President's Blog

Congratulations. You landed a large lighting order.

But before you celebrate, be sure to examine the customer’s purchase order to avoid any unexpected liabilities.

Last fall, NAED launched an investigation into the terms and conditions distributors may wittingly or unwittingly be agreeing to by simply accepting an order without reading the fine print at the bottom or on the back.

Some distributors choose to turn away business rather than accept these potential liabilities. Others learned the hard way that seemingly standard fine print has broad and potentially very costly consequences.

No one should miss an opportunity – or put their business in jeopardy – because the terms and conditions are too complex to manage.

Yet that’s exactly what’s happening, and that’s exactly why the NAED Education & Research Foundation’s Channel Advantage Partnership provided the financial support to explore this important issue.

Those results are now available in the “Terms & Conditions: Reading the Fine Print” whitepaper, which offers an array of examples and best practices from our legal researcher Bernie Heinze.

In the whitepaper and video below, Bernie gives us some red flags to watch for. Among them: 

• Consequential damages that compensate for damages beyond the price of equipment, such as lost profits from lost production or workers’ compensation costs for an injured employee;
• Indemnification clauses that call for you to protect and legally defend the other party from liabilities that may be your fault or the other party’s;
• Pay When (or if) Paid provisions that delay payment – or call off payment entirely – until the contractor is paid; and
• Vague “substantially completed” language that postpones enactment of the warranty period until a particular stage in the project.

I want you all to get the most out of this initiative. Download the whitepaper from the NAED Learning Center, and be on the look out in Newsline for expanded resources, including webinars and updated research.

We’re also actively involved in the ConsensusDocs effort, a coalition of contractors, suppliers, designers and owners agreeing on a variety of contract templates that are great first stops when negotiating contracts. Pay special attention to the 702 Standard Purchase Order for Commodity Goods. We helped develop that template for the coalition and think it will be especially valuable to your business.

This is a critical, complex issue for our industry. It impacts our relationships. The way we grow business. And the way we solve problems. Protect yourself by staying informed.

Let’s be honest: The electrical distribution industry is a complex, abstract concept for the general public – not to mention our representatives in Washington – to grasp.

Yet every day, Congress makes decisions that impact our business.

We can all help lawmakers understand the effects of their regulations and policies on our industry by cultivating stronger relationships on Capitol Hill. NAED is making it easy for you to do just that with the 2012 NAED Congressional Fly-In on July 11-12.

The Fly-In is a cost- and time-effective way to gain valuable face time with your representative. We’ll do the legwork for you, in terms of booking meetings with your elected official, gathering background and providing advocacy training. You just need to show up.

We’re making it even better for you by extending the early bird deadline to May 11. Save $75 by registering today.

The voice of our industry grows louder when we join forces – and with dynamic issues like LIFO, the Estate Tax, and EPACT energy incentives all vitally impacting the way we do business, we must make our positions heard. Join us as we rally for the industry.

As the industry recognizes Electrical Safety Month, make now the time to revisit ways we can help our employees and contractor customers stay safe when working with electrical equipment.

When distributors think about safety, their minds often turn to counterfeit products. The Consumer Products Safety Council has recalled more than a million of these electrical products in recent years. Yet, despite our growing experience in this area, counterfeits remain extremely difficult to recognize.

Here are a few things you can do help avoid counterfeit hazards:

• Scrutinize the product, the packaging and the labeling. Look for a certification mark from an independent testing organization, such as Underwriters Laboratories, and the manufacturer's label. Trademarked logos that unusual or slightly off may also signal a counterfeit.
• Trust your instincts. If the price is "too good to be true," it could be because the product is an inferior and unsafe counterfeit.
• Be extra vigilant when buying from an unfamiliar source or an online retailer. Know who you’re doing business with and check with the testing labs to ensure they are legitimate. Contact the brand-owner manufacturer if you have any doubts that the product is genuine.
• Finally, report safety-related incidents to the manufacturer or the U.S. Consumer Product Safety Commission.

Counterfeiting is one of the biggest safety challenges our industry faces, but it’s certainly not the only issue. Today’s global economy, paired with emerging technologies in electric vehicles, renewable energy, and smart automation, continues to impact and evolve standards. Stay current on electrical safety with these tools:

• National Electric Code books: NEC revisions came out last year. Are you operating up to code? NAED members can save $29 off the list price by purchasing them through NAED. Get the latest edition today.
• NAED Learning Center: Take a course on OSHA Safety Standards, enroll in our Electric Product Education Course (EPEC) program or revisit our whitepaper on “Theft & Fraud in the Electrical Distribution Industry” all available through this convenient, online training portal.
• ESFI’s “How Do You Know?” resource: This workplace safety initiative from Electrical Safety Foundation International features videos, self-assessments, best-practice tips and more to help employees stay safe on the job.

