A Southern Oregon mill is slated to become the first U.S. manufacturer of an innovative wood product suitable for use in structures ranging from houses to high-rises.

Riddle-based DR Johnson Lumber Co. is partnering with Oregon State University researchers to pilot the commercial manufacture of structural-grade (CLT) with the support of grants from the U.S. Department of Agriculture and Oregon BEST.

CLT panels are manufactured with lumber glued in opposite directions to form a solid slab for walls, floors or ceilings. The product has gained popularity in Europe and Canada over the past 20 years as a sustainable building material. But CLT is still relatively unused in the U.S. despite federal promotion of its benefits and growing interest from the design and build industries.

The emergence of a domestic manufacturer could catalyze greater use in Oregon and across the country because currently all CLT must be imported either from Canada or Europe, said Ken Vaughn, director of commercialization programs at Oregon BEST. The nonprofit provides money for clean technology innovation.

“The architects love it, but they can’t spec it in if there are no suppliers,” Vaughn said.

In Oregon, the product has attracted attention from architects and engineers as an environmentally friendly alternative to steel and concrete steel for high-rises.

The state’s long history as a timber producer and its established wood products industry makes it poised to capitalize on CLT production, said Lech Muszynski, an associate professor with OSU‘s Wood Science & Engineering Department. Oregon mills may eventually have a leg up over European manufacturers who are producing CLT using higher-priced timber, he said.

“The (Oregon) market is much more ready for innovations in wood,” he said. “There is a recognizable perspective for this industry booming here.”

A strong desire among design professionals in Oregon and the Pacific Northwest to use locally produced CLT and the support of OSU research helped convince DR Johnson President Valerie Johnson to pilot its manufacture. The company will invest in use of an existing mill for manufacturing glue-laminate wood products, Riddle Laminators, to produce CLT with the help of a $150,000 Oregon BEST grant.

“It doesn’t feel like a big leap for us,” Johnson said. “Our architects, especially in our region, in the Northwest, don’t want to import from Europe. They don’t want to truck in panels from Western Canada. That has come through very, very clear. We as a company have become convinced that there is a market.”

When DR Johnson officials last week announced during the 2014 Oregon Wood Solutions Fair in Portland the company’s plan to manufacture CLT, they were flooded with inquiries, Johnson said. Company officials hope to be ready to mass-produce CLT panels in 2016, but the effort could be fast-tracked to supply several projects next year, she said.

“The response at our exhibit was overwhelming,” she said. “We were talking nonstop.”

One project that could use DR Johnson-produced CLT is the new Western Oregon University College of Education building. The project is designated as a demonstration project under Gov. John Kitzhaber‘s ; it calls for state agencies to identify nonresidential capital construction projects that can showcase wood products in high-performance buildings.

Mahlum Architects‘ design team had initially considered using CLT in the building, but determined it would be too expensive, project architect Kim Olson said. Acquiring the product domestically through DR Johnson could make it feasible, she said.

With an Oregon-based manufacturer, CLT is likely to appear in more projects, Olson said.

“Having it … sourced here in Oregon is a huge deal,” she said. “I think it’s going to propel it into this market.”

The DR Johnson operation also will help projects gain points in green building certifications for using locally sourced building materials, Equilibrium Engineers associate JoMarie Farrell said. The Lake Oswego-based structural engineering firm is working on the Western Oregon University project and engineered the only CLT project approved in Portland – a small, single-story Oregon Zoo structure designed by SRG Partnership.

Gaining city approval for that 2,000-square-foot building with CLT in the roof required extra calculations for load capacity. Recent updates to Oregon’s structural codes with specifications for CLT will make it easier for building officials to sign off on projects that use the product, Farrell said.

An Oregon CLT manufacturer will also be advantageous for projects under construction, Farrell said.

“If you require the field fixes it’s highly unlikely that you’re going to get the guys down from Canada,” she said. “Just knowing that there is someone in Oregon a few hours away is huge.”

