Larry Eisenberg likes to have several tools for the job. As executive director of facilities planning and development for the Los Angeles Community College District, Eisenberg is in charge of a $2.2-billion program to build 40 new buildings and renovate some of the 455 existing buildings on campuses. And it’s absolutely essential, he says, that he can choose from several project delivery mechanisms and contractors.
There’s one problem: California government officials have made it difficult for Eisenberg to use all possible tools to build projects. Since Eisenberg took this position in 2003, he has been frequently turned down when wanting to use methods such as job-order contracting even though he has shown potential cost savings of 10 percent. And although Eisenberg has had good experiences with unions as a workforce, the political playing field is a different story. In places such as California, labor unions have pressured politicians to block such proposals to make sure union workers get the jobs. It’s the same for design-build projects.
“People perceive design-build as threatening because if you had the private sector delivering more effectively and efficiently, then it really raises the question about why you have all these [union] state employees working when the private sector could deliver this very effectively,” Eisenberg says. “[Unions] have a significant voice and people pay attention to them.”
In California, design-build projects were not permitted for community college construction until a pilot program was passed in 2005 that allowed design-build for projects costing more than $10 million. In 2007, the state lowered that amount to $2.5 million and extended the option to community colleges statewide. So some changes are taking hold.
“I think the legislature now is beginning to see the value of design-build,” Eisenberg says. “The unions realize that design-build isn’t as threatening as they really perceived.” Nonetheless, he often finds himself in a bureaucratic meeting justifying his chosen delivery method, explaining the fast-track capability of design-build. For example, Eisenberg says design-build takes 12 to 16 months compared to 18 to 24 months for design-bid-build.
“When done correctly, design-build is spectacular compared to design-bid-build,” he says. “I’ve done a $20 million project from signing the contract to ribbon cutting in 11 months all the way through. … We’re looking at 6 or 7 percent inflation [in the construction industry], and delays cost me a million dollars a month. So if I can open quicker, that represents huge savings.”
But politics can be a substantial roadblock, particularly in California. “Isn’t it a shame that we have to ask permission to save a million dollars a month for taxpayers?” says California Assemblyman John Benoit (R-Bermuda Dunes).
In May, Benoit pulled a bill that gave design-build authority to the Riverside County Transportation Commission because he says union-friendly politicians would have killed the measure. His bill, AB 1240, would have let local planners accelerate designs to ensure that a commuter-rail line from Riverside to Perris and Moreno Valley opened by 2010.
“They saw it as a threat to union jobs, and [unions] have a very, very strong place in California governance unfortunately,” Benoit says.
For Benoit, it’s a party issue as well.
“Union-related issues come down just about every time to a very strong [Democratic] party line vote,” he says. “In this case, the state engineers fought this even though my AB 1240 was a relatively modest, small, local single-project bill. [They] considered it a crack in the dam. … No amount of good logical offers or explanations of the value of design-build will overcome their stated opposition.”
It’s not just in California. Jim Pientka, executive vice president and co-owner of Madison, Wis.-based Planning Design Build Inc., agrees. “There is sometimes a [negative] union attitude towards being open to working with open-shop contractors,” Pientka says.
Overall, however, Pientka’s experience, like Eisenberg’s, suggests that once the political hurdle is jumped, unions and design-build can combine for positive experiences. Both have had good experiences with unions, adding that in areas like Chicago — where unions are more prevalent — the union labor force is excellent and effective in a design-build environment.
“When we’re in the Chicagoland market, we just know that it’s 100 percent union and don’t entertain any pricing from non-union people. In the Wisconsin area, where the unions don’t have as much of a stronghold, the subcontractors are pretty accustomed to working with each other, union and non-union,” Pientka says. “It’s amazing as you move around the country how different the marketplaces can be, in their attitude towards union.”
In New York, the attitude is pro-union and pro-design-build. Kathryn Wylde, president and chief executive officer of Partnership for New York City, says New York City has enjoyed good union and design-build relations since the 1970s when the area was in a middle of an economic crisis. Today, as economic recession looms, Wylde believes that design-build projects and union workers may help ease financial pressure on developers.
“The combination of speed from design-build and jobs for union workers is a win-win for everybody,” Wylde says.
A Project is a Project
American Water’s John Young, a DBIA board member, works with both union and non-union contractors in both union and non-union states. In fact, about half the people who work for American Water are unionized.
