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



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.


$

$

$$

$

$ $

$$

$$

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



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


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

[email protected]

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Down Came the Construction Industry