EDUCATING EXPORT EXPERTS IN CONSTRUCTION

INTRODUCTION

Those of us who have to do with the Associated Schools of Construction must be, by definition, "Associated Scholars of Construction" or some such thing. We are, and increasingly so, educators as distinguished from trainers. More and more we find ourselves involved with students of construction rather than trainees in the building trades. Perhaps that goes without saving; but I choose to say it, anyhow.

Nor do I mean to disparage those of our colleagues who are involved in the areas of practical application of building principles. Construction is, and will always be, the combining of component materials according to some design to produce a permanent structure. It is fundamental that constructors understand and appreciate the nature of materials. engineering, and design. Those are essential elements in the complete education of the construction professional; but they are not the only essential elements of that education.

Some of us have adopted the term, "Construction Science," to identify the particular discipline in the world of academe with which we are involved. Construction, however, is as much an art as it is a science it is neither; it is both; it is somehow, synergistically, something much more than a combination of the two. Admittedly, I obfuscate; I cover over with words that which is somehow inexplicable. The years to come will produce many experts far more capable than 1 to expound upon the precise nature of the study of "construction" as an art, a science, a metaphysical discipline: a Churchillian "riddle wrapped in a mystery inside an enigma." Let us at least agree. for purposes of this discussion, that we "associated scholars of construction" are not merely training people in trade schools; that we have accepted the responsibility of educating men and women in the discipline of construction within the context of the college and university.

in describing to my questioning friends and relatives the function of our department at Texas A & M, I explain: the architects dream it up; the engineers draw it up; the constructors put it up. The constructor brings into three dimensional reality the thoughts, ideas, and desires expressed by the two-dimensional sketches, drawings, details and specifications prepared by others for the owner

In order effectively to accomplish this. the constructor must understand and appreciate the perspectives of the owner, the architect, and the engineer. He need not master their work; but he must know about it. He must also know the basic principles involved in the planning and financing of the project, whether it be public or private. His own financial viability will depend upon it. He must have some acquaintance with the political process by which much of his industry is affected and, in substantial measure, controlled. He cannot survive without a thorough understanding of the law and practice of contracts, of labor and safety, of tort liability and exposure, insurance, bonds, yes, and bankruptcy, too (hopefully not his own, but the effects he may suffer when others involved "go through the wringer"). Certainly, he must be well versed in the principles of planning, scheduling, and estimating as basic tools of his profession; yet he will not be himself, a mere scheduler or estimator, ultimately. Some will find such a niche to be a comfortable and desirable career, admittedly; but we educate not with that limited end in view, but rather to equip the serious student as a professional constructor, capable of occupying as much of the industry's scope as his dreams, energy, and ambition dictate.

We see ourselves as a "young" or relatively recently developed discipline, neither solidly established nor enjoying the recognition and acceptance accorded the architect and engineer. From one perspective, it seems so. However, viewing the industry historically, we are aware that in times past, the professional constructor, the "master builder," was, indeed, the "architect." We receive the word from the Greek, architekton meaning, precisely, "chief artificer" or "master builder." Yet, today, the architect limits himself to the conceptual design of the structure, expressly abdicating the authority and attendant responsibility for carrying out the design. that is, building the project. The contractor, or constructor, has accepted that responsibility and exercises commensurate authority to get the job done.

It is our work, then, to fit these young men and women to serve as "master builders."

A lawyer by design and disposition, I view construction from a somewhat different angle than those of more obviously construction-related disciplines such as engineering or architecture. However, that warped perspective is tempered by years of experience in the mud and the dust on projects large and small, wearing greasy overalls as well as coat and tie. It is well that my audience should know whereof I speak.

Having said all that, I want to address myself to one particular area of our discipline which will claim an increasing proportion of our attention in the years immediately ahead. I speak of the International Construction Markets and our students' involvement with it.

THE VIEW FROM HERE

In considering construction internationally, or construction abroad, or foreign construction, off-shore construction, overseas construction - call it what you will - we need to look at it from here: from this day in this year of our Lord, 1987; from this place in these United States of America.

