Book Review: Broken Buildings Busted Budgets

Posted on November 19, 2010

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Barry LePatner’s book Broken Buildings Busted Budgets has provided some questions for my own practice and thoughts on the design and construction industries, which I have used to explore through posts. For those that have struggled to understand the gist of LePatner’s book, let me provide the Cliff’s Notes.

LePatner touches on many subjects tangential to construction, but fixing the construction industry is the main focus of his book. LePatner feels if the construction industry is improved, cost of buildings will drop significantly, benefitting everyone related to construction.

As the author sees it, the main problems with construction are:  1) low productivity; 2) severe market fragmentation; 3) short-sighted management; 4) uncompetitive market; 5) poor contracts utilized; and 6) asymmetric information.  In addition to these six items, there is no way to distinguish quality construction firms from suspect firms, and the client has no way to refute costs or measure whether he is getting a fair deal.

Each of these topics is discussed in greater detail.

LePatner’s major thesis to improve construction productivity is twofold:  1) an “intermediary”, and 2) true fixed cost contracts. He believes an owner has no assurance that a team is effective and the price is competitive without an independent intermediary whose job it is to assist the owner. Secondly, given the current way work the majority of work is pursued in construction (bid), and contracts are executed, costs are often not fixed because of change orders and lack of an iron-clad guaranteed price.  Only when contracts are truly enforced as fixed cost for the owner will construction firms be foreced to improve operations, thus everyone money.

And that is really the 250 word summary of Barry LePatner’s book, Broken Buildings, Busted Budgets.  I found it educational and was shaking my head affirmatively more than a handful of times.

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