Separations Act in 2017

During 2017, there were some memorable stories involving Pennsylvania’s  Separations Act. Today I’m going to touch on a few of the major stories.

But before jumping right into the fun, here’s a quick explanation of the Separations Act: this law requires public construction projects in Pennsylvania to build utilizing a multiple prime delivery system and hire at least four prime construction companies for one project. Our state is one of three states that require this handcuffing of public agencies to build in this cumbersome manner – don’t get me wrong the multiple prime delivery system can be a good option depending on numerous factors (owner’s expertise, complexity of project, budget, schedule, etc.), but multiple prime is one of many delivery options. The construction industry has evolved over the years and we now have more innovative and collaborative team approaches to consider, yet our state only allows one delivery option. Considering that the multiple prime delivery system is rarely used in the rest of the country, federal government, and private sector, it’s time for our state to amend our law and allow options in construction delivery systems.

Here we are in 2017 and PA is still mandating we follow this ancient law that impedes the construction industry from progressing. However, our current state is led by a self-proclaimed Harrisburg outsider, so maybe Governor Wolf will play a vital role in advancing the construction industry, and maybe, just maybe the Harrisburg outsider moniker played a role in kick-starting efforts in advancing the construction industry in 2017. Without further ado, here are my top Separations Act stories of 2017:

2017 Senate Appropriation Hearing

On Monday, February 27, 2017, the Separations Act got off to a good first step this year during the PA State Senate Appropriations Committee hearing. At this event, the Governor’s appointed Department of General Services Secretary Curt Topper said: “we face some significant constraints that the private sector does face when it comes to managing our money efficiently. So, for example the Commonwealth, when we go to market in order to contract to do construction, we are bound by the Separations Act of 1913. We are one of only three remaining states in the U.S. that has a Separations Act. That Separations Act requires that we do business less efficiently than we could otherwise do business.” Bravo to Governor Wolf for appointing a forwarding-thinking individual like Secretary Topper who sees an issue and wants it addressed to improve the Commonwealth. Plus, bravo to Secretary Topper for knowing that you were appointed to do a job and you didn’t let politics get in the way.

Click here to Secretary Topper’s hearing:  http://www.pasenategop.com/budget-hearings-summary/

Here is an OpEd on his testimony:  http://www.yorkdispatch.com/story/opinion/contributors/2017/03/07/oped-s-time-repeal-separations-act-pa/98857412/

Here is commentary from Philly Inquirer’s John Baer: http://www.philly.com/philly/columnists/john_baer/Another-old-PA-law-enters-the-states-fiscal-follies.html

 

Pennsylvania Organizations Want Change

What happened on that Monday in February of 2017 had tremendous reach beyond the room where the Senate Appropriations hearing was held. Organizations across the Commonwealth had a bounce in their step, as an executive in the governor’s cabinet publicly supported modernizing the Separations Act. This newly formed coalition mobilized in 2017 and even launched an online petition (located here:

https://www.change.org/p/time-to-modernize-the-pa-separations-act). More to come from this coalition in 2018.

 

A Union Uses Separations Act to Gain Marketshare Over Another Union

In a bizarre twist of fate, a school in the Pittsburgh area signed a project labor agreement (PLA) which pleased the union construction sector in that area. Promoted as a tool to assure labor harmony, West Jefferson Hills School District could not imagine their PLA project being shut down when one building trades union sued the school district, architect, construction manager, and others – but that’s exactly what happened. The plumbing contractor filed suit claiming that the site utility work outside the building footprint should have been assigned to them and not the general trades contractor. It is typical on a construction project (public and private) to have the plumbing contractor perform plumbing work from inside the structure to five feet outside the building. Yet, this plumber wanted work to exceed the ‘typical’ scope of work and this contractor wanted the site utility work assigned to them, which took work from the general contractor, site contractor and the Laborers Union. The Court of Common Pleas of Allegheny County sided with the plumbing contractor stating that the project ‘willfully’ violated the Separations Act. This ruling changes years of precedence that could have major consequences on construction in Pennsylvania – both public and private.

