Vesting Will Keep You Out of Jail!

I think  Manuel “Matty” Moroun, the billionaire owner of Detroit’s Ambassador Bridge, might be wishing that he used the Vested approach for his Detroit bridge as he was sentenced to jail time for missing deadlines on a construction project.

The Moroun case involves a dispute between Michigan’s Department of Transportation and the Detroit International Bridge Co. The Department sued DIBC in 2009, alleging that Moroun’s company reneged on a contract to improve freeway connections to the Ambassador Bridge. Wayne County Circuit Court Judge Prentis Edwards recently ordered Moroun and Dan Stamper, an executive with DIBC, to jail for failing to comply with court ordered deadlines.

While an extreme example, the Moroun case underscores what many face in the construction industry: the difficulty of consistently completing projects on time and on budget.

A project that runs on court-ordered deadlines has some serious flaws in terms of planning, governance and collaboration. There is a better, more collaborative way to get the job done without people winding up in jail—the Vested way.

It so happens that there is a great example of a highly innovative and successful bridge project in a neighboring state that’s a perfect counterpoint to the Ambassador Bridge fiasco.

The St. Anthony Falls bridge replacement project in Minnesota is powerful proof that a collaborative, innovative—and incentive-laden—approach to solving difficult problems will most often result in huge success.

I wrote about the bridge project in late 2010 in this space, but in brief, the St. Anthony Falls Bridge in Minneapolis, the major Interstate I-35 artery across the Mississippi River, collapsed on August 1, 2007, killing 13 people and injuring 145. It was essential to rebuild the bridge quickly; the initial estimate was that a bridge rebuilding project of this magnitude would take three years to complete. When then-Gov. Tim Pawlenty said he wanted the bridge rebuilt within 17 months many experts asserted that was impossible.

As it turned out, the governor was wrong: it took less than 14 months to rebuild it; the 10-lane 504-foot bridge opened to traffic on September 18, 2008.

The Minnesota Department of Transportation teamed with Flatiron Constructors and Manson Construction, using a design by Figg Engineering, for the rebuild project.

Completing the $234 million project three months ahead of schedule would not have been possible without a high degree of innovation and teamwork in construction and project management techniques. The construction team cut more than three months off the December 24 deadline, earning performance incentive bonuses that totaled about $27 million.

The achievement was made possible by adhering to the collaborative, flexible and outcome-based contracting principles embodied in Vested Outsourcing.

You can read the details on the St. Anthony Falls project in a 56-page case study available here.

A Vested agreement forges the kind of partnerships that have the power to deliver transformational results and solve real problems—like aligning and collaborating with construction contractors to build a bridge in record time and turn tragedy into triumph.

And by the way, it can keep you out of the slammer!

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