The LePatner Blog

LePatner Op Ed: Keep Public Projects on Budget

2012-01-24T11:23:00.001-05:00

As the new year kicks off, signs that our national and state leaders are beginning to finally recognize the job-creating potential that rests with infrastructure investment are rife. No longer are we seeing politicians trying to gain recognition by cancelling billion dollar bridge, road or rail projects, claiming that they will increase the deficit -- even as they destroyed tens of thousands of good-paying several year long jobs. As evidence that those tactics were self-defeating see the recall petitions running through the states of Wisconsin and Indiana and the fact that the Federal government recently forced the State of New Jersey to refund over $275 million for outlays that were part of the planning and design for the now-cancelled ARC tunnel project under the Hudson River.

Attention is also being paid to New York State where Governor Andrew Cuomo, in his State of the State speech announced a $15 billion infrastructure program that included the proposed commencement of construction for a much-needed new Tappan Zee Bridge. Well, the problem here is that the still under construction Interstate 287 in Westchester County that connects Connecticut to the Tappan Zee Bridge has had the terrible misfortune of being $78 million over budget and unaccountably equates to about $70 million a mile for its construction.

So how will New York State even begin to approach construction for what undoubtedly become a $10 - $20 billion effort to replace the structurally deficient and fracture critical Tappan Zee that each year costs the state $100 million to merely keep from falling into the Hudson River becoming the next version of the doomed I-35W that collapsed in Minneapolis in August 2007?

Barry LePatner's recent Op Ed piece in Newsday provides some serious suggestions that Governor Cuomo should heed before he starts down the slippery slope of turning so much money over to the highly inefficient and often corrupt construction industry. As always, we welcome your thoughts and comments.

http://www.newsday.com/opinion/oped/lepatner-keep-public-projects-on-budget-1.3462336

City Infrastructure Needs Federal Help

2011-11-22T11:00:00.000-05:00

First and foremost we at the LePatner Blog would like to wish each of you and your families a joyous Thanksgiving. This holiday provides a wonderful opportunity, in these tumultuous times, to stop for a time to reflect on the parts of our lives that bring us joy and love and share those moments with the special people in our lives. Even if you are one of those who are watching your weight, this is the one holiday to smile and have an extra bite of everything.

Last week, Barry LePatner was honored to be asked to speak at Real Estate Expo New York's forum on transportation issues. The distinguished panel included former Port Authority Executive Director Chris Ward, Noah Burdick, deputy director of Transportation Alternatives, and Seth Pinsky, president of the New York City Economic Development Council. The topic of discussion was "New York: Who's Driving This Train?" and allowed for a wide range of discussions on the capital investment New York City has and continues to make in transportation projects, the limitations that our city, state and federal budgets are having on future capital projects and the choices that need to be made to keep the whole city moving without disruption.

Seth Pinsky pointedly noted that "there is a national mindset that it’s possible to get something for nothing, and there is a lack of federal support for New York, despite the city’s infrastructure generating returns for the whole nation." "We are one of the great economic engines of the entire nation," said Pinsky, adding that without help from the federal government in maintaining the city’s infrastructure, "we’re going to be at best treading water."

LePatner pointed out that both the Bloomberg and Giuliani administrations had spent several billions of dollars making NYC bridges among the safest in the nation. However work remains on major roads and bridges in and around the metropolitan area including the Tappan Zee and Goethals Bridges. Question still remains if we will find funding to complete the much-needed 2nd Avenue Subway project.

This linked article entitled “City Infrastructure Needs Federal Help: Experts, NYC Infrastructure Needs Billions for Upgrades” by Zach Steiber in The Epoch Times, provides an excellent discussion of how critical our transportation assets are to the future commercial engine that is the City of New York.

LePatner to be Major Presenter at ASCE Forum - Tuesday, September 20, 2011

2011-09-15T11:00:00.000-04:00

The message of Barry LePatner's most recent book, "Too Big to Fall," has become more important as 2011 has entered its final few months. With Congress considering passage of both a new transportation bill and considering whether to pass an extension of the federal gas tax that funds our highway and transportation program, it is ever more important that our nation become actively involved in understanding whether our nation will once again begin to invest in our all important infrastructure or leave to crumble.

LePatner will be a major presenter at a forum entitled, "Our Failing Infrastructure - Who's Responsible for What?," on Tuesday, September 20, 2011, which is sponsored by the New York Chapter of the American Society of Civil Engineers.

LePatner will be discussing the tragedy of the I-35W collapse and how it could have been avoided. He will be challenging our nation's engineering professionals to play a greater role in overseeing our roads, bridges, levees and dams and fighting for increased transportation funding. An expert panel will then start a dialogue on these issues. It promises to be a rousing evening.

Below is information for any of our friends and colleagues interested in attending this important evening presentation on Tuesday, September 20, 2011, sponsored by the people who provided the Report Card on our civil infrastructure and gave it a "D+" for being in such a decimated condition.

When:

Tuesday, September 20, 2011

5:30pm - 8:30pm

Where:

Polytechnic Institute of NYU (NYU:Poly)

Pfizer Auditorium - Dibner Building

Six MetroTech Center

Corner of Tech Place and Bridge Street

(Subway: Jay Street – Metro Tech - A,C,F,N,R trains; Borough Hall – 4,5 trains)

The Seattle Times Reviews "Too Big to Fall: America's Failing Infrastructure and the Way Forward"

2011-08-23T11:00:00.002-04:00

Mike Lindblom, transportation writer for "The Seattle Times," recently wrote on article on Barry LePatner's new book "Too Big to Fall: America's Failing Infrastructure and the Way Forward". The article, entitled "'Too Big to Fall:' the hazardous health of America's roads and bridges" highlight's the nation's denial regarding the state of its infrastructure, noting "Elected officials crave the fame of cutting the ribbon on a new highway, rather than maintaining an old bridge."

Linblom's article notes that some politicians have awakened to the crisis, which makes "'Too Big to Fall' a timely book." In the mean time while the crumbling continues with America's infrastructure, the article endorses LePatner's urging of states to install strain gauges, weight scales, cameras and corrosion sensors to gather bridge data around the clock, instead of trusting sporadic visual inspections.

For his Seattle readers, Lindblom notes that even in the "enlightened Washington state," only about $1.1 billion of the $9 billion 2011-12 transportation budget goes directly to highway preservation or maintenance." Lindblom advises, "Washington state Transportation Secretary Paula Hammond suggests a quota for maintenance in the next round of Washington state transportation taxes — even if fewer new lanes are built. Until then, this book offers professional and armchair engineers a wealth of history to place future road failures in perspective."