From this viewpoint, we do not look at the here and now. We look from here; we look from now. We look from this point in space outward, along an increasing radius sweeping three hundred sixty degrees. We look from this moment in time backward to see clearly what has gone on before; and we look forward, extrapolating into the future the developments and trends to the limits of our reason and understanding. Only thus can we prepare ourselves and, more importantly, our students and our industry, to function successfully, profitably, and responsibly in the days and years and decades just ahead.

"The future," a wise man has said, "belongs to those who prepare for it."

It is our duty, is it not, to help these people who come to us to prepare themselves for the future. If we do our job, they will be prepared: and the future will, indeed, belong to them.

We disserve our industry, we disserve our students, we disserve our profession if we satisfy ourselves with the here and now. All the best of those good things that have gone on before must be taught as a matter of course. It is on such that we build and advance. The ineffective, the unprofitable from the past must be laid aside. The new, the improved, the most promising must be investigated, developed, taught and propagated among ourselves, our students, and our industry. To do that, we have to look, - we have to look - and we have to keep looking at the view from here - and now

We as teachers of those who desire to learn must ourselves be constantly learning - looking - both to discover more of the best that has been, and to learn of the new and better that is constantly developing through experience, research, accident, or otherwise.

What is the view from here? What was international construction before now

The years during and immediately following the Second World War saw the United States as "Builder of the World." Naval and military bases, airfields, war materiel plants, bridges, highways, both here and abroad, saw American construction production on a scale never before envisioned. It had to be done; we did it. Schedule was first priority; budget was ignored; but the war was won. Afterward, the rebuilding of whole civilizations overseas was, in a large measure, accomplished by the American construction industry. Allies and enemies alike benefited from U.S. construction design, engineering, management, equipment, materials and skilled labor, not to mention American funding, particularly through the Marshall Plan. The whole industrial capacity of Europe, destroyed by war, was rebuilt with major American participation. Japan enjoyed similar treatment. Around the world, American construction contractors were busy; American construction labor commanded astronomic wages; American engineering and design was everywhere in demand.

During the post-war period, the United States indeed built the world; but it also taught the world how to build itself. Certainly, Americans were not the only contractors and engineers in the world; but they were much sought after, world-wide. And, with all their building, they shared their know-how with the people of the countries where the construction projects were being built. As time passed, it became not only desirable, but required by the "host" country, that its own nationals be hired and trained by the American contractor; and that practice continues and grows yet today. America developed in Germany, Italy, Japan, Korea, Turkey, and otherwhere its own competition that today not only captures a substantial share of the "off-shore" construction contracts, but is increasingly competitive and successful in bidding on projects within the United States itself.

To be sure, American contractors still build more of the world's projects than anyone else. But America's share of that overseas construction has been steadily diminishing. " Between 1980 and 1984, the share of international contracts won by U. S.-based firms declined from 41 to 31%," Congressman Sherwood Boehlert (R-NY) told a roundtable on construction at the New York College of Technology at Utica. The competition is moving - and we're not!

That is a broad-brush view from here and now backward. Not everyone sees it from quite the perspective here indicated; but the over-all picture is not subject to major disagreement.

The view forward is not at all clear. There are those who decry the loss of' American participation in much of the foreign construction of the present decade, and see only further deterioration of America's position in international construction in years ahead. Certainly, highly pessimistic scenarios can be described equating the U. S. foreign construction industry at the turn of the new century to the buggywhip industry at the turn of the last. But such is not necessarily the case. It is clear that the strategies of yesterday will not succeed. But it is not clear that the American construction industry will not develop new strategies to occupy the position of undisputed leadership in building the world. Mr. Boehlert thinks research and development and new technologies are the keys to America's future in construction. But he notes that Japan, for example, has a similar view, its construction firms themselves spending over $100 million for R & D in 1980 and its government and universities spending far more.

The view forward, then, points the way for Construction Education: discover, develop, teach and advance information, methods, techniques, and programs to provide students of construction and the industry at large the means to compete effectively, profitably, and more widely in the international construction market.

