but if there has been any sport that I have followed to a degree, it has been the NFL.  For the record, they have just lost one more lukewarm fan.

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IT IS NO SECRET… that the product that we provide is not universally revered as the most economical and efficient way for a General Contractor to manage the liability and potential default of the major subcontractors on their projects.  The issue has always been what is viewed as the time and efficiency of a surety company’s ability to resolve a claim issue, particularly on the part of a critical path subcontractor on the project.  This perception or reality (depending on which side of the isle you are on) has led to a competitive product called SDI (Subcontract Default Insurance) that has had a tremendous impact on the revenue stream of the surety marketplace.

The Travelers, as well as a couple of other smaller sureties, have finally said “enough is enough”.  They have listened to the concerns of the General Contractors as it relates the claims handling process and Travelers has made the decision to provide a Subcontract Bond form that greatly shortens the time and predictability of the claims handling process.  Key areas of the new form are:

  1. Defined notice and response times on behalf of the surety. The surety has ten (10) days to request details/information, and once the information is fully received, thirty (30) days to advise the obligee of the action they wish to take.
  2. Requiring only a Declaration of Default by the obligee and not both a Declaration of Default along with the Termination Notice in order to trigger the engagement of the surety. This is different than the AIA form which requires the GC or Prime Contractor to go all the way to the termination before the surety is engaged.
  3. Allowing the GC to do certain things to mitigate the sub’s work in a default situation, and recover for these costs should the surety find the subcontractor in default.
  4. Also, allowing change orders (up to 10% of the subcontract) to automatically increase the bond amount, addressing something that is often misunderstood.

As a General Contractor who would prefer to utilize Subcontract Bonds rather than SDI either on all their projects or on specific subcontractors, Travelers Subcontract Bond form should be a requirement as far as I am concerned.  Until this form has been vetted out by the sureties that are writing the subcontractors, there may be some pushback because it does put a greater claim burden on the subcontractor’s surety in case of a potential claim.  I think this is the very point and the very issue that we need to deal with if the surety companies are going to maintain their clients rather than lose them to a SDI provider.

If you have any questions on this bond form, I would be happy to discuss it with you.  If you desire a copy of the Travelers bond form, please advise me and I will be happy to send it to you.

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THE SOUTH FLORIDA CONSTRUCTION MARKETPLACE… continues to be the best construction market in the Eastern United States and one of the best in the country.  Although we may see some flattening of the condo market in the next couple of years, we anticipate that even that market will be back in full force by 2019 to 2020.  In the meantime, the construction market, as a whole, continues to be extremely vibrant, particularly the infrastructure marketplace.  All of us who travel the South Florida roads and highways are well aware of the fact that we need more public transportation and we need significant improvements in our highways to accommodate the continued growth in our communities.  It is highly unlikely that any contractor in the South Florida marketplace will want for work in the next five (5) years.  As a matter of fact, the greatest challenge that most contractors will have will be to accommodate the financial organizational and employment issues associated with the amount of work available to them.  In line with that, contractors who work in the public sector or who need those occasional bonds in the private sector, maintaining a single and aggregate bonding line of credit that will accommodate their needs is an essential element in allowing them to grow.  Nielson, Hoover & Company is the largest surety broker in the Southeast United States and it is not by accident.  We deal on a daily basis with 70+ different sureties, we have the greatest number of account executives who specialize only in providing surety credit and we have, by far, the greatest base of customer service representatives (CSR) that deal on a daily basis with the service and clerical needs of our accounts.

I get the fact most of you have a relationship with an insurance agent and at one level or another with a surety market.  I can assure you, that given the opportunity, we can improve your entire surety credit package.  When we sit down together, we will be addressing your single project capacity, your aggregate capacity, your indemnity package and the premiums that you pay.  It would be hard to argue, that based upon our size financially and organizationally, that anyone does it better than we do.  I would like the opportunity to prove that to you.  Please give me a call, and depending on where you are domiciled in the State of Florida, I will connect you with one of our surety bond specialists who will review your current program and allow us to compete on your business.  You compete every day to the business that you get, there is no reason that your insurance agent (surety broker) should get a free ride and not have to compete for your business.