That proximity also will help the state’s design and build industry professionals as they experiment with the product, Vaughn said.

“The next key step will be finding pilot construction projects,” he said. “This will be a new product. It will be new for architects, new for engineers, new for general contractors.”

Although there will be an initial learning curve, contractors will soon find that the prefabricated CLT panels streamline the construction process, Vaughn said.

“Once they get the hang of it, they’re going to find it’s a lot faster, efficient way to build buildings,” he said.

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Sam Adams‘ tenure as Portland’s mayor ends this week, and many members of the architecture, construction and development industries say the era will be remembered as one when the city was hamstrung by the recession.

Some in the industry praise Adams for his determination to push for projects under tough circumstances, even though many never came to light. Others say the downturn incapacitated his office.

“The mayor’s term was coincidentally a horrible time for construction broadly,” said John Killin, president of the Associated Builders and Contractors’ Pacific Northwest chapter. “His term was riddled with a downturn no one foresaw and no one locally could easily solve.”

In January 2009, when Adams took office, the U.S. Bureau of Labor Statistics released a report that showed the construction industry had lost approximately 1 million jobs since peaking two years earlier. The report also showed that 111,000 jobs were lost in that month.

Local architecture, engineering, contracting and development firms had less work than ever, and some had to close their doors as a result.

However, despite budget shortfalls, Adams tried to stimulate job growth by allocating money for a variety of capital improvements. Some, such as the Sellwood Bridge replacement project, are moving forward; others, such as the Oregon Sustainability Center, were put to rest.

Adams’ ideas will help incite future development, according to Gerding Edlen CEO Mark Edlen. He believes that the relationships Adams has developed between the city and educational institutions will lead to more projects like those under way for Oregon Health & Science University and Portland State University.

“(Adams’) drive toward connecting PSU and OHSU to the city in a stronger, more meaningful fashion … has made a huge difference for those of us in (the) commercial world here,” he said. “Sam has a true love of … making connections between the cultural community and the built community through the arts, schools and others.”

Adams’ efforts to make Portland one of the nation’s most sustainable and transportation-accessible cities will help it attract young innovators and creators, Edlen said.

Other unfinished projects pushed by Adams, such as West Hayden Island development and the Memorial Coliseum renovation, will benefit the built industry greatly, said Brian Owendoff of Capacity Commercial Group and formerly of Opus Northwest, which folded during the recession.

“Mayor Adams was a man of action,” he said. “He had the courage to champion several issues that prior mayors chose not to or could not address.”

Perhaps Adams’ biggest direct influence on construction was his commitment to affordable housing. In 2007, while serving on City Council, Adams and three other councilors voted to set aside a 30 percent citywide average of urban renewal money for affordable housing.

Adams has since reinforced that policy by developing more urban renewal areas and establishing the Portland Housing Bureau. As a result, $150 million worth of housing has been built during his tenure, according to Nick Sauvie, executive director of Rose Community Development, a local affordable housing developer.

“Sam Adams was the driving force in creating the city’s affordable housing set-aside,” he said. “Thousands of Portlanders now have safe, affordable housing because (of) his efforts.”

Other industry stakeholders say the results of Adams’ tenure are less measurable. Many parties were affected by changes made to the Bureau of Development Services under Adams’ watch. In the last four years, system development charges have increased significantly and the number of BDS employees has dropped, resulting in slower turnaround times and fewer inspections.

Brian Emerick, owner of Emerick Architects, said he isn’t sure who should be blamed for the situation.

“With city coffers being tight, I don’t believe there’s a lot of political interest in pursuing (a solution) at this time, leaving us in our present situation of paying more for less at BDS,” he said. “I think these have been more a reflection of the economy and how BDS is funded, rather than something that is a result of the mayor’s policy.”

Meanwhile, the economy hindered Adams’ ability to influence large infrastructure projects such as the Columbia River Crossing or the Oregon Sustainability Center, Killin said.

“He had no opportunity to be the opener of major new developments or fight against them,” he said.

