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Friday, March 12th, 2010

Patriot-News: Archaic Pennsylvania statute handcuffs contractors

Local Upate

A recent decision to move Pennsylvania inmates to other states has editorial boards calling for Pennsylvania policy makers to address the problem of prison overcrowding.

Sentencing mandates and parole policies certainly play a role in causing prisons to be filled beyond capacity, but the General Contractors Association of Pennsylvania believes there is another issue that continues to go unnoticed: The commonwealth has been unnecessarily hampered from increasing the capacity the Department of Corrections so sorely needs.

Spring 2009 was the target for the Pennsylvania Department of General Services to award contracts for six prison construction projects to expand its inmate housing capacity.

It is now March 2010; three projects with a total value of about $35 million have been awarded, and three projects with a value of more than $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 four 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 such as schedule delays and claims.

When DGS decided to move forward with its expansion project, it 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 chapters and other contractors have caused interminable delays.

While the primary target of the challenge was another issue dealing with project labor agreements, 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 also is not a project delivery system used in the federal, private, residential or commercial markets.

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

The time has come 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 circumstances and requiring many solutions.

However, the commonwealth cannot afford to ignore the obstacle the Separations Act has become.

Clifford R. Rowe Jr. is president of the General Contractors Association of Pennsylvania, the statewide voice for more than 500 union-affiliated general and specialty contractors and affiliates.
This Op-Ed ran in the Patriot-News and on phillylive.com.