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Governmental Affairs

Legislative Update

The Oregon-Columbia Chapter, NECA has been actively involved in the Oregon Legislature since 1919’s, this includes co-writing the original Oregon electrical licensing, permitting and inspection laws, with representatives of the utilities, Industrial Industry and the IBEW. While many of our issues center around the electrical construction industry, we also are involved in many other business and state contracting issues. We have a very active legislative committee with the Oregon-Pacific-Cascade Chapter, NECA and employ PacWest Communications, headed by Paul Phillips, as our lobbyists, with Nathan Philips as our technical advisor. Our current list of issues includes:

Alternative Bidding Procedures in Public Contracting

Oregon’s Public Contracting Code (ORS 279C.335) allows exemptions from traditional Design Bid Build (Low Bid) procurement processes. Within the exemption process are statutory requirements that, for example, require that project exemptions not diminish competition or encourage favoritism, and that a “substantial cost savings” must be demonstrated.

The intent of allowing exemptions to traditional bidding methods was to add a tool to the contracting tool box which allows state and local governments to have flexibility to make sure that large complex projects are delivered in a timely and efficient manner. Unfortunately, in practice some agencies have used alternative bidding methods like Construction Manager/General Contractor (CM/GC) inappropriately for all construction projects, rather than an alternative to be used when extraordinary circumstances warrant its use.

We have also experienced a lack of objectivity, consistency, and transparency in the sub-contractor selection process administered by the agency-selected general contractor. NECA has been a staunch advocate for more transparency in the sub-contractor selection process, and scoring standards that are applied consistently to all subcontractors who submit a bid. There are currently relaxed standards within the alternative bid delivery model known as CMGC, which hurt the entire sub-contractor community. Specific disclosure and justification standards exist in traditional low bid procurement (ORS 279C. 370) whereas in the CMGC process, the general contractor is not bound by the same fair selection standards. 

As a result, myriad problems have arisen and the problems are escalating both in their magnitude and scope. NECA and other trades associations began introducing legislation in 2009 to reform Oregon’s public contracting code as it pertains to alternative bidding procedures—most notably the CMGC bidding method. Problems include but are not limited to; the use of prequalification’s that exceed the scope of work of the project, bid scoring methods that are not disclosed and applied differently for contractors bidding on the same work, bid shopping, and the lack of timely debriefings to explain to why unsuccessful subcontractor were not awarded the contract.

These problems led to a large number of bills being introduced by construction trade associations in order to require transparency and objectivity in the subcontractor selection process, end bid shopping and misuse of change orders, among many others. The common thread between the vast majority of bills was the intention of creating a fair and transparent process for sub-contractors bidding on public project. And a few of the pieces of legislation were specifically targeted at the Oregon University System (OUS), as among the industry CMGC contractors working for OUS are widely viewed as the most frequent violators of objective and transparent bidding procedures. Currently OUS enjoys a carte blanche exemption from the public contracting code, which allows it to waive traditional standards when upholding them is inconvenient for its purposes.

As one might suspect, the large number of bills caused legislative committee leadership to call a time out of sorts, opting for a committee working group to address the issues that led to such a large proliferation of bills. At this point we are not optimistic that the working group will produce an outcome that addresses the issues that were the impetus of the working group.

Building Code Division: Code Review Authority

The Oregon Building Codes Division is charged with establishing and maintaining regulations and standards related to building construction in order to protect the safety and lives of building occupants, in both commercial and residential structures. These standards include structural, electrical, plumbing, fire protection, seismic reinforcement, moisture barriers, and life safety, among many others. At times regulatory agencies outside of the Building Codes Division claim jurisdiction over such building practices. This can lead to conflicting interpretations regarding statutory requirements for constructing a variety of facilities. Conflicts can delay construction schedules and delay approval of occupancy which dramatically increase costs and strain relationships between contractors and our customers.

For quite some time, NECA has been a staunch advocate of one statewide building code and one statewide governing authority to develop and enforce construction regulations and standards—a system that minimizes conflicting legal interpretations and provides consistency for contractors and the customers who utilize our services.

At the outset of a project, building plans are submitted to governing agencies for review in order to assure that the proposed building meets all of the requirements of the established building codes. This process, which is called plan review, is frequently a source of conflict and misinterpretation of the code.  When a state or local government plan review authority interprets the code in a manner that differs from the statewide interpretation promulgated by the Building Codes Division, unnecessary costs and delays are the result.  This becomes particularly problematic when discrepancies are brought to a contractor’s attention for the first time when they are seeking final approval of occupancy.

