Hot-button issues often take the spotlight in statewide coverage of the California Legislature. A less flashy topic, however, needs to be discussed as it will have far-reaching effects on our state’s economy and the quality of life for Californians.
We all know California’s infrastructure is in tremendous need of upgrade and repair. Our water and wastewater systems were not built for 21st century needs. Our roads and bridges have made us famous, often for all the wrong reasons.
Certainly we have made some progress over the past several decades. Twenty years ago, zipping by traffic in an HOV lane was often just a dream. Today, it’s an option for many. Between 1963 and 1990, Los Angeles went without a rapid transit rail system, but today light rail provides a viable commuting alternative for more than 350,000 daily riders. These projects have improved the economy not only by enhancing our mobility but also by putting Californians to work. Still, we continue to fall behind.
Furthermore, this work comes at a price. Highways, water treatment systems and increased rail options don’t conjure themselves out of thin air. It takes dollars to stay on top of what, in many cases, has literally become crumbling infrastructure. Yet, at a time when every public dollar is under scrutiny, California is about to eliminate a critical financial and project delivery tool if a key piece of money-saving legislation is not renewed.
A law signed in 2009 authorized public agencies in California to test the use of a procurement method called design-build for key infrastructure projects. In design-build, the design and construction services are done by the same company, which tends to reduce the delivery schedule by overlapping and coordinating those two phases of a project. For certain projects, design-build has been shown to provide taxpayers with better value for their money than the traditional method.
The program has been a success. Cost overruns common to complex projects when design work is done independent of input from the construction contractor are not as significant when the same entity that builds the job also designs it for constructability. We’ve seen it recently right here in Los Angeles with projects like Phase 2 of the Expo light-rail line where the project is on schedule to be delivered faster and at less cost than anticipated had it been procured using the traditional design-bid-build method. Another example is State Route 22, where design-build saved Orange County both time and money on the addition of a badly needed HOV lane.
These significant benefits notwithstanding, if the authorization to use this innovative delivery method is not extended, design-build will no longer be permitted for public projects starting in 2014. This presents a tremendous risk to taxpayers and should be addressed immediately. At best, it puts the state and its people at risk for unforeseen costs. At worst, it could hold up critical pieces of infrastructure.
This problem will be compounded in 2017 if a similar deadline is not addressed for public-private partnerships. In these arrangements, a private company takes on a significant amount of the risk related to very large and complex infrastructure projects. Such risk can often be prohibitive for public agencies, making these impactful projects difficult or impossible.
The danger for California is that many of our neighboring states not only have legislation in place to allow for public-private partnerships, but have established processes that make these efforts easier for all stakeholders. Should California lag behind these states, private money will go elsewhere.
Californians should be aware of these issues and demand action. Otherwise, we risk standing in the past while other western states build for the future.
Mark Kempton is project director, Skanska Infrastructure Development North America. He is based in Los Angeles.