It appears that Mayor-elect Charlie Hales will take office at a more stable economic time than Adams did.

“Would we all have liked to see more tangible success stories? Of course,” said Christopher Linn, a principal with Boora Architects. “But there were factors beyond any single person’s control that made it close to impossible.”

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It’s no secret that the past few years have been tough for the construction industry.

Since 2008, construction spending in the United States decreased nearly $300 billion and resulted in a 2 percent reduction in the nation’s economy, according to the .

From all accounts, this past year wasn’t much different.

“I think most of 2011 looked a lot like 2010, which was for Oregon, definitely the worst year for construction in memory, if not history,” said John Killin, president of .

During the first 10 months of 2011, construction spending dropped 2.9 percent below the same period in 2010 to $655.5 billion, according to the United States Department of Commerce.

But in addition to its gloomy statistics, 2011 was also year of endurance, efficiency, competition and creativity as companies fought to eke out a profit.

“One of the things you do during a recession is you polish your ammo, you sharpen your swords, you mend your fishing net,” said Bart Eberwein, executive vice president for in Portland. “You don’t just sit around. You stay focused and make your organization stronger.”

Eberwein said the regionally based, Pacific Northwest company was on track to do approximately $800 million in sales for 2011. While that’s not quite as profitable as the company would have liked – last year Hoffman did approximately $1 billion – Eberwein said it was still a successful year and that the company had found a couple bright spots in the medical and higher-education sectors.

Hoffman is currently punching out a new $250 million tower for Children’s Hospital in North East Portland.

The company also is finishing construction of a new 620-bed state psychiatric hospital in Salem, and has started work on a second 340-bed psychiatric facility in Junction City. Together, those two projects are expected to cost the state $458 million.

Eberwein said Hoffman also found some hefty work in the form of dormitory and living-area construction from local universities and community colleges as they rush to meet the needs and desires of the now-college-age offspring of the Baby Boom generation.

“That’s kind of a bright spot in the galaxy, if you will,” he said.

To take advantage of those opportunities, Eberwein said, Hoffman has put a large focus on identifying “lean practices,” or those building processes that allow them to do more with less. He said successful subcontractors were following suit.

“I would say that the good subs have also responded to the recession by becoming a little more automated, a little more prefabrication, a little more reliance on computer-generated shop drawings like 3D CAD, or BIM (Building Information Modeling),” he said.

That is, companies are getting lean and mean, and those that don’t are facing the consequences.

Matt Paine, senior project manager with in Portland, sees it every time he emails a request for proposal to subcontractors.

“Every time I do, for the past three years, I get back bounces and not just a few but a lot,” Paine said. “Every time I send out a notice, I get responses that so-and-so is no longer with the company.”

From October 2008 to October 2011, contractor licenses in Oregon dropped 17 percent to 38,165, according to the Construction Contractors Board.

That’s a telling sign about the state of the industry, Paine said, and one that makes him feel fortunate about the amount of work they’re seeing at J.R. Abbot.

With established offices in Seattle and Arcadia, Calif., the company opened its Portland location in 2008 at the onset of the economic recession. While that may seem like bad timing, Paine said the decision was a calculated move to increase the company’s client list as owners with tightening budgets shopped around for new, more cost-efficient general contractors.

“Doors have opened for us that perhaps would not have been open to us before,” he said.

But the price of admission has also been high as owners with shrinking budgets increased their expectations for quality and delivery, Paine said. One example was the $20 million remodel this year of the Burlingame Fred Meyer – a 13-week project that the company delivered in 5 weeks.

“It was so aggressive that many in the industry were betting it couldn’t be done,” he said. “It’s that kind of opportunity – to show clients there is a different way, there is a better way, at a lower cost and at a more aggressive schedule.”

Paine said sales from their Portland office, which deals primarily in medical and grocery store construction, were up from last year at approximately $15 million. Company-wide, J.R. Abbot does around $100 million in sales a year.

Jim McKune, chief operating officer for in Happy Valley, said competition for work has been fierce and that owner-developers stand to gain a lot.

