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.

Open Door Policy

In life I’ve heard this line many times: “I have an open-door policy.” Teachers, coaches, employers, politicians, etc.  Many like to throw this line around, but do they mean it? Here’s an example of one individual who meant it, and as a result the rest of us (at least those in Pennsylvania) are better off because of it. Thanks Mike Turzai. Here’s the story:

During the summer of 2016, while living with my family in the suburbs of Pittsburgh, in the McCandless area, I was offered a job in the central PA area. After much thought and discussion with my wife and daughters, we decided to accept the position and move away from an area that has treated us great. We listed our Pittsburgh home for sale and began looking for a home in central PA.

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It’s signed! During the summer of 2016, we accepted the position of Executive Director for the Keystone Contractors Association. From this moment on, it was time to start the relocation process. 

We had three offers the first day our home was on the market (McCandless is an awesome place to raise a family and Michelle Petty is a great realtor). We accepted an offer that was best for us, but the buyers could not close on the purchase for at least two months, which turned out to be good for us in that we could live in the home for longer than we expected to, and it gave us time to find the perfect place to live in central PA.

While we were living in the McCandless home, the buyers continued to prepare to buy it and an inspection was part of this process. More than a week after the home inspection was conducted, we received an email from the buyer’s real estate agent that contained the results of the inspection. I remember it like it was yesterday. It was a Sunday evening when the email arrived; it was a lengthy, 50-plus page report with bold, red-highlighted items that the inspector deemed as important; and a few pages into the report I saw a line that made my heart sink: “GAS LEAK detected not safe to live in.” Since I was living in the home, with the four people who are my world, I was speechless…wait WTF did I just read?!?!?! We left right away and spent the night at my aunt’s home, a few miles down the road.

The next morning, I was busy on the phone. I called the gas company first (Peoples Natural Gas was amazing as they arrived right away, and they had the gas leak issue resolved within the hour). Then I proceeded to speak to my realtor and an attorney friend of mine. I wanted to know why, if my family was in harm’s danger, did the home inspector not alert us. The response I received was that home inspectors are not legally obligated to notify anyone of unsafe conditions, like gas leaks. My first thought was that you would think a member of a society/country would feel morally obligated to let someone know about this, but unfortunately this was not the case. Then I called my Pennsylvania State Representative Mike Turzai.

Turzai is a friendly guy who you speak with at the North Allegheny High School Football games or you see walking down the streets in your neighborhood. He told me a few times over the years, while living in the district he represents, to not hesitate to contact him if I encounter any issues: “my door is open let me know if I can help.” So, I thought I’d take him up on the offer to see if he could help. Yes, my issue was resolved when I called him, and my family moved back in our home after the gas leak was fixed, but I do not want any other family to have to go through what I went through and fortunately for the rest of Pennsylvania, Turzai agreed and did not want anyone else to go through this serious issue either.

After thoroughly understanding the issue, Turzai and his staff were able to assist in modifying a home inspection piece of legislation that at the time was moving through the 2015/2016 Pennsylvania legislative session. Time ran out on this piece of legislation and when the session ended on December 31, 2016, the home inspection legislation died.

When the new year arrived, the Pennsylvania legislature introduced a new home inspection bill for the 2017/2018 session and the provision that we inserted requiring home inspectors to notify residents immediately if they are living in unsafe conditions carried forward to the next session as well. House Bill 1001 recently passed in the House of Representatives and it is now in the State Senate. While it’s a comprehensive bill that affects many aspects of the home inspection process, I for one am glad that it spells out how home inspectors are to act when encountering threats to health and safety.

One would think that a home inspector would notify a homeowner if they were living in an unsafe condition, but I found out that is not the case. It’s a good thing Mike Turzai has an open door policy and listens to the people he represents.

Looking for a Good Construction Article to Read?

What does a four-time NFL Super Bowl Champion, a public relations specialist, and a human resources expert have in common? Each has been featured in the Keystone Contractors Association Construction Industry Articles of Interest webpage.

When I came on board at the KCA I expressed a desire to place a strong emphasis on education and the sharing of best practices. I was right at home with the KCA membership as they too feel strongly about education since it’s a vital aspect of career development. Members devoted time to creating our educational programming. Some topics were better suited for an in-person seminar/ presentation, while other topics were better in an article format. With the latter in mind, we created an online format.

During the past few months of its existence, we have been fortunate to have such intelligent and motivated professionals wanting to be featured on this new resource. We are extremely pleased to feature such diverse and important topics on this website. Sami Barry of Helbling & Associates, penned an article on women in the construction workforce; Tom Kennedy, UPMC consultant, wrote about Integrated Project Delivery from the Owner’s perspective; Rocky Bleier, Vietnam Veteran, Steeler Legend and Owner of RBVetCo, authored an article about teamwork in construction; plus, Jason Copley of Cohen Seglias, and Joseph Bosik of Pietragallo Gordon Alfrano Bosik & Raspanti, wrote separate articles about the Mechanics’ Lien Law.

The newest articles come to us from Christopher Martin, President of Atlas Marketing, and Thomas Williams, Partner at Reager & Adler PC. Mr. Martin’s article is on crisis communications. As an expert in this field, adding his insights to this serious topic was a no brainer. As a result of his interest in educating the construction community, we are in the talks now to create an educational program to prepare construction companies in responding when a crisis happens. Mr. Williams’ input is on a new contract provision being inserted by the Pennsylvania Department of General Services for construction services. Due to the potential ramifications of this new governmental clause, the KCA is leaning towards hosting an educational program on this subject matter too and it’s nice to know we have Mr. Williams if we go that route. Thanks to the proactive, and knowledgeable, input from both professionals KCA is able to educate the construction industry on serious topics.

If you want to be added to this resource, and position yourself as a construction industry expert of a specific topic, we’d like to hear from you.

To view the KCA Construction Industry Articles of Interest visit: https://keystonecontractors.com/industry-articles.

Let’s Spend PA Tax Dollars Efficiently

Today we are a few days away from the month of October. In Harrisburg, it should be a time that our legislature is working on crucial issues – education, healthcare, energy, opioid epidemic, etc., but instead our state is still trying to complete its budget. One Pennsylvanian even tracks it daily and any minute today we should see his post about the budget now being 89 days late.

Every time I think about the budget debacle, as a construction professional I think about a major issue that drives up the cost of public construction, that being the Separations Act. 10 to 13% – that is amount that we overpay for construction services in Pennsylvania. Think about that every time you drive around and see a public construction project underway – our state is paying 10 to 13% more from your tax dollars to construct that building than what Maryland would pay for it. Next time you hear that your local school district is holding a school board meeting, think about all the topics they cover under their buildings and grounds report and how those projects will cost tax payers 10 to 13% more than what New Jersey would pay due to a meaningless mandate.

The Separations Act requires Pennsylvania to build in an archaic manner where multiple prime contractors take a lead role, and point fingers at each other while standing next to their attorneys every step of the way. Claims, lawsuits, delays – those are the norm for public construction projects in our state and those are the factors that drive up the cost of construction. In other states, like West Virginia, Ohio, and 47 other states in our nation, they are free to choose the most efficient construction delivery method. Our federal government and the entire private sector are also free to choose the most cost-effective delivery method.

So next time you read a newspaper article on the state budget impasse, just think about how we overpay for construction services by 10 to 13%. Let that fact sink in while you start your day, the 89th day that we are late on this year’s budget.

Please share this petition with your contacts, urging them to sign:  https://www.change.org/p/pennsylvania-repeal-pa-separations-act. Also contact your legislators and let them know that you want action on Senate Bill 744 and House Bill 1529.