DOT Commissioner: “Disgrace” if State Design-Build Law Lapses

It’s still unclear where all of the funding will come from to pay for a new Tappan Zee Bridge, but officials overseeing the project have touted an estimated $1.5 billion in savings thanks to the state’s design-build law.

But with state lawmakers failing to renew design-build legislation earlier this year, the law is set to expire at the end of December—and state officials are worried that they will lose a valuable cost-saving tool for road and bridge projects across New York.

“I think it has been a real benefit to the department, a real benefit for the state, and I think it would be a disgrace if it doesn’t get passed,” state Transportation Commissioner Joan McDonald said Tuesday at City & State’s Public Projects Forum, an event co-sponsored by Parsons and IBM.

Before New York passed a design-build bill a few years ago, 41 other states already had similar legislation in place. At the time, the design and construction of projects overseen by the state Department of Transportation had to be bid out separately. After passage of the state design-build law in late 2011, a contractor could submit a single bid for both the design and construction of designated projects, potentially cutting costs, saving time and spurring innovation.

The law authorized several other state agencies to use design-build, including the New York State Thruway Authority, which is overseeing the Tappan Zee Bridge. At the state Department of Transportation, nine design-build projects have already been awarded, ranging from $15 million to the record-setting $555 million for a new Kosciuszko Bridge span connecting Brooklyn and Queens. Another nine are on the works, and four additional projects are under consideration. 

McDonald said that the legislation has helped expedite major transportation projects, which was especially helpful in 2012 when the construction industry was still reeling from the recession. 

“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,” McDonald said. “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.”

However, an extension of the legislation was held up this past spring. The renewal would have required that all major design-build projects rely on project labor agreements, which generally results in contractors using union labor. However, upstate developers were concerned about the costs, and the bill stalled.

McDonald said that her department currently determines whether a project labor agreement will be cost-effective as part of a due diligence study, and that some projects have them while others do not.

“We come up with an assessment of what the potential savings are if a project-labor agreement is included, and if it is real benefit to the state, we include a PLA, and if it is not, we don’t,” she said. “We have used both. There is a project labor agreement on the Kosciuszko Bridge, there is one on the Rochester intermodal station upstate, there will be one on the I-390 project in Rochester, but there is not one on the I-190 project in Buffalo. Depending on what the due diligence shows us, I make a determination and move that forward.”

But with the clock ticking, is the Department of Transportation rushing to get projects moving before the design-build law sunsets?

“That’s why we have nine in the works, and four that we are looking at right now,” McDonald said.