Down Came the Construction Industry
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Transcript of Down Came the Construction Industry
Down Came the
Construction Industry
A story of an anticipated collapse
THE COLAPSE OF 81% OF THE
CONSTRUCTION INDUSTRY
DUE TO FAVORTISM
ORS 279c.335 AND ORS 279.015
State Projects
City Projects
County Projects
Federal Projects
Private
PROJECTSCan Exempt
Can ExemptCan Exempt
Can ExemptShort List or Sole Source
Short List or Sole Source
Short List or Sole Source
Short List or Sole Source
CMGC
CONSULTANT
CMGC
CONSULTANT
CMGC
CONSULTANT
CMGC
CONSULTANT
OVER $25M TO UNION
SHORT LIST
SOLE SOURCE
CONTRACTORS
UNIONS
PLA’SContractors
Other Qualified Contractors
DISTRIBUTION OF CONSTRUCTION PROJECTS
Slide 1 of 10
8% o
f In
d. A
re:
11 %
of
Ind.
Are
:
81 %
of
Ind.
Are
:
Other Eligible ContractorsTodd Construction
Robert Gray Partners
BNK Construction
Skyward Construction
Brockamp Jaeger
Yorke & Curtis
Joseph Hughes Construction
Lorentz Bruun Construction
ALL OTHER TAX PAYING
LOCAL BUSINESSES AND HOME OWNERS
BOND
MONEY
Portland Metro 2005 IncomeSkanska USA Building $408MHoffman Construction Co. $251MAndersen Construction Co. $190M J.E. Dunn-Construction $150MHoward S. Wright Const. Co. $121MWalsh Construction Co. $155MLCG Pence Construction $55M Willamette ValleySlayden Construction $74MJohn Hyland Construction Co. $40MTriplett Wellman $31MEssex General Construction $20MMcKenzie Commercial Contractors $20M CentralKeeton-King Construction $20M
$
$
$$
$ $
$
$
Slide 2 of 10
$251 Million$408 Million
$190 Million$150 Million$121 Million$155 Million
$55 Million$74 Million$40 Million
$31 Million
$20 Million$20 Million
Year 2005
13 General Contractors were awarded
$1,515,000,000
In Public Contracts
They have earned even more in the coming years.
$1,330,000,000
Over $1.3 BILLION
DOLLARS
That is how much OREGON awarded to
7 General Contractors
in year 2005.
Portland Metro 2005 IncomeSkanska USA Building $408MHoffman Construction Co. $251MAndersen Construction Co. $190M J.E. Dunn-Construction $150MHoward S. Wright Const. Co. $121MWalsh Construction Co. $155MLCG Pence Construction $55M Willamette ValleySlayden Construction $74MJohn Hyland Construction Co. $40MTriplett Wellman $31MEssex General Construction $20MMcKenzie Commercial Contractors $20M CentralKeeton-King Construction $20M
$
$
$$
$
$ $
$$
$$
Potential Projects
Green Building Projects
PLA’s $25,000,000 (+)
MATOC’s
PROJECTS EXEMPT FROM PUBLIC BIDDING PROCESS
Other Eligible ContractorsTodd Construction
Robert Gray Partners
BNK Construction
Skyward Construction
Brockamp Jaeger
Yorke & Curtis
Joseph Hughes Construction
Lorentz Bruun Construction
$$
$$
$$
$$
$
National Building Budgets$300 Million OHSU Improvements
$400 Million College Improvements
$600 Billion - Schools
$120 Million Libraries
$65 Million City Halls
$100 Million State Buildings
$400 Million Federal Buildings
$85 Million Parks
SHO
RT LISTS
Slide 3 of 10
Condo Towers
Big Box Retail
Public Projects
DOMINO EFFECT OF LACK OF WORK FOR GENERAL CONTRACTORS AND SUB-CONTRACTORS
Skanska USA Building Hoffman Andersen J.E. Dunn Howard S. Wright Walsh LCG Pence
2 Story Buildings
Skanska USA Building Hoffman Andersen J.E. Dunn Howard S. Wright Walsh LCG Pence
Skanska USA Building Hoffman Andersen J.E. Dunn Howard S. Wright Walsh LCG Pence
Andersen Howard S. Wright
Projects (2)
Projects (4) Projects
(10)
Federal Projects
$25,000,000
And UP
MATOCS?
Projects UNIONS
Slide 4 of 10
Projects (0)
EmerickRobert Gray PartnersTodd ConstructionSkyward ConstructionBrockamp JaegerJoseph Hu ghes ConstructionLorentz Bruun ConstructionMarket Contractors
EmerickRobert Gray PartnersTodd ConstructionSkyward Construction
Brockamp JaegerJoseph Hu ghes ConstructionLorentz Bruun Construction
Brockamp JaegerJoseph Hu ghes ConstructionLorentz Bruun Construction
Slayden
LCG Pence
Walsh
Howard S. Wright
J.E. Dunn
Skanska
Andersen
Hoffman
PUBLIC PROJECTS
ROTATION OF THE SHORT LIST
Public Projects Exempted From Public Bidding
EXEMPTOHSU
Biomedical Research Bldg.