Mr. Lindblom's article is another example of the need for spreading the word and sounding the alarm regarding the nation's failing infrastructure. The fear of cost overruns should not doom infrastructure projects, where there exists a methodology to eliminate these concerns. The LePatner C³ Model allows owners to regain control of their projects and re-balance their relationship with the contractor by obtaining, for the first time, true complete-price contracts with those building their projects.

LePatner to Appear on CNBC

2011-08-15T17:00:00.001-04:00

Earlier this month, Barry LePatner, Esq., author of Too Big to Fall: America’s Failing Infrastructure and The Way Forward, was transported to a park overlooking the George Washington Bridge for an interview with Michelle Caruso Cabrera, award winning reporter for CNBC.

CNBC is planning a special program on infrastructure and wanted to interview LePatner based on Too Big to Fall. The first question the reporter asked was: “If you were giving a State of the Union address to Congress, how would you describe the state of the nation's infrastructure?” LePatner answered: “I would state to our national and state government leaders that the state of the union's infrastructural assets is perilous and getting worse with each passing year.”

The reporters will also be traveling to Minnesota to interview representatives regarding the I-35W. LePatner was asked about that tragic collapse and whether we should be expecting more bridge failures such as that one to occur. He indicated it was not a question of “if”, but “when”. The on-camera interview lasted about 20 minutes after which the camera crew returned to NYC and shot additional footage from LePatner’s offices.

LePatner & Associates, will provide you with further details on the interview air date when we receive them.

LePatner speaks at Yale Infrastructure Event

2011-08-08T08:00:00.001-04:00

Recently, Barry B. LePatner, Esq. spoke and participated in a Yale Club forum titled, Replacing the Tappan Zee Bridge: NYS’s Ultimate Infrastructure Challenge. Sponsored by The Manhattan Institute and the Business Council of Westchester, the event included excellent presentations by Westchester County Executive Rob Astorino and Niclole Gelinas, Contributing Editor, City Journal both of whom spoke about the history and the rather dreadful current condition of the Tappan Zee Bridge which transports more than 51 million vehicles a year and faces a $16 billion replacement for which there is little available funding.

Nicole Gelinas, who authored the article "The Tappan Zee Is Falling Down", warns that the Tappan Zee Bridge is, “a disaster in slow motion.” Not only is the bridge unsafe, but is also structurally deficient—currently costing the taxpayers of New York State $150 million a year.

The panel discussion was led by E.J. McMahon who astutely guided the panel members thru a comprehensive discussion of the challenges addressing politicians and the public in overseeing the replacement of the bridge and the diverse policy decisions that must be resolved to make this happen. My comments to the audience are set out below. Clearly, this subject is of great importance and will need what has been missing for too long both on a state as well as national level: political will. Stay tuned as the subject of how our nation addresses its failing infrastructure and the question of where we are going to find the scarce funding to remediate deteriorated roads, bridges, tunnels etc, will become more critical in the months and years ahead.

Barry LePatner's prepared comments at the forum are available below for your review and comments.

Replacing the Tappan Zee Bridge: New York State’s Ultimate Infrastructure Challenge

As presented by Barry LePatner:

“In his definitive blow-by-blow account of the 2008 Wall Street meltdown that triggered the financial crisis, Andrew Ross Sorkin quoted Richard Fuld, the head of soon-to-be-bankrupt Lehman Brothers. Fuld acknowledged the myriad of short term profitable but long-term investment mistakes he had allowed to go on that eventually led to his firm's demise. According to Sorkin, Fuld said, “It’s paving the road with cheap tar. When the weather changes, the potholes that were there will be deeper and deeper.” “Now,” wrote Sorkin, “here they were, potholes as far as the eye could see, and Fuld had to admit, it was worse than he'd ever expected.”

The attitude of our national and state leadership on infrastructure issues for decades has been about its failing akin to paving our rotting roads and bridges with cheap tar as the solution for both the short and long term.

As Nicole’s excellent article on the Tappan Zee shows, there is a huge price to pay for mere “stopgap” efforts when it comes to remediating our roads, bridges and tunnels. New York State has publicly acknowledged that it will spend $150 million a year to keep the bridge operational. Looking to a minimum 10 years before a replacement could conceivably be designed, financed and built, New York State taxpayers are facing an additional cost to maintain a bridge that is capable of collapsing at any time of over $1.5 billion!

There is a clear lack of political will in both Washington and state capitals for dealing with the overwhelming challenge of addressing our failing infrastructure. Decades of ignoring the obvious need for ongoing maintenance – in effect, states starving our built infrastructure assets while taking funding from Washington and using billions for new projects while ignoring our existing roads and bridges – has left a price tag of over $2 trillion for bringing our infrastructure up to minimal standards.

A reluctance to raise the federal gas tax that once funded the entire construction of the interstate highway system – while politically expedient -- is economically unsupportable. President Ronald Reagan raised the tax in 1982 when he realized that without doing so would make the cost of replacement even greater over time. President Bill Clinton was the last president to raise the gas tax in 1993. Today, a per gallon gas tax is unsustainable. The economy has caused a major fall off in national miles driven. Hybrids and more fuel efficient cars have also cost the highway fund dearly. The gas tax must be recast so that those who are major users get taxed on how many miles they drive and those who do not use our roads should no longer be subsidizing roads that are falling apart.

We can and we will begin to rebuild our infrastructure to meet the needs of a population that will total over 400 million by 2050. Repairing bridge inventory that, like the Tappan Zee, has exceeded its intended 50 year lifespan, must come about before gravity wins and we are forced to acknowledge our infrastructure shortcomings under tragic duress.

But make no mistake about the need for controlling the cost of our new and rebuilding efforts. We cannot afford to delay these projects with arguments that uncontrollable construction cost overruns leave our state and federal budgets at risk. Controlling construction costs with true fixed price agreements, negotiating with contractors all identifiable contingencies and requiring contractors to assume the risk of completing projects on time and on budget are within our control. Any politician who argues otherwise is ignoring the defined mechanisms that are available to secure a complete price for these projects and returning tens of thousands of out of work contractors back onto jobs. Different studies show that for every $1 billion of infrastructure work we generate from 11,000 to 30,000 jobs!

Finally, it is important to note that our infrastructure future will, ultimately entail turning to an increased role for public\private\partnerships and state and federal infrastructure banks to stimulate investment. Private investment funds totaling hundreds of billions of dollars await a workable financial model that can be adapted to allow remediation of bridges and tunnels and construction of new infrastructure across the nation. But private investors are concerned about the lack of leadership and the haphazard politics of moving these projects forward. New P3 models will not only provide fresh funding for building these needed assets but make provisions for maintenance and enhancements over the term of a long term lease so that the governmental owner gets a quality facility back at the end of the concession.

