New construction manager-general contractor rules for public agencies will take effect Tuesday, but some stakeholders are concerned that they lack teeth.

The changes came via Senate Bill 254 in 2013, after three years of work. They add transparency in how agencies choose to use the CM-GC model and how CM-GC firms select their subcontractors, said Jeremy Vermilyea, a Schwabe, Williamson & Wyatt attorney who was part of a 30-person advisory committee involved in the rule-changing process. However, no enforcement element is included.

“The big question mark is whether it will change behavior for the better without there having been any kind of added enforcement mechanism built into the law,” he said. “If I had one regret about this process, we were unable to fix the third leg of the stool – when the process goes wrong, there’s not a lot of ways to enforce.”

Under the expiring rules, public agencies were allowed to opt out of state CM-GC statutes. Many municipalities, including Portland and Multnomah County, followed the spirit of the law, but adhered to their own rules in the process, Vermilyea said. Other agencies, particularly those less experienced with the CM-GC process, in some cases awarded projects following a no-bid process.

“We found municipalities literally copying findings,” he said. “They had the same typos and the same misplaced commas. They were copied multiple times.”

The rule-making process, though slow and laborious, resulted in general consensus, Vermilyea said. A key result is that public agencies – including school districts, cities, counties and state governments – can no longer opt out. They are required to follow state rules, he said.

Now, the construction industry will have more power to essentially regulate itself and its agency partners, said Jerry Milstead, a construction project manager for Crook County who has been working on CM-GC projects with public agencies around the state for about 20 years. He also was an advisory committee member.

“There’s not a lot of teeth except for those of us who work in this business to read the law, follow the law and encourage agencies to do so,” he said.

Construction companies can now technically use the threat of lawsuit in cases where public agencies fail to follow the new rules, Milstead said. More likely, attorneys or consultants will direct their clients to adhere to the rules, he said.

“Some cities, counties, fire and school districts weren’t following things the way they needed to be done,” he said. “We pushed this so that we could say, ‘You’ve got to follow the rules.’ ”

The lack of an enforcement arm will make things interesting, said Brent Schafer, president of Todd Construction Inc., which has done several CM-GC projects in Oregon and Washington.

“I don’t think the rules are going to change people’s way of doing business,” he said. “I’m sure the committee put in a great effort attempting to improve the system, but until there’s an independent regulator overseeing the process, not much will change.”

The new rules – the first major overhaul of the state’s CM-GC process in about 20 years – will make a difference when it comes to the way agencies work with contractors and contractors work with subcontractors, according to Brian R. Smith, purchasing manager for Multnomah County and an advisory committee member.

“Prior to the new rules, an agency could get into a relationship with a CM-GC and there weren’t any rules with bidding out subpackages,” he said. “That was one of the big victories.”

Under the new rules, subs can request a debriefing after a bid package has been awarded if they did not get the work. This came about, Smith said, because subs often weren’t given information.

“The subs were saying, ‘We get a bid package from a general, and they say, Sorry, you didn’t get it,’ ” he said. “And that was it.”

But then Multnomah County let subs inquire about decisions made for the Sellwood Bridge and East County Courthouse projects, and the process worked, Smith said.

Also, public officials are now required to ask a lot more open-ended questions and reconsider whether the timing of the project, its complexity and other factors warrant a CM-GC process, Vermilyea said. That clarifies the process, he said, but does not require that information be forwarded to a state agency until the end of the project. By that point, there is really nothing that can be done, he said.

The rules also require CM-GCs to tell agencies how they plan to select subs during the interview process, whether by hard bid or other method.

“It creates more transparency, but does not mandate how contractors are selecting,” Vermilyea said. “And it gives subs the opportunity to ask a contractor why they weren’t selected. The agency is out of it.”

Three main points in new state rules

New state contracting rules that take effect Tuesday come with three things to keep in mind, according to Schwabe, Williamson & Wyatt attorney Jeremy Vermilyea.

The first is how public agencies choose to forgo a competitive bidding process and use the CM-GC model. Now, a more detailed explanation of that decision is required. This forces agencies to engage in thoughtful discussions at the decision-making level, Vermilyea said.