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PARTING SHOT:  Interesting Tidbit.  Hmmmmmm.

The President-elect won the election with less than 40% of the popular vote but had the majority of electoral votes.  The Republican Party had put forth a candidate to win several crucial states that could swing the electoral college.  The election was a bitter one with the Democratic Party fractured between two candidates.

The incoming President received so many death threats that he chose to arrive in Washington in secrecy.  The security for the inauguration was the tightest ever with troops stationed in buildings throughout the day.  This was an unprecedented amount of protection for any President-elect.  Many members of Congress chose not to attend the ceremony.

Despite all of this……Abraham Lincoln was sworn in as our 16th President on March 4, 1861.

Charles J. Nielson

CJN/cb

Nielson, Hoover & Company Welcomes Don Bramlage As Surety Bond Specialist in the Orlando Office.

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Miami, FL – Nielson, Hoover & Company, Inc., America’s number one provider of surety bonds, is proud to announce the addition of Don Bramalage to the Oralndo Office of Nielson, Mosholder & Associates.
Don is an experienced professional with over forty years of experience in the Surety Industry. Before joining NHC, Don was Vice President of a large insurance and bonding agency located in the South East. After graduating with a Finance Degree from the University of Cincinnati, and an MBA from Xavier University in Cincinnati, Ohio. Don launched his surety career with Cincinnati Insurance in 1977. Throughout his career, Don has built a diversified book of business, including general contractors ranging in size from middle market to multi-million dollar firms, to all the trades involved in the construction industry. He is a licensed agent who has established valuable relationships with excellent contractors and outstanding sureties, as well as CPA’s, insurance agents and attorneys.

“Don’s primary responsibilities at NHC include managing his existing accounts, but he has an uncanny ability for bringing in new business,” said Dave Hoover, President of Nielson Hoover Group. “He will work closely with various accountants, bankers and surety underwriters to successfully provide the right products to meet his customers’ needs.” He continued, “Don’s clients have gained valuable insight and guidance thanks to his combined insurance and surety background. His knowledge and experience make him the perfect addition to the Nielson, Mosholder team.” Mr Hoover also stated, “I was immediately impressed with Don’s knowledge of the industry and his dedication to his clients. Their 100% satisfaction was apparent right from the start,” he went on to say.

In his free time Don enjoys golf, fishing, scuba diving and spending time with his wife of 30 years and two daughters. Originally from Ohio, he now lives in Ponce Inlet, Florida with his family.

About Nielson, Hoover & Company, Inc.

Nielson, Hoover & Company is America’s number one provider of surety bonds. They bond more projects than any other agency. Throughout the years, NHC has developed a deep understanding of the surety industry. This knowledge allows them to provide superior services and a comprehensive solutions way to maximize your bonding capacity with the best terms and conditions. They have the capacity and experience it takes to support the largest national contractors and the hometown knowledge and personal service to ensure mid and small size contractors receive the same attention and expertise. NHC does business with over fifty sureties which ensures you will be matched with the surety that is best for your particular need. As your needs change, they have the market that will best match your changing needs. Whether you are out growing your existing relationship, or have gone through some difficult times, they can help you.

Nielson, Hoover & Company is the largest independent surety agency in the South East with offices in Miami, Palm Beach, Orlando, Tampa, Atlanta, Savannah, Charlotte, and Asheville. They have an extensive network of more than 20 experienced surety bond specialists. Their producers average over 20 years each in the industry with their customer service representatives averaging nearly 15 years.

To learn more about how Nielson, Hoover & Company can help you obtain the best rates and most favorable terms and conditions, please visit www.nielsonbonds.com or call 305.722.2663..