Sunday, July 01, 2007

New Guidelines By County Commissioners Are Well-Intentioned, But Miss The Mark

At their most basic, large public construction projects are living things.

That’s why managing them is a lot like parenting. It’s always good to have some basic rules, but success is most often found in flexibility and individual judgment calls. It is a curious fact of construction that each project takes on a personality all its own – a product of the layered construction process, the complexity of the project and the individuals on the construction team.

As a result, the recent guidelines passed by the Shelby County Board of Commissioners – although well-meaning – are essentially ill-conceived. They aren’t particularly new and won’t prevent future problems that they are being created to address.

Perhaps, this might work on school projects - which are largely variations on a theme and which also just happen to be the kind of projects the commissioners’ adviser was most familiar with - but the major construction projects of county government are one-off buildings that are altogether different.

The Wrong Comparison

More to the point, if the proof of the adviser’s expertise is exemplified by Shelby County Schools, that should be reason enough for concern. Cost comparisons frequently hail the county’s cheaper schools, but it shows in the second-class construction that has characterized the district for decades.

After all, building cheaper schools isn’t the same as building better schools or building schools that become hubs for their neighborhoods. Questionable school locations are a county schools tradition, most notably the massive high school being built at Hacks Cross Road and Shelby Drive, recently named once again one of the county’s most dangerous traffic intersections.

It’s the worst-kept secret in county government that school locations are more determined by favored developers than by educational policy, and for these reasons, applying the lessons of the county school system to county government at large is simplistic if not irrelevant.

It’s Worth What You Pay For It

This becomes pertinent not only because the experience of the volunteer adviser for the commissioners was in school construction, but more to the point, the chairman of the county ad hoc committee who drew up the guidelines is former School Board member and now county commissioner Wyatt Bunker.

Despite the populist appeal of legislative bodies claiming they will prevent future construction overruns, the answer isn’t found in more rules. In truth, local governments who manage projects well have a culture of accountability and experience that serves them well.

One of the new guidelines would have killed the Grizzlies’ move to Memphis, because the move was contingent on the opening of a new arena by a specific date. In this way, the ad hoc committee took direct aim at “design/build” projects like this one.


Overlooked is the fact that design and build projects are constructed successfully all over the country, contrary to the commissioners’ adviser who said, “The moment you start with incomplete designs, you are off on the wrong foot.” He’s just wrong. And more to the point, the design process has never been held up as the reason for the funding controversy that erupted over the FedExForum garage.

One criticism made by Commissioner Bunker’s committee was that the owner’s representative for the Forum answered more to the Grizzlies than to city and county governments. Considering that city and county were paying the salary of the owner’s representative and the Public Building Authority staff as well, it would have been easy enough to do it.

After all, there’s no greater power than the power of the checkbook, so nobody had more power than Memphis and Shelby County Governments. They are not victims; they are the owners and they do not have to acquiesce on anything.

Overrun With Experts

The commissioner’s adviser said that in the future, county government needs “an experienced owner’s representative,” but the Forum was overrun with nationally experienced people. One was deeply experienced in building NBA arenas and the professional staff of the PBA, notably the late David Bennett, had no peer.

Finally, the contract with the Grizzlies gave city and county the option of hiring their own representative on the Forum project, but more importantly, a coordinating committee, which included a county commissioner, was allowed to languish and collapse by county government.

This is an overriding lesson of the FedExForum. Every project needs dependable, persistent oversight, because in the absence of this kind of supervision, the margin for error increases drastically. It’s worth remembering that the controversy about the failure to comply with federal laws for the FedExForum garage resulted more from politics than lack of construction expertise.

The Wrong Target

The other public project most often cited as justification for the new guidelines was Memphis Cook Convention Center expansion. Interesting, there were so many people representing local government there that they often bumped into each other, so clearly, that wasn’t the problem.

In addition, there were two county officials on the board – including an influential county commissioner - overseeing the expansion, so that wasn’t the problem. If there is any lesson from the Convention Center, it is to beware of construction companies that low ball the costs of projects, get its foot in the door and then jack up the price.

