“One of the things that I said to my supervisor yesterday, if you notice someone that is sick or if you know someone that is sick and is being kept quiet, don’t keep quiet, call me to take action. If you have to stop the job, just do it and stay calm. Because this is not a secret. It’s not something that should not be a secret for anyone. You know, we have to tell them we have to speak out loud to be able to be in control.”– Victor De Jesus, L&M Group, LLC
In episode 1 of Build With Billd, Jesse Weissberg hosts Victor De Jesus, of L&M Group USA, LLC, who works as a tile installation contractor in Miami, Florida. Jesse asks Victor all about how he’s handling the impacts of COVID-19, including how he’s communicating with his clients, crew, GC’s suppliers, and more.
Jesse: Hi everyone, this is Jesse Weissberg, and thanks for listening to this episode of bill with Bill. Today we’re gonna talk about Covid-19 and how it’s impacting construction and the way contractors can protect themselves through these uncertain times. I’m sitting down here with Victor De Zeus, the owner of L&M Group USA. They’re a flooring contract In South Florida. L&M is one of our top customers and I’m really interested to hear his thoughts and suggestions around really attacking the next few months. So with that, I’m going to ask Victor to do a quick intro here.
Victor: Hi, how are you? Hi to everyone. As he said, I’m Victor De Jesus. I’m the owner of L&M Group USA in South Florida. We are subcontractors basically for most of the top GC’s here in the area and currently expanding through Orlando and Naples, all the West Coast later this year. Unfortunately, the COVID-19 had been on the way for a little while. So let’s hope the best and continue our progress.
Jesse: I agree. I agree. Well, thank you for that. I know. In Florida they recently announced the shelter in place mandate so this is kind of you know, hot off the press. But how has coronavirus impacted your business thus far?
Victor: Well, at the moment our construction in Florida is essential business. The government has said construction is an essential business. So, we are not impacted for the moment since everything is going on, you know, construction is ongoing. I have my concerns on that because if it is something that will move around very quick and between people. Construction sites are places where there’s a lot of people th. So I’m a little bit concerned there but we are ongoing. We have two projects right now and we’re working right now.
Jesse: So what are your major concerns, obviously for the safety and health of your workers?
Victor: Everyone! My workers, and all the workers and everyone in the project because you know there are somethings that you don’t control you know there’s people that believe this is important there’s a lot of people that think we should stop. So there’s a lot of opinions in the project. So basically, I go very early in the morning and I say to my supervisors and my crew guys you have to, you know, wash your hands, you have to keep distance, you have to if you’re going to eat, wash your hands, make sure the food is contained and everything. This kind of stuff that I know is important for them to have on their mind. This important they have got to take care of this.
Jesse: Yeah, so that’s, that’s probably a really good example of one of the changes you’ve you’ve implemented since the outbreak is there anything else specifically that you’ve changed with how your team is operating?
Victor: Basically it’s more about being conscious with them and they remember that they have to be conscious of things and also to keep distance. I would say one of the things that I said to my supervisor yesterday, if you notice someone that is sick or if you know someone that is sick and is being kept quiet, don’t keep quiet, call me to take action. If you have to stop the job, just do it and stay calm. Because, you know, this is not a secret. It’s not something that should not be a secret for anyone. You know, we have to tell them we have to speak out to be able to be in control.
Jesse: Yeah, I think that that’s a really good point. And that’s definitely the right approach. So you’re, I assume you’re kind of back-office team is now working remotely.
Victor: Yeah, basically my estimators on the office team are all working either from home or you know, their space. Nobody is in the office.
Jesse: Yeah, yeah, that That makes sense. So have you seen any project delays thus far?
Victor: No as of today, right now no, because we are an essential business here and we are going. There are few sites that have closed, none of mine, but I know a few sites that have closed because they made a decision to close. But as of today, we haven’t been delayed. We are working as much as possible to get the advantage of the time that we have.
Jesse: And in Florida is all construction deemed essential?
Victor: Essential? Yes.
Jesse: Ok. Because I know in other states depending on the type of construction, so for example, utility work, government work, telecommunication, you know, that will be deemed essential, but then there are other types, like residential construction that you know, is indeed essential, but it doesn’t sound like that’s taking place yet in Florida.
Victor: Well, not really. There’s, there’s for example, there’s one project where the client told me let’s begin next week and then the condo association, you know, put a statement on it all we have stalled work here until further notice. So basically, it was the condo association who controlled and said that you know, we don’t want masses in the condo or something like that, but we are essential business employees. So basically all my I would say one-hundred percent or 99% of my years are commercial jobs. So, I am working.
