Category: construction

The Impacts of an Inefficient, Cumbersome Law

The following article first appeared in the Keystone Contractor Magazine’s Spring 2023 edition. To view the entire issue visit: https://issuu.com/atlasmarketing/docs/the_keystone_magazine_spring_2023_final_issuu_0420?utm_medium=email&utm_source=sharpspring&sslid=MzcxtzQwMjE1MbcwAwA&sseid=MzI1MTUzNzOyNAAA&jobid=8e832794-eea0-4ecd-80ef-31f10ccb9ec3

The Impacts of an Inefficient, Cumbersome Law

The Separations Act – Wasting Tax Dollars Since May 1, 1913

By Jon O’Brien

President Theodore Roosevelt was among the admirers of Pennsylvania’s new Capitol building at the dedication ceremony on Oct. 4, 1906.

“This is the handsomest State Capitol I ever saw,” the president said as he entered.

While it was a magnificent building, the project was way over budget – three times more than the legislature allocated.

The subsequent investigation resulted in a law that, while well-intended at the time to protect taxpayers from fraud, is no longer relevant today. Instead, it is costing taxpayers money because it requires inefficient construction methods on public projects.

That $7.7 million Capitol overrun – the equivalent of more than $211 million today – triggered a probe that revealed grafting. Capitol architect Joseph Huston, superintendent of construction James Shumaker, general contractor John Sanderson, state Auditor William Snyder and state Treasurer William Matheus were sentenced to prison.

With little financial stewardship, each convicted individual had profited tremendously. But this sort of illegal activity wasn’t just happening at the Capitol project – it was the norm on public projects at the time.

Fast forward to 1913. Public outrage over the scandal remained. There was pressure on public officials to do something. Republican Gov. John Tener, a former congressman and major league baseball player, signed the Separations Act.

It mandated multiple prime contractors on all public construction projects. The thought was that the more eyes there were on the project, the less likely that there could be collusion for fraud.

Perhaps 110 years ago, enacting the Separations Act made sense due to the circumstances at the time. Other states imposed similar rules.

But in this day and age, every cent can be easily tracked. Every other state has done away with their laws because they recognized they were outdated and that providing options in construction delivery methods is the most-efficient way to spend tax dollars on construction.

Pennsylvania continues to cling to its law. Here’s how that is hurting taxpayers by driving up the price of constructing public buildings.

Requiring multiple prime contractors – one for HVAC, one for electrical, one for plumbing and one for general trades – means the owner must bid out and manage four separate contracts.

The primes are not contractually connected and this impedes communication with each other. This lack of contractual relationship also hurts the communication between the architect and the primes.  Each prime contractor and the architect are directly contracted with the project owner – like a school district, municipality or other government entity – and because of that all communication runs through the project owner.

The lack of a single point of contact from the construction team creates a nightmare of a scenario for the owner. It’s inefficient and cumbersome.

Most problematic is it eliminates the possibility of collaboration during pre-construction,  which is a more-efficient method of construction. If early collaboration were allowed between the project architect and a single construction manager, projects would proceed more smoothly. Hurdles could be anticipated and resolved in advance. Without collaboration, expertise from the construction team is sparse, if at all, during the design phase.

Legislation has been proposed several times in recent years that would do away with or amend the Separations Act.

During a legislative budget hearing in 2017, state Secretary of General Services Curt Topper testified that the Separations Act “requires that we do business less efficiently than we could otherwise do business.”

He said the old law “effectively sets up a situation where it is much more difficult to design a project, to bid a project and to manage a project. So, I’d love to see us address that problem.”

Yet the law remains on the books.

Its inefficiency is well-documented.

From 2000 to 2010, public education projects could opt out of the Separations Act through the Education Empowerment Act that was enacted during Gov. Tom Ridge’s administration. Seventy school districts applied for the waiver during that period, an indication of the unpopularity of the Separations Act.

The Allegheny Conference reviewed some of those projects and issued a report concluding that savings of between $8,000 to $2.5 million were achieved on school construction projects that used a single prime contractor instead of multiple primes.