“The owners are getting a very good deal at this point,” he said. “The contractors are taking all the risk, or the majority of the risk, and the owner is getting a good turn on their construction dollar.”

McKune said Emerick has been identifying ways to make its operations more cost efficient the past few years. This year, the 68-year-old company is budgeting approximately $45 million in sales – up from roughly $42 million last year – but it has done as much as $60 million in annual sales in years past.

He said a key ingredient to that has been staying diverse. While the majority of the company’s work has historically come from the public sector in the way of school construction, this year that dynamic flipped as the majority of the company’s back log came from private sector medical and high tech buildings.

He said one challenge that contractors face in today’s economy is that fees have shrunk from more than 4 percent during the boom years to less than 2 percent today. With that kind of a profit margin, the recipe for success has become finding large projects with short time frames.

“That’s the name of the game we’re in,” McKune said. “We work hard to find work and then we work even harder to get rid of it, as fast as we possibly can.”

And while the game has changed, this is not McKune’s first recession. He went through similar situations in the ’70s,’ 80s, ‘90s and the early 2000s and, like before, he expects there to be a light at the end of the tunnel – perhaps in 2013 or 2014.

“The trouble is the tunnel is a little bit longer this time than it has been in the past,” he said.

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Portland Public Schools officials are discussing plans that will impact the district’s next bid for a construction bond. After a $548 million proposal narrowly failed in May, the district is opting for a longer, more inclusive planning process it hopes will stir up more support.

Approximately 50 people on Tuesday night attended the first meeting of the newly named Long-Range Facilities Plan Advisory Committee, which will spend the next several months holding public meetings where people can weigh in on the size and details of the next construction package.

The district’s move toward a more inclusive process may attract more support from the construction community, according to John Killin, president of the .

“I think that a more open process really helps,” he said. “Then the construction industry will know more what’s coming, and the public will also better understand what they’re voting for.”

The previous bond request was the largest pitched by a local government in Oregon history. The money would have mostly gone toward reconstruction of eight schools, as well as various improvements at the district’s 77 others.

Superintendent Carole Smith said at the meeting that months of both formal and informal meetings since the voters’ decision have led her to conclude that the community wants to be more involved in planning of the next measure.

Although their reasons for rejecting the measure were diverse, voters consistently said that the construction plans should be based on a longer-term perspective, Smith said.

“We provided them with feedback during the previous campaign, and ultimately, school systems – not only PPS, but districts around the state – need better plans for the future,” said Mike Salsgiver, executive director of the .

Approximately 30 people were invited to serve on the Long-Range Facilities Plan Advisory Committee, according to PPS spokesman Matt Shelby. The group, which will meet six more times, represents a wide range of interests and expertise, including school officials, architects, parents and nonprofit representatives.

“This time they’re coming in with a realistic long-term plan that includes real data.” Killin said. “That will help the industry and the taxpayers. And contractors are taxpayers themselves – they watch their dollars wisely.”

Key considerations will include a 10-year student enrollment forecast, analyses of the facilities and their ability to support Portland’s shifting population, and issues related to the Americans with Disabilities Act, seismic safety and energy use.

“The Portland staff is on the right track, and ultimately, it’s good for construction because hopefully our members will compete for the projects,” Salsgiver said. “But even more than that, education is fundamental to economic success, and that is fundamental to our industry’s success. And we’re supporting that chain.”

The committee is charged with updating the district’s facilities plan by May 2012. The plan, although not a bond measure, will provide the groundwork for the district’s next proposal, PPS Chief Operating Officer C.J. Sylvester said on Tuesday.

After the committee submits its recommendations, they will be open to public comment. The school board is expected to adopt the updated facilities plan in June 2012. The next bond measure could go before voters as early as November 2012.

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President Barack Obama on Thursday night asked Congress to quickly approve his $477 billion American Jobs Act proposal, which includes $105 billion for infrastructure and construction spending.

