Relates to construction contracts let by the facilities development corporation

BILL NUMBER:S6981

Title of bill

An act to amend the facilities development corporation act, in relation to raising the financial ceiling above which construction contracts must be publicly bid

Purpose of the Bill:

The bill would increase from $40,000 to $80,000 the threshold above which the Dormitory Authority of the State of New York ("DASNY") must publicly bid contracts for the construction, reconstruction, rehabilitation and improvement of mental hygiene facilities under the Facilities Development Corporation ("FDC") Act.

Summary of Provisions:

Section 1 of the bill would amend the opening paragraph of paragraph g of subdivision 2 of section 9 of section 1 of Chapter 359 of the Laws of 1968, constituting the FDC Act (as last amended by Chapter 127 of the Laws of 2000) to increase from $40,000 to $80,000 the threshold above which all contracts awarded by DASNY for the construction, reconstruction, rehabilitation or improvement of a mental hygiene facility must be awarded by public letting.

Section 2 provides that the act takes effect immediately.

Existing Law: Under current law, DASNY may award construction contracts for mental hygiene facilities without public letting if the estimated expense thereof is no more than $40,000.

Prior Legislative History:

The bill is new.

Statement in Support:

The Legislature established FDC in 1968 as a public benefit corporation. The Health Care Financing Consolidation Act of 1995 (codified in Public Authorities Law ("PAL") Title 4B) continued FDC's corporate existence in and through DASNY, which has succeeded to all of the powers, duties and functions of FDC.

Among the functions of DASNY under the FDC Act are the construction, reconstruction, rehabilitation and improvement of mental hygiene facilities which include several hundred buildings across the State used by the Office of Mental Health (OMH), the Office for People with Developmental Disabilities (OPWDD) and the Office of Alcoholism and Substance Abuse (OASAS). The FDC Act requires that each contract for constructing, reconstructing, rehabilitating and improving a mental hygiene facility be awarded by public letting. The FDC Act makes an exception to the public letting requirement for contracts that have a value of no more than $40,000. A major use of this exception is small rehabilitation and improvement projects at community residences of OPWDD that would quickly prevent minor problems from expanding and becoming major problems.

This threshold has not been increased in more than 20 years. When the Legislature last did so in 1992, it increased the amount from $10,000 to $40,000. The bill seeks to raise this threshold to reflect the inflation in construction costs since 1992. According to RS Means, an established publisher of construction cost data, a project that cost $40,000 in 1992 would cost approximately $80,000 in 2014. Pursuant to PAL § 2879 and the guidelines required thereunder, these contracts would still be awarded on a competitive basis and where applicable, notices would be published in the New York State Contract Reporter. Prevailing wage requirements would still apply.

Budget Implications:

The bill would have no impact on the State budget.

Local Impact:

The bill would have no impact on local governments.

Effective Date:

This bill would take effect immediately.