The second is how the subcontractor selection process will change. For example, a CM-GC must tell the agency during the interview process how it plans to make its selections. Also, subs will have an opportunity afterward to ask why they were not selected. These measures will create more transparency and give agencies a say in how contractors select their subs, according to Vermilyea.

The third is that essentially no enforcement exists. No money was available to pay for an enforcement agency and some stakeholders resisted creation of one. In the end, the Rules Advisory Committee ran out of time, Vermilyea said.

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Employees of Parrish Excavating and DeWitt Construction have begun work at the future site of the East Multnomah County Courthouse in Gresham.

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Parrish Excavating is retrofitting seven pieces of construction equipment with a technology that removes carbon emissions as part of a project with the city of Portland and Multnomah County.

The city and county are contributing about $100,000 for the retrofit as a way to test the technology. It will help attain Leadership in Energy and Environmental Design certification for the East County Courthouse project in Gresham, said Mark Parrish, vice president of the company.

“It’s pretty complex equipment, but they say it will give us zero emissions,” Parrish said. “You can actually work in a building with it without having any fumes.”

Parrish is a subcontractor on the courthouse project. Howard S. Wright is the prime.

The equipment – including diesel oxidation catalysts, flow through filters and diesel particulate filters – has already been added to the company’s backhoes, excavators and skid steers. Two dump trucks have yet to be upgraded, he said.

The systems can run for about eight hours, collecting carbon dioxide, and then the gas is cleanly burned by the technology, which takes between 30 and 45 minutes, Parrish said.

Workers have been trying it for about a month now, he added.

“Every operator has to learn how it works, and if you forget to burn it off at the end of a shift you have to burn it in the morning, which can be a time waste,” Parrish said. “But so far, there has been a little readjusting needed, but it really hasn’t cut down on my efficiency yet.”

Parrish will report back to the city and county on how the technology is working as part of the project, which will last about five years, he added.

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Culminating a 30-year process, Multnomah County is set to break ground on its new $19.6 million East County Courthouse at a Jan. 7 ceremony.

The groundbreaking will take place at the 4.2-acre lot where the courthouse will be built, located in Gresham‘s Rockwood neighborhood at the corner of Southeast 185^th Avenue and Stark Street.

The Multnomah County Commission officially approved the money for the project in late October. But the process to get a new courthouse in East Multnomah County actually started three decades earlier when the county’s present courthouse first started to deteriorate. Budgeting issues have left the project idle until recently.

In addition to the project cost dropping more than $1 million in the past year because of cheaper construction costs, the county was the beneficiary of $15.1 million in subsidized federal bonds – known as recovery zone bonds – for the project. The rest of the money for the project came from the sale of the South Edgefield property in 2008.

The new three-story courthouse is aiming for Leadership in Energy and Environmental Design gold certification by the U.S. Green Building Council and is participating in the Architecture 2030 challenge, which is a national effort to achieve carbon neutrality by 2030. The building is expected to open in the spring of 2012.

Speakers at the ground-breaking will include County Chair Jeff Cogen, Commissioners Diane McKeel and Judy Shiprack, Oregon District 25 Senator Laurie Monnes Anderson, County Presiding Judge Jean Maurer and project manager Doug Obletz.

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More than 30 years after discussions about a new East County Courthouse started, the idea is finally coming to fruition.

The Multnomah County Board of Commissioners approved the project and its funding during a meeting on Thursday. Construction of the $19.6 million, three-story courthouse will begin in the first week of 2011. The move-in date is slated for late January 2012.

“For a project almost 40 years in the making, today marks a Herculean accomplishment and that cannot be overstated,” said state Rep. Nick Kahl, D-Portland, who represents the district where the courthouse will be built.

The new courthouse will be in Gresham’s Rockwood neighborhood, on the corner of Southeast 185th Avenue and Stark Street. The courthouse will replace the present East County Courthouse in Gresham; the county leases that building, which has been described as leaky, cramped and inadequate.

Funding is a big reason the project is moving forward now, said Commissioner Diane McKeel, who’s leading the effort. Over the last year, the projected cost has dropped from $20.7 million to $19.6 million because of declining construction costs. The cost has stabilized despite a recent addition of nearly 4,000 square feet to the project.

