Chapter Excerpts from
Broken Buildings, Busted Budgets

Introduction

Chapter 1: Overbudget & Overdue

Chapter 2: The Economic Context of Construction

Chapter 3: False Starts and Frustrated Beginnings: A History of the Industry

Chapter 4: Asymmetric Information: The Big Barrier to Change

Chapter 5: Minor Blemishes: Unions, Workers, and Government

Chapter 6: Fixing the Construction Industry: Consolidation, Intermediaries, and Innovation

Chapter 7: Practical Advice to Owners: Getting Started Now Charts and Figures

Introduction
Executives of major U.S. corporations, the leaders of public institutions, and millions of American homeowners are routinely held hostage by the construction industry to pay up or face even greater costs and delays. All too often, corporate executives, who retain business advisors and consultants to oversee and coordinate every phase of their daily business activities, readily cede control to a construction manager with an overt conflict of interest in structuring the cost of a project. These realities have stymied me for many of the thirty plus years that I have served as construction counsel to real estate developers, national and international corporations, educational and healthcare institutions, and countless architects, engineers, and homeowners.

When questioned as to why they felt they had no control over what they spent for their hospital, school, or hotel project, business leaders express anger, frustration, or denial. Often few have any good answers to why it cost so much and took so long. Yet runaway projects and pricing continue unabated. Whether a stadium for a football or baseball team, a new bridge or tunnel, or a hospital or school, all too often owners concede that neither the budget established by the contract nor the original scheduled completion date is under control. Knowledgeable construction executives, in defense, are quick to point out that each project is custom made, a veritable "one off." When events miraculously transpire so that a project actually is completed on time and on budget, few clients can explain how this happy event occurs. In short, I came to realize that no one involved in the process has a clear understanding of why our nation's construction world works the way it does.

Many will challenge the findings in this book. Some will assert that everything is fine just the way it is. Any uncertainty and fear on the part of the construction community as to what is reported in this book is and will be entirely justifiable. The change that lies just ahead will threaten long-established firms, careers and institutions. No one can hide from it. Some will read these chapters and see the opportunities they portend. Much like the flattening of the world described by Thomas L. Friedman, the impending use of the latest technology, global implementation of new materials and building systems, and long overdue research and capital investment will radically alter the construction landscape in the next ten to twenty years. The construction industry today is the last major industry in our world to remain "mom and pop." It is an industry that shuns risk at all levels and hordes information on its day-to-day operations. Outsiders are not welcomed and the throwback to the days of the guild is omnipresent.