Download - Construction Industry Round Table Letter to Chairman Issa - January 6, 2011

8/7/2019 Construction Industry Round Table Letter to Chairman Issa - January 6, 2011

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IndustryBoundThbIe

BOARD oF DIRECT0RS

Ch^irmaa, Linda Figg

Pr€side & CEO, Figg EngrneenngGroup

Viee Ch^ftma\ Robett E. Algel

CEO & President, he LaneConstructionCorp.

T reasnrer, Patrick Mocleamy

CEO,HOK Croup, nc.

Prst Chairman, Matt ew M. Walsh

CEO, The WalshCrroup

President,ugo Consultants,nc.

Presidenl,CDM

Willian B. FraselCEO,Carlson roup,nc.

Thonas F. Gilbane,Jr.

Chainnan CEO,Gilbane uildingCompany

CharlesL. Grcco

President& CEO, LINBECK

Da ald F. Greenwood

President,Bums & McDonneli Construction

Bruce E. GrewcockPresident CEO,PeterKiewit ons'.Inc.

Craig L. Martin

President, acobsEngineeringGroup

A. RossMye6

Presid€nl,Amencan nfiastructure, nc.

Patficia A. Rodgerc

President,odge6Bulders

Chajrman CEO,Sarge &LundyLLC

Douglas E. Woods

Presideni, PRConstruction.nc.

Mark A. Ca.so. Esq.

8 l l5 O ld lomnr ion r . .Su i te 10

M.l .eD, \ 'A 22102-2325

l 'h . ,x , :202 66 6 i77

$/.b Site: Ltr\t.{irt.,trg

January,2011

TheHonorablearrell . ssaChairman

U.S.House f ReDresentativesCommitteenOversightndGovernmenteform2157Rayburnouse ffice uildingWashington,C 20515-6143

Dear hairmanssa:

Onbehalf f heConstructionndustryound ableCIRT)1,ewishothank ou or equestingheRound able'sarticipationn hecriticallyimportantffort o dentify xisting ndproposedegulationshathave rmaynegativelympactobgrowthn our ndustry.

"Times money" othaxiomaticnd rue n hedesign ndconstructionindustry which emains eavilyaborntensiveo hisday. So, fsomethingakesmoreimet costobs . . thus,egulatoryelays,redundancies,nefficiencies,nd ed apecollectivelyave directmpactoncosts nd hereforehevitality ndability f our ndustryo remainprofitablendhiremore eople.

EvenheAmericanublic as omeo his onclusion,ith noverwhelming1percentgreeinghat hegovernmentneeds basicoverhaul"nd hould ndertakeanannualspringcleaning'toliminateunnecessaryegulationsnd ed ape." ccordingo a recentGlarusResearchroup oll Dec. 010).

Desiqn nd Construction ommunitv

Thedesign/constructionommunity's'can-do-spirit"nd know-hovf'tillexists,t' sus thardind nderhemountainsf aws,egulations,nd ulesthatwe nsist nheaping ntoourprivateectorobcreators nd henexpecthem o spureconomicroMh ndemployment.otonlys heexisting ass urdensomewhichnemight all the egulatoryomplex"),theuncertaintyndunintendedonsequencesf whatappearso beanever nding xpansionfgovernment'seach asalsodone everedamageo heentrepreneurialpirit nd isk aking bothnecessaryojumpstart robustecovery.

1 TheConstructionndustry Round Tabto CtRn stives to qeate one voiceta meet the intercstand needsof the design and constructionconnunity. C|RT suppotts ts menbers by actively

reprcsenting he industry onpublic policy issues,by imprcving he inage andprcsence

of itsleadingnenberc, andby providinga forum fot enhancingandlor developingstrcngnanagenent apprcaches n an everchangingenvircnnent through netwotuingandpeer

interaction.

The Round Table s conposed of approxinately 100 CEO, frcn the eading architectural,enginee ng, and consttuction inns n the United Sfates. Iogeibe,'fhese frrmsdelivet onbillionsof dollar, of publicandpivate sectot nfrastructurcproj&ts that enhance he qualityoflife of all Aneicans whiledl@gluenploying half-nillion Aneicans.



CIRTLetter nExcessive egulationsJanuary,2011

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Theprocessf designingndconstructings oneof man'smost omplex nddauntingndeavorsitoftens hemeans ywhichwemeasurehesuccess f anentire ivilizationtowit, he ruins" fancient orlds re ypicallyiewed s howadvanceheywereor how esourcefulnd asting).Partof hecomplexitys henumber fpartiesnd nterestedlayershatmayhave handnor nfluenceoveragiven roject,dd o hat henumber f ayeredurisdictionsfederal,tate,ocal, tc.); ndonebeginso understandhemyriad laces ndopportunitieshere elay/redundancyancreepinto heprocesshrough nnecessaryed ape.

