Playing by the Rules: How the Construction Industry Is Navigating Government Regulations

The Commercial Observer recently hosted Lou Coletti, President and CEO of the Building Trades Employers’ Association (BTEA), and Denise Richardson, Executive Director of the General Contractors Association of Greater New York, for a discussion about the effect of government regulations on construction projects in New York City. Here is an overview of that discussion.

Richardson spoke about how the effect of regulations on New York City construction projects is determined by the specifics found in the project labor agreement (PLA). “PLAs work best when they are structured to address specific issues pertinent to that project, because that’s where you’ll find procedural changes, work rule changes, and other things that help facilitate the successful execution of that particular project,” she said.

Coletti said there is a greater need for cooperation between the government and the contracting community. He notes that regulations are too often formulated by the government without consulting people in the construction industry, or making any real determination about whether the new regulations are truly necessary, or merely adding unnecessary expense to projects. Due to this, contractors must factor this extra money into their bids. He also notes that the construction industry largely consists of small businesses which cannot afford this sort of unnecessary expense.

Richardson agreed, noting that in many cases, specific city and state regulations might be effective on their own, but lose effectiveness because they contradict each other, causing headaches for contractors trying to comply with both. She gave the example of regulations concerning excavation material, noting that the conflict between city and state regulations in this area led to a 140 percent increase in disposal costs. The effect of these conflicting regulations has been so dire that they’re even affecting the cost of long-completed projects.

Coletti said the solution is better communication – those formulating these regulations should be communicating with the construction industry throughout the process, not after the regulations are already in place. He says that the governments failure to do so has led to unnecessary expenses for taxpayers.

Richardson said there has been a steep decline in federal support for infrastructure projects. Noting that infrastructure drives the economy, she said that without robust infrastructure including transportation, “a city like New York cannot survive.”

She called for a “concerted effort at the federal, state, and local levels to look at where our economic priorities are and what infrastructure investments we need to be making, and to come together at all levels of government to fund them all because the national economy depends on that.” Noting that the New York metropolitan area is responsible for 10 percent of the country’s GDP, she stated that, “we cannot have a situation where the metropolitan area’s infrastructure starts to fail,” and cites the troubling tunnel capacity under the Hudson River, where a new tunnel is desperately needed. “That is a national infrastructure issue,” she said. “The federal government and all the states impacted by that project need to come together and find a way to fund new capacity under the Hudson River.”