AGC San Diego Chapter

AGC's Monday Morning Quarterback, is a "hot off the press” and to the point, Monday morning briefing on the important issues facing San Diego's construction industry. It is prepared by AGC Executive Vice President Jim Ryan, and Vice President Government Relations, Brad Barnum. Please contact Jim Ryan at jryan@agcsd.org or Brad Barnum at bbarnum@agcsd.org with your comments, or with information that should be conveyed to the industry through this service.

If you would like to be a MMQB guest writer, please contact Brad Barnum at bbarnum@agcsd.org.

A Special Friday Morning Quarterback

February 5, 2010

San Diego Unified Bids First PSA Project….It is a Disaster for the Taxpayers!!!!

By Jim Ryan, AGCSD Executive Vice President

This is a special Friday Morning Quarterback…..there was just no way I could wait until Monday to write this article!!! As most of you know, the San Diego Unified School District School implemented a union-only Project Stabilization Agreement on most projects financed through the $2.1 billion Proposition S Bond issue, which was passed by the voters in November of 2008. The entire construction industry, with the exception of the Building Trades Unions and a couple of small, union contractor-only trade associations told the District time and time again that this was a huge mistake…the costs would escalate by as much as 25-30% on their projects. The industry explained that the PSA would stifle competition and this would raise prices…even in a recession!

The costs did escalate…to about 35%! The first project under the PSA, the Hoover High School New Woodshop Building bid yesterday at 2 pm. The District’s estimate was $2.5-$3.5 million for this project….so let’s call it $3 million. When bids were received the low bid was $4 million………about 35% over the average of the estimate…and this is during the worst recession in the San Diego construction industry’s history.

Now let’s compare that with the Auto Tech Career Center Project that was bid at Miramar College for the San Diego Community College District. This is a similar project and was bid on January 11…less than one month ago. The engineer’s estimate for this project was $2.8 million. The low bid was $2,195,000!!! Now, remember the San Diego Community College District allows all citizens of San Diego to participate….not just a select few!!! They have no union only PSA or PLA….they allow the free market to work.

So what happened??

Well…as we have told the District for over one year, they had very few bidders. Five general contractors bid the SDUSD Hoover project……17 general contractors bid the SDCCD Miramar College project. This lack of bidders was really apparent on the Hoover project at the subcontractor level. We are told that once the subcontractors that normally bid school projects really looked at the PSA, they decided not to bid…there were very few subcontractors bidding…especially compared to the Miramar project.

Perhaps the most ironic aspect of this whole catastrophe was the “local” aspect. The School Board members that voted for the PSA (Barrera, Evans, Jackson) as well as Tom Lemmon of the Building Trades, Lorena Gonzalez of the AFL CIO, and Al Shur of the IBEW repeatedly stated during the debate over the PSA that implementing this agreement was “the only way” to ensure “local participation” on Prop S Projects.

Well, guess who the low bidder was yesterday….USS Cal Builders…from…you guessed it …Los Angeles (actually Stanton..a LA suburb)!!! The low bidder on the Miramar project, however, is based on Mira Mesa Road…..right here in San Diego!!!! The Hoover project had three bidders from San Diego, and two from L.A. …so 40% of the bidders were not local…hmmmm.

I am sure the District’s spin doctors met with their friends in the unions until late in the night coming up with a spin on why all of this happened. It will be interesting to hear their version of how missing the estimate by 35%, having a low bidder from LA, and having pathetic interest in their job will turn out somehow to be a positive.

Lorena, Tom, and Al…you should be ashamed of yourselves. There is no way to justify this…it is simply greed. All you want is the millions in union dues that this PSA scam involves, and that is your motivation…pure and simple. You don’t care if the district builds only 65% of what they intended to build….let those roofs leak on the kids…what is the problem…right!

School Board members….the scam is now exposed…you did what you could for the unions and look what happened…Shelia Jackson….Richard Barrera….John Lee Evans……one of you needs to do what is right, and do it now…..stop the PSA….Lorena, Tom, and Al lied…they knew this was going to happen…everyone in the industry did.

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