Thisprocessasbecomerofoundlyore omplicated,srecently otedn he CivilEnoineerELOG:[t]he nvironmentalrotectionovementascontributedo heuncertaintyorconstructionbecausef he nabilityo knowwhatwillbe equiredndhow ong t will ake o obtain pprovalromthe egulatorygencies.he equirementsf continuede-evaluationfproblemsnd he ackofdefinitiveriteria hich reoracticalave lso esultednadded osts."

While xamplesf red apecanbe ound nprocurementf services,nvironmentalequirements,

public afety,inancialequirementsFinReg),rojectelivery,aymentystems, enefitmandates(healthare eform), ndcountlessther reas theyall hold ome hingsn common:ackofuniformity,edundancy,nd nefficiencies.

(A)Streamlininq"Asa people ehave hoseno unctionnder politicalystemhatpromotesiversityfgovernmentaluthority,ndstructure. s a result, e have evelopednationalegulatoryystemwellmeaningn ts ntentions,ut ayered ndoverly omplex.Oursocial urposes, issions,ndpublicnterestsften ompete, ithour44,000urisdictions,ll50states, everalerritories,nd hefederal overnmentach mending,dopting,nterpreting,ndenforcingivemajor etsofconstructionodes ndover2,000echnicaltandardsoverninghesit[e election],esign, ndconstructionf bu,idlngsNOTE:ust buildings"s being onsideredere in otherwordsverticalconstruction"not oads, ridges, nvironmentalemediation,tc.etc.)." See,NCSBCSnd ts54

nationalartnershereinafterAlliance"]

websiteentitled: treamliningtheNation's uildingReguatoryP oce s(www.csbcs.org/newsite/Streamine/Stream.tm)'

And hecost f red ape anbe substantial.heAlliance/FIATECHroject as oundhat ncreasingtheefficiencyfmodern onstructionodes,ules, nd egulationsswellas reducingheamount ftime t akeso move newbuilding r buildingenovationhroughhe egulatoryrocessyasmuchas60%annually,analso aveboth heprivate ndpublic ectorsensof billions f dollars.

When xtrapolatedo he ullconstructionarket,hestudy oteshat:

'zfhe Environmentatrctection gencyEPA)hasongbeena source f rcgulatorynefficiencynd costs.Almost0yearsagoL,A!9Lfut9pbSUoL 59,No.1, ebruary 983)publishedn afticleentitled:lnpactofRegulatory elays n he Cnst fWastewaterreatment lants" yKisla S. Reed ndC. EdwinYoungwhich ointed ut hat"Thecd tapenec$sary o neettheEPA cquiementsrequently elays he s&,ttol constructionanaverage l2 to 4years.'E @page35.

3TheNational ,onfetencef States nBuildingCodes nd Standards,nc. NCSBCS)aswo*ed over heyearswith edeftlagenciesndpublicandpivate sector ryanizations,ndhasnowoinedwith heEl![EPL!:3reA0]i0qgepi@ and heStateand Local overnmentuppod ctivities f Robeftwible& Associates ithagoal o rcduce he amount ftime t takes o movebuildingshtoughhe egulatory ystenby asmuchas 60%.



CIRTLetter n Excessive eoulationsJanuar/ ,2ol1

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Regutatoryosts lOok f he Annual$1.0rillionn tJ.S.Constructionr$100Billionn costs.a

BUT, venwith hese normousavingsmuch,f notall, J hepurposef hese roceduresouldbeaccomplishedithoutheunnecessaryelays ndcosts' that's otusta theory, uta factproven y heexperiencesorneromprojectscrosshecountry hen ime s of heessence.

(B)Contrastino roiectExperiencesThere reanynumber f examplesndexperiencesver heyearswherewecan ocus n heclearunmistakableessons e've earned ndput hem o workacrossheboard na myriad fpublicprojectso hatweget hebenefitsfefflcient,cience-based,ndcosutimeensitiveegulationswithoutheunnecessaryndwasteful urdens. rwecan gnorehemandcontinue ithwastefulinefficientrocedures.

. Cuftinq hrouqh edTape EarlvCompletion):fterbarely neyear somehreemonthsahead fschedule)new -35W ri dgetood here ne ragicallyollapsednAug.1 007.

