Authorizes public work contracts let by a city having a population of 1,000,000 or more to cover work ancilliary to maintain or support private facilities

The bill deems such work "public work" for the purposes of Section 103 and, thus, permits the City to award a contract to the lowest responsible bidder for all of the work, including the utility interference work.

The bill also provides that the costs of such work are not borne by the municipality.

Justification

Public rights of way generally contain not only municipally owned utility services like water mains and sewers but also utility lines for the transmission of energy and telecommunications These private facilities often must be moved or protected in order for the municipal work to proceed.

The municipal work can be delayed or stopped if the utility is required to negotiate the price of protecting or moving the utility facility with the contractor for the municipal work or locate another contractor to do the work. Because bringing in a second contractor is rarely practical, the negotiations often stall when the de facto monopoly position of the municipal contractor leads to prices that the utility believes to be far in excess of the value of the work. Delay of the municipal work adversely affects the public at large as well as local businesses.

In an effort to reduce the inconvenience resulting from the construction delays as a result of utility interference work, in 1992 the City of New York began the practice of "joint bidding." This practice requires bidders to provide, within a single bid, separate prices for the municipal work and the private utility work, with the contract awarded to the lowest responsible bidder for the combined work. The utilities, by separate agreement reimburse the City for the additional cost of the City's share of the overall low bid if the low bidder on the municipal work was not the same as the low bidder on the combined work. Thus, the cost to the City would never be more than the lowest bid for the municipal work. Taxpayers are able to benefit from the conveniences of joint bidding at no additional cost.

In 1998, the Court of Appeals determined that private utility interference work is not "public work" and cannot be included in a contract for municipal work pursuant to General Municipal Law Section 103 unless specifically authorized by the Legislature. DIAMOND ASPHALT V.SANDER, 92 NY2d 244 (1998).

Enactment of this legislation will benefit the public in the following ways: cities with a population of one million or more will be able to negotiate for the cost of the work with the utilities so that there will be no negative cost impact to the municipality for jointly bidding work; to the extent that the cost of the utility interference work is reasonable, utility customers, including residents and businesses, will benefit; and the massive inconvenience to the public and local businesses caused when the streets are to be opened will be minimized as a result of the shortened duration of construction.

After the September 11, 2001 attack on the World Trade Center, legislation was enacted to grant such authorization to projects in Lower Manhattan thereby acknowledging the significant benefits of joint bidding. This bill would expand the authorization, and benefits, to projects in all five Boroughs.

Prior legislative history

A.4222 (1999-00) A6123 (2001-02); A6136 (2003-04); A5257 (2005)

Fiscal implications

EFFECTIVE DATE: This act shall take effect immediately, provided that the amendments to subdivision 1 of section 103 of the general municipal law, made by section one of this act, shall be subject to the expiration and reversion of such subdivision pursuant to section 41 of part X of chapter 62 of the laws of 2003, as amended, when upon such date the provisions of section two of this act shall take effect.