Best Value Contracting: A Raincoat for the Perfect Storm

December 4, 2006

Madison - Today Madison Alder Zach Brandon and Mayor Dave Cieslewicz standing with a coalition of contractors, labor leaders, elected officials, and vocational educators, announced they would introduce a “Best Value Contracting” ordinance at tomorrow’s Common Council meeting.

Over the next ten years the construction industry, already in the midst of workforce shortages, needs to replace 250,000 workers every year to keep up with the demand of industry growth. Here in Dane County, with fewer young people entering careers in construction, the shortage will become especially prevalent.

The current outlook for the future of the construction workforce is troubling. The three factors of existing workforce shortages, the looming numbers of workers entering retirement, and fewer young people starting careers in the building trades, are creating a circumstance being called the “Perfect Storm” in industry circles. The impact of this convergence will result in increased costs, decreased productivity, and a lower quality of work, effecting both public and private sector construction.

According to a 2004 Construction Users Roundtable report, the nation’s premier project owner trade association, skilled craft labor shortages are causing “significant problems in staffing construction projects, resulting in escalating costs and schedule delays.” That same report also stated, “individual contractors must recognize the necessity and benefits of training their employees and be willing to invest in them.”

“Apprenticeship programs are an essential part of creating opportunity for those not on a four year degree path and Best Value Contracting will help many participate in high quality training and help grow our skilled labor pool,” said John Lalor, Dean of MATC Construction, Manufacturing, Apprenticeship, and Transportation School.

Madison’s Best Value Contracting ordinance is a set of enforceable qualifications that create a single point of accountability, performance qualifications, workforce development, and effective oversight program/transparency on publicly funded projects.

By leveraging public dollars, this legislation creates a cost effective investment in workforce development, without cost to the taxpayer. A 2004 federal report titled “Registered Apprenticeship: A Solution to the Skills Shortage” estimated that for every dollar the federal government invests in apprenticeship, it receives fifty dollars in return.

The City of Boston passed a similar ordinance in 1998, and two years later Mayor Tom Menino reported that the ordinance required no additional resources and has had a positive impact on workforce development. Madison’s Best Value ordinance will also include a two-year review to measure outcomes.

Changes from existing law to Best Value Contracting include:

· Requires all contractors seeking to pre-qualify with the City of Madison to participate in a Department of Labor approved “Class A” Training and Apprenticeship program.
· Requires detailed information on past performance history from contractors seeking to pre-qualify to bid on city work.
· Requires contractors seeking to pre-qualify with the city maintain a substance abuse policy program per Wis. Statue Sec 103.503.
· Requires that contractors seeking to pre-qualify with the city provide an affirmative action plan.
· Requires that all contractors used in publicly financed projects, including TIF projects, are pre-qualified with the City of Madison.

Best Value Contracting is also supported by many local contactors. “Passage of this Best Value Contracting ordinance will result in more contractors being pre-qualified with the city and more participation in apprenticeship, which is good for the industry as a whole,” said Dave Beck-Engle of J.H. Findorff & Son.

Alder Brandon and Mayor Dave Cieslewicz lead a group of elected officials including Ald. Lauren Cnare (District 3), Ald. Larry Palm (District 15), Ald. Noel Radomski (District 19), Ald. Austin King (District 8), and Ald. Paul Van Rooy (District 18) in support of Best Value Contracting. “This is an important workforce development initiative for our community,” said Mayor Dave Cieslewicz. “It will help ensure that as our city continues to grow, we provide a ladder of opportunity and training for residents from all walks of life.”

“This change in policy has been the result of many meetings and conversations about the best way to support workforce development and create a process that contractors can support. I am proud of what I will be introducing tomorrow.” concluded Ald. Zach Brandon.

Contact:
  • Ald. Zach Brandon, (608) 239-7327