Jesse: How has it affected your bidding, you know, upcoming jobs that you were looking to bid?
Victor: I will say right now, you know, I have over 15 projects that I’m biding right now. And it’s not stopping biding because it’s still important here. The COVID-19 is something that you know, we cannot control or we cannot see, we don’t even know when it’s gonna stop. That’s concerning. And besides that, the economy in the US is good. You know, if you take all the COVID-19 out, the economy in the US is good. And I was predicting that 2019 was good until 2021, but we don’t have control of this. I know that once we get out of this. The economy will go back, you know, back in a matter of, I will say a month.
Jesse: Yeah. I think that’s what we’re all hoping for.
Victor: That is what I feel.
Jesse: Let’s, talk a little bit more about your upcoming bids. One area that we could see affected, you know, throughout the remainder of the year and maybe even beyond, is on the material side. You know, the availability of materials, the price of materials. Have you seen any impact there? And what do you think is going to transpire?
Victor: I just got about I would say three hours ago an email from one of my suppliers that they’re sending materials, you know he had a price increment is it was not a big thing but it had already an impact there. What I am basing and telling my clients last week on looking into this situation that most of the material, tile or any other you know material that is coming from outside US, is that we don’t know what will happen. For example in Europe we don’t know you know, there’s a supplier Tony Victor, I don’t know when to put the order, because when I put the order, I will not know how or what delay I will have there because we don’t know. At least their plant in Europe is open. So we don’t even know what’s going to happen. Will we have a delay? Probably, yes, but we don’t know until those orders are processed and gone. No, at least here for the moment, I know that I got a pricing terminal selling material, not a big deal, but it’s a price increment. And I know I’m pretty sure that prices will go up as soon as this finishes. There’s a lot of people that need to recover the money back, then they’re going to price, you know, they’re going to increment the prices.
Jesse: So right now, are you just assuming those price increases, as you’re, you know, bidding the 15 projects that you referenced, you’re kind of layering in those additional costs?
Victor: Yeah, what I’m doing right now, is what I’m building based on the information that they provided me. And based on that, I price them and I am very specific that it is 30 days valid. After 30 days valid, I’m telling them, you know, it’s up to the supplier to tell me what will be the anchor because we don’t know, we don’t know, either the price increment or maybe it’s not a price increment and it will a be delay thing because material is not coming here because wherever the reason so yeah I’m being very specific on that part for one to be aware.
Jesse: Yeah all right we’re gonna or to slightly switch gears. You know prior to this outbreak you know your contract that you negotiate and execute with the general contractor, did those contracts typically cover pandemics or situations like this?
Victor: As of today, none of the contracts that I have signed that I have read all of them I haven’t seen something like this. This it’s something completely in my opinion, new. They are more specific in the natural disasters because we are in Florida we get Hurricanes, and some you know, storms that will impact and always, you know, if they don’t hit Florida, they’re very close and there’s more delays. But this pandemic thing I haven’t seen.
Jesse: Do you think it’s necessary to make changes or think through, you know, changes in the future when it comes to your contracts?
Victor: I will say that they will be modifying. I’m not an attorney, but I know that it will be modified because it’s something that impacts in some way or the other it will impact a project. Maybe it doesn’t impact me, but it maybe impacted another person or another supplier and then if they at the same time, you know, they have to be conscious that this is not something that we control. If we have a delay it’s because you know, we have a mandatory stop order that we need to stop so it should not be a problem. Either for the year contract or subcontractors, the owner should not be upset because it’s not something that we are in control of.
Jesse: Right. Right. I have read about some situations where GC’s have since the pandemic isn’t specifically called out in the contract with their subs, you know, ultimately it is a gray area who’s on, you know, who’s on the hook for, you know, carrying certain costs and not delivering and, you know, etc, etc. And I know that could become a pretty sticky situation, especially as you’re trying to maintain that relationship with the GC.
Victor: Yeah, that’s, that’s the main part of all this. That’s the thing that I am thinking in my mind, it’s my relation with the client, you know, I’m just not the person that will have one client one time and that’s it. I am the person I likes to build a relation, like the old days, you know, to grow with them and move with them, that’s the way I see the business. So you know, it’s something that we, at least me, a subcontractor, we are not in control of. We work as much as possible. Right now I have my crew working there on stop every day working as much as we can. On the weekend, I told them may rest Saturday and Sunday rest take time for you, you know, what are you need to. Because I know this is something that is important.