NAED is committed to providing you with the resources and training you need to operate safely and successfully. Do you have a safety trend you’d like us to explore in more detail? Leave your suggestion in the comments below.

After months of preparation, the 2012 NAED National Meeting will be here on Wednesday.

For many leaders in our industry, attendance at this annual event is not an option. It's a must because it affords them the rare chance to catch up on key trends and issues as well as colleagues and prospects all at once.

We've worked hard at NAED to make sure your time in Washington D.C. is well spent by packing a lot of education, discussion and networking into three days.

You can see our schedule has a ton in store, from timely keynotes and to deep-dive think-tank panels to lively discussion on relevant topics like ESCOs, talent management, technology and the challenges of fine-print contracts.

As you're attending the sessions, you won't want to overlook these meeting aspects as well:

• The chance for face time. B2B booth sessions and peer-networking groups are great venues for catching up with familiar contacts, while getting to know new ones. Clear some afternoon time before sightseeing excursions to attend one of these meetings.
• The colorful name-tag ribbons. This is your chance to mingle with experts and professionals of all different backgrounds. From first-time attendees to counterparts in sister organizations -- and even colleagues from overseas -- this meeting brings together many perspectives. Review our attendee list , and be on the lookout for special ribbons tacked on to attendee name tags.
• The free food and drinks. You come to the National to get smart on the latest trends. But you also come to network! Be sure to stop in the breakfast, cocktail and desert receptions hosted by NAED's allied partners  and associate members. They are not to be missed!
• The moments of tribute. Once a year we take time to celebrate the hard work and contributions of our industry leaders with the bestowing of our NAED Annual Achievement Awards. Join us for this special closing ceremony-turned-bash featuring live entertainment from Bruce In The USA - The World's Number One Tribute to Bruce Springsteen and the E Street Band.
• The possibility of coming back. If the spirit of the nation's capital -- paired with our government affairs education session -- has you charged for change, come back to D.C. with us this July! The 2012 NAED Congressional Fly-In is your ticket to meeting with key lawmakers and their staff on issues that impact your business.
  

Look forward to seeing all of you this week. And be sure to drop me a line afterward, letting me know how your experience went.

By Ed Orlet, Guest Blogger 

According to the Washington Post’s Ezra Klein, there’s a new word in the Capitol Hill lexicon: Taxmageddon. At the end of 2012, a number of tax provisions are scheduled to change, expire or go into effect that could have an unknowable impact on the slowly recovering economy. These provisions include:

• Increase in the top marginal estate tax rate from 35 percent to 55 percent
• Increase in individual tax rates
• Expiration of the payroll-tax holiday
• Increases in tax rates on capital gains and dividend income

A number of these provisions are routinely extended at the last minute. Cuts to Medicare providers have been an issue since they were first enacted in 1997, but they have never happened. Policy makers call this the “doc fix,” which seems to indicate they never actually plan to cut the rates.

Congressional Republicans are working to avoid the cuts to military spending they agreed to in the recent debt ceiling debate. Some are estimating the debt ceiling will need to be raised again before the election, but that’s a crisis unto itself. Take a look at this chart via Klein’s Wonkblog from the Committee for a Responsible Federal Budget.  It details the changes scheduled to lead to Taxmageddon.

If you haven’t noticed, this is an election year. With divided government in DC, any progress towards averting Taxmageddon prior to the election is, let’s say, unlikely. Add to this “budgetary free-for-all” the United States’ recently earned dubious distinction for having the highest corporate tax rate on the planet, and you can see that the stakes of this debate will be very high.

While many policy makers -- including the president -- have called for cuts to the corporate tax rate (and elimination of “loopholes” read: deductions), Profit Planning Group estimates that more than half of NAED member companies function as “pass-through entities.” So cutting the corporate rate, raising the individual rates and limiting deductions will actually amount to a devastatingly large tax increase on pass-throughs.

Another variable for distributors to worry about in tax/budget reform is LIFO repeal. Repeal was once again included in the president’s budget blueprint, and it will be in play during the coming tax fight. Some policy makers paint LIFO as an “oil company tax break” since energy companies hold the greatest amount of LIFO reserves. Unfortunately, electrical distributors must avoid being collateral damage in the war against Big Oil.

Election day is November 6. The U.S. House of Representatives has scheduled 16 legislative days for its lame-duck session before the end of the year and Taxmageddon. That’s not a lot of time. If you thought the debt ceiling debate was the height of hysteria, you ain’t seen nothin’ yet.

Join other NAED members as they take their voices to Washington during the 2012 NAED Congressional Fly-in happening July 11-12. NAED staff will help prepare you with scheduling, training and background information. All you need to do is register and attend.

Ed Orlet is vice president, NAED Government Affairs. Contact him at governmentaffairs@naed.org.