41/

Construction
January
6,2011

TheHonorable
Chairman
Darrell
E. lssa

U.S.Houseof ReDresentatives
Committee
on Oversight Reform
andGovernment
Industry 2157Rayburn HouseOfficeBuilding
Bound Washington,
DC 20515-6143
ThbIe
DearChairman
lssa:
BOARD oF DIRECT0RS
OnbehalfoftheConstruction IndustryRound Table(CIRT)1,wewishto
Ch^irmaa, Linda Figg thankyouforrequesting theRound participation
Table's inthecritically
Pr€side & CEO,Figg EngrneenngGroup effortto identifyexistingandproposed
important regulations
thathaveor
Viee Ch^ftma\ Robett E. Algel maynegativelyimpactjob growthin ourindustry.
CEO & President,The LaneConstructionCorp.
T reasnrer, Patrick Mocleamy "Timeis money"bothaxiomatic andtruein thedesignandconstruction
CEO,HOK Croup, Inc.
- whichremainsheavilylaborintensive
industry to thisday. So,if
Prst Chairman, Matt ew M. Walsh something takesmoretimeit costjobs. . . thus,regulatory delays,
CEO, The WalshCrroup redundancies, andredtapecollectively
inefficiencies, havea directimpact
on costsandtherefore thevitalityandabilityof ourindustryto remain
President,fugo Consultants,Inc. profitable
andhiremorepeople.
Presidenl,CDM
EventheAmericanpublichascometo thisconclusion,
withan
Willian B. Frasel
CEO,CarlsonGroup,Inc. overwhelming thatthegovernment
81 percentagreeing "needsa basic
Thonas F. Gilbane, Jr. overhaul"
andshouldundertake "anannual'spring
cleaning'toeliminate
Chainnan& CEO,GilbaneBuildingCompany regulations
unnecessary andredtape."accordingto a recentGlarus
Charles L. Grcco Grouppoll(Dec.2010).
Research
President& CEO,LINBECK
Da ald F. Greenwood
President,Bums & McDonneli Construction
Desiqnand ConstructionCommunitv
Bruce E. Grewcock
Thedesign/constructioncommunity's'can-do-spirit"and"know-hovf' still
President
& CEO,PeterKiewitSons'.Inc. it'sjusthardfindunderthemountains
exists, of laws,regulations,
andrules
Craig L. Martin thatwe insiston heapingontoourprivatesectorjob creators andthen
President,JacobsEngineeringGroup expectthemto spureconomic groMhandemployment. Notonlyis the
A. RossMye6 existingmassburdensome (whichonemightcall"theregulatory complex"),
Presid€nl,Amencanlnfiastructure,Inc. theuncertaintyandunintended consequences of whatappears to bea
Patficia A. Rodgerc neverendingexpansion of government's reachhasalsodonesevere
President,
Rodge6Bulders damage spiritandrisktaking- bothnecessary
to theentrepreneurial to
jumpstarta robustrecovery.
Chajrman
& CEO,Sarge &LundyLLC
Douglas E. Woods
Presideni,
DPRConstruction.
Inc.

1 The Constructiontndustry Round Tabto(CtRn stives to qeate one voice ta meet the intercst
and needsof the design and constructionconnunity. C|RT suppotts its menbers by actively
reprcsentingthe industryon public policy issues,by imprcving the inage and prcsence of its
leading nenberc, and by providing a forum fot enhancingandlor developingstrcng
nanagenent apprcachesin an everchanging envircnnent throughnetwotuingand peer
interaction.
Mark A. Ca.so. Esq.
The Round Tableis conposed of approxinately 100 CEO, frcn the leading architectural,
enginee ng, and consttuctionfinns in the United Sfates. Iogeibe,'fhese frrmsdelivet on
billionsof dollar, of publicand pivate sectot infrastructurcproj&ts that enhancethe quality of
life of all Aneicans whiledl@glu enploying half-nillion Aneicans.
8 l l 5 O l d l l o m n r i o nD r . .S u i t e2 1 0
M.l.eD, \'A 22102-2325
l ' h . , x , : 2 0 24 6 6 6 i 7 7

