The Wells Fargo/NAHB Builder Confidence survey, for February, reported a historic drop in Builder Confidence.
How builders and designers can succeed in troubled times
Construction expert Barry LePatner underscores need for industry reform
Barry LePatner knows that the construction industry needs massive reform. Over the past few years, he has almost singlehandedly started a national debate among those inside and outside the construction industry over what can be done to overhaul the trillion-dollar industry that is driven by cost overruns, project delays, and perpetual waste.
And as the dismal state of the nation’s infrastructure begins to receive more and more attention from the public, the press, and the U.S. government, LePatner says we can no longer postpone making key reforms to an industry that we will be looking to for a $2.2 trillion remediation. Long story short: If we want to rebuild the nation’s infrastructure so that it creates a stronger and safer nation, we must first reform the industry that will be in charge of these important projects.
At PSMJ’s Circle of Excellence Conference, this nationally acclaimed author, consultant, and advisor will share his expertise and methods for enabling your firm to rise from this economic downturn stronger and ahead of the competition.
With over 30 years of experience, Barry LePatner has become the nation’s foremost authority on design and construction industry issues. The November 2007 issue of Governing magazine stated, “If there’s a guru of construction industry reform, it’s LePatner.” In an article entitled “Building a New WPA,” appearing in the November 24, 2008, issue of New York magazine, he was referred to as “a Cassandra of infrastructure.” His perseverance in opening the eyes of industry leaders, government officials, and the general public has been fully detailed in his book Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry (University of Chicago Press, 2007).
He attributes the causes of this construction industry debacle to a few major problems. He states, “For too many years we have been beaten over the head with accepted doctrines that dictate how we design, build, set budgets, and the owner pays for cost overruns because it is their project and ‘this is the way we have always done it.’ We have been sold on the wondrous benefits of fast-track projects where construction managers promise owners that the risk in starting construction months before the architects and engineers complete their designs is far outweighed by the savings of millions in financing costs when the project is completed months earlier than typically expected. Except those savings are never realized as the project inevitably goes over budget and is delayed because of conflicts between the last-minute design package and what has already been built. We have been sold the illusion of guaranteed maximum-price contracts where the owner assumes it is the CM guaranteeing a maximum price for the work, when in fact, the CM knowingly excludes the cost of certain elements of the project that will result in additional enormous cost overruns that will bedevil efforts to complete a large construction project. We have been sold on the belief that low interest rates and the enormous liquidity of the lending world will assure a steady flow of funding no matter how much is needed to complete the work.”
LePatner continues to explain that the results will alter the way the industry does business. “Today, all of these assumptions are no longer viable and will not be permitted to operate the same way going forward. No longer will lenders automatically permit a construction project to move forward with only 10 percent equity from the developer/owner. No longer will lenders provide mezzanine loans to bail out an owner who has signed a standard form construction contract on an open-ended or GMP basis that almost guarantees that questionable change orders and claims will threaten to delay completion of the project. No longer should contractors be able to file unsupported mechanic liens to secure profits after bidding at or below cost to get the work and inflict unwarranted and costly litigation on an unsuspecting owner.”
At the Circle of Excellence Conference, LePatner will make a powerful case for re-examining the way projects are designed and built during this challenging time and beyond. He will provide solutions for regaining control over spiraling costs and unfathomable completion dates. He will also reveal his prescriptions for reinventing the practice, examining which individuals in the organization are truly the most valuable and exploring new ideas for communicating value-added services.
Barry LePatner has advised many of the nation’s leading architects and engineering firms. In 2002, the American Institute of Architects awarded him its highest honor for a non-architect, naming him an Honorary AIA.
Barry LePatner, Esq., Hon. AIA, is the founder of the New York City-based law firm LePatner & Associates LLP. An Honorary AIA member, Barry is a strategic advisor to architectural and engineering principals and has structured the business development and marketing plans for many firms during the past four recessions. He and his firm are recognized for excellence in delivering sophisticated packages of services that reflect a complete understanding of how today’s complex construction projects are designed, financed, and constructed.
PSMJ conducts more than 200 A/E/C educational seminars and conferences annually, supported by major professional societies, such as The American Institute of Architects (AIA) and The American Council of Engineering Companies (ACEC). Headquartered in Newton, MA, USA, PSMJ offers more than 150 titles in book, audio, and video and publishes two newsletters on A/E/C firm management. PSMJ also produces the industry’s preeminent annual surveys on management salaries, financial performance, and fees and pricing.
To register for the PSMJ Circle of Excellence conference, visit www.psmj.com.