We need fresh thinking without question; but most of all we need leadership in this vitally important policy area.”

Pipeline Drives Hydro-Plant Project Overruns

2011-07-07T08:00:00.001-04:00

As you know, The LePatner Blog endeavors to provide its followers with relevant and timely reports on cost overruns found in construction projects today. With that in mind, the Aspen Daily News in Colorado recently reported cost overruns regarding a pipeline project running from Thomas Reservoir to the proposed site of Castle Creek Energy Center. At the recent City Council meeting, the city utilities department requested an additional $1.92 million, bringing the total budget limit to $8.32 million. The original 2007 budget limit was $6.19 million, meaning its projected cost has increased over 30%.

According to city utilities director David Hornbacher, pipeline costs increased because of challenges encountered during construction. The article reported, “the alignment had to be rerouted numerous times to get around utility lines the city didn’t know were there, and the work had to be modified as required by a state permit.” The article also expressed City Council’s frustration over the delay and uncertainty of the project. Councilman Adam Frischas complains, “We need a clearer, simpler picture of where the chunks of money are going and what they are needed for.”

Councilman Frischas's frustration is not uncommon, as cost overruns plague the construction industry as a whole. Councilman Frischas—good news. LePatner has developed a method that provides its clients with "a clearer, simpler picture" of the construction as a whole and provides owners with control of their project. An owner can commit to a construction contract that is unyielding and inflexible and be assured that the construction cost and contractor fee will not be exceeded.

The LePatner C ³ Model protects owners against unexpected cost overruns similar to the complications with the Aspen pipeline construction described above. Under the C³Model, the Construction Manager participates in a Risk Contingency Workshop with the Owner and the Project Consultants, who anticipate and identify certain conditions and events and work out a contingency to avoid unnecessary change orders. Furthermore, the C³Model allows the Owner and Construction Manager to mutually accept the Complete Contract Price with includes a Risk Contingency amount, thereby forming a strong relationship between Owner and Construction Manager.

For more information about the LePatner C ³ Model and how you can control the costs of your next project, please consult our website at www.lepatner.com.

LePatner to Speak at the American Council of Engineering Companies' Fall Conference

2011-05-18T16:00:00.006-04:00

The American Council of Engineering Companies ("ACEC"), has announced that Barry B. LePatner, Esq. of LePatner & Associates, LLP will be speaking at the ACEC’s 2011 Fall Conference, "Sounding the Alarm: Collapsing Infrastructure Can't Wait" being held at Caesars Palace in Las Vegas, Nevada from October 19-22, 2011.

LePatner, author of "Too Big to Fall: America’s Failing Infrastructure and the Way Forward," will be speaking about the perilous state of our nation's infrastructure, the failure of the engineering profession to have spoken out about the true state of our bridges and dams and how the ASCE failed to make the necessary substantive response the fallacious report of the National Transportation Safety Board as to the cause of the I-35W Collapse in Minnesota.

Here is a link to the Event Details on the ACEC website.

LePatner Quoted in The Real Deal

2011-05-06T15:30:00.005-04:00

Barry LePatner, author of "Too Big to Fall: America’s Failing Infrastructure and the Way Forward," recently gave an interview to David Jones of The Real Deal, concerning a novel lawsuit by a construction lender against the law firm. The suit, against the law firm Herrick Feinstein, arises out of an opinion letter given by the firm with respect to a $70 million construction loan to a now-defunct developer. Mr. Jones' article, entitled "Law Firm Faces Suit from Lender at Turtle Bay crane collapse Site" is in today's edition of The Real Deal.

During the interview, LePatner advised that in New York State, the law places a non-delegable duty for safety at a construction site upon the owner and the general contractor or construction manager. The latter, by contract, is customarily charged with being responsible for all "means, methods, techniques and sequences" of construction. This, in turn, obligates the GC/CM to carefully oversee site safety including responsibility that all steps are taken to conform to applicable codes.

What LePatner did say in terms of the lender is that before making a construction loan, the lender is provided by the developer\borrower with full documentation on the project including all design documents, names of all project team members and appoints its own representative to serve as the proverbial "mortgage monitor". Clearly, in this litigation, the degree to which the lender undertook its due diligence into the background of this developer -- who had no prior experience with a project of this scale -- and the retention of the other team members would be a substantial part of any effort to claim reliance on the law firm that gave an opinion on zoning or related matters.

LePatner & Associates offers lenders and owners protection against the kinds of avoidable liability faced by the lender in this lawsuit and other issues that may arise on a project, such as fraud. LePatner & Associates' affiliate, Proactive Integrity Associates, LLC (PIA) has extensive experience in conducting due diligence background investigations essential to screening and verification of each of the project team's qualifications and background.

PIA works closely with LePatner & Associates to proactively identify and mitigate risks to protect owners, investors, developers and lenders from construction cost overruns and avoidable liability.

Cost Overrun Upate: Cost Overruns Threaten Flood Project

2011-05-05T11:36:00.011-04:00

The Napa Flood Control project in California is short of money due to cost overruns and budget-cutting in Washington D.C., creating the threat of a complete shutdown of the project this summer.

According to an article entitled, “Cost Overruns Threaten Flood Project,” written by Kevin Courtney of The Napa Valley Register, the U.S. Army Corps of Engineers may need as much as $6.2 million to keep construction on the relocation of railroad facilities and the Napa Creek flood defenses on track. According to the local project manager, Julie Lucido, if the projects are stopped, the suspension of work would result in further increased construction costs for which taxpayers would wind up paying for.

Dave Cook, one of the Army Corps' Napa managers, said that the corps is dealing with the fact that the company with the $65 million railroad contract incurred substantial unanticipated costs. In March of last year, Cook said he approved more than $3 million in additional costs for the general contractor on the project.

The LePatner C3 Model protects owners against unexpected cost overruns similar to the complications in constructing the new rail bridge over the Napa River. Under the C3 Model, the Construction Manager participates in a Risk Contingency Workshop with the Owner and the Project Consultants, who anticipate and identify certain conditions and events, which, if arise during the Project, may cause delays and require the Construction Manager to perform additional work. The conditions contemplated are then set forth in the Agreement at a fixed price, should the condition occur. The Owner and the Construction Manager mutually agree that the Complete Contract Price, includes an agreed pre-determined Risk Contingency amount, available to the Construction Manager in the event that the anticipated risk occurs. The Risk Contingency Workshop is another example of how the The LePatner C3 Model allows owners to remove the unknowns from the Construction process and permit their projects to progress with confidence that they will complete their project on time and on budget.