“When you talk about design-build as it may differentiate from some other project delivery method, we don’t typically feel that the quality of a project that’s being delivered is going to be influenced on whether we’re utilizing union labor or non-union labor,” Young says. He admits union workers can be more costly, but says he’s found no difference in quality. He believes design-build is a political issue, not a construction issue for unions.
“We’re pursuing a project in Southern California, and frankly to be able to move forward in a design-build mode, we’ve had to use the union contractor,” Young says. “We also had to actually go back in the food chain and use unions throughout the whole process. From suppliers to the contractor, there’s the political pressure to bring the unions in. But that’s more about how do you get the project accepted by the public and how you get the project politically moving.”
As for the unions themselves, some are reaching out to design-build firms hoping to build healthy partnerships. Joan Baggett Calambokidis, president of the International Masonry Institute, says design-build lends itself more to a collaborative effort.
“It’s actually some of the approach that we used at the International Masonry Institute because we represent contractors as well as union craft workers, and on our staff we have architects and engineers and other construction specialists,” Baggett Calambokidis says. “We can go to an owner or we can go to an architect and look at plans and say, ‘Did you ever consider this?’ and suggest some alternate ways to accomplish their goals. That’s what occurs in design-build — so it’s not so different from what we already do.”
She says the International Masonry Institute is in the beginning stages of talking with DBIA to help firms hire more qualified contractors. “Firms don’t care whether something is union or non-union — all they want is better contractors,” she says. “We’re interested in helping [design-build firms] get more qualified contractors. … Unless someone just has an anti-union bias — in my book there’s a difference between non-union and anti-union — there’s a strong case that can be made for union contractors.” That case includes workers who are constantly training, have a good safety record and have completed numerous like jobs, she says.
“Our people are usually pretty highly skilled,” says John Flynn, president of the International Union of Bricklayers and Allied Craftworkers. “We spend millions of dollars annually on training.” Flynn says he doesn’t differentiate between job types.
“A builder’s a builder,” he says. “When we go to work, they will ... sublet our work to a specialty contractor that specializes in that particular field so we’re usually working for that specialty contractor. We don’t know the difference whether it’s design-build or from some architect’s office. To the craftsman, the tradesman on the job, what would we care? We just want to go do our job and hopefully put some brick or some stone in it—so we have a job.”
Flynn says he doesn’t understand why unions in California have so actively opposed design-build. “I don’t understand what their logic would be because either you build it union or you don’t build it union,” he says. “It wouldn’t make more or less work. Whatever you build, you build.”
Time, Money are Crucial
Whether a union’s involved or not, Young believes design-build provides key competitive advantages over other delivery systems.
“Put another way: traditional project delivery in a union environment compared to design build in a union environment, design build still retains all the advantages,” he says.
Pientka’s firm has found a 5 percent total development savings of a design-build project vs. design-bid-build — typically a lowest bidder job that provides numerous union jobs. That figure represents savings in construction, financing and on-time delivery.
He says developers using the design-bid-build model are looking at the lowest construction cost and not the best value for the property.
“[Design-bid-build users] are also developers that will build one or two properties quickly and then try and sell them off in a short period of time,” he says. “The clients we work with build properties, develop properties, then hold them for a long period of time. … If you can be more energy efficient, if you can do the right things for the project with the right quality materials and lower maintenance costs on the project, your overall lifecycle cost is going to be less. That’s just one of the biggest values that design build brings over design-bid-build.”
But design-bid-build does have a place in today’s construction market, Eisenberg says.
For his community colleges, he uses design-bid-build for smaller projects that don’t require a lot of design resources. He admits, however, design-bid-build is often a contentious process that doesn’t necessarily lead to the best product because so many good architects and contractors won’t work on low-bid jobs to prevent from being sued if something happens to the building.
“[Design-bid-build] creates a controversial process because there’s this constant back and forth. It gets to be a natural finger pointing, with people saying ‘I specced that.’ ‘No you didn’t.’ ‘Why didn’t you do it this way?’ It just leads to that kind of environment,” he says. “With design-build, you basically have a team that’s together and focused on the objective.”
Nonetheless, Eisenberg uses design-bid-build, design-build, union contractors and non-union contractors. After all, he’s a builder and simply “needs a box of tools and will use the right tool for the job.”
Fred Minnick is a professional writer and photographer based in Louisville, Ky.