Report Title:

Construction Research Program; University of Hawaii


Establishes the construction research program within the University of Hawaii at Manoa, College of Engineering. Appropriates funds to be used for the center's programs and functions.


S.B. NO.









relating to A construction research PROGRAM.



SECTION 1. The legislature finds that construction engineering is a major part of our State's economy, and construction projects have a multiplier effect on the State's economy. Construction expenditure in Hawaii approximates $3,000,000,000 per year, while the State spends anywhere from $500,000,000 to $1,250,000,000 per year on construction and repair projects. Furthermore, investment in construction is a significant portion of the State's expenditure at a time of economic difficulties.

The legislature further finds that states wish for many expensive construction and infrastructure facilities that are durable and sustainable, and have strong needs for these items, but do not do enough to ensure the success of these needs, taking an important contribution for granted. Frequent cost and time overruns on construction projects are common. There is also considerable waste in construction through lost resource utilization, material abuse, poor management and procurement, substance abuse, accidents, and safety violations. The estimated waste in managerial, technical, and contractual effort on construction projects range from five per cent to twenty-five per cent, which amounts to more than $150,000,000 wasted per year from a $3,000,000,000 outlay, money that could be successfully used elsewhere in other social and public programs by both public and private agencies.

Furthermore, it is estimated that ten per cent of the Hawaii workforce is employed in the construction sector, with those workers' needs not having been fully met over numerous decades, even though they are a prime engine of economic stimulation.

Construction is a high technology area. Engaging in the construction of complex projects (such as dams, harbors, airports and runways, tunnels, bridges and highways; high-rise buildings for hospitals, hotels, and office space; housing complexes and commercial construction; coastal construction, offshore structures, and erosion control) requires long design and planning lead times and consumes immense effort on the part of the community.

The legislature finds that construction and infrastructure are very critical investment areas for all taxpayers, especially due to the singularly large capital outlay involved and that, accordingly, there is a need for the establishment of a construction research program.

Money set aside for a construction research program to specifically study, monitor, and research construction activities in the State can provide much needed information, useful strategies, and technological managerial improvements for the construction industry. Tens of billions of dollars have already been spent by the State in construction projects through the years, but not a cent has been devoted to learning from that construction or establishing a competitive and scientific research base that can be used for the benefit of those interested in and involved in construction in future years and to help with reducing waste and construction costs in Hawaii.

The dividends from this small investment for study and research will be many times the construction outlay and will have a long lasting effect on the business, construction, and economic environment in Hawaii. The results of research undertaken in a scientific manner will be used to benefit the State, public and private agencies, planning agencies, building and construction industry, and other interested individuals, such as local general contractors, unions, and engineering consultants engaged in construction activities.

The opportunity to improve construction management in Hawaii is immense because of minimal or non-usage of processes, such as value engineering, constructability reviews, project delivery alternatives, earned value techniques of cost control, resource sustainability, fair-cost estimates, and claims control. Through organized study, change order management will stand improved, the probability of timely completion of projects will increase, and cost overruns will be controlled. None of this is trivial, since the savings are expected to amount to hundreds of millions of dollars per year.

Studies by the Construction Industry Institute housed at the University of Texas, Austin, and the efforts of the Business Roundtable have concluded that there are immense benefits to be reaped through the proper practice of constructability reviews, risk management, material management, scheduling and resource management, and safety management. The Construction Industry Institute receives funds from construction contractors in the State of Texas. This is one model that the legislature finds is appropriate on which to base its recommendations for the construction research program.

The legislature also finds that Japan stimulated construction research by requiring all general contractors seeking federal contracts to devote 2 per cent of their profits to research, and also granting the contractors an income tax write-off of 2 per cent for the coming year. This has resulted in Japan becoming a world leader in construction mechanization, automation, and robotics, such that the Japanese construction industry is reaping immense benefits from more efficient construction techniques, saving large sums of money, and increasing the quality of the constructed value added. The legislature finds this is another model that can be applied to guide the creation of the construction research program.

The United States Department of Defense and all federal agencies require the use of value engineering pursuant to P.L. 96-104-106. The Department of Defense has reaped immense benefits amounting to many tens of billions of dollars ever since they started using value engineering in the 1950's. Other agencies are now reporting similar dividends. The legislature finds that using this federal model to improve the value of construction through the construction research program will help the State.

The legislature also finds that the United States Department of the Army has recently required the use of planning charrettes for twenty to thirty per cent of its construction projects. This has been done because the Department of the Army realized immense benefits to the value of construction through the identification and calculation of appropriate scope and cost by this process.