Business Update - The Entertainment Business That Is

2011-04-18T12:00:00.002-04:00

So that those of you who have been following The LePatner Blog do not think that the only thing on our minds here at C3 Central is controlling inefficient contractors and fighting against unwarranted cost overruns, today we offer you something of far greater value: the answer you have always been waiting for as to how all those ridiculous hit network dramas always seem to have come out of the same formulaic recipe. Answer: That's because they come out of the same formulaic recipe.

Ken Levine is the Emmy award-winning writer director and producer of these TV dramas and offers in this posting just how even you can write a successful hit TV drama with criminal overtones that keep millions of Americans glued to the boob tube hour after hour so that advertisers can lock them in for 18 minutes of every hour watched. Read his formula and laugh aloud -- as you should -- with how insightful he really is about the business.

Then go and watch Rizzoli and Isles on TNT (a Hollywood crime show starring Angie Harmon which is in its second season which Barry's son Mark is currently working on as we speak). Here is the link to Ken's posting. As always, we welcome your comments.

http://kenlevine.blogspot.com/2011/04/how-to-create-hit-network-drama.html

Update on Construction Cost Overruns

2011-04-14T09:00:00.001-04:00

The LePatner Blog was created to provide our clients and friends with the information and tools necessary to ensure that your investment, business and project goals are achieved. With that in mind, The LePatner Blog is launching a new initiative intended to keep its readers informed of the serious problems associated with cost overruns that plague the construction industry today.

From time to time The LePatner Blog will endeavor to provide its followers with relevant and timely reports on cost overruns found in construction projects today. These reports will identify specific projects facing overruns and highlight how inefficiencies in the construction industry, including, among others, the use of incomplete design documents, lack of coordination among design drawings, failure to anticipate and allocate monies for risk contingencies, and failure to properly manage projects, will prevent a project from completing on time and on budget.

The first report comes from Ronald B. Feingold, Esq., a Partner with LePatner & Associates, LLP, who responds to a recent article in the Reno Gazette Journal.

The article, entitled "Fired RTC engineer: I was a 'Scapegoat'", involves a lawsuit by Chris Tschirhard, which alleges that design flaws and other problems resulted in significant cost overruns during development of Reno’s Fourth Street Station, and that he was "ordered" by his supervisors with the Regional Transportation Committee ("RTC") to approve change orders, "so that there would be no delay in getting the project completed before election day." A total of 18 change orders for the project cost $2.37 million, bringing the project to over $15 million.

The RTC's Engineering Director confirmed that necessary changes to the project were the result of incomplete design documents. Not surprisingly, the RTC tried to downplay the devastating effect cost overruns can have on government projects. Hale states, "we got a great facility. Despite the overruns, I think the taxpayers still got a good deal."

From a political standpoint, the RTC is making an effort to put the best light on the situation. A cost overrun of over $2.3 million in change orders amounts to close to a 20% increase. On public projects such as this one, it is the taxpayers who wind up paying the increased costs. Taxpayers vote for the elected official who most likely appointed Hale, the RTC's Engineering Director. So, it is not unexpected for Hale to downplay the extra costs and adopt the party line. But there is another underlying and core message divulged here. And that is that governments too often readily accept cost overruns as the norm. Governments assume that cost overruns are the standard of the construction industry and cannot be avoided. The mentality is that it is accepted and taxpayers are expected to pay the added cost. It is both condescending and disdainful to the public’s interest for the RTC to argue “we got a good deal”, and “we got a great facility.”

It does not have to be that way. There can be construction cost certainty. No extra costs, no cost overruns, and no additional charges taxed to the people. An owner can commit to a construction contract for a designated amount and be assured that the construction cost and contractor fee will not be exceeded and will be unyielding and inflexible.

The LePatner C3 Model: Construction Cost Certainty for Owners, is a new complete-price approach to designing and building capital projects. Using the C3 Model, contractors bid on fully complete and coordinated drawings as opposed to bid documents that are typically 85% or less complete. Contractors can bid confidently based on such documents and are more inclined to assume the risk for completing on time, on budget, and to waive their right to assert claims based on incomplete scope documents.

The LePatner C3 Model provides a strategy that reduces the risk of cost overruns. Owners enjoy a new level of assurance that actual project costs will not exceed the contract price.

Barry B. LePatner's Conversation on the Nation's Infrastructure with Congresswoman Rosa DeLauro

2011-04-05T12:00:00.006-04:00

Barry B. LePatner, Esq., author of Too Big to Fall: America's Failing Infrastructure and the Way Forward, recently had the opportunity to speak at length with Congresswoman Rosa DeLauro, Third District of Connecticut, who is actively involved in pressing for reforms to the nation's infrastructure through her work on the Transportation and Infrastructure Committee.

Here is Barry’s first hand recount of his informative conversation with Congresswoman DeLauro:

“Congresswoman DeLauro said right off that she had read Too Big to Fall and was excited for the opportunity to solicit my thoughts on how to pass legislation that would make a difference in addressing these major problems. As she said it, ‘Here in Washington there is always a very short window of opportunity’ to get to the right officials in the Administration to shape a bill that has a chance to pass with new ideas.

She asked my thoughts on the proposed National Infrastructure Bank bill. I told her that I had actively had supported the concept in my speeches at the Brookings Institution and before American Public Transportation Association and the Transportation Research Forum. I noted that the idea of the bank would be best received as one that provided seed money to needed projects that would, in turn, secure private and public financing as a result of the National Infrastructure Bank's role in the project. I advised her that it would be helpful to have her staff review the European bank model that with some modifications could be applicable to how we can use such a bank, which is intended to lend money that will be returned with interest from monies earned from the project itself.

The Congresswoman and I spoke about the risk the nation faced with nearly 8,000 bridges that are both structurally deficient and fracture critical and that federal funds are not being channeled by the states to remediating these bridges. I mentioned the discussions I am having with Syracuse University to seek a grant to create a massive Google map showing everyone -- including those in Congress -- where each of these bridges are located. She stated that “there is nothing like putting a shotgun to the head of everyone to get them to focus” on information like this.

We talked a bit about public private partnership funding and I noted that it would become critical for state and local governments considering such outside funding to have sophisticated advisors to balance the expertise of the specialists on the private sector side to ensure fairness in how these long term deals are structured.