$195M
EXEMPTOregon State
Univ.
EXEMPTUniversity of
Oregon$45.6M
EXEMPTHillsboro School
Dist.
EXEMPTBeaverton
School Dist.
EXEMPTCentennial
School
EXEMPTWest Linn-Wilsonville
Schools
EXEMPTCity of
McMinnville
EXEMPTCity of
Wilsonville
EXEMPTOHSU
Patient Care Facility.$195M
EXEMPTUniversity of
Oregon$400 MILLION
Slide 6 of 10
$$$
$$
$$$
$$ Private Work$$$$ Exempted Public Work$$ Public Bid Work
2008
Construction
Projects in Dollars
$$ Private Work$$$$ Exempted Public Work$$ Public Bid Work
2009
Construction
Projects in Dollars
Exemptions
OHSU
Oregon University System
Portland Development Commission
School Districts
County
Exemptions
OHSU
Oregon University System
Portland Development Commission
School Districts
County
EXEMPTED WORK – CM-
GC REQ.D
EXEMPTED WORK – CMGC
REQ.D
Who will survive in the end?
TAX PAYER MONEY GAME
COMPLETION REPORTS
WINNING CONTRACTOR MUST SUBSTANTIATE HIS BID AMOUNT
BID PROCESS
MOST POINTS ON QUESTIONAIRE
CMGC COMPANY SELECTED
EXEMPT PROJECT FROM PUBLIC BIDDING
PUBLIC BIDDING PROCESS
MEETINGS SUBSTANTIATING NEED TO EXEMPT PROJECT FROM PUBLIC BIDDING PROCESS
PROJECT SCHEDULE ESTABLISHED
FUNDING
DESIGN CONCEPT
LOCAL ENTITY DECIDES ON PROJECT
START
2-100 Years Prior
2-20 Years Prior – Architect Hired
Bonds, Savings, Donations
After Funding Approved
Board decision only. Public may attend to voice their concerns.
Exemption From Public Bidding must be based on an EMERGENCY or Significant Cost Savings without harming other potential bidders or Start Date.
ALL QUALIFIED CONTRACTORS MAY SUBMIT A BID. NO CMGC.
Board limits the bidders to a Short List of 1-6 Bidders.
Owners Representative. Hired for a fee of a percentage of the total project. Typically 10-50%. ($10M = $1M-$5M FEE)
The Short List of Bidders submit a Questionnaire Packet which will be judged.
The board shortens the list of bidders again.
The winning contractor begins an actual estimate of the project costs.
It is required by law that the Board submit a Cost Savings Report post – construction on all Exempt Construction Projects.
OR
PER ORS 279C.335 AND ORS 279.015
Slide 7 of 10
Green PUBLIC Project
Green Certified Workers
Green PUBLIC Work goes to PLA’s
UNIONS
PUBLIC Work goes to Short List Of Contractors AND
$25M Proj. to UNIONS
Portland Metro 2005 IncomeSkanska USA Building $408MHoffman Construction Co. $251MAndersen Construction Co. $190M J.E. Dunn-Construction $150MHoward S. Wright Const. Co. $121MWalsh Construction Co. $155MLCG Pence Construction $55M Willamette ValleySlayden Construction $74MJohn Hyland Construction Co. $40MTriplett Wellman $31MEssex General Construction $20MMcKenzie Commercial Contractors $20M CentralKeeton-King Construction $20M
What direction are we heading?
Other General Contractors – CLOSE UP SHOP. Not enough projects available to cover costs of doing business.
Short ListContractors
OtherGeneralContractors
Sub-Contractors
Slide 5 of 10
PUBLIC PROJECTS EXEMPT FROM PUBLIC BIDDING PROCESS ARE EITHER GIVEN TO A SOLE CONTRACTOR OR GO THROUGH SHORT LIST BUDGET BID.
POINTS ARE AWARDED FOR THE FOLLOWING:(Members give Points of 0 to 5 for each section and then it is multiplied by the weight for final scoring
for section. (Point of 5 x Weight of 20 = 100 Points))
1. Insurance, Safety, Proof of Bonding Capacity, Valid License. (Pass/Fail)
2. Contracting Practices (15 Weight)
3. Background and Experience (20 Weight)
4. Key Personnel (25 Weight)
5. Scheduling and Site Logistics (20 Weight)
6. Safety & Security (10 Weight)
7. Statement of Why Should You Be Hired (10 Weight)
8. References
D. Section 4.0 – Experience…Contractor must provide evidence of current and past experience acting as a general contractor in general and specifically for a minimum of three public or institutional buildings projects in Oregon with a construction value of $4 million or more in the last five years. Emphasize any specific similarities of the example projects with the Project, including, if applicable, similar programs, installation of raised floor with displacement: ventilation system, use of masonry veneer …
In addition to the above, the contractor may submit evidence of up to three projects that they have constructed using CM/GC contracting method. IV. Selection Process
A. Selection CriteriaEach evaluator shall independently assign a score to each evaluation criterion as noted in
the table below based on the SOQs.. Scores will be summed and the most qualified contractors will be invited to bid on the construction contract for the Project. NOTE: It is the of this process to identify a limited pool of the most qualified contractors to bid on the Project. Any contractor not selected for the Short List or Bid is because the contractor were ranked below other contractors.
