Intelligent Designs

New York’s design-build law has been heralded as a cost-cutting and time-saving tool to help spur road and bridge projects across the state over the past few years.

But state lawmakers failed to renew the design-build legislation during the 2014 legislative session and the law expired at the end of December, leaving its fate uncertain going into 2015.

Before the design-build law was enacted, the design and construction of projects had to be bid out separately by the state Department of Transportation. When the design-build law was passed in late 2011, it allowed a contractor to submit a single bid for both the design and construction of projects, which proponents argue cuts costs, saves times and spurs innovation.

The 2011 law also authorized several other state agencies to use design-build, including the New York State Thruway Authority, which used the project delivery method on the Tappan Zee Bridge. Officials told City & State that the project has seen an estimated $1.5 billion in savings thanks to the design-build law.

“In addition to bringing innovation and creativity to the projects and to the industry, it’s held both the department and the industry more accountable,” state Transportation Commissioner Joan McDonald told City & State in September. “When you use best value, which is how you look at a design-build project, it’s not just low bid. It’s price, plus schedule, innovative means and methods, and now what I’m hearing from the contractors is they are looking at how they put their bids and proposals in in a much more thoughtful way.”

Now, as supporters gear up to renew the legislation in 2015, there is a major holdup: a provision that would require all major design-build projects rely on project labor agreements. Project labor agreements generally results in contractors using union labor.

Andrew Cuomo’s 2014-15 executive budget would have made the design-build law permanent and also extended design-build to local governments for projects over $50,000. However, in his 30-day amendment, the governor dropped the permanent extension and limited design-build to a three-year extension. The governor also included language mandating that project labor agreements be used on all design build projects worth more than $10 million.

Mike Elemendorf, the president and CEO of the state chapter of the Associated General Contractors of America, is a staunch supporter of design-build legislation, but he said that he is opposed the governor’s push to require project labor agreements. He argued that such agreements make it nearly impossible for non-union contractors to bid on projects and undermines collective bargaining, among other issues, for union contractors.

“I fully expect that the governor will be talking about design-build next Wednesday when he unveils his agenda and that there will be a design-build proposal and we look forward to that,” Elmendorf said. “We hope it takes into account the very, very strong opposition that came from virtually every segment to the [project labor agreement] language that came late in the process last year.”

Legislators in the state Senate have said they want to spend the state’s $5 billion windfall from bank settlements on the state’s infrastructure and transportation systems. Since proponents argue design-build saves money on construction projects, renewing design-build could allow the state to spread the wealth and fund more projects.

“As Senate Transportation Chair, I would certainly like to us consider any legislation that will save taxpayer dollars and increase the state’s competitiveness, including design-build,” state Sen. Joseph Robach said in an email. “The important thing is that we continue to have dialogue about this process and other ways we can improve our state’s aging infrastructure, while creating jobs for the hard working men and women of New York.”

Infrastructure Issues

BANK SETTLEMENTS: State lawmakers, budget experts and editorial boards have called for investing the $5.1 billion state windfall from bank settlements on fixing the state’s crumbling infrastructure. Gov. Andrew Cuomo has said that he would be open to using some of the funds on state infrastructure projects.

MTA FUNDING GAP: The Metropolitan Transportation Authority has a $15 billion gap in its five-year capital plan, and it is unclear how it will be closed. One possibility is using some of the funds from the bank settlements, but the transit system could also resort to higher tolls and fares.

TAPPAN ZEE BRIDGE: Cuomo successfully launched a project to build a replacement Tappan Zee Bridge after it had been stalled for years. But some observers are worried about how the state will pay for the $3.9 billion project and how high tolls on the Thruway Authority might go up to help fund it, and the state has yet to fully explain where the money will come from.