Every Friday, we select a few articles from the week that we think are worth your time as a construction financial manager (CFM). We look for compelling articles not only about financial topics, but about business, technology, and life, that challenges you to think about your role as a CFM in different ways. We’d love to hear from you about how we’re doing, and to have you join our community by subscribing to receive this weekly post by email. Follow #CFMReview.
Tishman Ordered to Pay $20 Million in One World Trade Center Construction Payment Fraud
Tishman Construction Corporation, a construction management company that worked on the One World Trade Center project in New York City, admitted to over-billing clients more than $5 million, over the course of a decade. Tishman charged for extra hours of work, at hourly rates that exceeded their contracts.
According to a Brooklyn U.S. Attorney, Tishman’s overbilling was “a systemic practice.” This was no mistake.
Tishman also defrauded customers on projects at the Plaza Hotel and the Javitz Convention Center.
This just goes to show, you can never be too careful with your bookkeeping. Construction financial managers have a tough enough time as it is collecting payment without running into illegal activity. Be vigilant!
Fed Raises Interest Rates: What It Means For Construction
The Federal Reserve increased interest rates last week for the first time since 2006. For the non-economists out there, this means that it’s going to cost more to borrow money. That means that lending will likely slow down.
But fear not (yet), the Fed’s increase is a mere 0.25 percentage point increase. Economists have said that they don’t expect such a small increase to impact housing or building markets.
Still, given that it’s been nearly 10 years since the last rate hike, this is a historic change. Moreover, the Fed plans four rate increases in the next year. As borrowing becomes more expensive, cash becomes every more important and valuable to construction businesses. The rate increase is also likely to affect mortgage rates, which influence home building.
Happy Holidays, and May The Force Be With You!