Criteria Weight ( x Score = Points)
Contractor Experience / Record of Performance 40 (Min. of three public proj. $4M +/ 5 Years)
Key Personnel Experience / Availability 25
Financial Information 15
Background Questionnaire – Attachment A 10
Project Administration Methodology 5 (CM/GC Experience)
MWESB Experience 5
Slide 8 of 10
Contractor 2000 2001 2002 2003 2004 2005 2006 2007 2008
Hoffman School School City Hall
School Fire Dept
School $5M
School $9M
School $60M
Library $400M
Andersen School School School School School $8M
School $13M
Library $20M
Pub. Bldg.
School $7M
Skanska School School School School School $50M
Librar$15M
School $8M
School $2M
School$16M
JE Dunn School School School School Library$4M
School $5M
School $5M
School $4M
School $5M
Howard S Wright
School $8M
School $6M
Library School $9M
School $7M
Walsh School School School School School Library School School School
LCG Pence School School School School School
Slayden School School School School
Robert Gray Partners, Inc.
School School School School School $5M
School $4.7M
School $4M
School $5M
School $10M
BNK Construction
School $1M
Todd Construction
School $5M
School $2M
School $4M
School $4M
School $4M
School $5M
D. Section 4.0 – Experience…Contractor must provide evidence of current and past experience acting as a general contractor in general and specifically for a minimum of three public or institutional buildings projects in Oregon with a construction value of $4 million or more in the last five years. Emphasize any specific similarities of the example projects with the Project, including, if applicable, similar programs, installation of raised floor with displacement: ventilation system, use of masonry veneer …
In addition to the above, the contractor may submit evidence of up to three projects that they have constructed using CM/GC contracting method. IV. Selection Process A. Selection Criteria
Each evaluator shall independently assign a score to each evaluation criterion as noted in the table below based on the SOQs.. Scores will be summed and the most qualified contractors will be invited to bid on the construction contract for the Project.
Criteria Weight ( x Score = Points) Contractor Experience / Record of Performance 40 (Min. of three public proj.
$4M +/ 5 Years)Key Personnel Experience / Availability 25Financial Information 15Background Questionnaire – Attachment A 10Project Administration Methodology 5 (CM/GC Experience)MWESB Experience 5
Slide 9 of 10
3 Public or Institutional Projects
Value $4 Million each
Within
The last 5 years
No longer qualified
Things to Remember Before Exempting a Project: 1. Sole Sourcing of Construction Projects costs more. If you
doubt this then Publicly Bid the project and compare yourself.
2. Mechanical, Electrical, Plumbing and Fire Sprinkler is always reviewed by those professionals and Value Engineered on every project. (Even without the CMGC Consultant).
3. Engineers are used on every construction project to ensure that construction techniques and materials are the most sound.
4. General Contractors hold meetings weekly with the Architect, and Owners Representative to ensure that clear communication in regards to the schedule, the decisions to be made and complications are voiced.
5. Documentation is forwarded to the Architect and the appropriate engineers as necessary for review and approval.
6. Pay applications are provided to the Architect for signature and the Owners Representative for final signature and payment.
7. ALL OF THESE SERVICES ARE PROVIDED ON ALL PROJECTS BY THE GENERAL CONTRACTOR.
8. CMGC CONSULTANTS DUPLICATE THIS PROCESS AND ARE PAID MORE THAN THE GC. CMGC consultants are used on EXEMPT projects.
9. Schools boards receive training to learn how to exempt projects from Public Bidding. A seminar put on by Sole Source GC’s and CMGC Consultants. The fee isn’t discussed.
Don’t stand on the sidelines while small contractors close their doors due to lack of new work.
You wouldn’t want your income to be eliminated. It would mean a catastrophe for you and your family.
Public Projects should always allow every qualified contractor to bid.
Exemptions are favoritism.
Emergency Declarations made by public agencies for the purpose of Exempting a project from the Public Bid Process should be strictly limited to the emergency description set by FEMA.
Any other Emergency Declaration is simply fraud.
Don’t allow abuse of the Exemption Rule in ORS 279c.015 or ORS 279.335.
The Oregon University System should not exempt projects for any reason. The tax payers providing the funds for such projects should have construction costs substantiated through the OPEN Public Bidding Process.
Keep the Door Open On Public Projects!
Sincerely, Laura Alexander - Oregon
Keep the Door Open On Public Projects! T-Shirts available through
Aramark Uniform Service 1-800-234-6025
Contact John Harvey