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35 years in construction marked by innovation.

35 years in construction marked by innovation

The past 35 years in the construction industry have been filled with increased sophistication of technique and an explosion of professionalism in construction by those who are doing the building.

It was exactly 35 years ago that our firm was founded. At that time, we, as professional engineers, had a less complicated state of the construction art. Contract types were few. Either we bid on a lump sum contract based on completed plans and specifications or a cost-plus contract with or without a guaranteed maximum price (GMP), also based, in all likelihood, on completed plans and specifications. Sometimes for engineered construction (heavy construction), the bids and contracts were unit prices.

Disputes were usually settled in the courts when the parties couldn't agree. Lawyers squared off in the legal equivalent of the trial by battle of the Middle Ages. Some lawyers timidly but suspiciously attempted arbitration, but most advised their clients against it. They themselves knew relatively little about it.

Field construction techniques were relatively unfettered. For example, there was no OSHA, there were no permits required to operate cranes or other dangerous equipment, and environmental laws were non-existent. Even hardhats for the workers were sometimes considered almost unnecessary.

And minorities? "Let 'em join the union. That's not our business. That's between them and the unions" was the way many in the building industry (not ourselves) sounded off.

What of construction schedules and construction management techniques? Our firm built an exhibit for a computer in the Federal Pavilion at the 1967 New York Worlds Fair, for example. the computer was the size of a large room and had about as much capacity as a present day lap top computer.

Today the forms of contractual relationships are almost numberless. Besides the familiar lump sum and cost plus, and the newer construction management agreements, we have variations all useful for specific situations: design/build; turnkey (this is not necessarily the same as design/build); preconstruction management converted to GMP; sponsor/-builder; developer/builder. The sponsor/builder works in government programs. The other developer/builder is a private enterprise, a battered breed today, but far from down and out.

We also have "body shops" such as the work we are doing for the New York City School Construction Authority where we provide technical personnel for the agency's own management executives.

It keeps their in-house personnel who are the best from the industry. We are currently operating in the entire Borough of Queens for them on six large school projects.

When it comes to disputes, the methods today favor alternative dispute resolution techniques (ADR) pioneered by the American Arbitration Association and its National Construction Industry Dispute Resolution Committee, plus its new offshoot, the Disputes Avoidance and Resolution Task force (DART). Available techniques have exploded. There is arbitration, mediation, minitrials, rent-a-judge, med/arb and others. Recognition has come fast. The U.S. Supreme Court is urging the use of ADR to free up the courts. Almost all government agencies either recognize it or are requiring it.

Since Oct. 15, 1990, when President Bush signed the Administrative Dispute Resolution Act, every federal agency must adopt an ADR policy. It fosters "settlement negotiations, conciliation, facilitation, mediation, fact-finding, mini-trials, and arbitrations or any combination thereof." Attorneys as well as clients, young and old, ar attending arbitration and mediation training workshops offered by the American Arbitration Association.

Construction job management techniques have undergone a technological revolution. The utilization of computers throughout the office and field have improved scheduling, safety, cost-keeping, equipment and labor utilization, and has increased professionalism of the entire building process.

For example, as recently as 10 years ago it took approximately 16 to 18 months to complete the average multistory apartment building. Today we confidently promised delivery of a 100-unit 8-story wall-bearing apartment house for the elderly in 12 months for the Wyatt Tee Walker Apartments on 118th Street and Frederick Douglas Boulevard in Manhattan. It was completed ahead of schedule and under budget.

The advances in job safety have been as a result of good planning, better equipment, and job site safety meetings being held routinely. Accidents still happen, but injuries are down in number and much less serious as we learn from each occurrence.

The affirmative action and equal employment rights story has been one of solid gains and acceptance. When we took the contract for the construction of the Wyatt Tee Walker Apartments, we received a challenge from Dr. Walker: "I'm going to be on the job every day and be the first one to lay down in front of your bulldozer if I don't see enough black faces on the job." We and our subcontractors achieved 70 percent minority employment in the workforce. And this by no means unique or exceptional to this particular job.

The gains made by women entrepreneurs and in a management have kept equal pace. In our own organization, Project Managers Joan Ulbrich and Barbara Brandwein each run their own jobs. Both were trained by us and sent to technical school at our expense. Kiri Borg and Marianne LaRusso, who were also trained by us, have left our employ and hold construction executive positions in other leading construction organizations.

Future prospects in the industry are bright. High building costs have been battered downward by competition and efficient contract administration tied to cost efficient contractual relationships. The design/build technique, long a staple on the European continent, is being used increasingly. In our redecent design/build contract for the IBM 504 Building in Fishkill, New York, not only did we accept responsibility for design and construction of the electro-mechanical systems, but we also agreed to a stiff liquidated damages clause for failure to turnover the first floor of the building in just nine months. We achieved the deadline for that and the remainder of the building as well. In addition, we gained a substantial savings of our GMP and shared the savings with the owners.

The key to the future is increased professionalism. Only well qualified professionals can position themselves in the 90's and into the next century. They are in the forefront of innovation and ahead of the competition.

Robert F. Borg is a graduate engineer and a Licensed Professional Engineer. he is also an attorney with a Juris Doctors Degree and a member of the New York Bar.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Review & Forecast Section III
Author:Borg, Robert F.
Publication:Real Estate Weekly
Article Type:Industry Overview
Date:Jan 29, 1992
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Next Article:Worst is over for Manhattan co-ops/condos.

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