Don't tread on me

Construction organizations prep for latest design/build legislation

By Chris Thompson
Editor at large

Many construction organizations have labored long and hard building a wall to keep design/build out of the state Capital, but, with another proposal on the horizon, it's unclear if the project was a success.

Last year at this time, if an industry lobbyist opened his mouth, design/build would have fallen out. It was the hot construction topic, and industry and legislative forces constantly realigned on the issue.

The topic has cooled off considerably, but it would be a mistake to think the proposal is dead. State Rep. Antonio Riley, D-Milwaukee, chairman of the Milwaukee Metropolitan Sewerage District Commission, wanted to see design/build legislation for the public sector last year, and he said he's ready to renew the fight this fall.

"We've been negotiating with labor and construction folks for some time, although nothing recently," he said. "We think we have something that's workable, and we're going to see what we can accomplish."

Last month, Riley submitted for drafting a bill proposal that would grant design/build authority to the MMSD. He said he expected to introduce the bill before the end of the year.

"It has a narrow focus for MMSD using design/build," he said. "I'll decide when to introduce it and who will be my Senate lead. It's still a tough sell, but we've been working with groups, and we'll see what we get."

Michael McCabe, MMSD's director of legal services, said the latest proposal marks the best chance at design/build legislation for the district.

"We sense that there is a consensus developing," he said. "We think our chances are much better than ever in the past."

Despite his optimism, McCabe said the drafted proposal would only be the first step toward introducing a bill.

"Antonio Riley has said he still wants to continue the dialogue to see what more can be done to make people more comfortable," McCabe said. "We're going to wait to get the bill out of drafting and then set up some meetings with the industry. It'll be easier once we have a bill to work off of."

Industry reaction

Design/build veterans from the Associated Builders and Contractors of Wisconsin, Wisconsin Association of Consulting Engineers, American Institute of Architects Wisconsin Society and Associated General Contractors of Wisconsin said the debate has become a staple of legislative life. So Riley's recent push generated only mild shock and a wait-and-see attitude.

"It's not terribly, terribly surprising," said Jim Boullion, government affairs director of the AGC of Wisconsin. "We hadn't heard any rumblings, so we are surprised in that respect. But as far as did we think we had it beat, no I didn't think that."

The issue might not be dead, but Boullion said he hasn't seen anything to change his mind about trying to kill it.

"It's a tough issue, and the industry has got to tackle it sooner or later. But the industry has to drive the legislation, and not have the legislation driving the industry." John Mielke Government Affairs Director ABC

"(Riley) hasn't talked to us, at least not recently," he said. "We're still opposed to it for all the same reasons as before. Everybody in the state -- even if they're not specifically in Milwaukee -- has an interest in precedent-setting legislation."

John Mielke, government affairs director of the ABC, said his organization hasn't heard from Riley since the legislator held prebudget discussions on design/build several months ago. Even so, Mielke said he would reserve judgment until the proposal was laid out in front of him.

"Maybe he is a wizard and has come up with a solution that other folks couldn't find," he said. "I know he held an industry meeting of the minds in which each organization had the opportunity to express its likes and dislikes. But we haven't seen anything."

The same holds true for Carol Godiksen, WACE's executive director, who said the MMSD proposal simply means industry legislative forces need to gear up for another winter of design/build discussions.

"It's politics as usual," she said. "So another bill gets introduced. I'm not surprised. But I'm pleased to hear it's narrowly focused on MMSD."

Godiksen's organization in June created the first crack in the industry's wall against design/build legislation with its support of MMSD's use of the project delivery method.

The battle that wasn't

Not only has Riley embarked on the latest design/build odyssey, but he said it would have happened sooner if he wasn't pulled from the Legislature's Joint Finance Committee in late April during a legislative power shakeup.

"It was my intention to do something in the state budget, but with my removal from Joint Finance that became more difficult," he said. "Things have been quiet for a while, but all I can say is we had everyone on board except for one or two groups before the budget. It's not like we've been sitting in a room alone trying to come up with something."

Boullion said he expected Riley to push design/build into the budget, and Boullion was ready to push back.

