More on "Home Star" Tom Meyers article

Tim McElwain

from September issue of Contractor Magazine:



WASHINGTON - Being a reputable, qualified and hon­est contractor is always tough. Let's add the current economy. New construction is nearly frozen. People are hanging on to what they own.



 

The National Association of Realtors said, "Sales of previ­ously occupied homes plunged last month to the lowest level in 15 years." According to the Associated Press, "The drop in July sales was led by a 35% plunge in the Midwest. Sales were down 30% in the Northeast, 25% in the West and 23% in the South."



 

This seems to indicate people are putting money into their homes. That's not the case. Mortgages, equity loans, and second mortgages are tougher to get. Simply, people don't have the money for re­pairs and improvements.



 

At first glance Home Star looks like a solution to the cash problem. So it seems, but it in­cludes what should be scary words for a contractor - "ac­credited contractor" and "certi­fied workforce." Here's why.

 

 

 

Under the current version of Home Star (part of Senate Bill 3663, "Clean Energy Jobs and Oil Company Account­ability Act of 2010"), to qual­ify for the Gold Star program, a contractor must be an accredited contractor with a certified work- force. What exactly does that mean? According to Home Star: "Accredited contractor means a residential energy efficiency contractor that meets the min­imum applicable requirements established under subsections (a) and (b) of section 3004."



 

"Certified workforce" is defined as the term 'certified' means a residential energy construction workforce in which all persons performing installation work in the areas of building envelope ret­rofits, duct sealing, or any other additional skill category desig­nated by the Secretary of Labor, in consultation with stakehold­ers and the Secretary of Energy, are certified through an existing certification that covers the appropriate job skills under:



 

 (A) an applicable third-party skill standard established by



 

1. BPI

2. by North American Technician Excellence

3. by the Laborers' Interna­tional Union of North America



 

 (B) and applicable third-party skill standard established in the state in which the work is to be performed, pursuant to the program operated by the Home Builders Institute in connection with Ferris State University, to be effective beginning on the date that is 30 days after the date notice is provided by those organi­zations to the Secretary that the program has been established in the state unless the Secretary de­termines, not later than 30 days after the date of the notice, that the standard or certification does not equal in quality to the stan­dards and certifications described in subparagraph (A); or



 

 (C) other standards that the Secretary shall approve not later than 30 days after the date of submission, in consultation with the Secretary of Labor and the Administrator.



 

 Confused yet? If not, read on.

 

 

Remember the reference to Section 3004? Section 3004 lists the contractor qualifications for Silver Star and Gold Star.



 

Gold Star contractors must meet the requirements for Sil­ver Star and “(B) is accredited by BPI;" or “--- under other standards that the Secretary shall approve ... “ and it drones on several more paragraphs describing the requirements and processes to qualify.



 

At this point, it is fair to say that to qualify for Gold Star a contractor must be a BPI Ac­credited Contractor with a BPI certified workforce. What does that mean to a contractor?



 

Under the bill, an accredited company must demonstrate con­tinued compliance to the BPI require­ments to maintain its accredited sta­tus, and accredited companies must remain in compliance with BPI's Qual­ity Assurance Program require­ments in order to qualify for renewal consideration.



 

To apply for or to renew BPI accreditation all contractors must pay an annual fee con­sisting of an accreditation fee and the quality assurance fee. The quality assurance fee is determined by the company's gross income from BPI-stan­dards related work. The table of fees goes from $1,000 to $7,000 and up. To renew ac­creditation, a contractor must pay BPI $1,500 to $7,500 and up.



 

 

Beyond the money, there are some other requirements. A BPI Accredited organization shall:

 

 

·        Participate in the BPI Quality As­surance Program. 

·        Employ BPI Certified profession­als.

·        Provide certain records or finan­cial data that can substantiate BPI Stan­dards-related work volume to BPI upon request.

·        Accredit each business location.

·        Employ a minimum of one full­time building analyst and one full-time specialty designation according to the work performed as required. The same individual can hold both these desig­nations. 

·        Must have an e-mail address and Internet connection.

·        Must agree to use the courts in New York.



 

The part about a "certified work­force" requires that all employees be BPI certified in any covered specializa­tion they perform.



 

Additionally, a BPI Building Analyst is required at each company location. For example, if you have branches in two cities that provide HVAC services, you are required to have your workforce certified in HVAC and one BPI Building Analyst at each branch.



 

 

There are the two options for BPI Certification: with classes or without classes. Although BPI does not require classes, it does recommend them. Classes are available through BPI Af­filiates at $1,595-$2,150 and up (not including employee wages, travel ex­penses, lost time, etc.).



 

The "without class" direct examina­tion option requires a written exami­nation and a field examination, both provided by BPI accredited proctors. Price: $500 plus.



 

To qualify for Gold Star, a typical three-truck, three-technician contrac­tor running an HVAC business out of the same location would pay:



 

Accreditation fees: first year $1,500, second year $2,500-$5,000 (assuming a gross income of $750,000-$2 million).



 

Certification fees: initial for three technicians plus the mandatory Build­ing Analyst certification.



 

Exam only: $2,150 ($550 x 3 + $500 x 1 [Building Analyst]).



 

Class option: $6,780 ($1,695 x 4).



 

Renewal (CEU credits + exams):



 

Please note this does not include cost of obtaining BPI-approved CEU cred­its. Thirty CEUs each: $1,050 ($350 x 3); 10-29 CEUs each: $1,500 ($500 x 3); less than 10 CEUs: $1,650 ($550 x 3).



 

During the expected two-year life of Gold Star, the example contractor must pay BPI (and its affiliates) between $ 7,200 to $14,930 in order to be eligible.



 

The bottom line is, after paying to become a BPI Accredited Contractor with a BPI Certified Workforce a con­tractor has the privilege of adding an additional 30 days (some say “30-days plus") to your cash flow timeline. Can anyone see problems with Home Star as written?



 

TOM MEYER

Director of Government & Professional Relations, ESCO Group