Finally, I spoke at length about the all important issue of addressing the question of ending unlimited cost overruns leading to cancellation of major projects such as tunnels and rail lines in New Jersey, Wisconsin, Ohio and Florida. I outlined for her how this could be negotiated to secure a cap on the open-ended contingency items that could then be backstopped by the Federal government in whole or in part. She was enthusiastic to hear this and receptive to my ideas.

She indicated that she welcomed my assistance and I offered to send along a copy of my speech to the Brookings Institution and American Public Transportation Association along with my recent article in the BNA Financial Reporter. She said I would be hearing from her legislative assistant Dan who would get in contact with me.

It is nice to try to be a good citizen and speak with a Congressperson trying to fight the good fight.”

Barry's conversation with Congresswoman DeLauro, is another example of the spreading the word and sounding the alarm regarding the nation's failing infrastructure. The fear of cost overruns should not doom infrastructure projects, where there exists a methodology to eliminate these concerns. The LePatner C³ Model allows owners to regain control of their projects and rebalance their relationship with the contractor by obtaining, for the first time, true complete-price contracts with those building their projects.

We welcome your comments and thoughts on Barry's discussion with Congresswoman DeLauro. Please enter your email address at the top right hand corner of the blog to receive regular updates from The LePatner Blog

Preparing for a Bipolar Economic Future

2011-03-18T12:00:00.036-04:00

Forecasting the Real Estate and Construction Markets

By: Barry B. LePatner

After attending several recent industry conferences and reading a host of financial analysis, my forecast for the real estate and construction markets for the near future is truly bipolar. A host of data shows simple growth in financial, housing and hospitality markets. At the same time, unemployment is likely to decrease from its current rate of 9% by year’s end, and other signs of renewed financial investment look positive for the short term. However, not everything is looking up and it is highly likely that “toxic assets” still linger to roil the economic pot.

In looking ahead to the economic future for the U.S., it would be derelict not to mention the international factors that will play a significant role in how our business, financial and governmental leaders plan and react. The turmoil in the Middle East and substantial increases in the price of oil, the tragedy that has befallen Japan following the recent earthquake and tsunami that have left that nation paralyzed both internally and in its international supply chain, as well as the debate about whether the U.S. will stick to a strict deadline to withdraw our troops from Afghanistan beginning this summer, all will be weaving pieces of the tapestry that will impact our financial future.

Here at home, we need to look across broad industry lines to see the telltale traces of factors, good and bad, that are the harbingers of the economy to come. Take, for instance, the troubled construction industry. Construction industry unemployment for 2010 not only averaged 20.6%, but increased from 19% in 2009. The U.S. Department of Commerce reported the dollar value for new construction for the first 11 months of 2010 “posted large declines for every major private non-residential building market, including massive year-to-year declines of 57% for hotel and motel work, 36% for office building construction, 34% for manufacturing work, and 26% for commercial buildings.” To bring these facts up to the present moment, McGraw-Hill reported the other day that, for the first two months of 2011, total construction on an unadjusted basis was $55.9 billion, down 9% from a year ago.

Cutbacks in federal stimulus spending, declines in the housing market and an overall decline in demand in most building sectors present little prospect for increased employment amongst an industry that in 2007 had nearly 10 million workers. Treasuries in many states across the country are almost bankrupt. Despite all this, the Association of General Contractors predicts that in 2011 there will be an increase in hospital and higher education work.

This month, the American Institute of Architects released its Architecture Billings Index, a key indicator of construction activity, which leveled off in January after strengthening late in 2010. The AIA said the January ABI score was 50.0, down from a reading of 53.9 the previous month. Any score above 50 indicates an increase in billings. The index reflects the approximate nine- to 12-month lag time between architecture billings and construction spending. More revealing was the fact that the new-projects inquiry index was 56.5,down sharply from a mark of 61.6 in December.

According to CB Richard Ellis, one of the world’s largest commercial real estate services firms, unpredictability appears to be the byword for the economy and the real estate world in 2011. The company’s annual trends report forecasts an “uneven tempo of recovery” this year, with “halting improvements rather than steady progress.” They predict uneven job growth across industries and geographies with key areas for growth during the year being trade, housing, and employment.

Predictions in the housing arena are also mixed. In depressing news the Department of Housing and Urban Development announced that it will be auctioning off more than 150 homes in Phoenix on March 26. In addition, a highly respected survey tracking housing sales reports that February sales were down 9% from 2010 levels.

Now that the data for 2010 is in, we see that banks sold more homes than builders by more than a 2-to-1 margin last year (837,000 repossessed homes vs. 322,000 new single-family homes). According to Boyce Thompson, editorial director of the BUILDER group of magazines, foreclosures still predominate in five states—California, Arizona, Illinois, Florida, and Michigan—and account for more than half of all foreclosures nationwide. Worse, markets such as Seattle, Houston, Atlanta, and Chicago, which had held their own in recent years, now appear to be struggling. For example, in Houston, 2010 foreclosures jumped 26% over 2009 levels.

But good news comes from the National Association of Home Builders, where economists report that “the rate of personal savings increased from 1.8% in the third quarter of 2007 to a high of 7.2% in the second quarter of 2009. In 2010, according to the NAHB, the savings rate dropped to 6.2% and it now appears to be returning to its 25-year historical average level of 5.2%.

To many economists, the increase from the 2007 rate is critical. That’s because when the personal savings rate approaches 3 - 4%, household budgets are freed to use funds for consumption and investment, thus triggering another round of economic growth.

So where are the seeming bright spots? It appears that the hospitality industry is one of the most hopeful. Investors are affiliating with a host of hotel companies to build new hotels and buy and refurbish older ones. Several new brands in the industry are also set to emerge in the next year or so.

Harbingers of hope also show up in the financial world. Take Warren Buffet and his mega company, Berkshire Hathaway. They just announced the purchase of chemical and lubricant giant Lubrizol, headquartered in the U.S., for $9 billion in cash, a 28% premium over the stock’s price. Why would the good Mr. Buffet make such an investment?

Consider that Buffet recently purchased Burlington Northern Santa Fe Railway, and you begin to see that the world’s smartest investor has placed heavy multi-billion dollar bets that the U.S. is a strong future market for railroad\supply chain infrastructure and the lubricants that grease the way for moving goods in the U.S. via trains, planes, and automobiles and keep our machinery and equipment running smoothly. Unfortunately, though Buffet recognizes that transportation is an important part of our future, the nation’s politicians appear to be proceeding along the same failing path by refusing to give priority in the current $536 billion transportation act to maintain our roads, bridges, power grids, antiquated airports, dams and levees. And too many U.S. corporations continue to draw away from research on long-term investments in education, new technology, medical research and infrastructure.