The United States Department of the Navy regularly uses functional analysis concept design on projects with a long-term aim of reducing change orders, reducing claims and litigation, and saving costs. It is recommended that the State also discover methods by which it can improve the value and quality of construction while saving costs. The Legislature believes this can be done through the creation of the construction research program.

Thus, there are quite a few highly successful models on which the State can base its premise for the creation of the construction research program. Some studies have already been undertaken that should not be repeated by the program, such as that of the benefits of value engineering and planning charrettes. The State is further urged to seek additional benefits on all its construction and infrastructure construction projects.

Suitable planning and resource management for construction work entails elaborate calculation techniques for effective results that include the use of innovative contractual arrangements, modern design and planning, operational analysis, process simulation, 4-D scheduling, design-construction integration, automation, robotics, computerized construction, agile construction, safety management, use of new materials and techniques, and resource optimization. The improvement and application of these sophisticated techniques will raise the professional standards in the Hawaii construction sector, serve Hawaii through the decades to come, and are potentially projected to save Hawaii $3,000,000,000 in current dollars over twenty-one years. These savings could be used for other urgent needs in Hawaii, such as elementary and higher education, capital improvement projects, transportation projects, prisons, salary increases in collective bargaining, and other future projects.

The State has unique conditions and cultural situations, the information and analysis of which cannot be obtained from any research performed on the mainland or elsewhere. The college of engineering of the University of Hawaii has the resources, facilities, skills, talents, visibility, and credibility to organize these studies. Furthermore, a dedicated construction research program will provide significant employment opportunities at the University of Hawaii.

The purpose of this Act is to establish a construction research program within the college of engineering of the University of Hawaii.

SECTION 2. Chapter 304, Hawaii Revised Statutes, is amended by adding a new subpart to part II to be appropriately designated and to read as follows:

" . Construction Research Program

304-A Construction research program. (a) There is established a construction research program within the college of engineering of the University of Hawaii to study, monitor, research, and disseminate information regarding the nature, business, and technology of construction activities in the State to provide information, useful strategies, and technological managerial improvements for the construction industry.

(b) The program shall be located in and be a part of the college of engineering at the University of Hawaii. The affairs and operations of the center shall be administered by a director appointed by the dean. To provide stability to the administration and to ensure sufficient experience with construction issues in Hawaii, the director shall be a tenured faculty member from the college of engineering having a terminal degree in the specialty area of construction engineering management. The director shall have not less than ten years professional experience in Hawaii.

(c) The program shall draw on existing personnel within the state government, insofar as possible, for necessary supplementation. Where bona fide demand for programs and services exceeds the capabilities of the permanent staff, as supplemented, additional personnel resources may be acquired on a contract basis without regard to chapter 76. Permanent staff, including post-doctoral associates, other researchers, and administrative assistants, shall be subject to chapter 76 or section 304-13, as may be appropriate.

(d) The program shall receive the full cooperation of all state agencies in the use of staff members, facilities, and other resources necessary to accomplish the purposes of this subpart.

304-B Functions and programs. (a) The construction research program shall:

(1) Perform comprehensive analyses of the construction industry in Hawaii in a scientific manner, organize seminars, and produce reports and deliverables for dissemination to the public, construction industry, and government organizations;

(2) Study labor conditions, productivity issues, capital financing, claims and change orders, procurement strategies, construction management, cost control, schedule control, optimization sciences, cultural influences, and types of investment sectors, with the objective to enhance the knowledge and technology base of construction in Hawaii and assist the local builders, contractors, and unions;

(3) Provide decision making information to government decision makers at the department of accounting and general services, department of transportation, and the governor's office on appropriate construction costs, comprehensively analyze information of the different areas of construction spending with relation to the state economy for future planning of construction outlays, and implement research findings through the dissemination of reports to agencies and contractors;

(4) Focus on construction items pertaining to Hawaii, including tourism, education, housing, mass transit, priority projects, and innovative projects;

(5) Coordinate, arrange for, or provide technical assistance to appropriate organizations and contractors to improve or implement construction education programs within those organizations to raise their professional skills and level;

(6) Prepare and disseminate educational information and publications on various subjects of concern and interest to engineers, contractors, and their organizations; and

(7) Provide advocacy to the state legislature and government for making future legislative changes to improve and enhance the construction industry in Hawaii."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,980,000, or so much thereof as may be necessary for fiscal year 2004-2005, for the planning, design, operation, and construction of a construction research program within the college of engineering of the University of Hawaii.

SECTION 4. The sum appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 6. This Act shall take effect on July 1, 2004.