Since retiring from the Hawaii Department of Accounting and General Services (DAGS) in 2003, I have been involved as a construction manager (CM) on two small, two medium and one large project. Thus, I have a closer working relationship with the designers and contractors than when I was the DAGS Public Works Administrator. I believe this new association has been truly beneficial because I am now acutely aware of the problems that are causing turmoil within the construction industry. However, it is gratifying to see that the designers and contractors that performed well while I was at DAGS are still performing well. Many of these current performing contractors were active participants in the Performance Information Procurement System (PIPS) projects at DAGS. Arguably, this should be tantamount to a testament of the success of PIPS.

Although non-performing contractors are still a major cause of the industry’s problems, they are certainly not the sole cause. The designers and owners’ representatives also share the blame. At DAGS, we stressed the importance of team work and the designers’ and project managers’ obligation to be responsive to the con-tractors’ and owners’ schedules. A few times I needed to intervene to try to make the designers more responsive. Unfortunately, on two of my projects, I am working with non-responsive design firms. On one of the projects, for the City and County of Honolulu, I had to cajole the electrical engineer to respond to the contractor’s submittals in a timely manner (some people do not understand how important time is with regard to making a profit). It worked once but not the second time. There is a possibility now that the consultant will need to pay for re-work because of his non-responsiveness. On the other project, a large design build project for the State, the designer missed every submittal dead-line and the quality of work is very poor. By the time the final plans were submitted, the contractor had completed almost $4M worth of work. Also, the designer submitted a very high unacceptable price for additional design work that the owner requested. Since the design firms’ ability to obtain future jobs depend a great deal on their past performance and their ability to work with the owners’ representatives, it would behoove these designers to improve their timeliness, responsiveness, and quality. However, it seems these firms are oblivious to these conditions. My recommendation to the City and State agencies would be to pass over these firms and not to select them for future jobs.

My experience indicates that the difference between a performing and a non-performing contractor is due largely on the amount of prior planning and risk management done by the contractor. Therefore, one of the best values from the PIPS process is it’s emphasis on pre-planning and its effect on profitability. The PIPS program clearly showed that contractors who were successful at pre-planning, including risk management, were able to complete their projects faster and profitably. Therefore, I am amazed at the number of contractors who lack this ability or simply do not recognize its importance. It seems that many of the contractors just follow the plans, especially on the smaller projects, and rarely read the specifications. In fact, some contractors do not read the specifications completely, are unaware of general and special conditions, and are generally “surprised on the job” when apprised of special conditions. Amazingly, one sub-contractor gives his job foreman the plans for the project the day he arrives on site. On larger projects, the contractors may have elaborate schedules and multiple eyes watching the projects but they are often behind schedule because they do not anticipate problems and pre-plan alternative solutions.

Since we were one of the pioneers of PIPS, it grieves me that the City and State are no longer practicing PIPS in Hawaii. PIPS has a structure that changes the environment of construction delivery. It assists to align the parties in the proper place, at the right time, doing what they do best. It is logical, straightforward, and adds value. I am disappointed that I served almost my entire career, before I found PIPS. There are many, many frustrated and stressed owners’ representatives and the tax payers are certainly not getting the biggest bang for their tax dollars.

I will be at the Best Value conference at Arizona State University on Feb. 11-14th, and look forward to meeting all of you.

Best Regards ,





Gordon Matsuoka has over 35 years of Public Administration experience. He was the first client representative in the public sector to implement PIPS. He is also a licensed Civil and Structural Engineer in the State of Hawaii. Retired in 2003 from the State of Hawaii, Dept. of Accounting and General Services. Started GM Consulting LLC in 2005 which special-izes in the best value principles in construction management, and project management. He is also a member of the PBSRG Hall of Fame.
He can be contacted at: Gomats_m@yahoo.com