Our nation has always been about building new, bold infrastructure. We saw incredible investment by private interests who gambled and built the Erie Canal and the Intercontinental Railroad which transformed the the economy of the nation and spurred additional governmental and private investments. We saw our government have the vision to build the Tennessee Valley Authority and the Hoover Dam as well as the spider web of the interstate highway system that transformed our nation into the global commerce leader of the post-World War II era. In every instance, investment in construction led our nation forward and spurred increased employment which, in turn, magnified our economic return on the investments made for projects that have served our nation well for decades.

But someone really smart, Warren Buffet, has just put billions of dollars of his own money to use betting on a growing economic future for the U.S. That includes a bet that we will be coming out of this financial morass before too long. So as bad as some of the economic information may seem to be, I believe that our nation is poised for renewed growth, for positive strides in rebuilding our ailing infrastructure, and for new investment and construction that will be desperately needed as our nation adds another 100 million people over the next forty years.

LePatner & Associates, LLP is interested in hearing your comments, thoughts, and predictions for the economy in 2011.

New Book - The Commercial Real Estate Revolution: Nine Transforming Keys to Lowering Costs, Cutting Waste, and Driving Change in a Broken Industry

2011-03-15T16:52:00.000-04:00

A recent book, "The Commercial Real Estate Revolution" discusses how the commercial real estate construction industry is a disaster full of built-in waste, noting that seventy-percent of all projects end over budget and late. The book, authored by Rex Miller, Dean Strombom, Mark Iammarino, and Bill Black makes several fine acknowledgments to Barry LePatner's groundbreaking book "Broken Buildings Busted Budgets."

"Commercial Real Estate Revolution" looks to ways in which inefficiencies in the real estate development process can be addressed so our nation can build smarter and more efficiently. If you open up the link to the book and take a glance at the complimentary free pages you will see that there is a greater recognition that follows on the heels of "Broken Buildings Busted Budgets" for everyone in the process to heed LePatner thoughts initially made three years ago.

Click on the site I indicate below to go to a brief excerpt from the book.

Onward!

"The Commercial Real Estate Revolution"

Wither Goeth the Real Estate Market?

2011-03-08T12:00:00.004-05:00

Last week, Barry LePatner of LePatner & Associates, LLP, attended an interesting forum on the state of the real estate markets both in NYC and around the nation. Held at the Harvard Club, the panel of experts included Robert Knakal, Chairman and Founder of Massey Knakal Realty Services, the largest commercial broker in NYC, Ivan Kaufman, Chairman and CEO of Arbor Commercial Mortgage, LLC, and Robert Ivanhoe, Esq., Chairman of the New York office of Greenberg Traurig and Chair of the law firm’s national real estate practice. The discussion was moderated by Dan Geiger, Senior Editor of Real Estate Weekly.

In response to the question that may interest Owners and Developers alike, to wit, “Are lenders coming back into the market?”, Ivan Kaufman advised the audience that “Clearly, there is momentum on lending and on the buyer side from owners.” He noted that “in 18 months we will see that the bottom of the market was 2010 and we will see moderate growth in the real estate world over the next few months.”

Robert Knakal added that insofar as new development is concerned, “There is a need for new space since the bulk of the existing building stock is old.” Anyone assessing the market today has to “look down the road two years and see that now is the time to plan for these new projects.” This was quite reassuring to hear from an expert such as Knakal since LePatner & Associates has been advising our clients to this effect for the past year.

With respect to new developments, Ivan Kaufman added that “We are actually lending on the residential side and will do some out of the ground loans if the deal is right and is priced correctly.” This was especially good news since securing construction loans for new projects in recent times has been about as difficult as expecting the New York Mets to be in playoff contention in mid-September.

A more cautionary note was sounded by LePatner’s friend Rob Ivanhoe, who represents many of the most significant players in the nation when it comes to real estate at the highest level. Mr. Ivanhoe noted that “I have never seen a time when there has been two extremes such as we see in this market. He described one market of distressed or less desirable properties that are still struggling, with little investor interest and lower pricing, while there is a second market for properties that come up for sale where there are many bidders and competition from lenders for stabilized Class A properties.” Outside of New York City he noted that most markets, with a few exceptions, are really struggling with values still declining and lots of foreclosure sales. Ouch!

Robert Knakal highlighted future potential hiccups in the market citing the fact that “there is still a lot of ‘shadow’ distress out there from owners who bought in ‘06 and ‘07. While these owners may be current on their low interest loans today, these loans are coming due in 2011 and 2012 and they face significant negative equity.” In other words, there are hundreds of properties in NYC that are more than likely to face foreclosure by their lenders since the values of these properties have not risen enough to sell to enable refinancing of these properties. Double Ouch!

So as we assess these excellent presentations of the state of today’s real estate market, I can state, from the experience of what we at LePatner & Associates are seeing, that it is akin to what LePatner heard this morning.

Clients with deep pockets and foresight are coming to us with plans to begin new projects because they have confidence in the projects they want developed in 2012 and 2013. We already have new assignments in contracts for large hotel projects, new residential development, new national and global retail projects and pure speculative residential towers beginning to move forward. We see the rest of the year slowly ratcheting upward and maintaining a slow-growth prospect over the next 24 months.

We would appreciate hearing your thoughts as to whether your perceptions or actual experiences are similar or different that what LePatner heard this morning.

LePatner in the Commercial Observer

2011-02-16T12:00:00.004-05:00

Yesterday's Commercial Observer included an op-ed piece from Barry LePatner entitled, "The Biggest Challenge Facing Ground-Up Projects" as the lead article on the construction industry.

LePatner warns owners about to start building, as we emerge from the recession, that the construction industry is poised to continue its errant ways of shortchanging projects with low bids and fast-track construction that will, assuredly, result in construction cost overruns that will drive prices up 30, 40 or 50% percent. Properly drawn construction contracts have the power to ensure proper cost management, and the availability of such contracts provides owners a true choice. A choice that empowers the owner and developer community toward obtaining a TruFixedPrice contract.

Real estate owners and developers now have the option of a choice: the ability to use LePatner C³ to ensure construction cost certainty on their projects.