NECA would like the plan review process to be consistent and predictable, and we support a policy which makes clear that building code interpretation and final review authority lies solely with the Building Codes Division and the local Building Officials who work under the authority of the Division. To be clear, in case there is any question, NECA’s number one focus is the safety of building occupants.

Construction Agency Consolidation

The fractured nature of the regulation of building construction in Oregon is makes navigating the system problematic, confusing, and costly for construction contractors and their customers. NECA is advocating for a consolidation of construction industry regulatory authority under one standalone agency responsible for responsible for everything that is construction related. This agency would provide a one-stop shop for construction contractors, including electrical and other specialty contractors, developers, architects and engineers, and property owners so that there would be a clear set of standards and processes for all regulated construction related activities.

Currently, contractors must wade through rules for consumer protection and contractor licensing at the Construction Contractors Board, building codes and specialty trade licensing at the Building Codes Division, fire code compliance at the Office of the State Fire Marshal, as well as time consuming one-off issues at the Department of Human Services, Landscape Contractors Board, and the Bureau of Labor and Industries, just to name a few. Consolidating construction related regulatory requirements under one roof would create consistency and predictability throughout all of the construction industry. This will reduce the time, labor and materials wasted navigating our inefficient system so that projects can be built faster and at a lower cost for Oregon taxpayers and private consumers.

Columbia River Crossing Project

  The Columbia River Crossing Project (CRC) is a corridor improvement that is vital to our regional economy, commuter safety, improving air quality, and the environment.  Today’s 95-year-old bridge has been designated as the worst chokepoint for moving commerce and people throughout the entire I-5 corridor from Mexico to Canada.  Backups caused by bridge lifts, poor interchange designs, and the lack of a shoulder for emergency needs, result in an elevated number of accidents (over one per day in the corridor) and create frustration for companies that rely on timely freight movement (traffic slows for four to six hours a day).  Studies have shown that by 2030 congestion on the I-5 corridor will double and collisions will increase by 80%. 

Aside from the benefits to commerce and safety, the current design of the CRC will offer an incredible expansion of transportation alternatives and improvements for the environment. The new bridge will have a filtration system which removes oil and other toxins from roadway runoff that currently enters the river and into aquatic habitat. The design includes an entire bridge deck dedicated to alternative forms of transportation, including bike and pedestrian paths and the first inter-state light rail on the West Coast. Because of the CRC project management’s steadfast commitment to building a “green bridge”, the National Association of Environmental Professionals gave the National Environmental Excellence Award to the CRC design team in 2009.

The construction phase of the CRC alone will be a stimulus project for our region.  It will create approximately 1,900 construction jobs throughout the seven to nine year construction phase.  The CRC project offers an incredible opportunity for Oregon to generate thousands of construction jobs, while improving the long term economic viability of our region.

Laying the ground work for the CRC has been a long and expensive journey, but it has lead to a strong design which recently received a Record of Decision (ROD) from the federal government.  The ROD will allow Oregon and Washington to tap into federal matching funds, which will finance approximately one third of the project. At a recent CRC Oversight Committee meeting, ODOT Director Matt Garrett explained that now is the time to get this project going.  He said, “I don't think money will be any cheaper. Property will not be any cheaper. This is a good time, business-wise, to move forward." 

  A funding package for the CRC is likely to include a combination of increases in the state gas tax, vehicle registration and title fees, and tolling. 

Public Contract Packaging

Oregon has a rich history as an incubator for small businesses. From Oregon Iron Works and The Sweetwater Company (known as EARTH2O), to IPM Tech, Inc., Oregon has been a leader in understanding the value of small businesses. Oregon’s contracting community is no different. Oregon has demonstrated its desire to ensure local contracting companies have the opportunity to bid on taxpayer funded public improvement projects. Local contractors have only asked that bid opportunities are packaged so that there is an opportunity for local contractors to win bids. Oregon’s contracting community has been clear that they do not want a hand-out or carve outs, but simply the opportunity to compete.

The Columbia River Crossing project is a $3+ billion project that has the real opportunity to significantly boost employment opportunities for local and regional contracting firms. The CRC has been referred to in two distinct ways: as a large monolithic project, and as a project that can be broken down into sections based upon need and importance, i.e. construction of the bridge span coupled with separate contracts for interchange work, lighting and signal upgrades, and light rail work.

