AGC Board Refuses to Endorse AIA Contract Document/USGBC Launches Green Schools Advocates Program

For the first time in 50 years, AGC unanimously voted not to endorse AIA’s A201 General Terms and Conditions document.

AGC Board Votes Unanimously Against AIA A201 Endorsement

The Associated General Contractors of America board of directors voted unanimously Oct. 12 not to endorse the American Institute of Architects’ A201 General Terms and Conditions document.

This marks the first time in 50 years that an edition of the document did not earn AGC’s endorsement.

“Our members believe that the A201 does not reflect the collaboration necessary for a successful project,” said AGC CEO Stephen E. Sandherr.

AGC says it conducted extensive member outreach for more than three years through its chapters, committees and divisions, as well as an owner-advisory group, before reaching an endorsement decision. AGC chapters throughout the United States urged the board not to endorse the document.

AGC’s members expressed concerns that the new edition does not fairly balance risk among all parties but instead significantly shifts risk to general contractors and other parties outside the design profession, Sandherr said. The membership also warned that the A201 does not positively serve the industry as a standard document.

“Fundamentally, the A201 mandates a command-and-control approach in stark contrast to the more collaborative and innovative direction of our rapidly changing industry,” Sandherr said. “However, we hope to renew stronger collaborative efforts with AIA to develop documents that better serve the industry.”

AEM and OSHA Partner on Safety,Training Programs and Outreach

The Association of Equipment Manufacturers and the Occupational Safety and Health Administration have formed an alliance to provide construction workers and equipment owners and operators with information, guidance and access to training resources to help foster a safer working environment.

The new AEM-OSHA alliance targets rough terrain forklifts, including telehandlers and straight-mast forklifts, with a focus on potential operating hazards, including ground conditions, machine mobility, overloading and their use in lifting personnel.

Rough terrain forklifts were chosen because they are found on nearly all types of construction work sites commercial, industrial and residential. While OSHA has training requirements for the machines, they are not always followed by machine owners and operators.

Materials developed as a result of the alliance will be made available in multiple languages, including Spanish. The two-year alliance will be periodically evaluated to assess results and progress and can be renewed or expanded to include other types of equipment.

USGBC Launches Green Schools Program

Sixty-four “Green School Advocates” from U.S. Green Building Council chapters nationwide received training in Washington, D.C. in October on how to organize green school committees in their areas.

The Local Chapter Green Schools Advocacy Committees have been organized to work with decision-makers, parents, teachers and others to create healthy, safe schools while saving school districts money, helping to mitigate climate change and improving the environment, USGBC officials said.

A 2006 study sponsored by the American Federation of Teachers, the American Institute of Architects, the American Lung Association, the Federation of American Scientists and USGBC found that building green would save an average school $100,000 a year in energy costs alone. That’s enough to hire two additional full-time teachers, purchase 5,000 new textbooks or buy 500 new computers. Greening all school construction would create more than 2,000 new jobs each year from the increased use of energy-efficient technologies and green schools improve teacher retention.

On average, green schools use 33% less energy and 32% less water than conventional schools, which would bring the United States closer to reducing its reliance on imported energy.

AGC Economist Suggests Materials Costs Rising Soon

The Associated General Contractors of America released its fifth Construction Inflation Alert, which warns owners, budget setters and contractors to expect bigger materials and labor cost increases in 2008.

“Nonresidential construction has had a banner year so far in 2007 and we’ve seen spending on nearly every segment increase compared to 2006, despite the plunge in home building,” said AGC Chief Economist Kenneth Simonson. “The materials cost surges that plagued the industry in 2004-2006 have slowed dramatically, and labor remains available in most markets.”

However, Simonson warned that many observers expect that the end of the calm is coming soon, “The worsening slide in home building and turmoil in the credit markets threaten some types of nonresidential construction. At the same time, some materials costs are beginning to turn up again, and labor costs have started to accelerate.”

The 28% cumulative increase in the producer price index for construction inputs from December 2003 through August 2007 remains more than double the 13% increase in the most common measure of overall inflation, the consumer price index for all urban consumers. Labor costs, in contrast, have risen at similar rates for construction and the private sector as a whole.

The cumulative difference matters because the estimates for many projects now being bid, especially public facilities, were prepared in 2003-2005 under the assumption that construction costs would escalate at the same rate as the CPI. That divergence explains why some projects are being canceled, delayed or redesigned.

Labor costs are also likely to accelerate further if residential building begins to draw back specialty trade contractors in late 2008. “Construction wages could go up 5 to 6% annually for several years beginning in late 2008,” Simonson said.

For the first time, the Construction Inflation Alert shows the cumulative price change since December 2003 and trends in construction wages. The report also offers a sampling of comments on credit market turmoil and examines the trends in construction activity, materials and labor costs over the past several years.

To download a copy of the Construction Inflation Alert, visit www.agc.org/Oct2007CIA

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