Legislative Alerts

Readers in the mid-state and western PA learned recently that sentencing mandates and parole polices aren’t the only reasons Pennsylvania prisons are filled beyond capacity. Cliff Rowe, President of GCAP, wrote an op-ed telling Pennsylvania readers that the commonwealth has been unnecessarily hampered from increasing its prison capacity because of the Pennsylvania Separations Act of 1913.

The complete text of his op-ed follows:

Fight Pa. prison crowding by eliminating Separations Act
By Clifford R. Rowe Jr.

A recent decision to move Pennsylvania inmates to other states has editorial boards calling for Pennsylvania policymakers 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 state Department of General Services to award contracts for six prison construction projects to expand its inmate capacity. It now is March 2010; three projects with a total value of $35 million have been awarded, and three 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 government 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 like 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 that 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. Nor is it a project-delivery system used in the federal, private, residential or commercial markets.

It is clear to us that the 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 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.

GCAP believes it is time 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.

After litigation by ABC member contractors stalled a major prison expansion initiative by the Department of General Services (DGS), the Commonwealth is moving forward with a key design-build project adjacent to SCI Rockview in Centre County.

DGS will use the technical scores in bid submissions to narrow the field of potential winners to three. From there, facts and figures will be the key in determining who will build the new $181.5 million facility. While DGS specs have driven the budget way down, the most significant change from the previous RFP is that there will be no PLA requirement. A bidder may include one at his option and will receive 10 points for doing so.

The Department will follow this RFP with one for SCI Graterford later this spring (late April/early May). Like SCI Benner, the revised RFP will contain slimmed down specs to keep costs well below the previously budgeted $400 million for the project. Unlike the Centre County venture, SCI Graterford will likely have a PLA.

For more information about these projects, please call contact Terry McDonough at 717-731-6272 or keystonecontractors@verizon.net.

On March 17, the Senate Education Committee held a public hearing to hear why the General Assembly should vote to extend the Mandate Waivers Program. Representing GCAP was H. Glenn “Bub” Manning, a Professional Engineer and Principal with the Quandel Group.

Manning told the panel that while no delivery method is perfect, multiple prime or “separated prime” projects run the risk of having one of the separate prime contractors negatively impact the project’s timeline and costs and affect the performance of the other primes. Even under the best circumstances, separated prime contracting is an inherently adversarial system that requires extra management oversight by the school district to avoid costly change orders and other delays. Choosing a single prime contractor can streamline this hierarchy of responsibility.

He effectively countered a presentation made by the Concerned Contractors group saying that the reality is that more often than not, a school district will not get an accurate comparison if they bid a project both ways because the market does not behave the same way for both methods of contracting.

In addition, Manning underscored comments made earlier by GCAP’s education partners, telling the Committee that the mandate waivers programs allows school districts to thoroughly deliberate the pros and cons of each delivery method, solicit expert advise and seek public input before bid day – that is how any comparison should be made. He stressed that GCAP’s recommendation is to maintain the Mandate Waiver Program and to allow the individual school districts and their design professionals to assess the local market conditions in their districts and decide which delivery method best fits their situation and is best for their constituents.

For more information about the hearing, please call contact Terry McDonough at 717-731-6272 or keystonecontractors@verizon.net.

The House Labor Relations Committee held public hearings on three bills: House Bills 2108 (Ellis, R-Butler), 2230 (Gergely, D-Allegheny) and 2160 (Bradford, D-Montgomery)

Rep. Ellis introduced HB 2108 over concerns that Whistleblower protections are not granted to entities receiving public funding – especially during a time when there is a large influx of federal stimulus dollars to the Commonwealth. His legislation would expand applicability of the Whistleblower law to non-profits and private sector companies that receive public monies, and would increase the civil fine from $500 to a maximum of $10,000. As intended by the prime sponsor, his legislation would apply to state contracts for capital construction.

Since 2005, more than 6,500 employers have participated in an industry partnership, and as a result, 75,000 workers have received some form of training. Rep. Gergley’s HB 2230 seeks to bolster the 72 current partnerships and drive that number even higher. It amends the Workforce Development Act to add industry partnerships and to provide funding for them through a grant program administered by the Department of Labor & Industry. It also lays out industry clusters and provides for interdepartmental cooperation, industry and labor market research, and development and implementation of an industry partnership performance improvement and evaluation system.

Concerned over high unemployment, especially in Montgomery County, Rep. Bradford has introduced HB 2160 to be a work sharing bill to offers employers the ability to alleviate layoffs by allowing employees to reduce work hours while still retaining them on the payroll. According to Rep. Bradford, 17 states have enacted such laws and his bill would require that all impacted employees would have to be covered, hours could not be increased or decreased by more than 20% and Employers would have to have a regular wage payment history established

For more information or to share your opinion on any of these bills, please contact Terry McDonough at 717-731-6272 or keystonecontractors@verizon.net.

DGS Secretary Jim Creedon appeared before both Appropriations Committees to answer questions regarding the Department’s prison expansion initiatives.

In the House, the focus was on SCI Fayette. Secretary Creedon told the Committee that three sites are currently be considered (one in German Township and two in Luzerne Township). DGS has environmental reviews on all three and appraisals for two of the sites. The Secretary said his goal is to get construction started by Labor Day.

