Letterhead for PSCP

STATE OF MARYLAND PUBLIC SCHOOL CONSTRUCTION PROGRAM 200 W. BALTIMORE STREET BALTIMORE, MARYLAND 21201 410-767-0617

DAVID G. LEVER

EXECUTIVE DIRECTOR

LARRY HOGAN INTERAGENCY COMMITTEE ON SCHOOL CONSTRUCTION JACK R. SMITH, Ph.D. GOVERNOR CHAIRPERSON Construction Costs Impacts on Maryland Public Schools Identified at LEA Facilities Planners Meeting - May 6, 2015

I. FACTORS INCREASING CONSTRUCTION COSTS

Market Conditions 1. Fewer bidders due to competition from other strong markets – residential, commercial, federal, military, airport, neighboring states 2. Fewer contractors/subcontractors in business after 2008 recession 3. Shortage of skilled and unskilled labor 4. Some contractors increasing profit margins to make up for losses in recession

Regulations/Codes/Standards In general, additional paperwork and stricter reporting and testing requirements result in both direct and indirect cost increases to design consultants and construction firms. Some contractors choose not to participate in public school construction, reducing competition. Frequently mentioned categories: 1. Storm water management – permits, reviews, temporary facilities 2. Prevailing wage rates on projects with 25% or more State funding – higher costs 3. Emergency electrical power – reviews, additional design, additional equipment 4. Minority Business Enterprise – recordkeeping, outreach, coordination 5. High Performance Building – third party certification fees, special consultants, commissioning fees 6. Americans with Disabilities Act - additional design standards, additional space requirements

Time 1. Longer time to get permits 2. Less time allowed for construction 3. Lack of holding schools requires multiple construction phases and increases construction time

Site 1. Increased site development costs for storm water management facilities 2. Increased site costs for installation of geothermal systems 3. High site acquisition costs 4. Less than ideal sites requiring costly soil mitigation and additional structural and civil engineering 5. Need to do construction on occupied sites reduces contractor’s staging areas and access, increasing costs

Union/DLLR Requirements Additional requirements that go along with prevailing wage rates: labor hiring requirements, overtime pay.

Educational/Community Programs STATE OF MARYLAND PUBLIC SCHOOL CONSTRUCTION PROGRAM 200 W. BALTIMORE STREET BALTIMORE, MARYLAND 21201 410-767-0617

DAVID G. LEVER

EXECUTIVE DIRECTOR

LARRY HOGAN INTERAGENCY COMMITTEE ON SCHOOL CONSTRUCTION JACK R. SMITH, Ph.D. GOVERNOR CHAIRPERSON Local school boards and community partners add programs to the educational specifications that require additional space, utilities and equipment such as: 1. Wired and wireless technology in all spaces 2. Additional computer labs for testing 3. Security vestibules, cameras, remote lock controls, badge-making systems 4. Security cameras connected to emergency generators

5. Additional special education classrooms and resource rooms in all schools 6. Additional space for special subject classrooms and laboratories 7. Additional office space for itinerant space 8. Additional dedicated space for community use 9. Requirements for single user toilet rooms in classrooms 10. Installation of sinks in every classroom

Building/Systems Technology 1. Shorter life cycle of computerized controls requires early replacement in less than 16 years 2. More sophisticated and costly control systems require specialized installation and additional training costs 3. Noticeable increase in costs for masonry construction

II. STRATEGIES TO REDUCE OR MITIGATE INCREASES IN CONSTRUCTION COSTS

Design 1. Study new prototype designs 2. Use steel rather than masonry structure 3. Share storage spaces between classrooms 4. Eliminate built-in cabinetry, shift cost to furniture and equipment budgets 5. Increase standardization of classroom design 6. Start design as early as possible to provide sufficient time for construction

Specifications 1. Specify open platforms on computerized control systems 2. Eliminate proprietary specifications 3. Improve quality of documents and reduce error and omissions 4. Specify less costly materials, such as plastic instead of copper piping, and accept the greater maintenance and replacement costs in future

Bidding 1. Increase use of add alternates 2. Require contractors to hold bids as many days as possible 3. Bundle bid packages 4. Avoid phasing as much as possible 5. Provide sufficient time for construction STATE OF MARYLAND PUBLIC SCHOOL CONSTRUCTION PROGRAM 200 W. BALTIMORE STREET BALTIMORE, MARYLAND 21201 410-767-0617

DAVID G. LEVER

EXECUTIVE DIRECTOR

LARRY HOGAN INTERAGENCY COMMITTEE ON SCHOOL CONSTRUCTION JACK R. SMITH, Ph.D. GOVERNOR CHAIRPERSON

Funding 1. Based on side-by-side bidding, accept 24.99% IAC funding to avoid requirement to use prevailing wage rates when appropriate 2. Separate information technology and furniture and equipment budgets

Advocacy 1. Support apprenticeship programs by construction trades to increase labor pool 2. Support directing students into construction and building maintenance career technology programs