While state leaders wait years to learn whether a revamped public-construction law saves millions of dollars on a trio of projects, scores of other building projects will continue under a 132-year-old law that university presidents say adds to their costs.
Ohio State University leaders hope to save $100 million or more on the $1billion medical center expansion. It will be one of three pilot construction projects to be completed under public-construction law changes approved as part of a state budget fix in December.
In the meantime, the university will spend about $200 million a year on other projects, including a $170 million renovation of five tower dorms and a $126 million chemistry and chemical engineering building.
Those and other undertakings across the state will continue to be built under Ohio’s current “multiple-prime contracting,” which hires separate contractors for general construction, plumbing and electrical work.
Ohio is the last state in the nation that solely uses that approach.
“The place we end up struggling is coordination among all those contractors,” said Lynn Readey, associate vice president of facilities, operations and development at Ohio State.
“All of the studies show that when you have a single point of contact it really makes a big difference, when a single construction management company can coordinate all of that work.”
The lack of coordination adds time to a construction project, she said. More time equals more money.
For that reason, some say state lawmakers should not wait long before expanding the construction-law overhaul to all public projects. Supporters have projected savings at 10 percent to 30percent.
Senate Republicans – who did not overhaul Ohio construction law while the GOP controlled all of state government for 14 years – in December pushed to get changes recommended by a governor-appointed council into the $851 million state budget fix. But House Democrats balked, and the two sides ended with a compromise allowing three pilot projects to proceed.
Sen. David Goodman, R-New Albany, said he would like another push for a full construction overhaul in the state capital budget, which likely will be considered later this year.
“I don’t know what kind of convincing (lawmakers) need,” he said. “If anybody is saying they are waiting for (pilot project data) to make a determination as to whether this is a good idea, I’m skeptical of that. We’re the last state not to do this. It’s a proven fact that this will save hundreds of millions of dollars.”
While a renewed push in the capital budget is not likely, Senate President Bill M. Harris, R-Ashland, said he wants to move a separate construction overhaul bill this year.
“I don’t think having hearings on a bill would impact at all on the pilot projects,” he said. “The pilot projects will indicate that construction reform needs to go forward.”
The Ohio Board of Regents plans to pick the three pilot construction projects March 23, with hopes that the state Controlling Board will approve the selections April 5. From there, the regents plan to issue reports on the projects every six months, possibly starting in January.
The speed of data flow will depend on the size of the project, said Ohio’s higher-education chancellor, Eric D. Fingerhut. The Ohio State Medical Center, including construction of a 17-story hospital tower by 2014, will be the largest of the projects.
Savings might not materialize at the initial bidding but could come when one looks at the entire project, including change orders, litigation and cost overruns, Fingerhut said.
“Now we’re going to have some real data on which the General Assembly can make a decision, rather than impressions and conflicting testimony,” he said.
“I’ve never talked to a university president in my entire career in state government that hasn’t wanted this law to be changed. They want to get projects done faster and cheaper.”
Sen. John A. Carey Jr., a Wellston Republican and chairman of the Senate Finance Committee, said it’s a shame that only three projects can be completed under the new law, but that shouldn’t discount what is being done.
“We do lots of things incrementally in state government, so doing it this way, I don’t think there’s anything wrong with that,” Carey said. “I think it will lead to complete construction reform.”
But barring major political changes, that reform is likely a few years away. Some unions have pressured Democrats to block the initiative, and Carey said he also heard opposition from architects and other subcontractors.
“When you do things more efficiently in government and save taxpayers money, it means someone else isn’t going to get the money,” he said.
Speaker Pro Tempore Matthew Szollosi, an Oregon Democrat, union attorney and leading opponent of placing construction changes in budget bills last year, said the issue is too complex to make a quick decision.
“It’s difficult to gauge how much data will be enough to trigger a conclusion,” he said. “I think it’s a difficult sell to conclude you’re going to get those types of savings early in the construction process.”