Initial reaction from built industry professionals – both locally and nationally – is that any increase in federal spending on infrastructure and other construction projects is sorely needed and much appreciated. But as with Obama’s $787 billion American Recovery and Reinvestment Act in 2009, industry professionals say they think any positive effects will most likely be short lived.

“Any effort is appreciated as we can all agree that we need more jobs,” said John Killin, president of the Oregon chapter of the Associated Builders and Contractors. “But as an organization we bought into the stimulus package, which this looks an awful lot like. As soon as the stimulus money dried up, our unemployment rate in Oregon rose again.”

A large portion of Obama’s plan focuses on the extension of unemployment benefits and tax breaks for small businesses. The rest focuses on short-term spending to modernize schools, fund federal infrastructure projects, and rehabilitate and repurpose vacant space in neighborhoods across the country.

While Killin likes the intent of the effort – getting people back to work – he doesn’t agree that the package offers a real solution to that problem.

“These tweaks and holidays don’t work,” he said. “We need to roll back these barriers to doing business and remove the regulations that are hurting the people that create jobs.”

U.S. Rep. Earl Blumenauer, D-Ore., a senior member of the House Budget and Ways and Means committees, voiced similar concerns in a statement he released following the president’s speech. But Blumenauer said he wants to keep an open mind until he is able to examine the plan in greater detail.

“I don’t believe that tax cuts will create as many jobs as investing in infrastructure, but I look forward to reading the president’s plan and to (learning) more details,” Blumenauer said in his statement. “We must guard against people just taking the easy political step of cutting taxes and not the heavy lifting of tax reform and funding our failing infrastructure.”

Others had fewer reservations, if any.

John Mohlis, executive secretary-treasurer with the Columbia Pacific Building Trades Council, said he considers any proposal that pays for infrastructure and puts people back to work to be a good thing in the current economy.

Tom Chamberlain, president of Oregon AFL-CIO, agreed. He believes the plan could really benefit Oregon.

“I saw a lot of good stuff, especially the transportation stuff,” Chamberlain said. “Hopefully there’s some money in there for the (Columbia River Crossing) project. That would have a direct positive impact not only on Oregon construction workers but our entire unemployment rate and the economy in general.”

The American Institute of Architects also voiced strong support for the president’s plan, especially the money dedicated to construction spending. The organization estimates that every $1 billion invested in nonresidential design and construction results in 28,500 full-time jobs. By that calculation, Obama’s plan could result in nearly 3 million jobs.

But while the AIA supports the spending in the plan, the organization is also calling for at least one more addition – the continuation of the Build America Bonds program.

“In the two short years that the program was authorized, state and local governments used Build America Bonds to finance roughly $180 billion (of) new construction projects, preserving tens of thousands of jobs,” AIA President Clark Manus said. “We estimate that at least $45 billion of that amount was used in the construction sector to finance schools, offices, hospitals and other building projects that improve communities.”

The U.S. Green Building Council took a similar stance. Rick Fedrizzi, president and CEO of the U.S. Green Building Council, offered the organization’s full support of the proposal and its passage. But he also mentioned several energy-efficient tax incentives that could be included to create more jobs.

“Specifically in commercial building, we know fixing the tax incentive for energy-efficient commercial buildings, Section 179D, could create 77,000 additional jobs in energy efficiency,” he said in a statement about the plan. “I hope Congress will strongly consider this commonsense tax fix.”

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Officials at Fred Meyer have been looking for a general contractor to complete a major remodel at the company’s Burlingame location in Southwest Portland. Even though the project is sizable compared to others in the area, don’t expect Chad Brix, owner of the Lake Oswego-based firm Brix Contracting, to bid on it.

The grocery retailer is using reverse bidding, also called auction bidding, to select a general contractor for the remodel project. The bid style, which had been relatively nonexistent for most of the last several years, allows all bidding contractors a chance to review the lowest bid price and then make cuts to their own bid in an attempt to win the project.