EMPLOYMENT HERE AND THERE

Effective competition by American contractors in the international construction market translates, of course, into jobs for Americans. We think of an American catskinner running a bulldozer on some airfield project in Saudi Arabia, perhaps, or an American ironworker high atop a bridge tower in Peru welding a beam in place. We think of a young woman from Sheboygan typing reports in a field office in Indonesia, or a grizzled old carpenter foreman from Yonkers running a crew on a power plant project in South Africa.

If that's what we think, we think yesterday's thinking.

That dozer operator is from Pakistan; the welder is a native Peruvian; the clerk-typist has lived her whole life within ten miles of the project; and the carpenter foreman is from the Phillipines.

American labor is far too expensive for American contractors to employ on foreign projects. Wages alone make it so: and costs of travel, lodging, recreation, and other factors make it altogether prohibitive. It was not always so. Time was when American laborers could work on foreign construction projects at double and treble the wages they could command stateside. Today, however, labor crews from the Phillipines, Korea, Pakistan, Turkey, and other countries are employed for a small fraction of the cost for American labor.

The low labor cost on many projects abroad dictates construction practices and procedures indeed "foreign" to the American constructor. For example, on a dam project in Jordan last summer, I found the Korean contractor moving concrete through wooden troughs by an army of shovelwielders. My Jordanian colleague and the Chicago consulting engineer explained how the use of a concrete pump would displace an inordinate number of workmen, disrupting the local economy as well as disturbing the social order of the community.

"We don't do it like that in Texas," I told him.

"You're not in Texas, John!" he observed. (I knew that.)

Americans building abroad are architects and engineers, construction managers, consultants, and specialists in various fields. The construction firm may have won a billion dollar contract; but it will employ only a small group of American professionals on the jobsite. Indeed, many of the engineers and other professionals on the project will be natives of the host country, often by government edict.

The good news is that, when an American firm gets the contract, it will employ Americans in America to design the project. It will have much of the machinery and equipment for the project designed and built in America. It will buy a substantial amount of special materials and supplies from American vendors.

Exporting construction has a positive effect on the United States' balance of payments in foreign trade. It also has a positive effect on the domestic economy of the country.

In a study of the contribution of architectural, engineering, and construction exports to the American economy, prepared by Price Waterhouse for the International Engineering and Construction Industries Council, it was found that each $1 billion in revenues generates approximately 24,000 jobs.

So, as construction professionals become more successful in exporting construction, the entire

economy of the United States is substantially benefited.

And that's good.

WHO BIDS? WHO BUYS? WHO PAYS THE BILL?

Under American free enterprise capitalism, there is one overriding reason for becoming active in international construction: profit. Contractors bid on domestic construction jobs for that reason and for no other: the opportunity to make a profit. The exact same principle applies to the international arena.

Who bids? Those who have bid successfully before! You read the list of them every year in the Engineering News Record: Kellogg, Parsons, Bechtel, Brown & Root, Lummus Crest, Foster Wheeler, Fluor, and scores of others. They've been in the game for awhile.

An interesting line from the Broadway musical, The Music Man, speaks eloquently to the matter: "You've gotta know the territory!"

Be sure, Kellogg, Parsons, Bechtel, and these others know the territory!

Who bids? Two kinds: the unwise, illadvised, naive adventurer cum bankrupt; and those who know the territory.

The construction professional interested in participating in the international construction market will first make himself completely knowledgeable and informed on international contracting generally, and on the country and the project under consideration. All of the considerations applicable to bidding any domestic project pertain, of course. But any number of other matters must be considered as well. The laws, customs, and traditions of the host country will differ markedly from those of the United States. Monetary policy; financial policy; performance assurance; labor laws, customs. and availability: tax laws of the host country and tax laws of the U.S.; logistics problems; and innumerable other particulars must all be taken into account. The investment required to investigate these matters is substantial.

The political stability of the country is, of course, of primary importance. Some markets would appear altogether unattractive to most American contractors, downtown Beirut, for example. Likewise, its economic stability must be considered as well as the sophistication of its legal system and the availability of alternate dispute resolution forums.