Also, the county will be allowed to use $15.1 million in interest subsidized federal bonds – known as recovery zone bonds – for the project, which will save the county $1.5 million over the life of project payment.

Multnomah County initially was allotted only $3.6 million in recovery zone bonds from the American Recovery and Reinvestment Act. But the county worked with the state’s business development department to use money allotted to the state that wouldn’t be used before the Jan. 1, 2011 deadline.

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Plans for a courthouse in Gresham now make up a fraction of the cost of what was once a comparatively grandiose facility.

After cost overruns doomed the first version of the East County Courts facility in 2008, project manager Shiels Obletz Johnsen and Multnomah County worked overtime to make the newest design for the courthouse the picture of fiscal responsibility. Any perception that the project makes ill use of taxpayer money could be bad news when the project faces the county’s board of commissioners for approval this fall.

The courthouse project has been in the works for the past five years. The facility would replace an existing Gresham courthouse that is too small and structurally deficient. The facility will process all misdemeanors, small claims and traffic-related cases that occur east of 122^nd Avenue. The new facility planned at Southeast 185^th Avenue and Stark Street would have three stories and 42,000 square feet. It would house three courtrooms and offices for the district attorney, judges and support staff.

“We want to set an image for Rockwood,” said Peggidy Coffman Yates, facilities policy liaison for Multnomah County. “This building should reflect the community as well as the dignity of a courthouse.”

An earlier project team including Hoffman Construction Co. and Emmons Architecture in 2008 planned for a courthouse that would cost $16 million to $18 million. At 70,000 square feet, this first design attempted to provide space for the Multnomah County Sheriff’s Office and Gresham Police Department as well as courts facilities. But after the project budget ballooned to $42 million, it was rebid and new contracts were awarded to LRS Architects and Howard S. Wright Constructors. The current number for hard and soft costs for the building is $19.6 million, Yates said.

Chair of Multnomah County’s board of commissioner Jeff Cogen has been watching the project closely to make sure history doesn’t repeat itself. So far, he is cautiously optimistic about the project team’s new design, which will use sustainable systems and cost-effective finishes to make the building durable and energy efficient.

“These are tough times,” Cogen said. “This project continues to move forward on schedule and on budget. Assuming we move forward, it will be great to see some construction work out there.”

One cost-saving measure being built into the courthouse project is the location of the county’s data center in the building’s basement. This will save the county from constructing a new building to house its servers as its current facility becomes increasingly derelict. The data center may also perform double duty if project engineers and designers can find a way to use heat from the servers to keep the building warm in the winter. Using excess heat would help the project meet the  goals of the Architecture 2030 challenge, which requires a building to be 60 percent more energy efficient than current building codes.

Still, the team will have to pick and choose which innovative systems to use on the building in order to keep upfront costs down, said Steve Cruzen, a project manager with Shiels Obletz Johnsen. The team is already dedicating about $294,000 of the project’s budget to solar photovoltaic panels to meet a state mandate that 1.5 percent of public building budgets be spent on solar.

Engineers are exploring using underground water at the project site to heat and cool the building as well as a greywater system that recycles toilet water. While all of these ideas will save the building money on operations in the long run, Cruzen said, the team will have to pick and choose based on the cost of each innovation.

“It took self restraint to keep the size and cost of the project down,” Cruzen said. “We’ve had to look at the cost and benefit of each sustainable design option and only spend money for the functional needs of the building.”

Cruzen also paid special attention to what materials would be used in the courthouse. Though television courtroom dramas depict wood paneled courtrooms with plush leather chairs, Rockwood’s courthouse would be more subdued. Only the judges’ bench in each courtroom would be wood paneled. Terrazzo tile would be used for flooring because of its low price, as well as its durability.

“This building will get a lot of use,” Cruzen said. “We’re being restrained in using expensive finishes. We’re not doing anything ornate or flashy.”

The project is being funded by $4.6 million in county land sales. The rest will come from bond financing, including $5.4 million in Economic Recovery Zone Bonds from the federal stimulus act. In October, the project team will present its final design, finance and construction documents to the Multnomah County Board of Commissioners. If the project is approved, general contractor Howard S. Wright Constructors could break ground early next year.