Preferences for Regional Contractors

In 2009, the legislature passed HB 2956, which created a regional preference for all inter-state bridge projects, most notably the CRC Project. The bill requires contracting agencies to give preferences to manufacturers of products, materials, and components that are fabricated within Oregon or an adjoining state to the maximum extent feasible without violating federal procurement law. 

We would like to see this standard expanded to include the selection of contractors, who commit to employ a local workforce and to provide wage and benefit packages that offer fair wages, health care and pension benefit coverage to their employees. When contractor selections and bid awards are based solely on the least “initial” cost of construction, it incentivizes certain contractors to seek cost savings by reducing wage and benefit packages offered to their employees.  This is important because providing a poor compensation package results in employees becoming a drain on taxpayer funded public services such as the Oregon Health Plan. These additional “hidden” costs to the state cause the total cost of bids from contractors offering low wage and benefit packages to be understated.    

OSHA Crane Operator Training Standards

The Federal Occupational Safety and Hazard Administration has issued new standards that increase the training requirements of all crane operators that impose an unreasonable burden on electrical and other contractors. It is not uncommon for electrical contractors to transport and set lighting and power poles with “digger-derricks,” and to off-load materials and equipment on job sites using boom trucks. Standards which are set to go into place in the fall of 2014 would group this type of work together with the work that requires heavy lift equipment. Equipment of this size ranges from:

  • 18 ton cranes with a horizontal reach of approximately 70 feet
  • 275 ton cranes with approximately 223 feet of reach
  • Sky cranes that you see dotting the skyline during good economic times.

The hoisting needs in the electrical industry are far less than the thresholds described above yet new OSHA standards would require operators to comply with the training necessary to perform these heavy lifts. In fact, the newly required training does not even address the types of hazards electrical contractors encounter with their smaller equipment.

The new OSHA rules require that training for the operation of cranes be done by a third party and prohibit the use of employer funded training sources such as our NECA-IBEW training centers which have a history of providing craft and safety training of the highest caliber.  These new standards will force electrical contractors to send their employees to costly third party trainers that are focused on the use of heavy lift equipment instead of using the industry specific focused training we currently offer at our training centers.  It is important to also note that the safety record for the use of cranes by NECA-IBEW contractors is impeccable.  We have a system that works and are being required to replace it with one that does not.

Regulatory agencies are permitted to apply for waivers from Federal requirements in circumstances where it is demonstrated that said waiver does not erode safety to employees or the public. NECA has been meeting with Oregon OSHA for several months regarding an Oregon waiver, yet a resolution to this issue does not seem likely.

Solar on the Rocks

Current statewide land use law makes the siting of large scale solar facilities on non-high value farmland in Oregon very difficult, if not impossible. This is yet another example of how logical development is stymied by the inflexible sideboards put in place by Senate Bill 100 – passed over 30 years ago. While SB 100 plays an important role in protecting high value farm land, exemptions for development on land that has limited demonstrable farm value are extremely difficult to obtain.  

Investors have recognized the fact that Eastern Oregon’s landscape and climate makes the region prime for the development of solar farms. Various federal tax credits, which expire in the near future, have made developers very excited to get solar farm projects underway. Unfortunately, Oregon’s administrative process has made it nearly impossible for developers to site large scale solar farms in Oregon. This is because the requirements for the siting of solar facilities are more stringent than the requirements for comparable types of energy facilities.  Governor Kitzhaber acknowledged this fact in his 10-Year Energy Plan, which states that current land use policies and environmental regulations relating to energy facility siting can be both costly for developers and ineffective in achieving the environmental protections they are meant to provide. 

Protect Against Unfair Third Party Administrator Taxes

Through multiple attempts in successive sessions, the Oregon Health Authority (OHA) has attempted to implement a tax on Third Party Administrators (TPAs) who manage the health care benefits of Taft Hartley and other employer funded health care trusts. These attempts have been fought back time and again. Even with legal opinions that confirm that such taxes are a violation of ERISA laws, the OHA continues to target this sector of the self funded market as a source of funding for the Oregon Medical Insurance Pool – state provided care for Oregonians who have no other source of health care coverage.

In one session alone, an attempt to tax TPAs was killed six times, a clear sign that this is not a palatable idea to Oregon’s elected leaders. This is an issue that the OHA will continue to push, especially considering the tremendous change in health care policy Oregon is currently undergoing.  

 

 

 
 

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National Electrical Contractors Association
Oregon-Columbia Chapter
601 NE Everett St
Portland, OR 97232
Phone: 503-233-5787
Fax: 503-235-4308


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