The ldspan arried orehan 40,000ehiclesdayand he oss f hebridge ascosting400,000erday ndiminishedevenue,ncreasedommuterxpenses,ndburdenonsurroundingoads.Businesssusual'andeedlessegulatoryelays ould otbeacceptabler oleratedy hedevastatedommunity. henncentivesxist,he egulationsand ed apecanbeovercome/managedndeliminatedo create notableuccess:heInterstate5Wbddgeeplacementroject ascompletedarly/belowudget ndwasawardedmerica's ransportationwards' randPrizeor 2009 y heAmericanAutomobilessn.,heAmerican ssn. f StateHighway Transportatlonfficials nd heU.S.ChamberfCommerce.RESOURCE:inda igg, iggEngineeringroupFL)l

. Tvoical roiect elavs: heprojecto rehabhecity of chicago'sRedline"andbring t o astate fgood epair, n tsexistingight way whichs currentlyn disrepairnd falling

" The Alliance d@unented the savings ron streanlining and use of lT methods or buildingprcjects and then applied t to

2007 Construdion Data (today,constructionspending s down to apprcxinately $810billion, of whichabout$256bi ion is innon+esidenti l bu lding).

5TheAlliance/FIATECHweb slte rofes:

'lhlsis not about cgulatory abandonnent! This s aboutspending bothgovemment

andpivate sector dollars wisely."

By 2007, the study found vast savings ton seeningly sinply efficiehciessuch as:(1) e-Pemit tuocessingnow used n over fio juisdidions acrcss he nation Enging in population rcn Los Angeles(3,695,000)o Cobleski NY (5,300) cduce &aff and building owner/architect ines to ppcess pemits by between 30 - 40%;(2) lntenctive Voice Resporse(/yR) sysiems,, Shelby Co., TN;Orlando,FL and Washingtonco., oR reduce the time toscheduleand conducl inspedions rcm 2-3 days to less han 24 hours; (3) Mobile ield inspection echnologybeing used ncities ncludingPhoenix,AZ: SanDimas,CA incrcasethe nunbet of inspectionspeiomed pet day by 25% and rcducecontactot down ime waiting or inspectionsand their rcsultsby 20%; (4) e-Plan Review now being conducted n: Atlanta, GA;Bend, OR; Madcopa Co. AZ; OsceolaCo. FL and a dozen other uisdidions rcduce the amount of time t takes to reviewplansby 40oA, lininate lost plans,and rcduce by 80% he nunber of tips to theseuisdictions by out of stateownergarchitects;and (5) strcamlinedprccessesarc geftingbuildings up and open faster,puftingbothpeople to workand

rcvenues nto lheuisdiction's

coffeB soonef fot example a 200 toon hotel openjust

3 monthsearlier using strcamlinedptocesseswithan 800/6 ccupancy= $144,000 n added ax rcvenues o a urisdbtion just fton the 10o/o ccupancy ax on$111/nightroons.



CIRTLetter nExcessive equlationsJanuari6,ot

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down')s estimatedo cost$4billion.f heCTA Chicagoransit uthority' ad hemoneyntheirhandsoday,heprojectll// ould otbe inished ntil 019; ven houghheconstructionhould nlv ake woyears. hedelay fsome -yearss due o heEPA,ElS,

andall heother roupshathaveo ouch heprolectnotwithstandingt'san existinginethat soperatingow) reventinghestartof constructionoryears! heMayor f LosAngeless acinghesame ypeof delaysnbuilding numberfhisprojectsn hiscity.IRESOURCE:imKenny, enny anagementervices,lL)]

(C)Procedures ProcessHiddenn anydiscussionf regulatoryastes heproceduralndprocessurdenor paperwork")hat ypically ccompaniesny ules.Examplesf hisprocessrebothuniversalnapplicationndoften imes nique r specifico ndustryroups nd/oregulatedreas. hesames rue or hedesign/constructionommunity.

. CompliancendPaperWorkCosts/Delavs:omewhatniqueo heA,/E/Community,hefederal genciesppearo be beefing-up"ndhiringull-timetafferso assigno argeprojectsnvolvingo-calledstimulus"funds,wtrereheyare equiring onthly versightmeetingso ensureomplianceith ederaluidelines.heSanDiego ourthouses n hecategoryf sucha "mega-project"over 100M):ontractorsredevoting number fpeopleand esourceso make ure heyare n completeompliancethepaperworkequiredsakin oa monthlyederaludit.

Regulationsave otbeen ltered rastically,utchances f being udited ave ncreasedand uditso agreaterepth ave een romised.heOFCCP,n act, as liminatedheir"desk udit" rocedurendhavemovedo more ggressiven-depthn-site uditingrocessacrossheboard this hen equiresreater reparationorpotentialudits n hecontractors'art nanticiDationf henotificationetter r knock n hedoor.