LePatner Comments on GOP Critic's Claim that Joe Biden's $53 billion High-Speed Rail Plan is 'Insanity' -

2011-02-10T10:00:00.003-05:00

The recent announcement that the Obama administration was seeking to invest $53 billion into a national high speed railroad network set off a flurry of comments, pro and con from politicians along the spectrum of interest groups. Barry LePatner, author of the recent book, Too Big to Fall: America’s Failing Infrastructure and the Way Forward, believes that initiating greater attention to the compelling need for infrastructure funding is vitally important as Congress will shortly begin to take up a $300 billion transportation bill this Spring.

Coverage of this announcement was carried by all the media. Shortly after the announcement, made by Vice President Biden, LePatner was contacted by a reporter for the Christian Science Monitor and was asked to provide his thoughts on whether this initiative to spur greater spending on infrastructure was likely to succeed and specifically whether high speed rail was important for the nation, as urged by the Administration.

Commenting in the article titled, “GOP Critic calls Joe Biden’s $53 Billion High-Speed Rail Plan ‘Insanity,’” LePatner said, “if you look at the last 100 years, it has been large public-works projects which have pulled our nation out of every recession,” LePatner went on to note that the building of the Erie Canal opened the Northeast in 1819, the transcontinental railroad connected the populated East to the developing West, and the interstate highway system built under Eisenhower “all opened up vast reservoirs of trade and economic investment.”

LePatner advised that studies how that $1 billion spent on infrastructure remediation produces between 18,000 and 34,000 jobs. He added, “Twenty-five to 35 percent of that then comes back in taxes, and the other multiplies in geometric ratios as spending on food, clothing, shelter, and other goods.”

On the question of whether we need the high speed rail system as proposed by the Administration, LePatner pointed out that high speed rail is most needed where congestion has tied up auto and commercial traffic leading to an economic impact of $87 billion to our economy. In non-congested areas LePatner noted less of a need to spend limited funding.

The national temperature for addressing our infrastructure funding needs is heating up. This issue, raised in the President’s State of the Union address, and beginning appear on the radar of state governors, will become avidly debated over the remaining term of President Obama’s Administration.

LePatner Launches Integrity Compliance Division

2011-02-07T14:45:00.007-05:00

In November 2010, LePatner made a key addition to its team. Proactive Integrity Associates, LLC (“PIA”), LePatner’s new investigative affiliate, brings with it decades of experience conducting a wide range of investigations, including monitoring assignments and forensic examinations in the construction industry. As part of the LePatner C³ team, PIA will aid LePatner’s clients by providing the crucial intelligence and analysis needed to make well informed business decisions and to prevent construction cost overruns.

PIA’s contributions to LePatner C³ include conducting pre-project risk assessment and investigative due diligence on contractors and others, developing integrity compliance and anti-corruption programs to control the activities of contractors and design professionals and performing forensic examinations of project documentation to identify improper or fraudulent billing.

PIA is led by Joseph Jaffe and Jonathan Newcomb. Mr. Jaffe serves as PIA’s President and is also a Partner at LePatner. As a former state and federal prosecutor, Mr. Jaffe has more than 40 years of investigative experience. He has performed a multitude of investigations and provided strategic and risk consulting services for attorneys, corporations, governments and others since founding a corporate investigations and risk management firm in 1991. Mr. Newcomb, Principal of PIA, is a Certified Fraud Examiner and licensed private investigator with more than a decade of experience working for investigative consulting firms. His significant experience includes due diligence investigations, fact finding and intelligence gathering, witness examination, asset searches and a variety of fraud and internal investigations.

Additional information PIA’s alliance with LePatner can be found under the investigative services dropdown on LePatner's website.

Smile Through This Video of Epic Construction Failures

2011-02-06T10:00:00.001-05:00

We at LePatner have the wonderful opportunity to see a litany of problems that emanate from the design and construction world. Most buildings get designed and built properly. But the sheer magnitude of what is built around the world ensures that there will be a regular litany of problems, big and small, that will get captured. Here are a few reminders that "good judgment comes from experience, and experience comes from bad judgment."

The following YouTube video will allow you to smile your way through a variety of design and construction blunders that will amaze and delight you. Enjoy!

New York City Building and Townhouse Owners: Protect Yourselves from Neighboring construction!

2011-02-04T15:00:00.002-05:00

One of the most critical issues facing New York city developments is its impact on the adjacent residential and commercial neighbors. Over the years, LePatner & Associates has represented Coops., Condos, townhouse owners, and commercial tenants in protecting against neighboring construction, and particularly the potential structural and consequential property damage. What should owners abutting these construction sites do? Especially when there is a limited budget to rely upon costly litigation after-the-fact?

This issue was squarely addressed in a recent article by Alexander Tuttle, a Partner with LePatner & Associates, titled The Ugly Neighbor. The article discusses the benefits of entering into a "license agreement" with the next-door neighbor when either the owner or the neighbor decides to undertake major construction. This proactive agreement pays for itself in spades in the event of delays and property damage, which almost invariably occur.

Building Managing Agents, unit owners, and real estate attorneys should all be mindful of these concerns. Should you wish to be involved in current discussions amongst Real Estate Owners, Developers and Investors regarding challenges faced in the real estate and construction industries today, please join our group on LinkedIn.

Will the NY Attorney General Crack Down on Government Contractors for Construction Cost Overruns on NY Healthcare System Projects?

2011-02-03T12:00:00.008-05:00

Henry H. Korn, a Partner with LePatner, commented on a recent Associated Press article posted in the Wall Street Journal. The article, "New York Attorney General to Target Contractor Fraud," discusses the recent announced initiative by New York Attorney General Eric Schneiderman, seeking to crack down on fraud by government contractors and seek triple damages for violations. Mr. Korn’s comment argues that this initiative should be a wake up call, especially to health care systems (by which we mean private/public hospital networks) operating in New York.

For decades, NY health care systems have passively received major State funding to support their capital expansions and renovations and knowingly stood by while their contractors ripped them off on construction costs, which has resulted in huge project cost overruns and delays. Taxpayers are the ultimate victims of health care systems that lack internal controls, inappropriate monitoring systems, and utilize construction contracts that poorly define with appropriate precision the critical terms and provisions necessary to afford these institutions control over their construction costs. These project controls are exactly the type of protections that LePatner C3: "Construction Cost Certainty" can provide for owners, such as health care systems, to ensure their projects are completed on time and on budget (See the LePatner C3 Services).

This is not the first instance where the Attorney General has launched this type initiative. Years ago, then Attorney General Eliot Spitzer announced such an initiative to claw back cost overruns on construction projects through the Medicaid Reimbursement Rate formula.

