P3’s Bring Opportunity and Uncertainty

When Governor Phil Murphy signed a bill expanding the opportunities for Private-Public Partnerships (PPP or P3) projects, many expressed great hope that this opportunity—with the private companies assuming the financial risk and long-term maintenance of the project—can be the answer to the state’s infrastructure crisis, as well as a boon for construction jobs.

“We’ve seen many municipalities in New Jersey struggle to repair roads and bridges, build new borough facilities and redevelop their communities,” said Jack Kocsis, CEO of Associated Construction Contractors of New Jersey. “This new law now gives them the means to cost-effectively finance much-needed construction projects.”

With the new legislation, a state or local government agency, as well as school districts, can contract with a private company for a project.

“It could be a local library, highway construction, transit-related, the whole raft of infrastructure,” Murphy said when he signed the bill at The College of New Jersey’s Campus Town development, a project built collaboratively with private-sector partners.

Previously New Jersey only allowed P3s with public colleges and universities.

“Democrats and Republicans alike recognize the tremendous benefits that can arise when public officials and private sector partners work together,” Murphy said. “By doing so, we give state, county, and local officials the much-needed flexibility they need to improve their communities while creating good-paying new jobs – in most cases good, union jobs – while leveraging private capital to invest in public infrastructure.”

At its best, a P3 is a win for all, saving municipalities money, getting vitally needed infrastructure upgrades or important community projects done sooner and creating jobs in the construction industry. But it doesn’t always go so smoothly. Not all projects are eligible for P3s and the contracts are complicated. The results have not always been as hoped either.

At least 30 other states had legislation for use of P3s in widespread projects, but many have run into trouble. In Texas, the private company that operated a toll road went bankrupt forcing the state to step in and assist in financing. In Chicago, a deal required taxpayers to reimburse the private company when parking meters didn’t produce expected revenues.

There have also been concerns about a lack of oversight with everything from potential environmental issues to transparency to ensure fair competition in bidding–would large companies, perhaps from out-of-state come in and do all the work, or could the high risk taken on by the private companies keep some from bidding at all?  Another big concern was labor protections. Most of these issues, however, were addressed during the legislative process and are reflected in the law.

“During the legislative hearings, UTCA (Utility and Transportation Contractors Association of New Jersey) was successful in obtaining important amendments to protect the interests of our industry. The Association has been working with our partners for several years on P3 legislation and thanks to that successful effort, New Jersey has an important new tool for financing infrastructure,” UTCA said in a statement following the bill signing in August.

Kocsis agreed that the key protections are in place.

“In addition, the new law contains strong, time-tested contractor and labor protections ACCNJ has promoted for decades,” he said. “Equally important, this P3 legislation will not replace traditional project delivery, but rather supplement existing procurement and project financing methods.”

It will take time, various projects-and likely some failures-to know how to use P3s most effectively and to the benefit of the public and all parties involved and to decide if the optimism was warranted and this type of partnership is, in fact, the best long-term answer.

By Chris Colabella & Kara Yorio

Solving the Shortage of Workers in Construction

As of July 2018, the construction industry’s unemployment rate in the United States is 3.4 percent, the lowest it has been in at least two decades. Jobs have been multiplying almost too quickly to be filled by qualified workers. These shortages can lead to roadblocks in projects by adding to the expense and length of construction.

Congress and the White House have been making efforts to bring more skilled laborers to the workforce with actions such as reauthorizing the Perkins Act. Also, programs are being brought to high school students and young adults to teach them the necessary skills to begin a career in construction.

To stomp out the labor shortage fire before it catches wind, companies in the industry are taking the initiative by seeking out groups of people to train who otherwise aren’t being utilized to the fullest as a resource in the industry. This means reaching out to groups such as young adults, at-risk-youths, veterans, and women, to bring them the training necessary for a career in construction. Read Brian Gallagher’s article in Manufacturing.net to learn more.

Virtual Reality is Now Construction’s Reality

In the real world, one mistake on a construction site can mean the end of someone’s life; there is no room to learn by trial and error. But using virtual reality, without doing anything other than slipping on a headset, companies can train their workers in safe job-site practices. Virtual Reality can submerge the users into an artificial world that feels real and three-dimensional, in this case simulating a construction site. This place for workers to practice working in a setting that may be dangerous or new is going to transform the construction industry.

In Laurie Cowin’s article “App Uses Virtual Reality to Address Fall Protection”, she outlines how useful virtual reality will be in preventing accidents on construction sites as well as help in the training of safe practices. The use of virtual reality could be a huge boost in on-site safety.