“The process is a bit of a bloodletting,” Brix said. “As it unfolds it starts to weed out potential efficiencies and advantages a general contractor may have over their competition, driving the bidding to a low-bid scenario, not best value.”

Brix’s firm doesn’t bid on projects that use reverse bidding, but he has worked for other companies that have. The strategy was used by large retailers such as competitors Home Depot and Lowe’s in the late 1990s and early 2000s.

“It sets the table for a potential adversarial, change-order-rich owner-contractor-architect relationship,” Brix said. “In most capacities it resembles bid shopping or an auction, in my opinion.”

In the mid-2000s, project owners began moving away from the practice of reverse bidding as they began to realize it often resulted in unintended consequences and created bad relationships, Brix said.

The country’s recent economic instability appears to have led to a resurgence of the practice, according to John Killin, president of the Associated Builders and Contractors Pacific Northwest Chapter.

“We are concerned with the practice,” Killin said. “I’ve been hearing about it lately from people locally, regionally and even across the U.S.”

The recession has several national retailers using the bid style, said Ellen Yank, program manager with Portland-based Market Contractors.

T-Mobile and Yankee Candle Co. are two retailers that have started using it exclusively, she said.

“We’ve participated in four of them over the past three months,” Yank said. “We weren’t the low bidder on a single one, but we still ended up with three of the projects because the lowest bidder left out details to get the lowest cost.

“This is a common problem. The plans say you need two fire extinguishers here, but through the bidding war the firm cuts the cost of one of them out. Well, the two fire extinguishers are a requirement, so the bidder ends up being disqualified and the project needs to be rebid.”

The Fred Meyer Burlingame project experienced similar results.

The owner did a second reverse bid after the first one failed to yield even one qualifying bid. After holding the second reverse auction it selected a handful of bidders and will now go ahead with a third auction.

While the process can create bad relations between the project owner and general contractor, it can also put a strain on the relationship between general contractors and their subcontractors, Yank said.

“Margins are so low right now that the only place to put the money cuts through these auctions is on the backs of your subs,” she said. “It doesn’t matter how big or small your firm is; we’re all feeling the same pain of doing this.”

From a specialty contractor perspective it’s frustrating to get a call from a general contractor saying, “we can get this job if you can bring your costs down,” Killin said.

“It’s hard to turn down opportunities right now,” he said. “Everyone wants to be working.”

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Construction on Intel’s new Fab D1X in Hillsboro could cause 6,000 to 8,000 construction workers to do the workplace shuffle, said John Killin, executive director of the local chapter of Associated Builders and Contractors.

That’s because most of the workers hired for the project probably won’t come from the ranks of the state’s unemployed, but rather from a shifting to the new project by workers that already have jobs, Killin said.

Still, unemployed construction workers in Oregon shouldn’t be frustrated by that, because the shift will likely help them in the end, he said.

“I think it’s likely that the unemployed will go to vacancies created by existing workers who have moved on to the Intel project,” Killin said.

Today there are about 70,000 construction industry jobs in Oregon, a dramatic drop from the 2007 peak of about 110,000.

And while the 6,000 to 8,000 new jobs at the Intel site are certainly welcome, they won’t be enough to improve the entire picture.

“It’s not a bad thing, though – we’re talking about jobs for perhaps one in five of our unemployed workers,” Killin said.

And there are also signs that the industry is perking up in other areas, Killin said.

“Since July the consistent anecdote we’re hearing from contractors is ‘we’re really busy,'” Killin said. “There’s not a lot of hiring, because those companies don’t know what the backlog is like, but we’re seeing people working more hours, which is a good sign.”

In his view, a real indicator that the economic dark age has ended will be if development picks up in areas like Bend and Medford, Killin said.

“When they pick up, we’ll be moving to the real recovery,” he said. “But there’s nothing there yet.”

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Nonresidential construction work is starting to pick up in the Portland area and across the nation.

The Construction Backlog Indicator, a forward-looking indicator that measures the amount of nonresidential construction work under contract to be completed, is up 27 percent since January, according to . The CBI now points to an average seven-month supply of backlogged projects nationwide.

