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03/17/2011

Kasich budget gives agencies alternatives to multiple-prime contracting

Ohio's local governments, schools and institutions of higher education would be permitted to build capital projects using a single-prime contractor, rather than the multiple primes now required in state law, under the state general fund budget proposal unveiled Tuesday by Governor John Kasich.

While acknowledging that his budget plan would slash state funding to local governments, Kasich proposes giving "additional flexibilities" to local governments to help them control their costs.

Under Kasich's $55.5 billion two-year spending plan, the Local Government Fund would be slashed by more than a third, from $1.3 billion in the current biennium to $526 million in fiscal 2012, and only $339 million in fiscal 2013.  This is sure to put even more pressure on local officials to shift scarce dollars away from capital improvement projects to fund basic operations.

To compensate for the loss of direct state funding, Kasich's budget Blue Book states that, "On some building projects, colleges and universities, schools and local governments will be able to replace multiple prime contractors with a single prime contractor, and use the design/build process to share risk and create new incentives to bring construction costs down."

State universities have long lobbied for the elimination of Ohio's multiple-prime contracting law, which requires them and most other state and local government agencies to enter into separate prime contracts for plumbing, HVAC, electrical and other construction trades when building capital projects.

Ohio is one of only two states in the country that has a multiple-prime contracting requirement, which opponents contend leads to a breakdown in coordination among the various prime contractors, driving up construction costs.

Two years ago, the Ohio Construction Reform Panel, a broad-based task force appointed by then Governor Ted Strickland, recommended that state universities and local governments be given project delivery options that would allow them to skirt the multiple-prime requirement.

Republicans in the Ohio Senate attempted to implement the recommendations of the OCRP but were thwarted by Democrats who were then in control of the Ohio House of Representatives.

With Republicans now in control of both houses and the Governor's office, the prospects for changes in Ohio's public works construction statutes would appear to be significantly improved.


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