Bay State OK's Limited Design-Build Usage

By William J. Angelo

	Gordon

On July 19, 2004, when Lt. Governor Kerry Healey signed a public construction reform act into law, Massachusetts became the 46th state to adopt the use of design-build project delivery. The law overcomes politics and a sordid history, but still comes with conditions.

The new law allows design-build delivery, but not finance or operations, on all public road and bridge projects valued at more than $5 million and construction management-at-risk on all building projects also valued at more than $5 million. It also requires municipalities to hire a qualified project manager on jobs costing more than $1.5 million and requires that all general contractors and subcontractors be prequalified and certified. But why limit design-build to just horizontal work? The answer lies in the state’s archaic practices and a lack of advocacy.

Twenty-five years ago, the Ward Commission made a number of recommendations to the legislature in response to widespread industry corruption. While resulting reforms stamped out corruption, they also may have stifled innovation. This led to complaints about a slow, expensive process that resulted in a number of school construction problems, including late completion and poor quality work, stemming from design-bid-build delivery.

That was the catalyst for the creation of the Special Commission on Public Construction early this year. The commission was co-chaired by a state senator, state representative and Christopher M. Gordon, director of capital programs and Logan International Airport modernization at Massport, a state agency wrapping-up a 10-year, $4.4 billion upgrade program. Governor Mitt Romney (R) appointed Gordon.

The commission also includes 20 diverse members selected from political and industry segments. It held two full days of hearings, listening to contractors, designers, unions, mayors, vendors and others talk about general problems and some pet peeves, such as filed sub-bids, which are required on large building projects.

After the hearings, the commission met on a weekly basis to find solutions and alternative project delivery systems were high on their list. Due to a number of large projects completed in state, there were plenty of knowledgeable engineers and lawmakers who thought they knew how to achieve cost savings. And they spoke out. "People liked CM because it was used successfully on special projects in the state and wasn’t a mystery," says Gordon. "Road builders especially wanted design-build and they made an appealing case." Demand was partly based on pilot projects. "For the last 20 years, design-build was not allowed, but gradually it started being used on a case-by-case basis with prisons. Then the state tried it on a large mass-transit project and a pilot program on State Route 3 and found it was useful," says Peter M. Zuk, former Central Artery/Tunnel project director and now chief program officer, London Underground Ltd.

While the commission could have decided on unlimited use of CM and design-build, time was tight because of an extensive school backlog and the launching of a multi-billion dollar building program by Romney. So the panel settled on a compromise that could be expanded at a latter date. "The commission was comfortable with CM for buildings and design-build for roads, but they felt that expanding design-build into buildings was a more complicated issue and they were not comfortable with it, plus nobody was advocating its use for buildings," says Gordon. "Schools are complicated, expensive and come with various site issues. Many people do not like design-build usage on buildings, including designers and general contractors who feel they would be shut out. The biggest resistance was from the industry itself."

And so Massachusetts gets a partial victory. "Using alternative delivery methods gives us more tools," says Gordon. With CM-at-risk, the construction manager now can prequalify subs and "design-builders can propose their own team," he adds.

Massachusetts does about $3 billion annually in public construction. Healey estimates the reforms will result in 10% savings, free up some stalled projects and significantly improve quality and schedule performance. "The bill reaches an appropriate balance between private-sector style efficiency and public-sector transparencies and access," says Gordon. Still to be determined is how much can be saved by allowing design-build on buildings.