Category Archives: News About People

A Truly Bizarre Decision

On Monday, Judge Timoth Patrick O’Reilly rendered a head-scratching injunction in Allegheny County Court of Common Please, one that will cost Jefferson Hills taxpayers a bunch of money.

The prime plumbing contractor on the project, Wheels Mechanical, filed to have the sanitary and storm sewer portions of the site contract removed from the general contractor’s scope of work and assigned to the plumbing contract. Wheels claimed including the site utilities in the site package was a violation of the PA Separations Act. In assigning the scopes of work, Turner Construction decided to include the site utilities in the site work because of the extensive work (roughly 160 acres) and the advantage to the overall scheduling of sequencing the installation of the utilities at the time the cut and fill was done.

During three days of testimony, little evidence was brought that clearly showed how this kind of separation of scopes is done. There is ample precedent for both approaches. What wasn’t shown was any evidence that the inclusion of the site utilities with site work was in any way intended to circumvent the Separations Act, especially since the delivery method included nine separate contracts.

Finding for Wheels Mechanical, Judge O’Reilly rendered the opinion that the school district and CM had “willfully” violated the Separations Act. This language makes it more difficult for appeals and stays of the judgement prior to the appeal. That counts because O’Reilly gave Turner 10 days to get prices from Nello Construction on a credit for removing the site utilities and a bid from Wheels for the addition to its scope.

I am a proponent for abolishing the Separations Act. But in this case, the problems with the decision go well beyond the Separations Act. First, there was a Project Labor Agreement in place, which means that jurisdictional disputes were to be decided by the method agreed to in the PLA. That means the judge should not have heard the case.

More glaring is the timing of this claim. Wheels was a bidder on the project, meaning that it attended pre-bid meetings, reviewed the bidding and contract documents for months prior to bidding and signing contracts. A reasonable judge should have asked why the claim wasn’t brought forward then or during any of the months before this phase of construction reached a critical point. Wheels is an experienced K-12 contractor. The scopes of work weren’t too confusing, nor is this the first time Wheels has had the plumbing contract on a project where the general construction contractor had the site work assigned to its scope. It is likely the first $73 million project that this occurred on, I’m sure, which may have added motivation.

There was time to redress the “violation” during bidding and contract evaluation. The time lost and additional money that will be spent (if the work is priced the same as was carried in the bid, this will be the first project in recorded history) by Jefferson Hills will be punitive to the taxpayers and the students. Observers noted that Judge O’Reilly asked a number of questions during the proceedings that betrayed a lack of understanding about construction. His decision confirmed that.

A Moment for Joe Massaro

Joe Massaro’s funeral was Monday morning. The mass at St. Paul’s Cathedral gave anyone attending a good idea of what was important to Joe during his life. His highest priority was family.

A beautiful funeral mass isn’t exactly the setting for story telling, however, and that’s a bit of a shame when it comes to Joe Massaro. His life and career are a treasure trove of stories. I had the privilege of spending a lot of time with Joe just before the onset of his Alzheimer’s disease. His sons had asked me to help document his life story for Joe’s many grandchildren. Over the course of a year, I heard hundreds of stories, many of which have been told repeatedly through the years by Joe or his sons. The one story that hasn’t been told nearly enough was how Joe’s business nearly failed and recovered. Those four or five years scarred Joe and he was understandably happy to have put the period in the past, but the experience also galvanized his already close family.

Joe was remarkably candid in talking about the bad decisions and bad luck that led to his company’s troubles. The battle to save the business brought two of his sons into the business. Joe talked with great respect about how hard those two, Joe III and Steve, fought to help right the ship. His other son, David, later joined the business as well.

When Joe told me the story of that period, it was also pretty clear that he leaned even more heavily on his wife Carol to endure the battle. He spoke of not wanting to get out of bed in the morning – comparing it to going to war every day – and said it was Carol and their daughter Linda who pushed him each day. He said Carol reminded him that no one was going to fix the problems for him.

Joe gets credit for his determination in turning his company around. He didn’t take such credit in retelling the story of that time in his life. He sincerely believed that it was his family that made the difference and it’s probably true that without that combined effort Massaro Corp. would not have survived.

