Public Construction Reform, 2004
For years, there were calls for “construction reform” in Massachusetts, and for years, ASM opposed it, because it did little more than target the filed sub bid law and eliminate competitive bidding for subcontractors. 2004 was different. ASM was part of a 20-member Special Commission of all interested parties (public agencies, legislators and construction industry leaders) who worked over several months to achieve consensus on proposed changes. The result was a true reform package designed to improve all aspects of the construction process, including design, contractor selection and project oversight - while also preserving the best features of the existing law.
Chapter 193 of the Acts of 2004 calls for improved designer selection procedures, experienced project managers on all municipal projects over $1.5 million, DCAM certification of subcontractors, prequalification of both general contractors and subcontractors on all projects over $10 million, increase in the thresholds that trigger filed sub bidding, authorization to use alternative methods on projects over $5 million, and more.
The reform package easily won the support of the Legislature and the Governor and was signed into law on July 19, 2004. It brings the first major changes to public construction in nearly 50 years, and ASM is proud of our role in making it possible.
Construction Management at Risk legislation, 2004
In 1997, ASM worked cooperatively with the state’s chief building agency, the Division of Capital Asset Management (DCAM), to craft the innovative procurement method used successfully for the state’s largest public building project ever - the Boston Convention and Exhibition Center. The procurement method, combining a CM at Risk process with prequalification of subcontractors and award to the lowest bidder, in turn served as a model for legislation ASM negotiated in 2002 with DCAM for use on courthouse construction.
Against this background, ASM in 2003 forged a team with the Associated General Contractors and Boston Society of Architects to develop comprehensive legislation that would authorize the use of CM at Risk on appropriate large-scale public building projects, and standardize the procedures across all public agencies. In 2004, the ASM/AGC/BSA CM at Risk legislation became the centerpiece of the Construction Reform package proposed by the Legislature’s Special Construction Commission.
Under CM at Risk, the CM is selected on quality as well as price, comes in early to ensure design plans are good, and is held responsible for costs that exceed a guaranteed maximum price. Trade contractors in the filed sub bid trades are pre-qualified to bid, contracts are awarded to the lowest bidder, and subcontractors enjoy the same contract and payment protections as under current law.
The CM at Risk legislation represents the first statewide authorization of “alternative methods” on public buildings in the Commonwealth, and became available on January 1, 2005.
Pay if Paid, 2004
In 2004, ASM won House and Senate approval of major compromise legislation that would restrict the use of pay-if-paid clauses in construction contracts. Despite universal industry support, the bill was vetoed unexpectedly by the governor, with no opportunity for legislative override. Thanks to the momentum achieved in 2004, however, we remain confident of victory in the new legislative session.
Prompt Pay Law, 1998
In 1998, ASM, AGC and CIM won passage of a “Prompt Pay” law which speeds up payment on public projects by requiring state agencies to pay contractors in 30 days instead of 45, on both Ch. 149 building projects and Ch. 30 road and bridge work.
Lien Law Reform, 1996 and 2002
In 1996 ASM and a coalition of industry groups won sweeping reforms to the 100-year old Massachusetts Lien Law, after a seven-year effort. The new law expands the scope of lien protection; covers more types of projects; and extends the time limit for claiming a mechanics lien, giving better payment protection to contractors and suppliers on private work. In 2002 ASM won passage of a major correction to the law, to extend the filing deadlines on projects where there is a lien bond in place, and prevent subcontractors from losing lien rights prematurely.
Despite broad support for the 1996 reforms, bills are filed in every session to amend the law and wipe out the new payment protections for subcontractors. Thanks to aggressive opposition from ASM and our industry allies, the bills never see the light of day, and subcontractors’ new lien rights remain intact.
Preservation of Filed Sub Bid Law, 1990-2004, prior to Construction Reform
Since 1954, Massachusetts’ Filed Sub Bid law has allowed qualified subcontractors in 17 trades to compete directly for contracts on public building projects, in a fair and open process that is free of corruption and gets the best deal for taxpayers. The law has a proven track record for producing high quality public buildings that are the equal of any in the country, at the lowest possible price.
For more than a decade, the filed sub bid law came increasingly under attack from those who claimed, without evidence, that the law adds significantly to the time and cost of public construction. Between 1990 and 2000 ASM defeated five successive attempts by the Governor to either repeal the filed sub bid law outright, or pass “reforms” that were little more than repeal in disguise. In addition, ASM stopped numerous bills seeking special exemption from the law for state and municipal projects, and in 2002, persuaded the Legislature to stop approving “home rule petitions” seeking exemptions for school construction. On the final round of school exemptions in 2002, ASM won amendments to protect the rights of subcontractors on the exempted projects.
In 2003, the state’s fiscal crisis once again prompted calls to “reform” the public construction laws as a way to save money and provide “relief” to cash-strapped municipalities. Bills were filed to curtail competitive bidding and allow the use of design/build. Thanks to opposition from ASM, the bills were set aside while the Legislature formed a Special Commission to review the construction laws and recommend improvements.
ASM was named to the Commission to represent subcontractors, and over the course of six months, helped to craft historic legislation that represents reform in the true sense of the word, preserving the best of the current system (including the filed sub bid) while bringing needed improvements that will benefit contractors and public agencies alike.
For more than 50 years, ASM has taken a leading role in protecting the rights of subcontractors on public and private work, through legal action and strong legislative advocacy. Today, ASM is widely recognized as THE voice of subcontractors on Beacon Hill. ASM has an impressive track record passing legislation favorable to subcontractors, AND defeating bills harmful to subs. Highlights of our legislative history follow. For information on current legislative initiatives, go to: