Not in Massachusetts, baby. No way. Today’s report from WBUR just confirms what you already know: Construction projects take forever and go over budget. Interestingly, it seems to be because we’ve been penny-wise and pound-foolish: Taking unrealistically low bids, and not providing money for projects in a timely way, allowing them to finish early. As for just plain foolish, I’d add the totally unnecessary mandated police presence.
And just for more on the Romney record, here’s more evidence of how much he cared about governing our fair Commonwealth:
In 2006 then Governor Mitt Romney didn’t file a transportation bond bill so as many as a hundred construction projects stopped. This can drag projects out for years. The biggest project underway now is the $300 million dollar reconstruction and widening of nearly 14 miles of Route 128. It includes replacing 22 bridges. Many parts are behind schedule including work at the 128/95 south interchange in Canton and the overpass on Route 1 in Dedham.
This seems like a victory of appearance over substance and short-term gain over long-term needs.
<
p>
It’s also a basic function of government government should do well and that the public cynically expects government never to be able to do well. How do we fix it? What’s the problem?
Does anyone know more?
I work in the environmental cleanup field and often I’m involved in projects for the state or towns. We also do construction management for both public and private jobs. The public jobs are usually for renovation and construction of schools and other public buildings. These jobs are required to meet the same standards for biding and project reporting as your typical road project. From this experience I can tell you that one of the biggest impediments to timely construction in Mass is Labor Unions.
<
p>
Labor Unions have resulting in some of the most ridiculous biding laws in the country. For starters prevailing wage. Any job for the state or towns has conform to prevailing wage, which is a rate set by the state, you can get more info here. The prevailing wage is a rate set by the Department of Occupational Safety based on the local collective bargaining agreements that is a minimum wage based on job classification (i.e. truck driver, laborer, carpenter, asbestos abatement worker, etc.) for a given area.
<
p>
For example, in the Taunton area, these are the prevailing wage rates (per hour) for the job classifications I listed: truck driver $40.12, laborer $38.50, carpenter $49.27, and asbestos abatement worker $32.55. For the most part these make sense relative to each other, but I listed asbestos abatement workers for a reason. They require special training and licenses that laborers do not, they work with one of the few things listed by the EPA that are known to cause cancer and the laborers are specifically not allowed to work with asbestos. So why is the laborer rate higher then the asbestos abatement work? Unions and possibly some racism. The laborers union is more powerful (i.e. better lobbyists) then the asbestos abatement workers union. Some asbestos abatement workers are also members of the laborers union but are typically Hispanic, Cambodian or Vietnamese. Your average “white guy” laborer won’t go near asbestos because of the added dangers. It has gotten to the point that the major training provider for asbestos abatement training offers more classes in Spanish then in English.
<
p>
But I digress, the only way around prevailing wage is to only higher union workers for the project. If you do this you only need to pay the union rate, which is less then the prevailing wage rate. This combined with the requirement that the awarding authority take the lowest bid, virtually guarantees the work will go to a union company. And if a non-union company wins the work, the unions picket the job site. They call it a “community information line”, but it is an illegal picket line. They wear sandwich boards, call you a scab if you try and enter, use typical intimidation tactics like vandalizing your car and refusing to get out of the way of your car.
<
p>
As for the delay in payment, many of the bids now require participation by minority owned business. This often results in less experienced firms winning and managing the project then in the past. And no where does the lack of experience prove to be a bigger problem then with pencil recs or wage documentation. The prevailing wage law requires that documentation be submitted to prove that you are using union labor or paying prevailing wage. No payment can be issued until these documents are received for the billing period. These are often rejected and require several rounds of resubmittal to get the paperwork exceptable. The pencil rec is a draft invoice that is reviewed the by clerk and/or construction manager. These also often take several rounds of resubmittal prior to approval. The quality of these submittals have severally digressed in the last ten years.
<
p>
And when the project falls behind, union and prevailing wage requirements make if very difficult to work more hours to get the project back on schedule. In private construction, the contractor often has to eat into their profit for the overtime required to get back on schedule. But due to the wage laws on public construction, the town or state often takes most of that hit. Again, due to nice lobbying work by the unions.
<
p>
Chuck, you take a nice dig at Romney in last section of your post, but he did try and fix this but was given no help by the AGs office and was left out in the wind and couldn’t get anything done.
<
p>
As to address some of KBush’s points.
<
p> * Incompetent project management by the state? Romney enacted a law that requires jobs over a certain dollar amount (I believe $50Mil) to be funded for professional project management up to 10% of the contract value. The project management is awarded under a separate contract and has no ties to the contractor. This is how much of private construction works.
<
p> * Well-meaning laws and regulations with unintended, harmful consequences? – See prevailing wage discussion above.
<
p> * Organizational rigidity and ossification? Not quite sure what you mean by this.