The contractor, himself, will not comprehend all pertinent information; rather, as in any other circumstance, he will call upon the expertise of specialists in the field before he decides what - and whether - to do. However, he must know what specialists to engage; he must be educated on the subject in order to know what help he needs. He will learn what sources of information are available to him, including government agencies, trade journals, association staff, and others.

When he learns, through advertisement, news announcement, or otherwise, of a foreign project with possibilities, he will find out the source of the financing for the project as well as the contracting party (owner), whether a government, a public or private agency, or other. He may well have to document his qualification as a bidder before securing the bid documents.

It is often the case that a project will be financed by one of the international lending agencies, or a regional development bank. If so, a thorough understanding of the requirements of that institution is essential. The World Bank (the International Bank for Reconstruction and Development), with its affiliated agencies, is one such. The U. S. Agency for International Development (USAID) might be involved, or the Export-Import Bank, the InterAmerican Development Bank, or some other. Sometimes countertrade is involved in the contract, and the constructor's willingness to accept such a provision may be altogether controlling.

Often enough the "Owner" - the country buying the construction - has little or nothing to say about payment, the lending agency exercising full control over approvals, payments, releases, and the like. Who buys is not necessarily who pays.

Knowing one's competition in the field is essential to successful bidding, of course, So is being well acquainted with the real or controlling factors on the project. It is not infrequently the case that the contractor who is able to put together a financing package will be awarded the contract even though his price may be substantially higher than other bidders'.

Another essential, as on any construction project, is a thorough understanding of and familiarity with the contract documents. The F.I.D.I.C. standard conditions of contract is accepted, with some modifications, in most countries. However, the interpretation of that document, and others, may vary from time to time. It is imperative, therefore, that the contractor in the international arena be able to communicate accurately and completely with the other party. Knowing the language is not essential in most instances; but it is certainly an asset. However, becoming acquainted with the foreign nationals with whom one deals is imperative, as is an appreciation of their social customs. Courtesy and consideration count for a great deal. A failure in this regard can do more damage to a construction contract than all the natural catastrophies one can imagine.

THE LAW. HERE AND NOW - THERE AND THEN

As languages differ; as interpretations are not everywhere the same; as customs, manners, and traditions vary from place to place - and from time to time - even so, the Law, too, is a many-splendored thing of constant change and infinite variety. Consider the changing nature of the law in America - consider, if you dare, the recent "improvements" in the Internal Revenue Code! Now you understand why Tip O'Neill decided to retire! Laws relating to construction are as subject to change as any other, whether in Indiana, Colorado, and other states of the Union, or in foreign countries such as Nigeria, Argentina, West Virginia, or Texas. Why, in Texas, it is central to the Lone Star catechism, committed to memory - nay, "learned by heart!" - by every little cowpuncher before nursery school and never forgot, that, "no man's life or pocketbook is safe as `long as the legislature is in session."

If the law is inconsistent from time to time, and from place to place, in America where most of us generally speak one or another dialect of the English language, should we be to any degree amazed that difficulties are multiplied as we attempt to engage in the construction business in foreign countries. Customs, traditions, mores, religious influences - all these, and more, act to confuse the understanding between owner and contractor. It is a problem domestically; it is another whole kind of difficulty internationally!

Dispute resolution. for example, can present a sticky problem for the unwary contractor in a foreign land. It is unlikely that he will feel comfortable going to court - he doesn't feel comfortable going to court in his own hometown! He may have an arbitration provision in his contract; but under what rules will the matter be arbitrated, and where, and by whom? Will he be able to enforce the award if it is in his favor? It is no small thing for a neophyte to enter the international field; it is fraught with difficulties he had never imagined could arise on a simple construction job.

But! - such difficulties, whether occasioned by the law or by other matters, are not insurmountable. They need not be feared; they need only to be anticipated and overcome. Others have done so in times past and in every part of the world. Information - intelligence - in short, education is the answer. Yes, I'm still addressing myself to our work!

