DIGEST

UCONN 2000 CONSTRUCTION MANAGEMENT

Background

In 1995, the legislature authorized the University of Connecticut to independently finance and carry out a 10-year, $1 billion capital improvement program known as UConn 2000. Under the direction of the board of trustees, the university's architecture and engineering services office is responsible for all design and construction activities related to UConn building projects.

Effective construction management to control costs, scheduling,and quality is critical to the success of the UConn 2000 program. As project owner, the university also has the obligation to require its contractors to comply with all relevant employment and worker safety laws.

Serious prevailing wage rate violations on a UConn 2000 project in the summer of 2001 prompted legislative concern about the effectiveness of the university's oversight of contractors. In response, the program review committee initated a study to assess UConn's construction management process, focusing on compliance with contract provisions, wage laws, and worker safety requirements.

UConn Construction Management Process

Findings

The university process for managing the UConn 2000 construction program incorporates industry best practices for controlling costs, schedule, and quality. Necessary expertise and resources are provided by a small in-house staff that is augmented with a full-time construction administrator for major projects and a variety of outside professional services obtained as needed.

University management periodically reassesses construction-related policies and procedures to identify and implement changes to improve performance. Outcomes are regularly monitored by the board of trustees and the legislature.

As required by statute, the university prequalifies contractors for the UConn 2000 program to ensure bidders for projects have the required experience, resources, and integrity. The university's process permits it to screen out contractors unsuited for particular projects or with poor performance records. It can also protect against over reliance on any one company to perform work.

General contractors and construction managers have ultimate responsibility for the performance of their subcontractors; the university relies on their selection policies to screen out unqualified companies. In addition, the university has the authority to ask that a subcontractor with a poor record not be hired.

The university has no established mechanism for rating or reporting on subcontractor performance. At present, there is no comprehensive inventory of all firms that have or are working on UConn 2000 or other university construction projects.

RECOMMENDATION

1. The university should develop and maintain an automated database of all companies that perform construction work. In addition, a system for evaluating contractor and subcontractor performance at the conclusion of a project that includes a way for companies to officially respond should be established and used to develop a "poor performers" list.

UConn 2000 Construction Project Outcomes

Findings

Success in the construction industry is generally viewed as finishing a quality project on time and on budget. The university's structure and process for managing construction of UConn 2000 projects has had good results overall.

The bulk of the UConn 2000 construction work has been completed without significant delays or cost overruns. Serious contractor performance problems have been rare (occuring on only three of 39 major projects to date) and the university has responded with appropriate corrective measures.

Since most UConn 2000 construction work is less than five years old, the long-term quality of the projects is not easily determined. Work quality is monitored during construction on a project by project basis. However, information related to the quality of construction on UConn 2000 projects is not systematically compiled or evaluated by university staff.

Comprehensive data on work quality is needed to fully assess project success, identify problem contractors, and determine the adequacy of design standards and field monitoring procedures.

RECOMMENDATION

2. The university should define outcome measures for work quality and establish a system for tracking and regularly evaluating data on the quality of its construction projects.

Employment Law Compliance

Findings

Employers on public works projects such as UConn 2000 must comply with prevailing wage rate laws as well as all federal and state employment statutes including immigration requirements for alien workers. The university contractually requires all contractors working on UConn 2000 projects to abide by relevant employment laws.

In response to a complaint, the state labor department cited significant prevailing wage violations at one UConn 2000 project (Hilltop Apartments in 2001). Following this case, contractor compliance with prevailing wage requirements became a priority for the university

Since 2001, UConn has given prevailing wage matters more attention and expanded oversight efforts to ensure compliance. It has taken a more active owner's role and implemented tighter payroll review procedures. Most recently, the university adopted a "zero-tolerance" policy toward noncompliance with employment laws particularly prevailing wage requirements. New statutory mandates (enacted as part of the UConn 21^st Century act) require stricter monitoring of and periodic reporting on contractor and subcontractor compliance with prevailing wage requirements by the university.

Excluding the Hilltop Apartments case, the amount of Department of Labor enforcement activity and prevailing wage violations on UConn 2000 projects have not been unusual, given the size, scope of work, duration, and budget of the construction program.

The extent of the hiring of undocumented workers is unknown among contractors working on UConn 2000 projects. The university ensures to the extent possible in its role as owner that contractors and their subcontractors comply with all relevant employment laws including federal immigration policies.

The U.S. Immigration and Naturalization Service (INS) is the only entity with authority to investigage alleged violations and enforce immigration laws; the state of Connecticut has no jurisdiction in this area. At this time, issues related to the hiring of illegal aliens are not an enforcement priority of INS.

Allegations subject to potential INS follow-up have been made regarding two UConn 2000 projects, both of which involve out-of-state contrators. The university responded appropriately to the complaints in both cases. To date, no complaints about the hiring illegal aliens have been substantiate.

Given labor practices within the construction industry and the current levels of state and federal enforcement effort, the potential exists for employment law violations to go undetected on UConn 2000 projects.

Safety Compliance

Findings

The federal Occupational Safety and Health Administration (OSHA) has primary authority to set and enforce worker safety standards on private sector job sites such as those included in the UConn 2000 program.

Assuring compliance with safety regulations is an on-going process that requires commitment from all parties involved in the construction process. Owners, contractors, employees, and insurers all have a strong financial interest to work safely and prevent injury and lost work time.

Safety is stressed as the university's highest priority in its contract documents, policy manuals, corresondence and directives. At present, there is a full-time safety manager responsible for monitoring all projects covered by the university's Owner Controlled Insurance Program (OCIP). The university's policy of hiring contractors with superior safety records and its procedures for ensuring compliance with safety regulations and standards on its job sites have had good results.

UConn 2000 projects have not prompted any special concerns or increased enforcement activity by federal OSHA staff. Preliminary analysis by the administrator of the university's OCIP program indicates the UConn 2000 program safety record compares well with statistics from similar capital improvement programs.

RECOMMENDATION

3. If the university does not continue OCIP for the duration of the UConn 2000 or UConn 21^st Century programs, it shall maintain a fulltime safety manager to conduct inspections, determine and oversee corrective action, education and train contractors and workers, and identify trends in safety violations.

Labor Relations

Findings

The success of a construction project depends in large part on a good working relationship between employers and the labor force. Several union grievances have been filed against contractors and a few labor disputes have ocurred to date in relation to UConn 2000 projects . While limited in number and impact, these incidents have contributed to the university's strained relationship with labor unions.

State labor and contracting laws do not mandate a union preference in awarding public works projects. The university's labor relation policy for the UConn 2000 program, in accordance with state law, is neutral in this respect.

Analysis of contractor/subcontractor data by committee staff and by UConn staff both indicate Connecticut companies and workers are performing most of the construction work at the university. Data necessary for detailed analysis of union participation in university construction are not readily available. Committee staff estimated major UConn 2000 projects in terms of dollar value were about equally distributed between union and non union contractors as of November 2002.

Organized labor has urged the university, the governor and the legislature to promote the hiring of in-state companies and union workers through such mechanisms as statutory preferences and project labor agreements. Any statutory changes to give preference to unions in future work at the university is a public policy matter for the General Assembly to determine