Jesse: Have you have you seen any changes in terms of the communication and the conversations you’re having with your clients yet?
Victor: Well, yeah, basically, nobody knows what’s going to happen. You know, we can plan for now, but we don’t know. We don’t know. We don’t know when we can start the process of maybe our hold. There’s a lot of projects that I bid and my clients have been awarded on right now their on hold, you know, that’s it. I will say, probably than more than three or four of our wider projects that I bid for, that they are awarded and I am talking about big projects. You know, we don’t know it’s an absurd thing. We’re just getting ready not stopping bidding, giving prices for them to organize and put the budgets together and then hope for the best you know, once we have the green light back to that project, we go back.
Jesse: Yeah, yeah that i think that’s that’s the right mentality. We talked about taking it by day-by-day right now and sometimes it’s hour hour depending on what’s going on, like the filter in place now in in Florida. So what are some of the ways that you’re preparing your business for when everything gets back to normal? I know you talked about you’re continuing to bid on projects and you’re keeping all the wheels in motion there. What are some of the other things that are kind of on your radar?
Victor: Basically, um, you know, it’s a good time to organize myself, my people, and get my team on the office side to be organized. It’s nonstop bidding, you know, there’s clients out there that they want us to give them feedback, to give them pricing and give them all the support that they need. And that’s what we’re doing and we will do it, you know, until we can’t do it.
Jesse: Yeah, yeah. Do you have any additional advice for other business owners out there just in terms of how to attack the next few months?
Victor: I will say, at least on the part of the management side in the office, I will say don’t stop your progress in the office. Sometimes having people working from home is more productive, they’re safe. They’re you know, they don’t have to drive. They don’t have to go out and they’re not scared about being out exposed to the problem. So being in the house for a lot of people that work in the office is good on that part. They’re safe. They’re with the family, and they can be productive. And at the same time, being productive helps the entire team for example, the accounting continues the payments because that’s something that you know, that we are working, but we don’t know they’re gonna get paid later next month, to be honest, I hope. Yes, but we don’t know until the pay obligation is accepted and approved and they release the checks, but it’s something that the general contractors, that have that part that is the one that pays the subcontractors do not stop working, do not stop working. Because you can work from home you can do all this stuff from home management things you know, and keep the ball rolling. And it will help all of us subcontractors be productive and at the same time knowing that okay, there’s good communication there. They will pay me in or don’t that’s helpful for us to clear our mind and move forward with them. Remember subcontractor is the smallest one in the project. So basically, we need the full support from the GC. And my advice with them will be you know, don’t forget your people. Make sure they save the sites, your construction sites needs to be ready. Wash down stations, you know, distance from everyone. You know, keep the rule if you’ve seen somebody that is sick, speak up, raise your hand, don’t be quiet, you know, and if you think that you need to close your project, don’t think about it. You know, it’s you have to talk to the owner. You have to close it. It’s you know, we have to in life, we have to be honest. We have to raise our hands and say we need to do this even if the decision is hard. It’s easy, difficult, whatever you have to make.
Jesse: Yeah, and I think that’s one of the underlying themes probably throughout our conversation today is is on the communication front you know, it there’s a lot of uncertainty but the best thing we can all do is stay in communication and, and have those very honest, frank conversations with with each other and help each other stay abreast and up to the moment and and it’s just a matter of when right you know, we’ll there will be a light at the end of the tunnel here. No one knows when that is. We will get there.
Victor: Yeah, you know, besides all these negative things that we see in the news and everything I’m just giving you know, positivity and reality. This is something that is happening that we cannot control. We don’t have the cure, or nobody has a cure as of now for it. We have to take the precautions and be positive because there will be one day that we will pass all of this. We don’t know when, but we will. And now we have to say positive, it’s the only way that we can survive and be relaxed. If you don’t, you have a heart attack. So you have to take it easy.
Jesse: Yeah, agree. Well, Victor, really appreciate you joining us here today. I think this was super helpful to understand how you’re thinking about this as a business owner and thinking about this in terms of your employees, and then the other members of the construction, you know, ecosystem here. So, really appreciate your time. And I wish you the best of luck and stay healthy and safe.
Victor: Thank you, thank you for the opportunity. Thank you for all your support as well. And because you’re part of a team, you know, I have you guys on my team and thank you for the support and your time. Anytime you need me and you just let me know I will be there.
Jesse: Thank you. Appreciate it.
Victor: Stay Safe.
Jesse: You too.