It was about as predictable as the springtime wind blowing up the Rio Grande River Valley, and nearly as fragrant. When funding dried up for private commercial projects and the housing bubble went the way of the Hindenburg, Washington’s benevolent answer to the construction industry’s demise was to spend billions of phantom dollars on federal, state and municipal building projects. What else could we expect when we started in singing those Depression-era songs ("nobody knows the trouble I’ve seen …”) but that a 21st century version of the New Deal would follow close behind.
The ratio reflected in my bid load four years ago was something like 70 percent private work and 30 percent public. Now the formula is completely inverted and I’m up to my armpits in courthouses, military base expansions, detention facilities, schools, government clinics and administration buildings. OK, I admit that it’s better than nothing, but I’m always a bit leery about gifts from strangers. And before we all start thinking that we’re steppin’ in tall cotton, I should point out that there just might be a few thorns in that bouquet of roses that just hit your bid log.
As is the case when dealing with the bureaucracy at any level, in any circumstance, the red tape can be cumbersome or downright paralyzing. Mandatory wage scales, certified payrolls, the e-verify program, the Buy American Act, LEED requirements and overkill in design are just a few of the stumbling blocks that come part and parcel with government work that add hidden costs that cannot be reflected in an estimator’s bid if he or she is to remain competitive when jumping for the bones that our leaders have tossed out. At the risk of appearing to bite the hand that "feds” me, I’d like to expand on these items and some of my experience in wrestling with red tape.
At first brush, some of these requirements seem reasonable or even advantageous until reality creeps in. For instance, the Davis Bacon wage requirements appear to put all qualified bidders on a more or less even playing field with regard to labor costs. In the case of union shops, they are empowered to compete with non-union shops, some of which might otherwise gain an unfair (?) advantage by paying substandard wages. But there are any number of cunning ways to circumvent the intent of the standard, both in the bidding and performance stages. For example, certified payrolls can be, and often are, fabricated to show compliance when in fact employees are underpaid. I know of a past competitor who was exposed in this kind of ruse, and he received only a hand-slapping (a warning and a meager fine) from the labor board for his transgression. I seriously doubt if it deterred him from continuing the practice, as he still bids consistently low on public projects. Go figure.
Consider too, if you are a non-union shop paying a subscale wage as a survival measure and you are awarded a Davis Bacon project. Imagine the dissension that the skew in the payroll will cause. The hue and cry going up from workers who are assigned other projects and not receiving premium pay might very well sound like a chorus of scorched cats.
Then there’s the e-verify program, the brainchild of the Department of Homeland Security, which mandates the re-screening of all employees for "employment eligibility” on any federally funded projects, and any new employees company-wide, thereafter. Now, I’m all for screening out undocumented workers, but isn’t this just a duplication of effort over the I-9 process that’s already in place? Just more red tape and paperwork, by my reckoning. And then there’s the Buy American Act, which forces you, under the auspices of patriotism, to violate many of your prior material purchasing agreements with your suppliers. How is that patriotic?
But far and away the most maddening hoop that we’re forced to jump through on government projects are the LEED mandates. In 2006, the U.S. Department of Agriculture, the Environmental Protection Agency and the Department of Veterans Affairs issued Sustainable Buildings Implementation Plans, requiring all new construction or major renovation of projects receiving federally funds in the amount of $3 million or more to earn a LEED certification or equivalent green building certification. In 2007, the Department of Health and Human Services followed their lead. In 2008, the Department of Energy, the Department of the Interior, the Army, the Navy and a host of state and local governments followed suit like a flock of green sheep. Now, the record of my stand on the very existence of LEED and the USGBC is pretty well documented ("worse than worthless”). But the very notion of our government misappropriating our tax dollars to build mandatory LEED projects that require costly certifications that are completely meaningless is an outrageous insult.
Unfortunately, as estimators and construction entrepreneurs, it seems to be our lot to choose: either tolerate the tangle of government red tape for now and navigate through it, or drown in red ink. Like I said, nobody knows the trouble I’ve seen.
Vince Bailey is an estimator at Darrell Julian Construction, a commercial drywall/framing contractor based in Albuquerque.