July 19, 2004

LT. GOVERNOR HEALEY SIGNS CONSTRUCTION REFORM INTO LAW

Legislation Ushers in Most Substantial Construction Reform in Nearly 25 Years

Lieutenant Governor Kerry Healey today signed into law the Commonwealth’s most significant public construction reform package in nearly a quarter century, streamlining the process, saving taxpayer dollars and preventing unnecessary delays in construction projects.

“For too long, our municipalities have been burdened with the most rigid and highly regulated public construction laws in the nation,” said Healey, who was the Romney administration’s point person on construction reform.

She added, “The passage of construction reform allows cities and towns to begin new projects through an inclusive process that saves money and results in better quality construction.”

Healey said that with annual public construction spending in Massachusetts at more than $3 billion, the series of reforms will save as much as 10 percent on building costs statewide.

Under the new law, all large public building projects valued at $5 million or more will be eligible to use the “construction manager at risk” method. With this approach, the construction manager will guarantee a maximum price for the project and any cost overrun will be borne by the contractor – not the taxpayer.

“The reform package now holds construction managers accountable for project delays that result in cost overruns, not the taxpayers,” said Healey. “By streamlining the construction process for cities and towns, we will reduce statewide construction costs and proceed with projects that have previously been stalled.”

The new law also adopts a “design-build” delivery system for road and bridge projects, a process that greatly reduces construction time. Massachusetts will now join 45 other states that have established this highly regarded system of construction.

In addition, the legislation requires municipalities to hire a professional project manager for all projects valued at more than $1.5 million to ensure that informed decisions are made every step of the way.

The bill, which reflects recommendations of the Special Commission on Public Construction Reform, represents the most significant changes in public construction reform since the Ward Commission report was released nearly 25 years ago.

“I am confident that this legislation, based on the recommendations of the special commission, will lead to construction projects in which there is a greater level of accountability, increased flexibility, more opportunities for minority-owned and women-owned businesses and greater competition,” said Senator Dianne Wilkerson, the Senate chair of the commission. “I am proud to have been a part of this legislative effort.”

“Creating this legislation has been a truly bi-partisan process. This legislation was put together by a group of dedicated and hardworking individuals from all aspects of the construction realm. I believe we, as a group, have succeeded in drafting some of most comprehensive changes to public construction in over 25 years,” said Representative Martin J. Walsh. “I am extremely pleased with the Governor’s decision to sign this legislation into law.”

“This bill reaches an appropriate balance between private sector style efficiencies and public sector transparencies and access,” said Chris Gordon, Director of Capital Programs at the Massachusetts Port Authority and a chair of the commission. “It will provide significant, long-term advantages for taxpayers including more options and accountability, and no perceived disadvantages. The only groups that will not benefit from this reform will be unqualified contractors, designers and owners.”

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