Spring 2009 was the target for the Pennsylvania Department of General Services (DGS) to award contracts for 6 prison construction projects to expand its inmate housing capacity. It is now February 2010; 3 projects with a total value of approximately $35 million have been awarded, and 3 projects with a value of over $800 million remain on hold. While delays happen and it is easy to blame bureaucracy, DGS is not at fault. The real culprit is the Pennsylvania Separations Act of 1913.

Under this archaic act, the governmental entity in charge of a project is required to bid separately and award separately a minimum of 4 prime contract packages; general trades, electrical, plumbing, and HVAC. Each of the prime contractors has a separate (thus the name “Separations Act”) contract with the governmental entity awarding the work. This is an inefficient contract delivery method fraught with problems like schedule delays and claims.

When DGS decided to move forward with its expansion project, they bid contracts under the widely supported “best value design-build” delivery system which would have enabled construction to begin as soon as possible after a contract was awarded. Further, the attractiveness of the design-build delivery system is that DGS can select a single contractor that is completely responsible for the design and construction of a project for a lump sum price. Given time constraints and budgetary considerations, design-build is clearly in the taxpayers’ best interest.

Unfortunately, a legal challenge filed by the Pennsylvania Associated Builders and Contractors (ABC) chapters and other contractors have caused interminable delays. While the primary target of the challenge was another issue dealing with project labor agreements (PLA’s), the pending litigation also contended that the design-build procurement method does not comply with the Pennsylvania Separations Act.

As a result, instead of being able to move forward, contractors, subcontractors, architects, and engineers are spinning their wheels – wasting hundreds of thousands of dollars on bidding and re-bidding projects that are likely to be re-bid yet again. This waste of time, energy, and resources is all because the DGS must conform to the Separations Act – a statute that exists in only a handful of states. It is also not a project delivery system used in the federal, private, residential, or commercial markets.

It is clear to us that the Pennsylvania Separations Act is again wreaking havoc on important taxpayer funded construction. Six prison projects – projects that would improve public safety, provide hundreds of much needed jobs and would otherwise be completed under a widely supported design-build delivery system – remain on hold.

The negative impact of the Separations Act is not limited to prison expansion. It is also a stumbling block for school districts that seek to use single prime or alternative delivery methods it deems best to complete priority construction projects.

GCAP believes the time is now to repeal this antiquated and pointless statute. Until we do, more practical and efficient options such as design-build and single prime contracting will not be available to the DGS, school districts, or other public agencies in Pennsylvania.

GCAP recognizes that prison overcrowding is a multifaceted problem caused by many things and requiring many solutions. However, the Commonwealth cannot afford to ignore the obstacle the Separations Act has become. No matter what policy changes may be on the horizon, the need for well-constructed facilities – built on-time and on-budget – will always be an essential part of the equation and in the best interests of the taxpayer.