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Contractor protests public project process


Claims that larger firms receive preferential treatment

When the grand opening was held for the Wade Creek Health Clinic at Estacada High School last month, Robert Gray was pleased to see his handiwork come to fruition. After all, his Tualatin-based firm had been the general contractor for the project.

It is expected that the Oregon Legislature will authorize some rather large public works projects during the session that started Monday, Feb. 4. But Gray is convinced that the contracts for those projects will ultimately go to a handful of large, politically connected firms in what he characterizes as a flawed process.

Gray has been in the building industry since 1964. He said that since then, the competitive bidding process for public projects “has deteriorated almost continually.”

“Because we don’t like the bureaucracy involved with public work, we used to do mostly nothing but private work. We would bid jobs and negotiate jobs in the private sector,” he said. “But since starting in 1964, I’ve witnessed a number of recessions. In recessions, you run out of private work and the only thing left to bid on is public work. It used to be that public work was decided totally on competition. You would bond a job, bid it and get the job.”

Anymore, Gray said, 80 percent of public projects in Oregon are being constructed using the Construction Manager-General Contractor delivery method. Public entities advertise a request for proposal and contractors respond accordingly.

“The proposals are subjectively graded and a contractor is selected. This is not a guaranteed maximum price any more than a bid is a guarantee. Each price can be increased with a change order,” Gray said. “RFPs are often written in such a way as to preselect a certain contractor or eliminate a highly competitive firm. We believe CM-GC regularly costs the client 10 to 20 percent more than the competitive bidding process.”

Gray estimates that the extra 20 percent added to every public project ends up costing Oregon taxpayers more than $50 million per year.

Ryan Tribbett is the vice president of government affairs for Pac West Communications. That Wilsonville-based political public relations firm counts among its clients several building trade unions from throughout Oregon.

Tribbett said that there are several different types of contracting methodologies that get used for projects.

“There are definitely ones where the people who don’t get the work feel shut out from it,” Tribbett said. “I’ve certainly heard that frustration.”

A replacement for the Interstate 5 bridge over the Columbia River is a top priority for the building industry, Tribbett said. Oregon’s share of the project’s costs will come to about $450 million.

“If the money isn’t approved this session, the whole review process has to go back to the drawing board,” Tribbett said. “Nobody wants to see that.”

Another priority is the building of a mental health facility in Junction City. Tribbett said that project is important for the building trade unions in that area, some of which are now facing 30 percent unemployment among their members.

“At any given time, you can take the regular unemployment rate and triple it and that’s what they’re feeling in the construction industry,” Tribbett said. “A year ago, we had some locals with over 50 percent unemployment. That’s every other guy out of work.”

Gray said he does not expect his firm to bid on any aspect of the I-5 bridge replacement or the Junction City facility, but would like to see more opportunity for smaller projects.

“We’re not interested in those sized jobs. They’re too big for us and we can’t bond them,” Gray said. “But a $5 million fire station or a $10 million library, those are fine jobs. They are just handed to bigger companies and we never get a shot at them. The state wants us to pay taxes, but won’t allow us to compete. That’s wrong.”

Tribbett said that the main focus at this point is ensuring that there is enough work to go around for firms of all sizes.

"Whether we are talking about large public works or smaller public improvement contracts, these opportunities are important to Oregon's construction workforce," he said.