A 2011 New York state law set to expire at the end of the year is widely credited with shaving years off large public infrastructure projects and saving $1 billion on a single bridge, but builders in New York City are worried that a brewing labor conflict could threaten its renewal.
"The debate in Albany cries out for compromise," said Richard Anderson, president of the New York Building Congress, an industry group that strongly supports the measure known as design-build legislation. He noted that New York Gov. Andrew Cuomo's budget proposal calls for renewal of the law, which he deemed crucial for infrastructure projects in the five boroughs and beyond. "All sides have much to gain from the bill's passage."
Design-build's renewal has been proposed before, but was dropped during annual budget negotiations.
Typically, when government agencies undertake large construction projects, they first put out a bid for the project's design, and only when that process is complete do they look for construction firms to build it as specified by the initial bid winner.
Design-build allows a single development team to submit both the design and construction plans at the same time for certain projects, such as bridges built for the state Department of Transportation. Combining the two elements saves time and money and eliminates the risk of finger-pointing and lawsuits between construction and architecture firms who bid separately before working together.
Supporters of the process say it is saving $1 billion on the cost of a new Tappan Zee Bridge, about 20% of the total, and has shaved years off a pipeline of state projects.
Design-build draws near universal praise from the construction industry, but last Thursday Mr. Cuomo added language in his updated budget proposal that would require what is known as a project labor agreement for any design-build project topping $10 million. The change is being sought by unions, as it would virtually ensure that such projects are built with union labor.
A state official said the new provision simply codifies core principals used by agencies like DOT, but the tweak caused concern for groups including the Associated General Contractors of New York State.
"We support the concept of design-build," said Michael Elmendorf, chief executive at the association, which includes union and nonunion members across the state. "But there are likely going to be some significant concerns about (the) new language."
The project labor agreements would be drawn up between the government and the collection of construction firms on a job. The agreements typically attract union construction shops that can all agree on wages and hours worked. Mr. Elmendorf said it works well downstate, but could pose a challenge to firms based elsewhere where organized labor is not as prominent.
On the other side of the debate are organizations like the New York State Building and Construction Trades Council which have long supported project-labor agreements and think they should be mandatory for state projects.
"Am I pleased 100%? No," James Cahill, president of the council, said of the new language in Mr. Cuomo's budget. "But I am happy with the (new bill)."
Mr. Cahill contends project labor agreements save taxpayers money. He noted that Gov. Cuomo's bill calls for such agreements on design-build projects only if a feasibility study finds a labor cost savings of 5% or more.
Joe Anuta writes for Crain's New York Business, a sister publication of Business Insurance.