Mechanical Eyes in Project Site’s Sky

Drones seem like new age technology, an incredible concept brought to us only recently because of our advanced scientific knowledge. But functional unmanned drones have been a reality since 1918 and incredible advancements have been made since then. And now, 100 years later, this incredibly useful mechanism has been capitalized on by the construction industry. The unmanned aerial vehicles are being used for efficient and accurate information gathering on project sites as well as further ensuring worker safety, among other things.

Drones also aid in cutting costs on projects by saving time and manpower as well as reducing safety risks for tasks which could be dangerous for a person to perform. In Jeffrey Freund’s article published to Construction Business Owner Magazine he addresses the ways in which the new pair of eyes in the sky is aiding construction companies.

Read more

Reference:

Stamp, Jimmy. “Unmanned Drones Have Been Around Since World War I.” Smithsonian.com, Smithsonian Institution, 12 Feb. 2013, http://www.smithsonianmag.com/arts-culture/unmanned-drones-have-been-around-since-world-war-i-16055939/.

Proposed Changes Could Knock Down Environmental Roadblocks

The United States Interior Department, on Thursday July 19th, 2018, has proposed changes which will lessen the environmental roadblocks for construction projects to obtain approval. Environmentalists are taking up arms against this motion as the potential changes would leave threatened species with less protection. The Interior Department is clashing the interest of economic development with the fight for environmental conservation.

More specifically, the proposed changes are to the Endangered Species Act of 1973 in an effort to make it easier for construction projects to get approval in areas with a fragile environment. It is also working to remove protections from threatened species as well as make it more difficult to move a species from threatened to endangered status. David Bernhardt, the deputy secretary of the Interior Department, is adamant that the proposals would not gnaw at wildlife protections. This plan is to be finalized after 60 days of public commentary.

Read more at The NYTimes

Mayor de Blasio places the DDC and the SCA in one woman’s hands

Lorraine Grillo, as of Monday July 16th, 2018, is not only NYC’s president of the School Construction Authority (SCA) but also the city’s commissioner of the Department of Design and Construction (DDC). Ms. Grillo has been president of the SCA for 8 years and has an impressive track record to call upon. According to Katie Honan with the Wall Street Journal, Grillo will take over as DDC’s commissioner after years of delayed projects and “cost overruns”.

As the new commissioner, Grillo plans to bring her seemingly successful tactics from the SCA with her to make the fixes necessary to the DDC. Ana Bario, the former commissioner of the Department of Design and Construction, has joined the Department of Environmental Protection in light of Ms. Grillo’s appointment. Hopefully, Grillo is the leader the DDC needs.

See the original NYC Press Release .

 

Smart City Planning for the 21st Century

Dan Doctoroff, New York City’s former Deputy Mayor for Economic Development and Rebuilding under the Bloomberg administration spoke to Stephen Dubner on Freakonomics Radio about retrofitting old cities in the midst of an historic rise in urbanization and his new venture to build a modern city from scratch.

Listen to the podcast on the Freakonomics website.

Doctoroff also talks about New York City’s bid to host the Olympics and how that spurred development.  He references the High Line Project, Hudson Yards and The Shed, which is expected to open in March of 2019. See CIS Project Details for construction information or visit The Shed website for information on cultural events.

AEMP Releases their Guide for Hiring Veterans.

The Association of Equipment Management Professionals (AEMP), in partnership with the Center for America (CFA), has developed a handbook to help employers in the construction industry more easily connect with qualified veterans and military service members.  The handbook contains skill matrices for high priority categories and individual hiring workbooks for the three hardest to fill job series.

Discover more, plus a link to the full version of the handbook and workbooks, on the AEMP website.

DuPont family heir changing his golf club into a family friendly athletic club.

Ben DuPont and Don Wirth, longtime members of the DuPont Country Club, plan to increase the club’s membership, currently 1,750 members down from 5,000 in 2004, by investing $18 Million in more family friendly facilities.   Plans include construction of a 15,000 sf fitness facility and indoor golf driving range, three all-season swimming pools along with associated site improvements within the 525 acre property.  See project details.

DuPont and Wirth expect their venture to be profitable by catering to today’s families, who look to spend more time together.  One of the options they are considering – reducing the par 3 course from 18 holes to 12. According to WHYY News

Construction is expected to begin this summer and be completed by 2020.