"We were ready to take it on in the state budget, but it never showed up," he said. "There were discussions about introducing a bill or a Joint Finance Committee amendment, but when Antonio Riley left Joint Finance it stopped. It just didn't stay at the top of the list."

Bill Babcock, executive director of the AIA, said design/build simply lost momentum when it came time to fashion the budget.

"It's been kind of quiet, and that's not necessarily a bad thing," he said. "I think there were a lot of bigger issues. The issue just didn't rise to the top as a fall-on-your-sword kind of issue."

Mielke also said he expected to see design/build in the state budget. But even though it didn't make it, he warned that Riley or any another legislator picking up the cause should use caution.

"There were rumors and speculations that it would be in the budget because in a budget year everybody is trying to get their thing in," he said. "We were half expecting it, and then it didn't show up. I just hope that whoever is pushing this forward will get the groups together again to see what problems the industry has with it."

A dangerous topic

Riley's recent bill aside, the road to design/build legislation for public work is littered with well-intentioned and ultimately doomed proposals.

Whether it was Senate Bill 426, authored by Sen. Gary George, D-Milwaukee, in 1998, George's Senate Bill 198 in 1999 or the 1999 state budget bill, in which then-Gov. Tommy Thompson vetoed design/build language, the issue unfailingly leaves legislators in the ditch.

Godiksen said design/build's ugly track record is enough to scare away most lawmakers.

"I think some of that is they see the bloody noses people got when they worked on design/build legislation," she said. "If you're a smart legislator, you're staying away from this issue, especially as we get closer to election time."

State Rep. Steve Wieckert, R-Appleton, is one such legislator, although he said his avoidance is based more on industry opinion than fear of the topic. Last fall, Wieckert expressed interest in design/build but said he wouldn't rush forward with legislation, opting instead to wait for feedback from industry groups.

"I know the AGC and ABC guys, and they listed why they had problems with design/build because of it limiting competition," Wieckert said. "We want to encourage competition, and they were persuasive to me that maybe we need to rethink this. We decided that maybe it would limit competition too much."

Wieckert said he dropped design/build, and, barring a change in the industry climate, he'll stay on the sidelines.

"If we looked in our office for our design/build work, we would probably find a dust-laden file for it," he said. "I'm not working on it. I would say I am waiting right now."

The pause doesn't surprise Bob Brandherm, interim director of State Fair Park, who as former secretary to the State Building Commission and state Department of Facilities Development administrator, tried unsuccessfully last year to find design/build common ground.

"I talked to some people who were involved last time around, and their comment was that a lot of people didn't realize what a sensitive issue design/build is to the construction industry," Brandherm said. "The old way of doing things with design/bid/build has a high level of integrity, and they don't want to damage that. If they do something new, they want to have the safeguards in place so the new process has the same level of integrity."

Future uncertain

The design/build issue, while mostly nonexistent in the last several months, still has a level of support outside of Riley and the MMSD. Dan Thompson, executive director of the League of Wisconsin Municipalities, said his organization made the first push for public design/build a few years ago, and it hasn't given up hope.

But hope, he said, is a far cry from active pursuit.

"It's still something we think makes sense, but we have other fish to fry," he said. "It's certainly something we're interested in pursuing, but we have 400 pieces of legislation that we're tracking at any one time. We're not interested in putting up a lot of political capital for something that is, in theory, good public policy but not an immediate need."

When the opportunity presents itself, Thompson said he would step in with the same suggestions he had when the issue first came up.

"We will continue to give legislators advice on design/build, but it's up to the legislators to decide if they want to listen, and that stuff takes a while," he said. "It's just not that big of an issue for a lot of people now."

And Mielke, like many of his colleagues, knows that the design/build issue, regardless of Riley's potential success, isn't going away.

"It's a tough issue, and the industry has got to tackle it sooner or later," he said. "But the industry has to drive the legislation, and not have the legislation driving the industry.

"My hunch is that one of the biggest challenges on the horizon is construction companies winning work with something other than a hard bid. That's true in private industry, and it's one of the biggest challenges facing contractors: How do you compete for and win work in an arena that is not using the hard bid?"

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