We need but to keep reminding ourselves, and our students, that they don't do it in Kuwait the way they do it in downtown Lubbock; but also, that "people are people" all over the world.

WHO WANTS TO KNOW?

The student of construction wants to know, that's who!

How do I know that? Because I am persuaded that he needs to know. And I am earnestly attempting to persuade you that he needs to know, and that without apology.

The proposition is well supported by the evidence; it seems to be so plain as to admit of no contradiction. However, the fact that the construction curriculum in nearly every school represented in the ASC provides no course in international contracting is contradiction enough.

Janet Yates-Suver, Ph.D., Texas A & M University, Class of 1986, conducted an extraordinary study of this matter for her dissertation. Her major subject was Civil Engineering, and her Committee Chairman was Pat Maher of our construction faculty, himself conscious of the need for advancing our knowledge of construction internationally. Based upon her fully documented research, she states that "Colleges and Universities need to realize that the professions of engineering and construction can no longer view themselves as being exclusively domestic operations. All engineering and construction firms are affected by events which take place throughout the world even if they never send an employee outside of the United States. College curriculums need to include courses which heighten a students awareness of the consequences of working in other nations, with foreign nationals."

The construction student who aspires to a job with a small housing contractor, with the expectation of attaining a position as partner to the owner eventually, may very well care not a rap about the subject here addressed. And that's as it may be. However, there are others studying in the construction discipline who will profit immeasurably during their careers from having been introduced to the field of international contracting. They may or may not become involved directly in foreign projects; but they will be sufficiently informed to know what is happening in the world of construction. They will understand something of why the federal government should, or should not, subsidize or penalize the construction industry through its regulation of activities abroad. They will have a professional, informed outlook on their industry, the largest single industry in the most industrious nation in the world.

'We, as professional educators - professors of the art and science of construction - have the privilege and responsibility to advance the professional standing of the students who come to us, placing their professional careers in our hands to mould and direct as we see fit. To fail to make them acquainted with the larger world of construction because we don't want to spend the time and energy to consider the view from here, and comprehend the effect, and the practice, and the rules of the game on the international scale, is to deny our own profession. If we presume to teach the practice of the construction profession from a provincial perspective and ignore the world view, we inspire ignorance, limit illumination, and promote poverty.

CONCLUSION

International construction contracting is a vital part of a comprehensive education in the construction discipline. Increasingly, the international aspect of the construction industry concerns the construction professional in America. American firms are experiencing increasing competition abroad. effectively denying to them a substantial part of that market. Closer to home. American firms are experiencing increasing competition from foreign contractors for construction projects in the United States.

The construction industry is in need of new approaches, new technologies, more effective methods, in order to remain a strong contender in both foreign and domestic markets. Construction education at the college level has the capability, and the opportunity, to help to find and develop those approaches, technologies, and methods, and to teach them to the coming generation of professional constructors.

Academe has proven itself effective in educating men and women for leadership in the American domestic construction industry. It must move forward to accept the challenge of educating its people for the export of American construction.

For the good of our industry, the advancement of our profession, and the strength of our nation, we have no alternative to accepting that challenge.

Let's see to it!

REFERENCES

"Engineering in Foreign Lands." Specifying Engineer. (July, 1986): 76-79.

 

"Foreign Contracts Inch Upward." Engineering News Record (July 17, 1986): 39-53.

 

"Foreign Design Billings Recover." Engineering News Record (August 7, 1986): 26-39.

 

International Construction Law. American Bar Association. Forum Committee on the Construction Industry, International Division. Washington, D.C. November, 1985.

 

Price Waterhouse. The Contribution of Architectural. Engineering and Construction Exports to the U. S. Economy. Washington, D.C., April, 1985. Prepared for International Engineering and Construction Industries Council.

 

"To Keep America Competitive." Engineering News Record (July 31, 1986): 23-31.

 

Yates-Suver, Janet. A Cross-cultural Evaluation of the Behavior and Training of American Engineering and Construction Professionals who Operate in the International Marketplace. Dissertation. Texas A & M University. December, 1986.