Kennett Consolidated School District did one project with a single prime and one with multiple primes per the Separations Act. The single prime project was finished two months ahead of schedule and $300,000 under budget. The multiple prime project came in over budget. This is just one the many examples to show that the Separations Act is costly to taxpayers.

There is a long line of organizations, trade unions and governments that are lobbying for modernization of the Separations Act.

They include: Pennsylvania Chamber of Business & Industry, National Federation of Independent Businesses PA Chapter, Pennsylvania School Board Association, Pennsylvania Coalition of Public Charter Schools, Pennsylvania Association of School Business Officials, PA Association of Rural and Small Schools, Green Building Alliance, Green Building United, U.S. Green Building Council Central PA, Keystone Contractors Association, Master Builders’ Association of Western Pennsylvania, National Utility Contractors Association Pennsylvania chapter, Association for Responsible and Ethical Procurement, Carpenter Contractor Trust, Construction Legislative Council of Western Pennsylvania, Design-Build Institute of America, General Contractors Association of Pennsylvania, General Building Contractors Association, Cement Masons Local 526, Eastern Atlantic States Regional Council of Carpenters and Laborers’ District Council of Western Pennsylvania.

Many public owners want to modernize the Separations Act and a few of the more vocal ones include: Philadelphia School District, Pittsburgh Water and Sewer Authority, Peters Township School District, Cumberland Valley School District and Community College of Allegheny County.

Jon O’Brien is Executive Director of both the Keystone Contractors Association and the General Contractors Association of Pennsylvania. He can be reached at 717-731-6272 and Jon@KeystoneContractors.com.

Life Lessons Are All Around

Recently I was driving with one of my daughters and as we went through the construction road project she says, “dad do you know that guy?” She was asking about the flagger who was directing traffic as we entered the construction zone.

I told her I did not know that individual and how I wave to all flaggers. She responded with, “yeah I know you wave all the time, but that guy smiled when he waved back, and it looked like he knows you.”

After we drove through the jobsite, I went on to explain why I wave to the flaggers: Try putting yourself in someone else’s shoes in life. If you have a job where you see people all day long, would you rather see people who look at you, appreciate your role and give you a friendly smile? Or would you rather encounter people all day long that ignore you?

Every job is important and serves a purpose, that’s why employers pay workers for their efforts. Using the construction flagger as an example, can imagine life without the flaggers – it would be chaos without them, and I appreciate the order and safety they bring to our roadways.  

I didn’t expect to have this discussion with my daughter as we drove to her cheer practice, but I’m glad we took advantage of the moment. Life lessons are all around, just look for the signs and make the most when the opportunity arises.

A Veterans Day Message from the Keystone Contractors Association

This Veterans Day let’s all step up our appreciation for our country’s heroes. It’s a nice gesture when we see a Veteran to say ‘Thank you for your service’ but it doesn’t have to end with that. Ask the Veteran how they’re doing or how they’re day is going or if they’re looking for a civilian career.

As you may know Veterans have one of the highest suicide rates in the country. In the recently released 2022 National Veterans Suicide Prevention Annual Report by the Veteran Affairs, it was reported that in 2020 (the most recent data) 6,146 Veterans took their life. Suicide is now the 12th leading cause of death in America and it continues to hit the Veteran population hard. According to the recent VA report, Pennsylvania was the fifth highest on the list with 240 Veteran Suicides. Our state’s annual number has dropped every year since 2017 when we lost 294 Veterans, but at 240 we have lots of work to do and we’re not moving fast enough as we strive to reach zero.

Finances and lack of purpose could be two reasons why one might contemplate this fatal decision. The construction industry offers family-sustaining careers in both professional and labor positions. Construction professionals take pride in building Pennsylvania and with the strong work ethic Veterans are equipped to be successful in this industry.

