Review: LePatner, Broken Buildings, Busted Budgets
Barry B. LePatner’s Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry is featured in today’s Wall Street Journal business section. Reviewer James R. Hagerty uses LePatner’s book to cite one possible benefit of the otherwise gloomy housing market crisis—weeding out the weaklings in the contracting businesses. Hagerty writes:
Every now and then, a major construction project is completed on time and on budget. Everyone is amazed.
Barry LePatner, a New York lawyer specializing in construction cases, thinks this exception should become the rule. Broken Buildings, Busted Budgets outlines his proposals for making that possible.
Mr. LePatner’s swift kick to the construction industry comes when it is already down. Commercial construction is slowing, and house building is in a severe slump, partly caused by a glut of new homes erected by overly optimistic builders even before the subprime crisis made it harder to find qualified buyers. The downturn will apply the wrecking ball to many of the weaker construction companies. But that won’t be enough, according to Mr. LePatner. He argues that the industry will become efficient only when its customers become savvier and more demanding.
His solutions involve, among other things, hiring experts who can monitor builders and who have financial incentives to prevent needless overruns. Tougher contracts should enforce fixed costs or, at least, severely limit the scope for escalation. And thorough background checks—looking for lawsuits, public complaints and financial troubles—may lower the chance of hiring dodgy engineers and construction teams.
Such steps would force out of business weak firms that can’t deliver on their promises. The survivors, Mr. LePatner thinks, would be larger firms that are less reliant on subcontractors and are better able to train employees and invest in technology.