$/.b Site: rLtr\t.{irt.,trg

 CIRTLetteron Excessive
Regulations
January
6, 2011
PageTwo

Theprocess of designingandconstructing is oneof man'smostcomplex anddaunting endeavors - it

oftenis themeansbywhichwe measure (towit,the"ruins"of
thesuccessof an entirecivilization
ancientworldsaretypically viewedas howadvance theywereor howresourceful andlasting).Part
of thecomplexity is thenumberof partiesandinterestedplayersthatmayhavea handin or influence
overa givenproject,addto thatthenumberof layered jurisdictions
(federal,state,local,etc.);and
onebeginsto understand themyriadplaces andopportunitieswheredelay/redundancy cancreep
intotheprocess throughunnecessary redtape.

Thisprocesshasbecomeprofoundly morecomplicated, as recentlynotedin lhe CivilEnoineer

ELOG:"[t]heenvironmental protection
movement hascontributed to theuncertainty forconstruction
because of theinability
to knowwhatwillbe required
and how longit willtaketo obtainapproval
from
theregulatory agencies. Therequirementsof continuedre-evaluationof problems andthelackof
definitive havealsoresulted
criteriawhichareoractical in addedcosts."

Whileexamples of redtapecanbefoundin procurement of services,

environmentalrequirements,
publicsafety,financialrequirements(FinReg),
projectdelivery,paymentsystems,benefitmandates
(healthcarereform), andcountlessotherareas- theyall holdsomethingsin common:lackof
uniformity,
redundancy, andinefficiencies.

(A)Streamlininq
"Asa peoplewe havechosento functionundera political systemthatpromotes of
diversity
governmental andstructure.
authority, As a result,we havedeveloped a nationalregulatorysystem
wellmeaning butlayeredandoverlycomplex.Oursocialpurposes,
in itsintentions, missions, and
publicinterests
oftencompete, withour44,000jurisdictions, all50 states,severalterritories,
andthe
federalgovernment eachamending, adopting, interpreting,
andenforcing fivemajorsetsof
codesandover2,000technical
construction standards governingthesit[eselection],
design,and
construction
of bu,idlngs(NOTE: just"buildings"is beingconsidered here- in otherwords"vertical
- notroads,bridges,
construction" environmental remediation,etc.etc.)." See,NCSBCS andits54
partners 'Alliance"]
national [hereinafter websiteentitled:Streamlining^theNation's Building
ReguIatoryProcess (www. ncsbcs.org/newsite/Stream line/Stream.
htm)'

Andthecostof redtapecanbe substantial.TheAlliance/FIATECH Projecthasfoundthatincreasing

theefficiency codes,rules,andregulations
of modernconstruction aswellas reducing theamountof
timeit takesto movea newbuilding
or building throughtheregulatory
renovation processbyas much
as60%annually, canalsosaveboththeprivateandpublicsectorstensof billionsof dollars.

market,thestudynotesthat:
to thefullconstruction
Whenextrapolated

'zfhe EnvironmentatPrctectionAgency(EPA)haslongbeena sourceof rcgulatoryinefficiency andcosts. Almost30years

agoL,A!9Lfut9pbSUoL 59,No.1,February1983)published an afticleentitled:"lnpactof Regulatory
Delayson the Cnstof
Wastewater TreatmentPlants"by Kisla S. ReedandC. EdwinYoungwhichpointedoutthat"Thercd tapenec$saryto neet
theEPArcquiementsfrequentlydelaysthe s&,ttol constructionan averageol2 to 4 years.'E @page35.
3 TheNationalC,onfetenceof Stateson BuildingCodesand Standards, lnc.(NCSBCS)haswo*ed overtheyearswithfedeftl
agenciesandpublicandpivate sectororyanizations, and hasnowjoinedwiththeEl![EPL!:3reA0]i0jqgepi@ andthe State
and Localgovernment suppodactivitiesof Robeftwible & Associateswitha goalto rcducetheamountof timeit takesto move
buildingsthtoughtheregulatorysystenby asmuchas 60%.
 CIRTLetteron Excessive
Reoulations
Januar/6, 2ol1
PageThree