. ProcurementulesorConstructionroiects: nother xample f regulatoryulemakinghathasa directmpact ncosts/timeelateso procurementroceduresorA,/E/Crojects:

D Useofproject Labor AgreementsPLA)on FederalConstructionProjec6: fhenew uleseekso mplementresidentbama's xecutive rderNo.13502Feb.6,2009), hichor he irst ime stablishespolicy f'encouraging'ederalgenciesto considermposingnion-onlyLA's n ederal onstructionrojects hoseotalcosts xceed25million. esidesheobviousotentialandikely)mpact nincreasingostsor ederal rojectswhichmeansessproiectsanbe nitiated),heproposallso nd unsCongressionalandatesnd aws."RESOURCE:enBrubeck,BC [email protected])l

> RedefininglnherentlyGovernrnentar":neof hemore erniciousxpansionsfgovernments tswillful ffortso compete ith heprivateector.To urtherhataim, heAdministrationasundertakenrulemakingrocesso expand nd lip heintent f what s inherentlygovernmental'o as o prevent ork rombeing

contractedo heprivateector. learlyhishasa directmpact n heability f irms

" Theproposalontenplates xpandinghe PLAmandateoprcjectshatdonotditectlynvolvehefederal ovemnent asapafty o the contract) y sinply attachinghe cguircmento the unding.Curently,cases ppeat o restict suchan expansivercading f the NLRI'.Theprcposal lso nbrtercswithCongrcssionalirectionhat ederal gencies hould tive to "obtainfullandopenconpetition" s set otth n the Conpetitionin Contrcctingcl."Moreover,he uleviolates nd gnores U.S.C.e,04CongrcssionaleviewAct)and heREgulatorylexibilih/ cl.



CIRT etter n Excessive egulationsJanuary,2011

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to survivendmainta-inheirpersonnelf thegovernmentgencyeducesr stopscontractingutwork.'RESOURCE:ohnPalatiello,[email protected])].

> "CardCheck"Thepotentialemains, ithouthevotes nCongresso passchangen he aw elatedo heso-calledCardCheck"egislation,heAdministrationwill urn o heNLRB'sulemakinguthority.ivenheconstructionndustry'saborintensiveature, nd he act t s airlyhighly nionizedatapproximately4.5olo),sucha ruleor regulatoryhange illhave n mmediatenddirectmpact n heconstructionortionf he ndustrv.

ConclusionThe imehascome,f not ongpast,oretfortso ocus nwayso rolFback,unset,epeal, nd/grde-fundheexcessiveregulatorycomplex"hathasariseno newheightsver hepastde-cade."Beyondhesemeasures,hecourtsmayalsoneed oplaya role o reversehe mbalance.'

Short f outrightepeal nd/or liminationf excessiveegulationsnd ules,heaffect fstreamlininghemwhereby ctions redone oncurrentlyndshared mong ndbetweenjurisdictions/agencieso hata projectmaymove orwardna timelymannerevoid f unnecessarydelays ould reatlymproveheability f F|./E/Cirms o complete orkandgainfullymploymoreAmericans.ight ow,dollars llocatedo bespent n hese rojectsresubjecto endlessredundantimeconsumingndoftenwastefululeswhichweigh own fficienciesnddeliveryimes,whilencreasingosts.

To expectheU.S.economyo expand, reateobs,andbecomeobusthroughovernmentinterventionndexcessiveegulations,s o expect omethinghat neyer asandneverwillbe" toparaphrasehomas efferson.

Sincerely,

Constructionndustrv ound able

'TheOFPP uidanceefte/s constructy9!&Sthe oiginaland ong-heldntentoffedealpolicyo contrcct-outot goods nd

seryicesl!959 theywete"inhercntlyovemnental"n naturc,o one hatnow suggestshatagency fficials ustprovet isD9!"inherentlyov6mm6ntal"o contnct-out.See, 5Fed.Reg.16,196Match 1,2010)].

3CIRTs awarc hat henew111 Congressay take-up nunberof proposatshat seeko rcbalancend/oraddrcsshe

rcgulatory omplexhat srcpidlyeplacinghe C,ons,titutionalaEguards nddivisionshatarc he hallna* of oulgovemnentalysten.TheRoundTablesuppotts uch ffodsandcommendshese lotv withsuchsuggestionssput otlhby J.T. Youngo applydeficilcuttingechniquesy creating "Regulatoryudget"hatbeginsoquanw the enomous"hidden

ax'foundn

excessiveegulationsnd ules.See,Viewpoint,p(Dec.

29, 2010)age

Al l].e

L)nfoftunately,he coutts ave been xploited ndusedo expand he cgulatory cach y advocatel hohave used hen(often utside f thei expettise t scientificnowledge sonetimesnfluenced y aullyor even hudulentdata,as n he caseof CO2emissions)ogethvonble rcgulatory utcameshat atexceededhe ulemakingt@essot Congrcssionalntent.Howeverorc rccently,hecouttshavecane dot n hardonsomeexcessivecaches y heFCC in he caseof "netneutrclity' roposedules),EPAf Arcuit enanded he 2009 onstructiontom water ule),and Dol'snandatory il di ingmontoiun whichwasstruck ownas ahitraryandcapicious, s wellaspotentialcpealofpottions f the nassivehealthcarebill.