Relates to extending certain provisions relating to certain contracts of the NYC construction authority

Section two amends Subdivision 1 of section 1735 of the public Authorities Law to extend the exemption from section 101 of the General Municipal Law to June 30, 2014.

Section three makes the act effective immediately.

Justification

Section 101 of the General Municipal Law (Wicks Law) requires school districts to prepare specifications that allow separate and independent bidding for four contracts including subdivisions of work on public construction projects: electrical; plumbing; and heating, ventilating and air conditioning as well as a general contract. New York is the only state to impose these requirements on building projects. The NYC School Construction Authority (SCA) has been exempt from the wicks Law since the' SCA's inception in 1988. However, the SCA's Wicks Law exemption is set to expire June 30, 2009. without a Wicks exemption, the SCA will incur substantially greater costs for the design and construction of schools in New York City (where costs are already higher than those in the rest of the state) and longer construction schedules that will delay the delivery of desperately needed new capacity to the public school system. The Wicks mandate of multiple prime contractors complicates construction coordination on projects, adds layers of expensive construction oversight, fragments the delivery of construction services, and promotes delays and disruptions in the construction process which, in turn, drives up costs. The extension of the wicks exemption is essential because it allows the SCA to maximize the use of limited capital resources in the construction of public schools in New York City.

A 1999 analysis of the impact of the Wicks Law on public school construction in New York City (Wicks Law Economic Analysis by Price-Waterhouse Coopers) concluded that projects built under the wicks Law cost significantly more and took longer to construct than similar projects not subject to the wicks requirements. Other studies and reports (NYSSBA, 1991; NYS Division of Budget, 1987; Niagara School District, 1996) presented similar findings of increased costs of Wicks projects ranging from twenty (20%) to thirty (30%) percent. In addition to the marked increase in the direct costs of construction, the extended construction durations resulting from compliance with the wicks Law adds to the final project cost in less apparent ways, such as the extra interest and the cost of leasing space for longer periods of time.

In 2008, the State adopted reforms to the wicks Law for the first time since 1964, raising the threshold above which contracts would be subject to its requirements. The thresholds were increased to $3 million in New York City, $1.5 million in the downstate suburbs, and $500,000 upstate. These reforms amounted to a sixty (60)-fold increase in the threshold in NYC, a thirty (30)-fold increase in downstate suburbs, and ten (10)-fold increase for upstate. The prior $50,000 threshold had never been adjusted for inflation. The adoption of these reforms presents clear evidence that the wicks Law adds costs to public construction. Yet these changes in no way provide the relief from the Wicks law that the SCA has always had and needs to have extended. If the Wicks exemption is not extended, the SCA would be required to award multiple prime contracts, thereby creating a need for additional personnel or consultants to coordinate effectively the contractors' activities on site. The SCA would literally be forced to suspend its operations for a time to reorganize its operations, hire or retain consultants to provide the appropriate construction management resources, modify the plans and specifications of already designed projects, dividing them into multiple trade packages, and re-bid all pending projects that had not yet commenced. In addition to the burgeoning construction costs, this would delay the creation of new public school seats, adversely impacting the children attending New York City public schools in already overcrowded districts. As the SCA works to implement the capital plan adopted as part of the settlement of the Campaign for Fiscal Equity lawsuit, it needs to ensure that every dollar is used to implement this agreement. Any lapse in the SCA's Wicks Exemption will result in less funding available and far more time necessary to achieve this plan.

Prior legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately.