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Lawmakers advance pilot oversight for state construction projects after unions warn of wasteful overruns
Summary
The committee advanced a proposal to pilot a state construction-management program targeting high-cost projects, with agencies seeking a five-year pilot and lawmakers debating $12.5 million in initial funding and whether 90 positions are appropriate.
Lawmakers on Wednesday voted to advance a proposal to pilot a state construction-management office intended to curb cost overruns and speed up delayed state projects.
The committee recommended passing SP2543 (as amended) after testimony from the Department of Accounting and General Services and strong support from trade unions, who estimated hundreds of millions in recent cost overruns on state projects and urged a pilot oversight program.
Keith Regan of DAGS stood on written testimony and described a proposal that would provide targeted staff and funding to process state permits and monitor large projects. DAGS proposed thresholding projects by design value (for example, projects with design values of $2 million or greater) to reduce the initial caseload from roughly 1,200 projects to about 300. DAGS officials estimated approximately $12,000,000–$12,500,000 in start-up funding for the first fiscal year to lease an office, buy equipment and hire staff; subsequent years would fund positions and support costs.
Unions and contractors, including the Hawaii Building Construction Trade Council and the Ironworkers Stabilization Fund, urged passage. Cliff Laboy (Building Construction Trade Council) said the plan would “stop the bleeding” of wasted project dollars and recommended a pilot approach; union representatives urged passing the bill with DAGS’ suggested thresholds and amendments.
Opponents and skeptical members raised concerns about creating a new layer of bureaucracy, potential staffing and management issues, and whether the state should instead address internal county capacity. Milton Nieto, a retired construction engineer, urged training and decentralization of authority rather than creating a new statewide office.
The committee adopted amendments suggested by DAGS, including a $2 million project threshold and other technical edits, and recommended the bill pass with amendments. Legislators recorded some reservations but approved the recommendation by voice vote. The committee noted a plan for a limited-duration pilot (five years was discussed) and suggested agencies could reallocate some funds for training if the committee so chooses.
Next steps: the bill was advanced with committee amendments and will move to the next committee of referral for financing and implementation details.