The Senate hearing covered a wider range of issues. Secretary Creedon told the Senate panel about all seven projects. Contracts for SCI Cambridge Springs, SCI Coal Township and SCI Pine Grove have been awarded, and the projects are underway. SCI Forest and Rockview are in the process of being re-bid. SCI Grateford is on hold and SCI Fayette is still in the land acquisition phase.

The secretary did discuss bid price issues and litigation over PLAs and the Separations Act as being the reasons why SCI Grateford and SCI Rockview haven’t started yet. He also outlined the decision of the Court that allows PLAs to be considered, but didn’t confirm that DGS will use a PLA for the bigger projects moving forward.pThe Secretary also discussed the Separations Act and the design build concept. He highlighted two major projects – the Penguins Arena and the Philadelphia Convention Center that received waivers from the Act.

Secretary of the Budget Mary Soderberg has notified the Majority and Minority Appropriations Chairmen in the State House and Senate that the Department of General Services (DGS) intends to issue Notices to Proposers on March 4, 2010 for two of its prison expansion projects. According to the Secretary, these notices begin the procurement process to allow interested firms to submit their design-build proposals for a new 96 bed L-5 housing unit at SCI Forest and a new 2,000 bed facility which will be called SCI Benner (adjacent to SCI Rockview). For more information about these projects, please call contact Terry McDonough at 717-731-6272 or keystonecontractors@verizon.net.

The Education Empowerment Act that enables school districts to seek a waiver from the Separations Act is set to expire June 30, 2010.

The General Contractors Association of Pennsylvania (GCAP) strongly supports school districts having the unencumbered option to use single-prime contracting. That is why GCAP has joined with the AIA Pennsylvania, ACECPA, the Pennsylvania School Boards Association, the Pennsylvania Association of School Business Officers and the Pennsylvania Association of School Administrators to form a coalition of construction and education professionals who support the school mandate waiver program and would like to see it continue WITHOUT any new mandates on how schools bid their construction projects if they seek a waiver.

Unfortunately, the group, Concerned Contractors of Pennsylvania, seems committed to distorting the facts about the benefits of single prime contracting.

To make sure legislators, school officials and contractors get the full picture on why choosing single prime is a good idea, GCAP and its coalition intend to tell all interested parties, “the rest of the story” (first installment included below).

GCAP sent this document to all the members of the General Assembly and key staff to make sure they understand why a new mandate requiring school entities to bid projects both multi-prime and single-prime before awarding a contract will not give school officials an apples-to-apples comparison on bid day.  More specifically, such a mandate fails to consider the actual issues and conditions that determine the numbers included in a proposal on bid day, and ultimately how those numbers can change during the course of a project.

If you want to raise this issue with your own state House Member or Senator, feel free to forward a copy of The Rest of Story with a note telling him or her why you support schools getting a waiver from the Separations Act WITHOUT having to bid a project both ways.

GCAP will post future installments of The Rest of the Story” to the website. In the meantime, for more information about these efforts, please call contact Terry McDonough at 717-731-6272 or keystonecontractors@verizon.net.

Attached is a letter containing comments and recommendations on the Pennsylvania Department of General Services’ revised Request For Proposal (RFP) for the Department’s four prison expansion projects.  Check out the PDF.

N E W S R E L E A S E

December 9, 2009

McDonough tells House Republican Policy Committee that the General Contractors Association of Pennsylvania opposes the mandated use of project labor agreements in state contracts.

Harrisburg – General Contractors Association of Pennsylvania (GCAP) Executive Director, Terrence McDonough told a State House panel today that GCAP opposes the mandated use of project labor agreements (PLAs) in state contracts. Click here to see his complete testimony.

Appearing before the House Republican Policy Committee, McDonough told lawmakers that GCAP opposes government-mandated PLAs because they restrain competition, drive up costs and disrupt local collective bargaining.

“While GCAP members regularly employ a union workforce, our general contractors have no seat at the table when a PLA is negotiated between a public owner and a union,” McDonough testified. “In the current process, the provisions agreed to by the union are for their benefit and their benefit alone.”

McDonough advised the panel that GCAP members are well-respected contractors who engage in public and private construction throughout the Commonwealth. As a result GCAP members recognize that the most effective ways to increase efficiency and ensure quality are the same regardless of who the owner of a project is. And, there is no good policy reason why public construction should not mimic the best practices of private construction.

“GCAP believes that neither a public owner nor its representative should mandate the use of a PLA that would compel any firm, union or nonunion, to change its labor policy or practice in order to compete for or to perform work on a publicly financed project,” said McDonough.

Incorporated in October 1953, GCAP represents the member interests of the Master Builders Association of Western PA (MBA), the Keystone Contractors Association (KCA) and the General Building Contractors Association (GBCA). As such, they are the statewide voice for more than 500 union-affiliated general and specialty contractors and their affiliates throughout the Commonwealth.

For more information, contact:

Terry McDonough (717-731-6272)

GCAP continues to work with the Pennsylvania Institute of Certified Public Accountants, the PA Chamber, Associated Pennsylvania Constructors and others to ensure passage of this important legislation. If you or your company are located in a municipality that levies the BPT, please contact Terry McDonough at 717-731-6272 or keystonecontractors@verizon.net.