Costs= lOokof the Annual$1.0

Regutatory trillionin tJ.S.Construction
or $100Billionin costs.a

BUT,evenwiththeseenormous savings- much,if notall,oJthepurpose oftheseprocedures could

beaccomplishedwithouttheunnecessary delaysandcosts'- that'snotjusta theory,buta fact
provenbytheexperiences bornefromprojectsacrossthecountrywhentimeis of theessence.
(B)ContrastinoProiectExperiences
Thereareanynumberof examples andexperiences overtheyearswherewe canfocusontheclear
unmistakablelessonswe'velearnedandputthemto workacrosstheboardon a myriadof public
projectssothatwe getthebenefits
of efflcient,
science-based,
andcosutimesensitive
regulations
withouttheunnecessary andwastefulburdens. Or we canignorethemandcontinue
withwasteful
inefficient
Drocedures.
. CuftinqThrouqhRedTape(EarlvCompletion): Afterbarelyoneyear(somethreemonths
aheadof schedule)a newl-35Wbridge stoodwhereonetragically collapsedonAug.12007.
Theoldspancarried morethan140,000 vehiclesa dayandthelossof thebridge was
costing$400,000 perdayin diminished
revenue,increased commuter expenses, andburden
onsurrounding roads."Business
as usual'and needless regulatory
delays wouldnotbe
acceptableortoleratedbythedevastatedcommunity. Whenincentives exist,theregulations
andredtapecanbeovercome/managed andeliminated to createa notablesuccess:The
Interstate
35Wbddgereplacement projectwascompleted early/belowbudgetandwas
awarded America'sTransportation
Awards'GrandPrizefor 2009bytheAmerican
AutomobileAssn.,theAmerican Assn.of StateHighway & TransportatlonOfficials
andthe
U.S.Chamber of Commerce. [RESOURCE: LindaFigg,FiggEngineering Group(FL)l
. TvoicalProiectDelavs:Theprojectto rehabthecity of chicago's'Redline"andbringit to a
stateof goodrepair,on itsexistingrightaway(whichis currently and'falling
in disrepair

" The Alliance d@unented the savingsfron streanlining and use of lT methods for building prcjects- and then applied it to
2007 Construdion Data (today, constructionspending is down to apprcxinately $810 billion, of which about $256 bi ion is in
non+esidential building).

5
TheAlliance/FIATECHweb slte rofes: 'lhls is not aboutrcgulatoryabandonnent! Thisis aboutspending bothgovemment
and pivate sector dollars wisely."

By 2007, the study found vast savingsfton seeningly sinply efficiehciessuch as:
(1) e-Pemit tuocessingnow usedin over fio juisdidions acrcss the nation Enging in populationfrcn LosAngeles
(3,695,000)to Cobleski , NY (5,300)rcduce &aff and building owner/architecttines to ppcess pemits by between 30 - 40%;
(2) lntenctive Voice Resporse (/yR) sysiems,, Shelby Co., TN; Orlando,FL and Washingtonco., oR reduce the time to
scheduleand conducl inspedions frcm 2-3 days to less than 24 hours; (3) Mobile field inspectiontechnologybeing used in
citiesincludingPhoenix,AZ: SanDimas, CA incrcasethe nunbet of inspectionspeiomed pet day by 25% and rcduce
contactot down lime waiting for inspectionsand their rcsultsby 20%; (4) e-Plan Review now being conducted in:Atlanta, GA;
Bend, OR; MadcopaCo., AZ; OsceolaCo., FL and a dozen otherjuisdidions rcduce the amount of time it takes to review
plansby 40oA,elininate lost plans,and rcduce by 80% the nunber of tips to thesejuisdictions by out of state
ownergarchitects;and (5) strcamlined prccessesarc gefting buildings up and open faster, pufting both people to work and
rcvenues into lhe juisdiction's coffeB soonef fot example a 200 toon hotel open just 3 months earlier using strcamlined
ptocesseswith an 800/6occupancy = $144,000in added tax rcvenues to a jurisdbtion just fton the 10o/ooccupancytax on
$111/night roons.
 CIRTLetteron Excessive
Requlations
Januari6,zot t
PageFour