It made Joe unhappy that his mistakes changed the plans his children had made but the crisis galvanized the family in a way that none of his successes had. Creating a business that would be a family legacy was a driving motivation for Joe Massaro. He may have been uncomfortable with how that legacy was created but there is little doubt that it’s a legacy that has endured.

The Gas Tax

Gov. Wolf surprised no one on Feb. 11 when he announced plans to create a severance tax of five percent on the natural gas extracted in Pennsylvania. Wolf campaigned on this tax – this exact level of levy — and has wasted no time following through. Unlike his predecessor, who was hamstrung by his ‘no tax’ pledge to Grover Nordquist – Gov. Wolf can make good on his promise without having to put it into effect. The severance tax will have to become legislation, meaning that something specific will have to get through the Republican-controlled legislature. As of the announcement, there were few specifics of the proposed law released.

The lack of specificity tempered the remarks of anyone who responded. The shale gas industry responded negatively. There were implied threats of further slowdown in drilling and development of the resource in Pennsylvania. Comparisons to the extraction taxes of other states brought reminders that places with higher taxes – like Texas – have virtually no corporate taxes. The comparison to West Virginia prompted the reminder that drilling and processing in West Virginia lagged the activity in PA by quite a bit. But again, it was hard to lodge too much of a complaint against the proposal without knowing what was in the proposal.

One tidbit that the governor did mention was that local government would still participate in the impact fees, which will still be charge to some degree. My belief is that the loss of impact fees to local government is the biggest negative in Gov. Wolf’s proposal. The gas industry will figure a way to profitably get at the largest gas deposit in North America. Local municipalities and counties bear the brunt of whatever impact drilling has. The use of those impact fees has brought new roads and infrastructure to places that the state has barely invested in over the years.

Washington County Chamber of Commerce President Jeff Kotula may have spoken for all local government yesterday when he expressed concern about the share of impact fees that would find their way from Southwestern PA to Southeastern PA, where there is no drilling but a lot of votes.

Thoughts on the Astorino/Cannon Merger

This morning’s Post-Gazette story on CannonDesign’s acquisition of Astorino followed a few days of rumors of the deal and has of course spawned its share of speculation about the deal. Given Cannon’s reach and the fact that the firm has regularly – if not frequently – worked in the Pittsburgh market, it seems like Cannon could gain market share without buying Astorino. If you look at Cannon’s announcement of the deal, however, you get some insight about the motive.

I haven’t spoken to Lou Astorino yet and Cannon’s CEO Gary Miller is out of the office, so what follows is speculation. Cannon positions the acquisition as the merger of two like-minded firms serving similar clients. They point out that the two firms have worked together before and share similar philosophies. Once you get into the meat of the news you see that Cannon makes a point of touting the additional capabilities that Astorino Development’s design/build team brings. This construction management arm, that Lou P. Astorino leads, is the value that the Astorino side brings to the table. Astorino’s resume is impressive (how many companies can boast PNC, the Pirates and the Pope as clients?) but no more so than Cannon’s; and Cannon’s billings are roughly 14 times that of Astorino’s. But Cannon didn’t have that construction resume.

Delivery methods are evolving. It was Lou Astorino’s recognition of this fact that led to the launching of the construction management group. I believe it’s more than a gesture that Lou P. is going to lead the design/build operation from Pittsburgh. Whether it’s design-led design/build or just the opportunity to act as as CM-at-risk, Cannon now has capabilities to serve clients that are looking at streamlining the process with an alternative delivery method. In particular, healthcare clients – one of Cannon’s major client groups – are looking at ways to deliver expensive construction with less cost and more predictable outcomes. Highmark/AHN has used Astorino that way. Other large CM/design firms are pitching a modular approach to hospital construction. This puts Cannon in the mix with competitors that it couldn’t joust with before.

Hola Pittsburgh and a Workforce Solution

Yesterday’s Allegheny Conference Regional Investors’ Council meeting offered a few things beyond the usual regional cheerleading. More important to the construction industry were two programs that may help with workforce issues.

