Difficult economic climate calls for a little protectionism by state officials

You can barely hear yourself think in Nevada government these days with all the fat-trimming and belt-tightening going on.

The Silver State's copper-plated economy has become tarnished, and Gov. Jim Gibbons has called on departments to cut more than $900 million to balance the budget. Gibbons has vowed not to raise taxes, and conservatives have double-secret-vowed to hold him to that promise.

With hiring freezes in effect and government cinching its midsection, it's more important than ever to keep our tax dollars close to home where they can do the most good.

That's what galls me about the decision by the state Public Works Board to award the preconstruction contract for a $230 million expansion at the High Desert Prison near Indian Springs to construction giant the Layton Cos. of Salt Lake City. At its peak, the prison expansion will employ from 400 to 500 workers.

Not that Layton is in over its head. Hardly. The company has been around since 1953 and in 2006 was the 77th largest commercial contractor in the country, according to Engineering News Record. It has plenty of experience building big projects in Nevada, including the Centennial Hills Hospital. In addition to its Salt Lake City headquarters, Layton maintains offices in Boise and Phoenix.

The recent award of the Construction Manager At Risk (CMAR) contract to Layton has drawn the ire of the Southwest Regional Council of Carpenters, which submitted a stinging rebuke of the company in a recent protest letter. In the letter, the council's senior representative James Sala outlined the union's argument that Layton failed to meet "the standard for a CMAR award." As the project manager, Layton will be able to pick subcontractors.

The company has "no real ties to our community or even a real office in Nevada," Sala wrote. He added that Layton, as of April 28, lacked a Nevada bidder's preference and has settled two violations for doing business with unlicensed subcontractors.

"This type of behavior from a contractor showing disregard for our laws should not be rewarded with a CMAR contract," Sala wrote. "We have seen plenty of projects in this state, that in hindsight, we wish we would not have been awarded to a contractor that we were warned about. This time let's use foresight."

The state board disregarded the union's argument and awarded the contract to the Utah company.

Layton does keep a phone and a secretary in its construction trailer on a local job site. With its increasing focus on the Nevada market, it might qualify as a preferred bidder even without an office.

"Right now it's pretty easy to get there from here, from Salt Lake," Layton Vice President Bruce McDonough said.

Will the company open a Las Vegas office?

"Probably," he said, "but who knows?"

Although McDonough said Layton was "an open shop" that solicited bids from union and nonunion subcontractors, he added that the company has a track record of working with nonunion contractors with ties to Salt Lake City.

Although one of Layton's fines exceeded $22,000, that's not much for a company that generates hundreds of millions of dollars a year in construction contracts. You won't get far questioning the company's overall ability to get big jobs done right. The company has been in business more than half a century. It knows what it's doing.

But I think Layton's critics are on solid ground when they question just how loyal the company will be to the working men and women of Nevada during the most challenging times in the construction trade in more than a decade. Whether union or nonunion, construction industry layoffs have risen sharply in the past year in Nevada, and this is no time to use a company that will be tempted to bring its own managers, foremen and friendly subcontractors from out of state.

In booming times only union diehards take the danger of out-of-state contractors seriously. But in worsening economic times, with hundreds of home-owning, taxpaying Nevada construction workers scratching for steady employment, the Legislature should work to ensure the state's big construction jobs remain with capable Nevada companies.

If that sounds protectionist, I plead guilty.

The next time our elected officials cry for revenue, someone should remind them to stop handing it to out-of-state companies.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295.