New York’s Infrastructure Investment Act of 2011 which was signed into law by Governor Andrew Cuomo allowed five stage agencies; the New York State Dept. of Transportation, New York State Bridge Authority, Office of Parks, Recreation & Historic Preservation, New York State Thruway Authority and the Dept. of Environmental Conservation the right to use the design-build project delivery method on projects valued at $1.2 million or more. Language in the law also stated that it would expire and be deemed repealed three years after the date it was enacted. Barring an extension, the law is set to expire after December 9, 2014.
The good news is that Governor Cuomo’s initial proposed 2014-15 Executive Budget called for not only making the design-build law permanent, but also would have extended it to allow local governments to use the design-build project delivery method. Unfortunately, the 30-day amendments to the budget proposal released on February 20, 2014, removed the provisions that would have extended the use of design-build to local governments and instead of making design-build use permanent, it would only extend their use for another three years. In addition, any project using the design-build method that is estimated to cost over $10 million would be required to use Project Labor Agreements.
Project Labor Agreements (PLAs) are collective bargaining agreements used to establish conditions and terms of employment for a specific construction project through one or more labor organizations or unions. Terms for the PLA apply to all contractors and subcontractors who successfully bid on the project and typically include provisions on the use of local labor, diversity requirements for MBEs, SBE’s WBEs, etc., preset wage requirements, uniform work rules, dispute resolution and normalizing shift work.
The design-build project delivery method is universally accepted as a viable contracting method with every state allowing some form of its use for public projects. When done correctly, design-build projects have been proven to save both time and money. PLAs on the other hand do not enjoy the same level of acceptance as the use of design-build projects. Eighteen states currently have laws that prohibit government agencies from mandating the use of PLAs on public projects. New York is one of only four states that have legislation allowing or encouraging the use of PLAs on public projects.
Opponents of PLAs argue that their use increases construction costs and are anti-competitive. Supporters of PLAs state that construction delays are avoided by being able to quickly resolve labor disputes and also avoid labor shortages by guaranteeing access to skilled labor and a trained workforce which will also result in on-time delivery of the project.
A group of 13 trade associations and organizations, including the New York State AGC, ABC and the Business Council of NYS, sent a letter to Governor Cuomo on March 4, 2014 urging him to extend and expand the use of design-build contracting for public projects and opposing the requirements for the use of PLAs. In the letter, they claim that mandating the use of PLAs on design-build projects would “effectively halt the use of the design-build process in New York State” and “stifle the progress that New York State has made in infrastructure improvement and storm recover efforts.”
What do you think? Should the use of design-build contracting be made permanent in New York for public projects? Should they be tied to Project Labor Agreements? Let us know your thoughts on the proposed extension and changes to the law in the comments section below.