John Killin, president of the ABC Pacific Northwest Chapter, said it’s an uptick, not a massive change. But in all, it’s a positive sign, he said.

In the western U.S., increases in the backlog trail the national increases. The backlog increased 7.8 percent in the 13 western states over the past year. In all the U.S., the Northeast saw the highest increase, 40 percent over the past year.

Killin added that the backlog could be a result of larger projects, not necessarily more projects. But of the local contractors he’s spoken with, the data seems to ring true in the region.

The CBI is complied through monthly surveys sent out to ABC members across the country, using the 2007 revenues from each firm as the baseline for the indicator.

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With fewer private jobs up for grabs nowadays, more contractors are pursuing public work, and the Oregon Bureau of Labor and Industries is urging them to learn about prevailing wage before taking on these jobs. A contractor that fails to comply with prevailing wage rules could not only be fined, but also be prevented from working in the public sector in the future.

Prevailing wage, the hourly rate that must be paid on all jobs paid for with public money, is designed to ensure that contractors maintain community established compensation standards. The rate is usually set according to the average pay for a specific profession in a region’s largest city or town. If the prevailing wage isn’t paid correctly, BOLI can require the contractor to attend training seminars, assess it civil penalties of up to $5,000 per violation and even disbar it from being able to work on public projects in the future.

A few years ago everyone was staying away from public work because they didn’t want to deal with prevailing wage, said John Killin, president of the Associated Builders and Contractors Pacific Northwest chapter. “But jobs have become more sparse, and contractors are having to turn toward public projects whether they want to or not.”

In the past nine months BOLI has conducted 76 prevailing wage investigations, and has 223 cases open or under investigation. The numbers are fairly similar to those over the past decade, but are somewhat skewed because less public work is taking place these days.

“It’s not that there is more public contracting work in this economy,” Killin added. “It’s just that there is more public work than private work, and contractors are flocking to it.”

Susan Wooley, prevailing wage rate technical assistance coordinator for BOLI, said the real increases haven’t been at the investigation level, but rather the education level. Attendance at her free prevailing wage seminars has more than doubled in the past year, she said.

Kate Newhall, legislative director for BOLI, said the agency fields numerous calls daily from contractors wanting to learn more about prevailing wage. The trend has picked up significantly over the past year, she said.

The Oregon-Columbia chapter of Associated General Contractors also has been fielding calls on a daily basis from contractors wanting to learn more about prevailing wage and public contracting in general, said John Rakowitz, the chapter’s public affairs director. In response, the organization set up an event where Wooley can explain prevailing wage rules to all Oregon members, Rakowitz said.

Newhall added that a recent law also is helping limit the number of prevailing wage investigations.

Seeing the demand for prevailing wage education and the number of public-private projects continuing to grow, the state passed legislation in 2007 that allowed BOLI to conduct a predetermination hearing to see if prevailing wage is required on a project. Contractors and public agencies can send project documents to BOLI, which then has 60 days to determine whether a project falls under prevailing wage rules. BOLI has evaluated 23 predetermination cases in the last nine months.

One was for the Blanchet House, a Portland-based nonprofit that provides food and shelter to the homeless, when work began earlier this year on a new affordable housing facility in Old Town. Representatives of the Blanchet House argued that the project wasn’t subject to prevailing wage rules because it was considered residential construction. But Oregon Labor Commissioner Brad Avakian ruled that the project was subject to the law because more than $750,000 – the cutoff point – of it was paid for by a public entity, the Portland Development Commission.

But not all contractors or public agencies have the foresight to conduct a predetermination hearing, or the knowledge to know that a project falls under prevailing wage rules.

“Our investigations are complaint driven,” Wooley said. “The complaints either come from employees who aren’t paid properly or third parties that are aware of the situation.”

When BOLI gets a complaint, investigators usually subpoena payroll records and daily log books. They also can conduct interviews with present and former workers, and visit projects on-site to take pictures of workers performing specific tasks.