down')is estimatedto cost$4 billion.lf theCTA"ChicagoTransitAuthority'

hadthemoneyin
theirhandstoday,theprojectsll//couldnotbefinisheduntil2019;eventhoughthe
constructionshouldonlvtaketwoyears.Thedelayof some7-yearsis dueto theEPA,ElS,
andalltheothergroupsthathaveto touchtheprolect(notwithstanding it'san existingline
now)preventing
thatis operating foryears!TheMayorof Los
thestartof construction
Angelesis facingthesametypeof delaysin building a numberof hisprojectsin hiscity.
IRESOURCE: JimKenny, KennyManagement (lL)]
Services,
(C)Procedures & Process
Hiddenin anydiscussion wasteis theprocedural
of regulatory andprocessburden(or"paper
work")thattypically
accompaniesanyrules.Examples of thisprocessarebothuniversal
in
application
andoftentimesuniqueor specific groupsand/orregulated
to industry areas.The
sameis trueforthedesign/construction
community.
. Compliance andPaperWorkCosts/Delavs: Somewhat uniqueto theA,/E/C community, the
federalagencies appearto be"beefing-up"
andhiringfull-timestaffersto assignto large
projectsinvolving 'stimulus"
so-called funds,wtreretheyarerequiringmonthlyoversight
meetings to ensure compliance guidelines.
withfederal TheSanDiegocourthouse is in the
category of sucha "mega-project"(over$100M):contractorsaredevoting a numberof people
andresources to makesuretheyarein complete compliance - thepaperwork required is
akinto a monthly federal
audit.

Regulationshavenotbeenaltereddrastically,butchancesof beingauditedhaveincreased
andauditsto a greater
depthhavebeenpromised. TheOFCCP, infact,haseliminated their
"deskaudit"procedureandhavemovedto moreaggressive in-depthon-siteauditingprocess
acrosstheboard- thisthenrequires greaterpreparation for potential
auditson the
oartin anticiDation
contractors' of thenotification
letteror knockonthedoor.
. Procurement RulesforConstructionProiects:Anotherexample
of regulatory
rulemakingthat
relatesto procurement
hasa directimpacton costs/time procedures projects:
forA,/E/C

D Useof project Labor Agreements(PLA)on FederalConstructionProjec6: fhe

newruleseeksto implement President
Obama's ExecutiveOrderNo.13502(Feb.6,
2009), a policyof'encouraging'
whichforthefirsttimeestablishes federalagencies
imposing
to consider union-onlyPLA'son federalconstructionprojects
whosetotal
costsexceed $25million. Besides
theobviouspotential(andlikely)
impact on
costsforfederalprojects(whichmeanslessproiects
increasing canbe initiated),
the
proposalalsoendrunsCongressional mandates andlaws."[RESOURCE: Ben
Brubeck,ABC(brubeck@abc.orq)l

> Redefining"lnherentlyGovernrnentar": Oneof themorepernicious expansions of

government is itswillfuleffortsto competewiththeprivatesector.To furtherthat
aim,theAdministration hasundertaken a rulemaking process
to expandandflipthe
intentof whatis 'inherentlygovernmental' so asto preventworkfrombeing
contractedto theprivatesector.Clearlythishasa directimpacton theabilityof firms

" Theproposalcontenplatesexpanding thePLAmandateto prcjectsthatdo notditectlyinvolvelhe federalgovemnent(asa

paftyto thecontract)bysinply attachingthercguircment to thefunding.Curently,casesappeatto restict suchan expansive
rcadingof the NLRI'.TheprcposalalsoinbrtercswithCongrcssional directionthatfederalagenciesshouldstive to "obtain
fullandopenconpetition"as setfotthin the 'Conpetitionin Contrccting
Acl."Moreover, theruleviolatesandignores5 U.S.C.
e,04(CongrcssionalReviewAct)andtheREgulatory Flexibilih/
Acl.
 CIRTLetteron Excessive
Regulations
January
6,2011
PageFive

theirpersonnel
to surviveandmainta-in if thegovernment
agencyreducesor stops
contractingoutwork.'IRESOURCE: BCFC(iohn@impa.us)].
JohnPalatiello,