With this initiative, Attorney General Schneiderman also has at his disposal the incredible reach of the State False Claim Act, N.Y. Fin. Law sections 187-94. Read broadly, as we all can be assured the Attorney General will do, any health care institution or contractor that “knowingly presents ... a false claim ... for payment or approval” through inflated construction costs, may face the prospect of liability for three times the cost of such inflated claim.

With Governor Cuomo recently announcing significant Medicaid cuts, New York's hospital networks will see major cuts in their capital budgets too, yet certain renovations, expansions and capital improvements must continue to be made to replace and repair our aging healthcare infrastructure. These networks must establish new, effective cost controls and monitoring of future construction projects in order to prevent cost overruns, for which no additional funding exists, and remain in compliance with New York regulations governing disbursement of State funds for construction.

Real Deal Article Reveals Construction Industry's Deepest, Darkest Secret

2011-02-01T15:00:00.005-05:00

Last fall, the Real Deal published an article on the construction industry that, while likely shocking to many, came as no surprise to our those of us at LePatner who have been representing owners addressing unwarranted construction cost overruns for many years. The article, "Lowballs Lead to Strikeouts" tells in the words of two industry experts, how contractors and construction managers, reeling from 20%+ unemployment, have been compelled to submit lowball, unprofitable bids for projects as the only way they can win work. They know that if they win the work and sign a contract, they will then have a chance to make profits by finding ways to file change orders and make delay claims, that rely on purported incomplete design documents, alleged owner delays, and concealed site conditions.

As detailed in Barry LePatner's book on the construction industry, Broken Buildings Busted Budgets, the construction industry is highly inefficient causing over $120 billion a year in unnecessary cost overruns. Reluctant to make major improvements in productivity, the construction industry rests as the most inefficient industry in America -- as well as across the globe. For all other industries, in both good and bad economic times, business decisions are sometimes made to sacrifice short-term profitability in order to enter a new market or grab market share from competitors. But those decisions are typically made by well-capitalized companies or those with a clear strategy in mind. The construction industry is not comprised of those kinds of companies. 90% of all construction firms employ 20 or fewer, have little capital, and are highly cash-flow dependent. These are not the kinds of firms that can afford to bid unprofitably and remain in business. Yet this is what they do time and time again.

When LePatner was interviewed for The Real Deal article, we already knew that the industry thrived on the low-bid claim-game strategy even when times were flush. What is incredible about this article is that, for the first time we can recall, top construction industry executives go on record to confirm that the construction industry does systematically pursue projects by low balling prices that are intended to mislead public and private owners; that they pursue a defined business strategy to find any and all ways to jump up the contracted price by 30, 40, 50% or more to make a profit off of unsuspecting owners, the very clients they would want to continue to do business with after the economy improves!

LePatner C3: "Construction Cost Certainty" for owners provides the advice and protections from cost overruns that you need to move forward confidently on your next project.

Owners, for the first time, now have a choice.

LePatner's Analysis of the NTSB Report in Connection with the Collapse of the I-35W Bridge in Minneapolis

2011-01-25T15:00:00.001-05:00

Barry LePatner has been an outspoken critic of the final report issued by the National Transportation Safety Board ("NTSB") in connection with the collapse of the I-35W Bridge in Minneapolis on August 1, 2007.

LePatner argues that the report, by all measures, was at the very least, misleading. That it blames the collapse on a forty year old design error (without ever really explaining why the bridge was able to function all that time despite two large expansions) is inexcusable by engineering and construction standards.

Independently, with the advice of expert bridge design professionals, LePatner's research concluded that the NTSB was flat out wrong and had chosen an expedient - and non-existent - victim (the engineering company that did the design was no longer in business) rather address the real causes associated with a total failure of the bridge agency to manage needed maintenance over its forty year history.

LePatner research makes the case that the NTSB report totally ignored a discussion of major causative factors such as:

the failure of MnDOT to remediate frozen bearings that prevented the bridge from needed movement due to thermal stresses;
widespread "section loss" or corrosion throughout the bridge;
the failure to prevent the redecking contractor from asymmetrically loading the bridge at a single point with 578,000 lbs. of construction material and trucks just prior to the collapse.

Independent experts have acknowledged that even if the gusset plates were sized properly, they may not have been able to resist that load and the forces placed on the bottom chords of the steel trusses directly under the construction materials where independent structural engineering experts believe the failure occurred. In-depth analysis by the highly respected structural engineering firm of Thornton Tomasetti and other experienced bridge engineers disclosed that the failure was initiated on a bottom chord of one of the adjacent steel trusses and that the NTSB finding was flawed from the outset.

Most importantly, LePatner demonstrates that the bridge was always acknowledged by MnDOT and its consultants as "fracture-critical" or "on-load-path-redundant." This means that if just one critical loadbearing structural element failed, the bridge's structural system would not be able to safely transfer the load from the failed member to another load-bearing element, and therefore the entire structure could collapse from the failure of a single critical element.

As the nation moves forward with addressing trillion dollar deficits that threaten to worsen an already jeopardized infrastructure shortfall in needed funds, we can find ourselves facing the prospect that one or more of the 7,980 fracture-critical and structurally deficient bridges could, in much the same manner as the I-35W. As LePatner's new book, Too Big To Fall, attempts to make clear to readers, "Gravity wins."

We hope you read this important analysis. It should become a critical document to be put in front of everyone who has a say in addressing the need to improve our ailing infrastructure.

Follow this link for LePatner's analysis:
LePatner's Analysis of the NTSB Report

Reclaiming the Architect's Authority

2011-01-24T16:27:00.002-05:00

Alexander Tuttle, a Partner with LePatner & Associates, recently wrote an article for distribution among friends and colleagues. In the article, entitled "Reclaiming the Architect's Authority," Mr. Tuttle discusses how architects' authority over construction projects have eroded in the last 40 years and advocates recapturing their role as "Master Builder". Currently, construction managers run unchecked on projects. Invariable delays occur, which lead to construction cost overruns.

Mr. Tuttle considers how implementing a fixed price construction process through up-front project planning, complete and coordinated construction documents and more extensive architectural project oversight will carve a new landscape in the industry -- reclaiming architects' authority. Consider, for example, if architects could stand behind complete and coordinate design documents? If architects could restore owner control over the project budgets? And if, when the design documents were completed, the owner secured an independent cost estimate that would define the parameters of the costs to be anticipated by the contractor bidders? This is the essence of the LePatner C3™ Methodolgy.

Mr. Tuttle concludes that the construction industry is ripe for change. And change will only emerge through construction cost certainty and architects reclaiming their role as efficient and effective intermediaries. We hope you find this article interesting.