Bibb Addresses Associated General Contractors of America
As prepared for delivery
David L. Bibb
U.S. General Services Administration
Remarks to Associated General Contractors of America
Thank you very much, Bill (Choquette), for that kind introduction.
Good afternoon, ladies and gentlemen. It's a pleasure for me to address one of GSA’s most important partners, the Associated General Contractors of America.
You may know that I’ve been Acting Administrator at GSA since last November. It’s been an interesting time, to say the least. Our plan to merge two of GSA’s main service lines into a Federal Acquisition Service has received approval from the key congressional committees, and we continue to move forward. Just last week, a key Senate panel passed legislation that would allow us to combine the General Supply Fund and the I-T fund, a necessary step that will enable GSA to provide its customers with greater business flexibility for I-T solutions and improved money management.
In a nutshell, the reorganization will make us more efficient, enabling better service for our client agencies. That, in turn, will allow them to concentrate on their missions, thereby delivering benefits to the American taxpayers on multiple levels. In sum, we expect that the changes underway will enable us to remain the government’s premier acquisition agency.
We’re also excited that President Bush has nominated Lurita Doan to be the next GSA Administrator. I’ve met twice now with Mrs. Doan and can tell you the same qualities that made her a very successful small businesswoman are the same qualities that would help her lead GSA. She is energetic, she is pragmatic, and she is highly focused on – and enthusiastic about – leading GSA into the future.
With all we have going on, you might think I never have a chance to leave the office. On the contrary, over these past several months, I’ve had the opportunity to visit GSA building projects in New York, Oregon, Florida, all around the D.C. area, and elsewhere.
It’s no exaggeration to say that I’ve been extremely impressed by the scale and quality of the work that we’ve accomplished together.
This was not headline news to me, of course. In previous incarnations at GSA, I served as PBS Deputy Commissioner and Assistant Commissioner for Planning.
So I already knew that great architecture is only realized through quality construction. Ideas and visions become reality through the direct efforts of hundreds of workers led by skilled management. Looked at in that light, we see that our federal buildings are produced by a robust cross section of American society, from the federal judges - who are our customers - to the newest Americans working hard on projects to begin a life in our great nation.
GSA's Public Buildings Service, now led by Commissioner David Winstead, is one of our great success stories. PBS and the Design Excellence Program continue to produce legacy buildings that express the vision, leadership, and commitment of the government to serving the public and the values of the nation. PBS has also made GSA the only agency to get to green on the portion of the President’s Management Agenda that addresses real property asset management.
It’s also extremely satisfying to realize that when we serve a federal agency or the judiciary by delivering a new federal building, the economic ripple extends well into the surrounding community, often creating many new opportunities for individuals and businesses.
The facilities that you help us deliver represent the highest aspirations of our culture and are intended to last for several generations, whether they are new courthouses, border stations, federal office buildings, or building renovations.
Still, as proud as we are of our accomplishments, it’s the day-to-day administration of the projects we design and build that consume most of our energy. It’s no secret that the last few years have presented enormous challenges for all of us. The dramatic and largely unpredicted cost hikes that began during the fall of 2004 disrupted the building programs of just about everybody in this business. As most of you know, due to the federal budget cycle our budgets are prepared many months in advance of construction award, using forecasted industry escalation rates. I can tell you – though I’m sure I don’t have to - that during 2005, construction costs rose multiples of historic escalation rates.
The increases were so unpredictable that sometimes we would run three cost estimates by the industry’s leading estimating firms on the final construction documents, put the project out to bid, and still exceed the budget. I understand from staff that many leading general contractors were as surprised as us at the costs turned in by their subcontractors.
All indications are that the construction economy is not going to cool off anytime soon. That’s okay. GSA doesn’t have a problem with a high escalation rate as long as we can plan for the situation. The 2004-2005 problem was the impact of an unpredictable market on projects budgeted during a more stable period.
Your forum today is so valuable because of the discussion it generates between the industry and GSA. Together, we need to develop the practices that will spell success for all parties as we go forward. And that is happening. One example -- Commissioner Winstead recently signed and issued a memorandum referencing the construction manager as Constructor (CMC) Standard Clause that was developed by representatives of the AGC, CMAA, and GSA.
Standardizing our processes simplifies the development of projects at our end and, more importantly, on your end. When we package a project a certain way, it should fall within a set of expectations regarding the type of information and preparation necessary to prepare a proposal. That’s simply more efficient.
Another thing we’ve learned through this type of forum is that contractors would rather focus on straightforward projects than those with complicated and protracted procurement practices. This means that long, drawn out government procurements usually will translate to fewer bidders and higher prices.
We understand that and are working to streamline the construction procurement process whenever possible.
My point is that we’re not here today to issue instructions. We’re here to join in a constructive – no pun – discussion on how we can work together to improve the project delivery process to our mutual benefit.
Lastly, as we go about our daily business in the Washington metro region each day, as we fret about the traffic, worry about the next meeting, and maybe pray a little for the Nationals, it’s easy to overlook the magnificent buildings and architecture that rise from our nation’s capital. Try looking again with a fresh perspective. Try to remember the first time you saw some of these awesome structures that so embody our American ideals and spirit.
Most of you will be involved in the construction of many buildings in your careers. My hunch, though, is that your experience with the federal building program is always something special.
Thank you very much.