> "CardCheck"Thepotential remains, withoutthevotesin Congress to passa

changein thelawrelatedto theso-called "CardCheck"legislation,
theAdministration
willturnto theNLRB's rulemaking authority.
Giventheconstruction industry's
labor
intensive (atapproximately
nature,andthefactit is fairlyhighlyunionized 14.5olo),
sucha ruleor regulatory changewillhavean immediate anddirectimpacton the
construction of theindustrv.
Dortion
Conclusion
Thetimehascome,if notlongpast,foretfortsto focuson waysto rolFback,
sunset,repeal,and/gr
de-fund
theexcessive'regulatory
complex" thathasarisento newheightsoverthepastde-cade."
Beyondthesemeasures, thecourtsmayalsoneedto playa roleto reversetheimbalance.'

Shortof outrightrepealand/orelimination
of excessive regulations
andrules,theaffectof
streamliningthemwhereby actionsaredoneconcurrently andsharedamongandbetween
jurisdictions/agencies
sothata projectmaymoveforwardin a timelymannerdevoidof unnecessary
delayswouldgreatlyimprove theabilityof F|./E/C workandgainfully
tirmsto complete employmore
Americans. to be spenton theseprojects
Rightnow,dollarsallocated aresubjectto endless
redundant timeconsuming andoftenwastefulruleswhichweighdownefficiencies anddelivery
times,
whileincreasingcosts.

To expecttheU.S.economy to expand,createjobs,andbecomerobustthroughgovernment
intervention
andexcessive
regulations, that"neyerwasandneverwillbe"-to
is to expectsomething
paraphraseThomasJefferson.

Sincerely,

Construction
lndustrvRoundTable

'
TheOFPPguidancelefte/sconstructry9!&Sthe oiginalandlong-heldintentof fedeal policyto contrcct-out fot goodsand
seryices!l!959 theywete"inhercntly govemnental" in naturc,to onethatnowsuggests thatagencyofficialsnust proveit is
D9!"inherentlygov6mm6ntal" to contnct-out.[See,75Fed.Reg.16,196 (Match31,2010)].
3
CIRTis awarcthatthenew111 Congress nay take-upa nunberof proposats thatseekto rcbalanceand/oraddrcss the
rcgulatorycomplexthatis rcpidlyteplacingthe C,ons,titutional
saEguardsanddivisionsthatarcthehallna* of oul
govemnentalsysten.TheRoundTablesuppottssucheffodsandcommendsthesealotv withsuchsuggestions asput fotlh
byJ.T. Youngto applydeficilcuttingtechniques bycreatinga "RegulatoryBudget"thatbeginsto quanw theenomous
"hiddentax' foundin excessiveregulationsandrules.[See,Viewpoint, Ep (Dec.29,2010)pageAl l].
e
L)nfoftunately,
the couttshave beenexploitedandusedto expandthercgulatoryrcachby advocatelwhohave usedthen
(oftenoutsideof thei expettiseot scientific - sonetimesinfluenced
knowledge by faullyor evenfhudulentdata,as in lhe case
of CO2emissions) to gethvonble rcgulatoryoutcames thatfat exceededtherulemaking pt@essot Congrcssional intent.
Howevernorc rccently,thecouttshavecane dot n hardon someexcessive rcachesby theFCC(inthe caseof "net
neutrclity'proposedtules),EPA(f Arcuitrenandedthe 2009construction stom waterrule),and Dol'snandatoryoil di ing
montoiun whichwasstruckdownas ahitraryandcapicious,as wellaspotentialrcpealof pottionsof the nassivehealth
carebill.