<
p> * Badly written contracts that reward delay and inefficiency? I would say the contracts are usually written well. The problem is that contractors have turned finding change orders into an art form. Most of them will set up two teams when the go to bid the job. One to price the job as written, the other to find change orders. Half the RFIs you get during the bidding process are set up to look for change orders. In the past, many of the charge orders were dealt with by field changes that would result in negligible dollar changes that contractors often did not submit change orders for. Now, you ask them to pick up trash from the coffee truck and they want a change order. And this is a change I have seen in the last 10 years. I can’t imagine what it is like from the 50’s, 60’s or 70’s.
<
p>
I hope this post doesn’t come off as union bashing. I think unions had there place. But in today’s construction, much of what they do appears to be self-preservation at a cost to the general public from my point of view.
I cannot let JK’s statements about construction wage and bid laws go unchallenged.
<
p>
The state prevailing wage law mirrors a federal construction wage law (Davis-Bacon). The state prevailing wage law is based on contracts bargained between thousands of contractors and the unions representing the workers within a craft. They reflect the fair market wage and benefits. The idea is that the state should not be in the business of forcing contractors to lowball workers on public constrcution. That means every contractor (union and non-union) starts out on a level wage and benefit playing field when bidding. Therefore management skills and other factors set the final bid.
<
p>
(a note here -why do I never see a call for limting profits on taxpayer funded projects. Never limiting lawyers fees, bank fees, etc. Why is the worker who is the target and not the business side of the cost factors?)
<
p>
You can’t avoid the prevailing wage by hiring a union contractor. That is simply a false statement. The state and the AG monitor the prevailing wage law – it is the same for every contractor -union or non-union. Because unions generally negotiate contracts of 3 -5 years in length and construction projects are often bid during negotiations there are several times when the prevailing wage is actually lower then the union wage because it takes almost a year for the wage scales to be updated within the state system.
<
p>
In 1988, a group of non-union contractor executives (lead by Steve Tocco – later with the Weld and Cellucci Administrations) and Barbara Anderson placed a ballot question repealing the prevailing wage – it lost 58% to 42% (losing in 350 of 351 cities and towns).
<
p>
Laws such as the file subbid law were implemented to address criminal behavior in public bidding. As with everything else, how you manage a project has more of an impact on costs then anything else. Poor planning, poor oversight, lack of accountability are not “union” created problems.
The state prevailing wage law does have a lot in common with the Davis-Bacon law, I never said it didn’t. Although, the Davis-Bacon law does not apply to projects in Mass unless they are funded directly with federal money, such as HUD or EPA superfund for example. I am unsure how this relates to roadwork, I don’t believe most of the road work jobs, the 128 expansion for example, are funded directly with federal dollars. Most of the requests for proposal I see for bridge and road work specify compliance with the state prevailing wage law.
<
p>
Either way, what you call “the fair market wage and benefits” is not a free market, it is a restrictive market.
<
p>
As far as I understand the law, and I am willing to admit I may be off on this, I am not a labor attorney, the prevailing wage is the highest of the either the rate paid to a similar trade employed by the state or municipality or the rate paid to a union trade worker in the area and there may be some other rates that come into play in this calculation. Most towns have official rates for these positions established through negotiations with the town or state employees unions, even if there is no one employed in that position for the town or state. The unions then know this rate and set theirs under it. This is how the law was explained to be by a clerk on job in Boston. If I am wrong that the union rate is not exceptable and even union workers need to be paid at the higher rate, then please correct me.
<
p>
Also, please feel free to speak on the other points I have made about public biding and unions. I would especially like your input on the “community information lines” since you are obviously affiliated with unions.
<
p>
To your note, we should never limit profits. If someone can find a better, smarter, more efficient way to do something why should we ever limit the profit they can make on that? Because you and your union buddies might loose a job to someone who figured a better way to do your job? We should set up very basic limits that they have to work within (no illegal immigrants, no stolen or sub-spec equipment or supplies) and then set up performance based criteria for the contractor to meet. If someone can do the job while meeting those criteria while making a windfall profit and being cheaper, quicker or better then the next guy, why should we ever put limits on that? To stagnate innovation?
<
p>
As to your point about repealing the public bid law, really, that was almost 10 years ago and way before all of the problems with the CAT project. Don’t you think the results may be a little different? And If I recall that correctly, labor unions dumped huge amounts of money into preventing that question.
…it occurs to me that, if contractors (and their sub-contractors, and their sub-sub, etc) are supposedly required to bid on a contract for a project that is supposed to go on for X years, based on the then-prevailing wage, but, because of government or other delays, actually goes on for Y>>X years, there is more than a bit of a problem. The “prevailing wage” on which the original bids were based will likely have significantly increased in the meantime.
<
p>
What is the solution? The solution is obvious. Cost-plus contracting. That is what you will get, to you everlasting detriment. Cost-plus is what sky-rocketed the DeptDef procurement budget, and they still haven’t figured out how to get it under control (assuming they want to).