“This is a good project that keeps getting better,” Cogen said. “The team is not just getting the project built, but designing it to keep it running for the long term. I hope that’s the case in October.”

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Multnomah County commissioners today voted unanimously to pay for design work for a new courthouse in Gresham‘s Rockwood neighborhood. Construction on the building, estimated to cost between $15.9 million and $19.5 million, could start as early as December.

The project will replace the aging Gresham courthouse, which commissioners and members of the pubic testifying before the board called too small and leaky. The state requires Multnomah County to offer a court facility for offenses taking place east of 122nd Avenue.

Building the courthouse now will take advantage of a weak construction economy and attractive financing rates, Commissioner Judy Shiprack said. “It’s timely because construction companies are hungry and interest rates are low,” she said.

Chairman Jeff Cogen described himself as a project skeptic, given tight county budgets. He said he received assurances that the county would have the money to operate the courthouse.

Invoking the Wapato jail, which the county built but couldn’t afford to operate, Cogen said repeating that mistake “would be devastating to our reputation in the community.”

“That was my biggest fear about the whole thing,” Cogen said after the vote. The district attorney, sheriff and court staff told Cogen that they could shift resources from the Portland courthouse without any extra operating cost.

“They told me they could do it, I expect them to do it and I’m going to hold them to it,” he said.

The new courthouse, planned to be built at Southeast 185th Avenue and Stark Street, will have three courts. Commissioners had discussed whether to build only two courts.

“It doesn’t make sense for us to build a facility that will be cramped and crowded almost immediately upon construction,” Commissioner Deborah Kafoury said.

Despite county budgets that require cuts year after year, Kafoury said the current Gresham courthouse doesn’t do the community justice. “It’s truly a disaster,” she said.

“One has to spend five minutes in there to see that.”

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Multnomah County may dedicate $3.6 million in Recovery Zone Economic Development Bonds to the East County Courts project in Gresham, according to Mark Campbell, acting director of finance and risk management for the county. In addition, the county this week will issue a request for proposals for projects to compete for $5.4 million in Recovery Zone Facility Bonds.

The RZED bonds are part of the American Recovery and Reinvestment Act and were awarded to the county last year to finance government projects. According to Campbell, the county has filed paperwork with the state of Oregon saying it plans to use all of its $3.6 million allocation for the courts project, which is expected to cost between $17.4 million and $20.7 million to construct.

Though the county at first though it would not use its RZED bonds, it changed its mind when it found it could get a 45 percent subsidy back on a project like the East County Courts, Campbell said.

Planned for construction by early 2012, the new justice center will be built at Southeast Stark Street and 185^th Avenue and will include 35,000 to 40,000 square feet of space. Up to three civic courtrooms and related space for the state of Oregon District Court, as well as offices for the Multnomah County District Attorney, will be included in the schematic design, which is expected to be completed in mid-April by LRS Architects and HOK.

The RZF bonds are also part of the ARRA and can be used to finance business development activities, including the purchase of business property within a Recovery Zone. Campbell hopes to make an announcement to businesses this week regarding funding opportunities through the bonds. Projects that received funding would be announced some time in April.

“We’ve had a couple different firms interested in the bonds,” Campbell said. “The only projects that wouldn’t qualify would be building something like a race track or a casino.”

The city of Portland seems eager to take advantage of the bonds; it has an agenda item listed for this Wednesday’s city council meeting to name the entire city of Portland as a Recovery Zone.

Both Clackamas and Washington counties are already in the process of narrowing down projects for their RZED and RZF bonds. Washington County plans to submit of Recovery Zone projects to the state later today. Washington County has been given $12.8 million in RZED bonds and $19.2 million in RZF bonds.

Clackamas County’s deadline for projects to apply for bond funds was today. Projects applying for bonds include a sports fitness facility and a new warehousing and packaging facility for a produce company, according to Renate Mengelverg, economic development manager with Clackamas County. Clackamas received $13 million in RZF bonds and $8.8 million in RZED bonds.

