Mayor Edwin M. Lee today issued a Mayoral Executive Directive to require City Departments to enter into new partnerships with private sector contractors to help assure on-time and on-budget delivery of City projects. The directive focuses on the City departments with contracting authority including the Department of Public Works, Port of San Francisco, Recreation and Park Department, San Francisco International Airport, San Francisco Municipal Transportation Agency, and the San Francisco Public Utilities Commission.

“Partnering with private sector contractors can result in increased competition for City projects, lower costs and more timely projects,” said Mayor Lee. “By identifying and resolving problems before projects even begin, we can avoid costly conflicts down the line. It’s important that every City department knows that this is essential to delivering capital projects on time and on budget.”

The Executive Directive will ensure better communication, require more frequent face-to-face meetings and create a process for raising concerns and addressing those concerns in a timely manner with private sector contractors. The directive also focuses on new payment procedures for subcontractors assuring faster and more transparent payments.

“San Francisco government can and should serve as a model of how to do business the right way,” said City Administrator Naomi Kelly. “That means great customer service and fulfilling promises, including prompt payments to our contracting partners. By having common protocol across all City departments, contractors know what to expect when they bid on our jobs.”

The Mayoral Executive Directive was developed as a result of two working groups to devise new ways to improve the City’s business practices with construction contractors. The Mayoral Executive Directive calls for renewed commitment by City departments to assure that subcontractors on public projects are paid promptly by the City and their general contractors. It also institutes a commitment to develop a culture of “partnering” to improve communications between City agencies and construction contractors to minimize disputes as projects progress. DPW Director Mohammed Nuru led the two working groups over the past six months.

“After several meetings with City Departments and contractors, we have agreed to adopt better processes to ensure that construction projects run smoothly,” said DPW Director Nuru. “In addition, contractors and their subcontractors will be able to track and receive information about their payments in a timely manner.”

“On behalf of the construction industry stakeholders, I would like to commend the efforts of the City of San Francisco and Mayor Lee, in instituting a culture of project partnering,” said Ghilotti Brothers President Mike Ghilotti. “It has been truly astonishing how quickly and efficiently all City Departments have implemented this world-class partnering program. Public Works Director Mohammed Nuru has displayed true leadership in embracing this transformation which will solidify the City into an agency of choice to do business with.”

“San Francisco is a city that leads the nation in creating solutions for financing projects, creating job opportunities, and protecting the local work force,” said Yerba Buena Engineering & Construction President Miguel Galarza. “We will now provide an environment that protects and fosters emerging and small construction businesses that beautify, enhance and protect the public and the infrastructure that we live and work around. As banks and lending institutions pull back on small business financing, we as a city stand ready to ensure small businesses survive and thrive by paying them in a timely fashion.”

“The new prompt payment and partnering program demonstrates to the city and others around the country how public agencies and the construction industry can come together to address how business can be done more efficiently in the public works arena,” said Associated General Contractors of California North Bay District Manager Kevin Rowe. “Currently, subcontractors want to get paid faster and know that they can solve issues quicker by having the city partner with the contractor on specified jobs.”

The City met with contractors from Associated General Contractors, National Association of Minority Contractors, and United Contractors to develop these recommendations for the Mayoral Executive Directive. Members of the International Partnering Institute provided expert advice and guidance.

For more information on the City and contractor partnership, go to www.sfdpw.org.