Construction Reform Could Save Kent State Millions

Changing the way public universities manage construction projects could save Kent State — and Ohio's other public universities — millions each year.

Architects at all of Ohio's public universities are watching closely as the discussion about reforming Ohio's 133-year-old public construction management process takes place in Columbus among legislators.

That means people like Tom Euclide, Kent State University's associate vice president for facilities planning and operation, are waiting to hear the outcome of that discussion.

"No other state uses the form of management that we’re forced to use in the state of Ohio," Euclide said. "(Reform) would really allow us to do our construction more efficiently and without as much conflict as we have now. It would give us a lot of tools to build our buildings faster and at lower cost."

A century-old mandate

Ohio law requires public universities use what's called a "multiple-prime" process.  Universities must hire separate prime contractors for every aspect of a building's construction or renovation — from plumbing to masonry and landscaping — instead of hiring a single construction management firm to coordinate a project.

It can be a complex, slow and expensive process.

Ted Curtis, vice president for capital planning at the University of Akron, said multiple-prime construction has all but been abandoned in the private sector.

"The way I look at it, you have three or four quarterbacks calling signals rather than one," Curtis said. "I always felt that never really did work well. It's tough to have three or four signal callers when you’re trying to get a team of people to move as a team."

The existing process, in place since at least 1878, forces a university to have all aspects of the project fully designed and an architect on board before bidding each project component separately.

"It's a lot of work all the way through," Euclide said.

Other construction options

Euclide and his counterparts at other Ohio universities want to be able to use other options for building than Ohio law mandates.

Among those options Euclide wants is design-build. The process combines the design and construction phases into one contract. Euclide only has to point to downtown Kent, where construction on Acorn Alley II is moving quickly, for a design-build example.

"They can build things in a fraction of the time Kent State can because they don’t have to finish all the designs before they build the building," he said. "You can start construction when you get your foundation plans finished instead of waiting for the entire design to be done. A design-build can go a lot faster."

Using a single prime contractor, instead of multiple prime contractors as required now, also would  streamline university construction, Euclide said. Using Acorn Alley II again as an example, Metis Construction is working as the single prime contractor and hiring subcontractors for plumbing, masonry and other work.

Construction management is another building option, and it's one that has been used by Curtis at the University of Akron.

In a five-year period, Curtis said the university saved $2.6 million on the construction of 10 buildings by using the construction management process.

"While at the same time we were winning design awards and getting our buildings built on time and at or under budget. So we still have quality design, quality construction, but I believe we have a very good project," Curtis said.

Ohio State serves as guinea pig

Ohio State University started lobbying for construction reform two years ago as plans developed for a $1 billion transformation of the four-hospital Medical Center campus in Columbus.

Jay Kasey, chief operating officer of the Ohio State University Health System, said independent financial and construction consultants told university officials then that  "the present system of controls that the state and the university use would make the building of this size of a construction project impossible, because it would make it too long to get the approvals and controls of the contract completed.

"And it would make it too expensive," he added.

So last year Ohio legislators designated the project at Ohio State to be a test project to see if alternative construction methods indeed save time and money.

Kasey said construction started about a year ago with site excavation, and steel will start shaping the new buildings next month. When finished in about three years, the project will house the new Arthur G. James Cancer Hospital and Richard J. Solove Research Institute, and a new Critical Care Center.

The work includes building the new critical care center tower, upgrading and relocating existing roadways and infrastructure, renovating space in several of the existing hospitals, demolition of one hall and construction of a new chiller plant on the south campus.

"We are running below budget at this time, we are running ahead of schedule and, hopefully, that will be how we bring this project in," Kasey said.

He said using a single construction manager on the project has helped in three ways.

"First of all, construction reform has allowed us to be much quicker in the design and the approvals and the controls that the state and campus require, so we are able to move quicker," Kasey said. "We are saving money in litigation and risk, because we are able to contract with a general contractor as a contruction manager at risk, thereby we push the risk off to the construction manager.

"And the third is just cost," he said. "Cost is lower because of the ability for the construction manager to bid aggressively across a number of vendors and get a competitive price."

Officials at Ohio State are preparing to summarize their results so far from using a single construction manager and report in a few weeks to state officials, who are auditing the project.

"Our primary responsibility is to get this building open for the medical center so we can get more patients in and get them better care," Kasey said. "But our second responsibility is to save money and show Ohio there are better techniques."

Big savings expected with reform

University officials estimate that eliminating the multiple prime contractor requirement could save anywhere from 6 to 10 percent or more on construction projects.

Ten percent can amount to a large savings, considering Kent State is planning a $250 million renovation of its main campus. At those estimates, that's $25 million Kent State could potentially save by using a single-prime or other construction management process. In the case of the new $45 million architecture building that is part of that plan, the savings could amount to $4.5 million.

"That’s a lot of money," Kent State University President Lester Lefton said. "There’s no question construction reform will save universities money, will save the taxpayers money, will save the students money. We are very supportive of construction reform."

Jacqueline Woods, chair of the 11-person Kent State Board of Trustees, said the board also supports construction reform.

"This is a topic that’s been brought up several times in the legislature," Woods said. "And we are supportive of restructuring the way that we would let projects so we would not have to have so many individual suppliers, so we could do it under one umbrella.

"In all honesty though, right now the legislature is very distracted with trying to come up with this budget," Woods said. "So keeping them focused on the budget is probably, for the state, the best thing for the next few weeks or so."