 

 

Separations Act Project a Mess on a Grand Stage

The saying goes, that nothing attracts a crowd like a crowd. Well, in construction, nothing attracts the masses like a massive project. Originally set to open during November of 2015, the State Correctional Institution Phoenix in Montgomery County, PA, which is the largest public building project in our state’s history, is way over-budget and years past schedule. Since this project is so mammoth and expensive, it has the attention of many people statewide, from construction professionals who want to see how it’s built to concerned tax payers who want tax dollars spent efficiently. But a disastrous, multiple prime construction project should have been foreseen since it took years to bid the project, bidding three times over the timeframe of two Governors – Ed Rendell and Tom Corbett. I could go on and on about the mess that is the SCI Phoenix, but I think the PA Corrections Commissioner John Wetzel summed it up best in a Senate Budget hearing when he said: “It’s been a terrible construction project.”  For more information on this developing, and apparently never-ending story, click here to read one of the many articles on it:   http://www.philly.com/philly/news/crime/prison-graterford-phoenix-phila-convention-center-20170901.html

 

Well those are my top Separations Act stories of 2017. They were each briefly presented but if you would like additional information on any item listed please do not hesitate to contact me. Also, if you have an opinion on these stories or think I’m missing an item, I’d like to hear from you.

My Favorite Moment from My First Year at KCA: The Meeting that Changed It All

As I celebrate my one-year anniversary at the Keystone Contractors Association, I recall the meeting that changed it all for the KCA. I started at the KCA during the fall of 2016 and, after a three-month transition period learning from Mr. McDonough, I became the Executive Director of the KCA.

We held two KCA Board meetings and some KCA Committees met during the first six months after the transition period. Despite not having much to go by as far as a comparison goes, it just felt like the KCA get togethers were business as usual – nothing special. Then it happened.

For those first two Board meetings, I thought we were accomplishing what was expected of us – financials were in line, Association was humming along with minimal issues, etc. But I could sense that each of us, the entire Board and I, that we wanted to do more. What I did next could be viewed as unconventional, and if it failed could be viewed as a lousy idea, but what happened was magical.

We held a Board meeting with no agenda. I sat in a room with twelve construction executives, successful ones too that run their own construction company. Their time is extremely important. When the meeting started I said: “for today’s meeting, I want to know what’s on your mind: what work related topics do you want to discuss? What challenges do you face in running your company? Look there’s no agenda today. I’m hopeful that we’ll have a lively discussion in any direction we all want to take it. So, who wants to start it off?” The room went silent and then I continued: “This meeting could last two minutes or it could last two hours; it all depends on all of us.”

Again, silence. I really started to doubt my idea for this meeting and then one Board member said: “Does anyone else in the room have trouble finding qualified workers?” The ice was broken. From that point on it was as if the levee had broken. We discussed a wide gamut of issues affecting construction company owners from safety inspections to leadership development to community service to managing millennials to construction legislation. You name it and we discussed it. We went over our self-imposed two-hour limit too.

For each topic, we would spend ample time discussing it. Board members would offer each other advice on addressing an issue and collectively we would discuss if it’s something the KCA should look into addressing. This agenda-less meeting was succeeding on various levels. As the ‘new guy’ I got to see how the Board members interacted and you could sense the strong relationships that existed among them. Plus, I got to understand what issues are facing the membership and I could create a strategy to address issues that were appropriate for the KCA to get involved in.

One major KCA initiative that came to life as a result of our agenda-less meeting is our efforts in workforce development. KCA talked about this issue in the past but there wasn’t much action. We are currently working on a strategy to address the serious construction worker shortage issue that exists with both labor and management. This strategy will feature activities that stretch from grade school to middle school to high school to college to post education. While this comprehensive plan is being created, the KCA has begun implementing some actions already. This week we’re addressing students from Harrisburg High School about careers in the construction industry.

I share this agenda-less meeting story because I believe in sharing best practices. It worked for me and I’m not saying it may work for others, but if considering and you want more details let me know. If you’d like to share your management strategies with me, please feel free to contact me at 717-731-6272 or Jon@KeystoneContractors.com.

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It’s always nice to leave a meeting and see a KCA member building a better quality of life. JC Orr is the General Contractor for the PA Housing Finance Agency in Harrisburg. This project is being built to achieve LEED Platinum and Passive House Certifications.