First there was an interesting video and short speech about the Hola Pittsburgh initiative. This is a effort aimed at attracting the professionals and workers leaving Puerto Rico because of the poor economy. The figures the Conference gave were about 50,000 people emigrating every year. Pittsburgh may not seem the most likely place for Puerto Ricans to land but there is a connection because of career of Roberto Clemente of all things. If successful, Hola Pittsburgh would have the unintended benefit of making the region seem more like home to Hispanic workers in all industries. And construction is an industry that has been attractive to Hispanic workers in other major cities.

The second initiative is the Service to Opportunity effort, which connects returning veterans to jobs. The thrust of the initiative is to match valuable skills learned in combat and service to the civilian opportunities, especially in energy and construction.

Construction is facing a serious workforce shortage as Baby Boomers retire with no backfill of labor ready to move in. Trades have been increasing recruiting but this segment of the population – veterans – comes equipped with transferable skills and excellent attitude. Both these regional initiatives have potential to draw people to our industry.

Not much construction news this week. UPMC selected Alexander Building Construction as CM for its $20 million Altoona Hospital job. Another big piece of the Route 219 extension in Somerset has been put out by PennDOT. The $80 million Garrett Bridges project is due October 23.

A Good Guy Gets His Due

Proving Leo Durocher wrong, the MBA announced yesterday that Angelo Martini Sr. had been selected by the AIA/MBA Joint Committee as this year’s recipient of the James Kling Fellowship Award. The Kling Fellowship recognizes professionals from the contracting and design communities who have demonstrated the utmost in cooperation between the two professions. Angelo Martini is one of those people who you meet in this industry that everyone likes. That’s a group to which there are few members. Congratulations to Angelo.

Construction remains pregnant instead of prolific at this point. Turner has started work on Cenveo’s 300,000 sq. ft. tenant work at the RIDC Westmoreland, which is the former Sony plant. The few jobs that are out to bid are attracting fierce competition and owners seem to be interested in taking the fullest advantage. The Ligonier Valley YMCA took proposals on an $7-8 million addition that came in over $8 million. While getting VE suggestions from Jendoco, Volpatt & A. Martini & Co., the YMCA put the job out to bid to General Industries & DiMarco Construction. As you can imagine, the subs working on the value engineering were less than thrilled to get invitations to bid from other contractors. Earlier this week, WVU took bids on a small renovation to its Clinical Trials Unit at the BRNI. The project attracted 14 bids from all shapes & sizes of contractors from Pittsburgh and Morgantown. The results are below:

Manheim Corp. – $1,324,000; Mascaro Construction – $1,429,000; TEDCO Construction – $1,430,000.

 

Goodbye to Gary

This morning there is a celebration being held to mark the life of Gary Carlough, who passed away on Sunday. Gary was one of the good guys of our industry and his death diminishes Pittsburgh a bit.

Gary’s architectural pedigree is pretty impressive. He cited Dahl Ritchey as a mentor, working for Deeter Ritchey Sippel (now DRS Architects) towards the end of their run designing some of Pittsburgh’s iconic modern structures. Gary also was part of the first team at The Design Alliance when that firm was breaking ground in architecture.

I met Gary in 1994 as we were starting the Pittsburgh Construction News. He had recently left TDA with the intention of going to London to study but one of his former clients had asked him to help out with a project so he delayed that trip to take on the job. Before he could go he got another call, then another and you get the picture. His office was in the carriage house behind Dutch MacDonald’s and Becky Mingo’s home in Friendship. When I stopped in to introduce myself, Gary jumped at the chance to stop working and chat. Barefoot and smoking a cigarette in the un-air-conditioned garage, he talked about going to London and what he believed about architecture; and he asked a lot of questions about what we were doing. He seemed to be having fun. As I learned later, it was a fairly typical Gary Carlough experience.

Aside from his personal nature, what I liked about Gary was his passion for what he did. He had different ideas about design and was willing to try them. His firm, EDGE Studio, did some of the more interesting projects of the last decade or so. I admired that EDGE tried to create all the time. Chances are good that EDGE designed one of your favorite projects from the last 15 years.

I wish Gary’s sons and his wife, Anne Chen, peace and healing from this loss. Perhaps they will take solace in the number of people who were shocked by Gary’s death and touched by his life. I will miss him.