Public Projects, Public Scrutiny

The public sector – whether at the federal, state, or municipal level – provides great sources of revenue for construction companies. However, as many construction executives have learned the hard way, there can always be a danger to participating in public projects. These projects often bring a unique set of headaches and require delicate relationship management. Not only must construction companies answer to their clients, but when public funds are involved, they end up answering to the general population as well.

The increase in public scrutiny is born from two changes. The first is the Internet, which now provides a larger public platform, especially through social media and blogs, and makes public information more easily accessible. Additionally, the Great Recession has changed much of the public’s opinion about the use of tax dollars. Citizens are more attuned to spending choices and budgets, particularly as governments work with tighter budgets. Potential disputes and crises can arise with any project such as labor disputes, design flaws, mismanagement or inaccurate budgets. However, with a public project, the dispute is often magnified and receives a great deal of attention.

Examples abound from across the country. Late last year in Cottage Grove, Minn., a new city hall/public safety building was unveiled. The project was surrounded by criticism, primarily focused on cost concerns for constructing the new building. Although completed successfully, the controversy certainly hampered the project. In Cincinnati, there has been a firestorm of criticism from unions about the labor used by developers and construction companies on a public-private partnership (PPP) to help revitalize part of the city’s downtown. A construction company based in Richmond, Va., received a great deal of bad press when a miscommunication between the city and the public led to the removal of trees from the construction site of the new Washington Redskins summer training facility.

In these recent examples and countless others over the years, construction companies have been directly or indirectly affected by public criticism. Sustained and mounting controversies can damage a business’s reputation easily.

These challenges have become more prevalent with the rise in PPPs and the increased spending on public construction. The National Council for Public-Private Partnerships calculates that there are thousands of PPPs operating today. Meanwhile, the U.S. Commerce Department reported that public construction spending in February rose for the second straight month. Spending jumped 0.9 percent and was led by state and local spending (up 1.1 percent).

As PPPs and public spending on construction rise, it’s imperative that construction companies prepare for questions and potential public backlash about projects on which they are working, because elected officials are quick to point the blame at a third party when their reputation is on the line. Creating a comprehensive communications strategy can decrease the likelihood of miscommunication, protect the company’s reputation and produce public goodwill.

What Should Construction Companies Do?

Companies should be prepared for controversy on two fronts: protecting their name and reputation and helping a client address questions and concerns about a project.

This second point is especially important. Construction companies are on the front line and have on-the-ground expertise. They are intimately familiar with projects. Their experience is an added benefit that they can offer to clients, particularly those in the public sector. When questions about the project arise, offer to help answer them. Be visible at public hearings, as needed, to discuss why particular decisions are made and how those decisions benefit a project. Construction executives can build relationships with current clients by offering to help develop talking points about a project. The goal of any project is to be done well, on time, and under budget. Construction companies should help their clients explain why decisions are made or changes are needed. Frame these explanations in terms of what’s in the best interest of the project and ultimately the locality.

Offering to provide these services and following through proactively sends a powerful message to clients. Assisting clients by helping them respond to criticism is the hallmark of a true partner and showcases additional value.

There are a number of ways to handle public criticism and crises, but here are five key rules to follow:

  • Be Prepared: Do not wait until an issue arises before creating a plan. Create one as soon as a contract is signed.
  • Act Quickly: Hesitating to respond can be costly. News organizations and the general public are often quick to point the blame at an entity if no one responds. Have prepared remarks ready and use them.
  • Be Honest: Honesty is always the best policy. The public is actually a lot more forgiving than most companies think.
  • Be Accessible: You must be available to talk to reporters and be at public meetings. Also, make sure your statements are accessible and not weighed down by technical language. Speak to the public in language it understands.
  • Defer, but Defend: It’s OK to defer questions to your client and some clients may prefer to handle inquiries. However, make sure   you’re ready to defend your company when needed.

There is no easy answer for a crisis, especially one involving public criticism. Public projects are a valuable source of business for many construction companies. To ensure that you navigate the always changing public sector, consider developing a proactive and comprehensive communications strategy. As with any construction project, planning ahead is simply good business, and has the added benefit of building relationships with clients and ensuring a company’s reputation is protected.

Mike Gray and Andrew Ryan are partners with Commonwealth Partnerships Group (CPG), a full-service marketing, public relations and government relations firm. Based in Virginia, CPG works with the real estate, construction, engineering and architecture industries. Gray can be contacted at mgray@cpgroupllc.com and Ryan can be contacted at akryan@cpgroupllc.com.

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