“One of the most common prevailing wage complaints is contractors paying employees the wrong prevailing wage for the specific task they are doing,” Newhall said. “Considering workers take on several different tasks on a jobsite, they need to be paid for the specific task they are doing.

“If a laborer does some carpentry work they need to be paid as a carpenter for that time, regardless if they are hired as a laborer. This is where photos and logbooks can really come in handy during an investigation.”

Wooley added that the best way for employers or employees to safeguard themselves is to become familiar with the rules and to document everything.

“Some of the prevailing wage cases are intentional, but a lot are accidental,” Wooley said. “You need to learn about the laws because we would rather deal with it at the education level instead of the enforcement level.”

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When Nike co-founder Phil Knight recently offered to direct his private development company to pay to expand three athletics buildings at the University of Oregon, university administrators called the move “generous.”

But the way Knight has proposed going about the project has some building industry professionals saying it is time to reexamine the public bidding process.

Knight, through his private development firm Phit LLC, received approval from the Oregon State Board of Higher Education last week to lease property from the university, construct an 80,000-square-foot expansion to football facilities already on that land and then gift the finished product to the school.

Phit will develop the site as though it were a private project, rather than a public one. That will allow the firm to bypass what can be a time-consuming and expensive public bidding process, according to Paul Weinhold, president of the UO Foundation, which manages Phit’s operations.

Though the public bidding process will be bypassed, Phit has promised to employ only contractors and subcontractors that are properly licensed in Oregon. The company also has promised to pay all contractors on the project reasonable, competitive and applicable prevailing wages as required by law.

“This process is an efficiency model more than anything else,” Weinhold said. “There is nothing unethical or illegal about (the football facilities expansion). Considering it is being funded entirely by private donors, they are going to control how it is built.”

Some trade and union groups say they’re concerned about Phit’s approach and UO’s willingness to embrace it.

John Killin, president of the Pacific Northwest chapter of Associated Builders and Contractors, described the football expansion project as similar to a philanthropist donating a car to a charitable organization. If that person is paying for the car, they should get to choose the make, model and color, he said.

“This is a demonstration of how cumbersome and costly the public process is becoming,” Killin said. “We are all for the competitive nature of having contractors bid public projects, but the process is time-consuming and can be very expensive.”

Public agencies and entities are increasingly tapping into alternative methods of contracting. Phit and UO, for example, previously bypassed the set-in-place public bidding process when the John E. Jaqua Academic Center for Student Athletes was constructed. But if the trend is going to continue, some steps need to be taken, said Bob Shiprack, executive secretary for the Oregon State Building and Construction Trades Council.

“I’m in no way opposed to (the UO) project,” Shiprack said. “I just think that if it is going to be the new trend in alternative contracting methods, the legislation should take a good look at it.

“I’m sure Phit will hire a great contractor and use the highest quality materials. But taxpayers will have to pay the maintenance costs when it is done. They should at least have some input to make sure the university can cover those costs.”

Shiprack added that the process isn’t more time-consuming because of the way public contracting laws are written. But he added that city, county and regional governments have added so many oversight committees for public projects that the process has become longer and costlier, he said.

“The process to get unanimity is time-consuming,” he said. “If this process is going to be used more often, we need some better criteria.”

However, these alternative methods of contracting need to be the exception and not the rule, added John Rakowitz, public affairs director for the Association of General Contractors in Oregon.

“The public interest will always be best served when the public process is followed correctly,” Rakowitz said. “Not only does it ensure that the public gets the best price, but it also maintains transparency throughout the entire process.”

While the expansion project’s specifics and final cost are not known yet, it shows how much public projects have evolved.

“This trend is part of the evolving market,” Killin said. “These public/private projects are fairly new, and a donation on this scale is basically unprecedented.

“This project definitely warrants a deeper look into this method of contracting. But it seems there has only been a continuation of efforts to add more process – exactly what Phit is trying to avoid.”

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