February 6, 2004
HEALEY: CONSTRUCTION CHANGES KEY TO SCHOOL BUILDING REFORMS
WALTHAM – Joined by municipal leaders and public finance experts, Lieutenant Governor Kerry Healey today touted construction reform as essential to Governor Mitt Romney’s proposal to eliminate the staggering backlog of school building projects.
“When we reform our public construction laws, the real winners will be the students and teachers across the state that will benefit from teaching and learning in new schools,” said Healey, speaking at the John W. McDevitt Middle School. “Public construction reform is not simply a cost-saving measure, it is a smart investment in our children’s future.”
By reforming the state’s construction laws, Healey said the Commonwealth will be able to move forward more quickly on the 420 school projects that are currently waiting state funding.
With his Fiscal Year 2005 budget, Healey said the Governor proposed a series of construction reforms that will save as much as 30 percent on building costs statewide. The proposal translates to annual capital savings of at least $200 million for the state as well as millions of dollars more for cities and towns, which will see school construction costs drop dramatically as a result.
Jeannette McCarthy, Mayor of Waltham, welcomed Romney’s proposals: “It is important that we pass the necessary reforms including construction reforms that will allow us to correct the current problems with the School Building Assistance program. If the Governor’s reforms are accepted, Waltham will receive around $110 million in reimbursement for our eight school projects.”
Romney’s proposal calls for state and municipal governments to have the freedom to use alternative procurement and delivery methods on particularly complex construction for projects valued at more than $5 million. This includes switching to a design-build process that greatly reduces construction time. Massachusetts is one of only five states to prohibit using a design-build process.
To hold contractors responsible for cost overruns, Romney’s proposal also allows for the use of a construction manager at risk.
In addition, the plan proposes the elimination of filed subcontractor bidding. The current system prevents direct negotiation between contractors and subcontractors, a standard procedure in the construction industry. Far too often, filed sub-bids cause needless delay and foster adversarial relationships between contractors and subcontractors, which typically results in cost overruns due to change orders and claims.
The Governor’s proposal also includes a requirement for municipalities to hire a project manager for all projects valued at more than $5 million.
“Some of the worst abuses of the Commonwealth’s public construction laws occur at the municipal level, because local governments often lack the expertise to oversee effectively school and other complex construction projects,” said Healey. “We are extremely confident that the savings stemming from professional management will far outweigh any cost imposed by this requirement on cities and towns.”
Nearly 25 years ago, the Special Commission Concerning State and County Building, known as the Ward Commission, highlighted the extraordinary corruption and waste associated with the Commonwealth’s filed sub-bid law. The report stated that filed sub-bidding should be repealed, saying it is the least desirable of any known alternative for the selection of subcontractors and its continued use will result in the building of more defective construction at the expense of taxpayers.
“Eliminating the filed sub-bid law was a principal recommendation of the Ward Commission in 1980,” said Nick Littlefield, who was chief counsel to the commission. “Unfortunately, we did not succeed in removing that vestige from the past, but I fully support the overdue effort to eliminate it today.”
“Associated Builders and Contractors support the Romney Administration’s commitment to real reform throughout the Massachusetts construction industry,” said Greg Beeman, President of the Massachusetts Chapter of Associated Builders and Contractors. “We look forward to pursuing our shared goals of ensuring fair and open competition in the construction marketplace and delivering best value to taxpayers.”
“I admire the Romney Administration for their courage in addressing construction reform,” said Frederic Mulligan, the President of Cutler Associates, Inc. and Immediate Past President of the New England Chapter Design Build Institute of America. “The taxpayers will be the beneficiaries of reforming our construction laws as it is ultimately their funds that pay for the projects. For many years, private owners have enjoyed the benefits that creative approaches such as design build, best value selection and prequalification have afforded. It would be a welcome change to extend those advantages to the public sector in Massachusetts.”
“Public construction in Massachusetts is governed by a set of antiquated laws that drive up costs while driving down quality,” said Glen Tepke of the Massachusetts Taxpayers Foundation. “The Commonwealth can no longer afford the luxury of these outmoded public construction laws when we face severe fiscal constraints and an enormous backlog of unfunded capital needs that are crucial to our long-term economic success.”
Healey said that she is looking forward to the recommendations of the Legislature’s commission on construction reform and expects that the commission’s report will help enhance the administration’s proposals.
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