Pack Folds Up

My sister MH) and brother-in-law (CH) are in town helping their daughter-in-law (MIH) look at preschools for EH.

MH and CH's son, my nephew, (ADH) works weekdays in New York City and isn't available to help his wife (MIH) do some of these things. (ADH's entertaining web log can be found at http://blogs.havill.com/cc)

MH likes doing this sort of thing anyway, so it's not a job or errand for her but more like fun. Plus, they love any opportunity to spend time with their granddaughter (EH).

Yesterday, CH took EH to a magic show and afterwards we met for lunch. EH is a real sweetheart and it's fun to watch her with 'papa' CH.

I gave my basketball tickets to MH and CH for last night's game against Seton Hall. What an abysmal game.

It was State's only home loss this season - and - it was State's worst game by far. Seton Hall came in and just demolished the Wolfpack. They jumped out to a 16 point lead early in the game and never relented. State just couldn't mount a come back. Seaton Hall won by 19 points. It really was a blow out. The early key was rebounding. Seton Hall at one point had out rebounded the Pack by 22 to 8. I never would have expected such a dismal game by the Pack this year. Talk about having an off night - we just didn't show up at all.

Today I again met CH and EH for lunch. They had been to Barnes and Noble doing some sort of story time and crafts. EH made a mitten out of paper with thick yarn for thread and decorated it. Then they checked out the Toys R Us going out of business sale and then met me for lunch at Dunderbak at Crabtree Valley Mall. MH and MIH showed up around 1300 just as I was leaving to go back to the office. MH and MIH found some promising preschools during this morning's outings. I think they have one more appointment for tomorrow morning - afterwich MH and CH will head back to Reston VA.

Let's see - what else on the home front?

Since JN has left the Army and moved back to his house, it's been really quit at home. I like having company, but I also like having the house all to myself.

In fact, MH and CH usually stay with me with they visit, but since there's such a full schedule with MIH looking at preschools, they are staying at MIH's in Cary this visit.

JN is not the tidiest person on the planet. Actually, that's a huge understatement. I've spent evenings thus far this week getting the house straightened up and back to normal.

Work

We, the State Construction Office, held our annual State Construction Conference Monday and Tuesday. The annual conference is the major gathering for businesses that do construction work for the State, including higher education. It's also of interest to firms that work for local governments as State statutes and regulations also apply to local governments.

North Carolina made the jump into allowing Construction Manager at Risk projects in 2002/3. There was a lot of anguish and worry when CMR was first proposed in the legislature. The tried and true single and multi-prime low bid process has worked well for public projects and there were a lot of unknowns with trying the CMR approach.

Projects have now progressed to where we're getting some measurable results. The CMR process works extremely well. Contract defaults are well below the averages experienced with traditional bid contracts. Budgets and schedules are being met at a rate better than bid contracts. The real stunner is Historically Underutilized Businesses (HUB) participation. Formally known as MWBE (Minority and Women Business Enterprises), HUB is the outreach and goal of trying to help disadvantaged (i.e. small minority) firms get public work. The early results under CMR is a stunning 17% participation by HUBs. That number is getting darn close to the overall minority population percentage in North Carolina. And it's about 3 times the percentage of HUB participation under the traditional bidding process.

The key is flexibility. With traditional public bidding, contractors and sub-contractors must secure performance bonds and sureties. HUB's, traditionally small and undercapitalized, can't secure bonds. CMRs however, can assume sub-contractor risk and use methods such as dual party check payments to allow work by HUB firms that otherwise wouldn't qualify under traditional methods.

That's not to say you just give out work to a HUB because it makes you feel good. These companies must have a track record; good reputation; proven results in order to work on publicly funded projects. But it is a method to give HUBs an opportunity to work. The idea is that HUBs can grow, become more financially stable, and eventually able to compete without special assistance. And, of course, expanding their businesses employs more people in disadvantaged communities and so on.

As HUBs become established and mature as businesses, they will be better able to compete in the private sector. And as HUBs grow - employees will gain experience and strike out on their own to establish new businesses. Increased opportunities beget more and better competition.

With any luck, the concept of HUB will become moot. A diversity of construction companies and trades will be established - background will become irrelevant. Best work at the best price will always be the bottom line - we'll just have a greater diversity of companies to choose from.

It really does work under the CMR process and with the added plus of fewer defaults and on-time and on-budget performance, CMR seems to be a winner all the way around.

As the use of CMR projects becomes more common with State projects, eventually local governments (counties, municipalities) will begin to try it out. The same authorization statutes that apply to State government projects also apply / enable local governments to use this contracting method. This will have a further, and potentially greater, effect on HUB opportunities around North Carolina. Plus the early indicator that CMR seems to work better overall anyway for larger, more intensive and complex construction projects will lead to wider use.

Here's my anecdotal indicator of the success of the CMR process and greater utilization of HUBs.

The first day of this year's conference was focused on the CMR process, how it's working so far, refinements, new projects coming up, etc. Let's talk business kind of stuff. Lot's of HUBs and first and second tier contractors in attendance.

Just a couple years ago the focus / discussion was on pleading for opportunities to get work. HUBs wanted the chance to prove themselves - basic opportunity and survival was the issue. This year, the discussion / issues were the traditional, routine, mundane complaints about process, breaking out bids into individual components, processing pay requests and such.

In other words, the issue of breaking into the business is done. The opportunity to get jobs is a given. Competition and a more level playing field is happening.

This year the complaints are what you would have from any contractor, regardless of background. The difference is, instead of complaints from a room full of middle age white guys, the complaints were from all different sorts of people. And the complaints had nothing to do with race, background, or opportunity. The complaints were about processing pay requests, coordination among trades, value engineering, equivalent specifications, time to prepare bids and proposals, gripes about the designers, drawings, plans, technical specs. All the usual stuff. The difference is the accents and make up of the people doing the complaining.

I was sitting over to the side listening to bitching and moaning, and actually being glad to hear it.
The photo isn't really representative of the Conference. The real action is taking place beyond the doors in the back of the room. The McKimmon Center lobby was packed with just as many people as in the meeting room. That's where networking was taking place. I wish I had a photo of that space - the lobby is where you would have seen a great diversity of contractors, all talking with each other about ongoing and upcoming projects, what work was around the corner, etc. In fact, we had anticipated about 1,000 people. It turned out to be about 1,800. The boost came when we added the half day on Monday with the topic of CMR. That's what contractors wanted to talk about - projects, contracts, work!

Speaking as a middle age Southern white guy Civil Engineer - I'd have never predicted the North Carolina construction industry as being progressive in cultural issues.

Heck, the words Southern, North Carolina, construction, progressive, and cultural just being in the same sentence . . . . .

My, my, my . . .