Lastly, despite the mythology to the contrary, the price of The Pyramid did not increase because of overruns, but because of design changes and scope changes that were approved as the project evolved and public ambitions grew. Pertinent to the committee’s deliberations is the fact that there were regular reports to the board of commissioners throughout the project’s construction and public reports through the Public Building Authority.

A One-dimensional World

The simplistic understanding of complex projects is a byproduct of modern media and politics, where one-dimensional understanding is the norm and in-depth understanding falls prey to a reality TV world. Hopefully, as they deliberated on the guidelines, the commissioners also learned that the popular stories about these projects only hint at the truth, if they do at all.

For us, the increased political intrusion by the board of commissioners into construction is cause of concern. That’s because anytime more politics is injected into a process, it results in more money being spent. It would seem that parttime elected officials would have more than enough to do setting the policy direction for a major urban government and allow the Wharton Administration and its fulltime staff of thousands to be responsible for construction – with regular reports to the board of commissioners.

Put precisely, it is the administration’s job to manage projects, and it is the administration that has the ability and the time to do it best. The blurring of the lines of responsibility has always been an area of concern in county government (removing this gray area inspired the restructure of the government in 1974).

Sticking To Its Knitting

What the commissioners should be doing is performing its responsibility for policy, but what it shouldn’t be doing is issuing specific directives that could do nothing more than add another layer of bureaucracy to construction projects whose oversight rests with the administration.

It’s a reoccurring problem in Shelby County Government, where the lines of authority still aren’t as crisp as they should be (or as clear as city governments), and in the end, it’s this clouding of responsibilities that is the most troubling aspect of all about these new guidelines.

We’re not saying that the commissioners’ intent was not noble, but when it’s free adviser says that a new four-headed “oversight team” will act as the board of commissioners’ eyes and ears, it becomes clear how much off track he is. That’s precisely the role of the administration.

We admire Commissioner Bunker for finding some free advice, but we’d prefer to pay for advice from construction experts known nationally for their expertise on massive projects. There is just such a firm in Memphis – Less and Getz – and before the board of commissioners move too far along on these guidelines, they ought to ask for the advice of lawyers who know these kinds of projects inside and out.


Anonymous said...

Smart City,

Let me begin by saying how much I like your blog, because it is well-researched, thoughtful and useful. However, on this issue, I have to respectfully say I think you have missed the mark.

The key point that is missed is that the committee's guidelines are simply that -- guidelines. As I described them in committee , they are a checklist for Commissioners when construction contracts are brought before us for approval. They do not prohibit design-build or any other method of construction, but raise a "red flag" and require the administration to justify why they chose a different construction method than those prescribed by the guidelines. In relation to the project team, the guidlines don't require that all four members be a part of the project team. Again, those are individuals that are recommended be a part of the team.

Additionally, many of these recommendations came from contractors who I met with and with whom other Commissioners had conversations. These contractors were unwilling to appear before the Commission. While Steve Shields, the attorney who volunteered, was integral to the development of these guidelines, others in the business made similar suggestions.

As you know, I have a fair amount of experience with commercial construction contractors -- some who make their living using design-build, others preferring CM or CM at risk and still many who are ardent "hard bid" contractors. All are legitimate methods, but all have short-comings if the proper accountability is not in place. The guidelines are designed to create that accountability and force a regular, even predictable converstation and series of questions every time a new project is undertaken.

Other benefits to the guidelines are the protections for local subcontractors and that major change orders (like leaving an entire floor out of a garage or changing the roofing system at the arena) must be approved by the Commission.

I agree that we do not want to micro-manage the administration, and I for one have supported through my actions and continue to support a stronger mayor system than the one we have now. I also admit the format of these guidelines as presented at the Commission were confusing and not specific enough for legislation in my opinion, which could be the cause for confusion.

These guidelines won't prevent all future cost overruns or other snafus associated with major construction. However, with the possibility of a new $260-$300 million county jail on the horizon, they will hopefully lead to intelligent and thoughtful debate about how we get a high-quality product and protect taxpayers.

Thanks for being on top of the issues and for this forum to agree and sometimes disagree.


Mike Carpenter
County Commissioner

Smart City Consulting said...


Thanks for your perspective and inside information on this issue. Your comments are always helpful and well thought out. We appreciate your taking the time to elaborate on this process.