This year the KCA, in partnership with our labor allies, went to great lengths to educate organizations and individuals who work with Veterans as they transition from the military to civilian life. The Carpenters and Laborers unions have been excellent stewards of the industry and together we worked with both to talk about the benefits of working in this industry, the type of positions and guidance for entering. We are not done either. For the remainder of this year and for the foreseeable future we plan to continue this outreach. If you are interested in learning how you and your organization can get involved, please let the KCA know.

In closing, this Veterans Day saying ‘Thank you for your service’ is appreciated, but remember you never know what a person is going through by simply looking at them and giving a passerby message. A little conversation can go a long way and can be the best way to show your appreciation.

The 2022 Construction Opioid Awareness Week – July 25-29

Have you ever felt like you’ve gone back in time? Or that someone hit the rewind button on you? That’s how I feel when I look at the opioid issue and its impact on the construction industry. 

In 2016 the Keystone Contractors Association conducted a needs-assessment of Pennsylvania’s construction industry. Concerning our construction labor workforce, one glaring topic needed attention and that’s education in the area of opioids/pain medication. Construction is tough on the body, no one denies that statement. When the aches, pains and injuries come, many turned to pills so that they could keep working. Five years ago, we heard story after story on how opioid addiction was wreaking havoc on our industry and our communities.

As a result of our findings, we knew we had to do something. Sure, there were ads to warn against opioid abuse from the government and healthcare systems, but I did not find channels that spoke directly to construction workers. Since I did not have much luck, in the summer of 2017 the KCA worked with industry allies in our state to create the Construction Opioids Awareness Week. This recognition week is the last full week of July and for it we arm construction employers with lots of resources to discuss pain medication use/abuse with their employees. It’s hard to gauge the success of a movement like this, but one indicator that I believe is crucial for success is if we get the construction industry talking about the issue. And over the next few years we had the industry talking – employees were talking to employers.

But then 2020 arrived. The KCA workforce went from building Pennsylvania to being non-essential (NOTE: Pennsylvania was the only state to shutdown construction during the COVID-19 pandemic). For a month and half during the Spring of 2020, the construction industry was shutdown and only healthcare and other projects continued. Then on May 1, 2020, Pennsylvania’s construction industry reopened, while the majority of businesses and schools remained closed or operating remotely.

2020 put a lot of stress on the construction workforce in our state. They went from being unimportant to some instances where workers were the lone person of a household to go into the COVID-19 elements and returning home not sure how to feel or how to interact with their family. Or for the workers who lived alone, it was worse – they went from being non-essential, sitting at home all alone to returning to work but not having the normal human contact after work at such places as church, restaurants, etc.

Along with an increase in stress levels in 2020, the construction industry also experienced an increase in addiction and suicide rates. The sad part is that we were heading in the right direction entering 2020, but this unfortunate downward trend continued in 2021.

In 2022, we are ready to tackle the challenge of reversing these horrible trends happening in our communities. And like 2017, we are ready to make an impact on opioid awareness. We are going to make a difference by returning to the 2017 playbook – conversation is key to building a construction industry in Pennsylvania where people feel comfortable enough to seek help.

For this year’s Construction Opioid Awareness Week, we are encouraging construction companies to reengage on the topic and work to get valuable resources to the workforce while making sure our workforce knows they are respected and appreciated, plus they know it’s ok to ask for help. We want the same energy and passion the industry displayed in the years leading up to 2020 to help our workforce.

This year’s week is July 25 to 29. During this week we encourage companies to participate in the week by offering the following safety toolbox talks:

  • Monday – Pain Management
  • Tuesday – Signs of Impairment
  • Wednesday – Reducing Stigma in Construction
  • Thursday – Importance of Employee Assistance Programs
  • Friday – How to Use NARCAN

We hope Pennsylvania’s construction industry will join us for a trip back in time when we were helping the lives of our fellow construction professionals. Hopefully, we can create an environment where those needing help know that we are there to assist them.

For more information on the 2022 Construction Opioids Awareness Week, as well as toolbox talks on the topics listed above, please visit: https://keystonecontractors.com/Opioid-Awareness/.