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The East County Justice Center project changed several times in the past three years. This timeline explains the project’s history.

February 2007: A plan for three to four courts, the District Attorney, Multnomah County Sheriff’s Office and City of Gresham Police to be located in the East County Justice Center is approved by Board of County Commissioners. HDR and Emmons Architects are contracted for programming and conceptual cost estimating. Hoffman Construction is selected as Construction Manager/General Contractor, but a formal contract is not entered by Hoffman and the County. Estimated project cost is $14.64 million.

March 2007-August 2008: The contractor and cost consultants’ estimate is found to be substantially higher than the approved $14.6 million figure. The County in August 2008 solicits proposals for a project management consultant and chooses Shiels Obletz Johnsen. SOJ works with the county, HDR and Emmons Architects to continue pre-design of the project. An alternative building site owned by the county is identified for a downsized courts facility at Northeast Eighth Avenue in downtown Gresham.

September 2008-present: Project remains dormant through first half of 2009 while the county and the city of Gresham continue work on purchasing property at the Eighth Avenue site. In mid-2009, Gresham notifies the county it would not move forward with its purchase of the Eighth Avenue property. The county requests SOJ to re-address the status of the project and begin looking at options to develop a reduced scope project at the original site at Southeast Stark Street and 185^th Avenue. A new bid released for architecture services is awarded to LRS Architects and HOK. A new request for proposals for construction management/general contractor services closes on Feb. 10, 2010, with eight firms, including Hoffman Construction, responding.

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East County Courts project timeline

It’s take two for the East County Justice Center project in Gresham.

Along with a new architect, the Multnomah County-owned project will have a new construction manager and general contractor in the coming months. A request for proposals for CM/GC services deadlined last week.

The project, now called the East County Courts project, faced budget challenges in 2008 after a $14.6 million budget figure ballooned to nearly $42 million during programming discussions. As a result, the county put the project on hold and hired project manager Shiels Obletz Johnsen to look at reducing the scope of the project.

“Due to the change in the scope of work, we felt it was appropriate to rebid the project,” said Peggidy Yates, economic development policy advisor with Multnomah County.

Both Hoffman Construction, and architecture firms HDR and Emmons Architects, were notified of the situation by the County and invited to rebid for the project, according to project manager Steve Cruzen of SOJ.

“Hoffman never dropped out and no one was ever fired,” Cruzen said. “Nothing negative ever happened. We let both parties know this was the case.”

Under a new plan, the scale of the justice center has been reduced, and a new design team made up of LRS Architects and global design firm HOK has been assigned to the project. LRS project manager Paul Boundy said design work is just beginning on the facility.

“This will be the first significant new public building in Rockwood,” Boundy said. “It needs to reinforce the community without dominating the area. Working this into the fabric of the Rockwood community will be a challenge.”

The justice center building will need to blend with nearby buildings, which are occupied by a Taco Bell restaurant and a Parr Lumber outlet.

Planned for construction by early 2012, the new justice center will be built at Southeast Stark Street and 185^th Avenue and will include 35,000 to 40,000 square feet of space. Up to three civic courtrooms and related space for the state of Oregon District Court, as well as offices for the Multnomah County District Attorney, will be included in the schematic design, which is expected to be completed in mid-April.

The court facility will cost between $17.4 million and $20.7 million to construct, depending on how many courtrooms are included in the design.

“The lower cost would be a building with two courtrooms,” said Cruzen. “The highest cost would be with three courtrooms. And there are a couple of other options in between.”

Hoffman Construction, the firm that was originally selected as the CM/GC for the project in 2007, has again responded to the county’s RFP. Hoffman vice president Bart Eberwein says he expects competition for the government project to be fierce.

“There are a lot of hungry, good contractors out there,” Eberwein said. “We told the county to let us know when the clock starts again. The county has provided a level playing field and access to information. We’re just happy to be invited to the party.”

JE Dunn Construction Co., Emerick Construction, Bremik Construction, Skanska, Robinson Construction, Howard S. Wright and Lease Crutcher Lewis also responded to the county’s call for RFPs. Yates says oral interviews for the RFP will be conducted the week of February 22.

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