Governor Cuomo Authorizes Agencies to Use Design-Build Contracts to Expedite Certain Public Projects | Practical Law

Governor Cuomo Authorizes Agencies to Use Design-Build Contracts to Expedite Certain Public Projects | Practical Law

Governor Andrew M. Cuomo signed into law the New York City Public Works Investment Act which authorizes New York City to use an alternative delivery method known as design-build contracts to expedite certain public works.

Governor Cuomo Authorizes Agencies to Use Design-Build Contracts to Expedite Certain Public Projects

by Practical Law Finance
Published on 16 Jan 2020 • USA (National/Federal)
Governor Andrew M. Cuomo signed into law the New York City Public Works Investment Act which authorizes New York City to use an alternative delivery method known as design-build contracts to expedite certain public works.
Initially passed by the New York legislature in June 2019, on December 31, 2019, Governor Andrew M. Cuomo signed into law the New York City Public Works Investment Act (NYC Act) which authorizes New York City to use an alternative delivery method known as design-build contracts to expedite certain public works. This Act will allow certain NYC agencies to issue a single contract for the design and construction of major infrastructure projects.
The authorized agencies include the NYC:
  • Department of Design and Construction.
  • Department of Environmental Protection.
  • Department of Transportation.
  • Department of Parks and Recreation.
  • Department City Health and Hospitals Corporation.
  • School Construction Authority.
  • Housing Authority.
Using this method, an authorized entity retains a single contractor to provide design and construction services for the project which:
  • Minimizes project risk.
  • Increases the accountability of contractors and streamlines the delivery schedule.
  • Saves time and money.
  • Introduces innovation during project performance by incentivizing the project provider to discover creative ways to reduce project schedule and delivery methods.
Under the design-build method, an authorized entity would issue a request for qualifications to receive a list of entities that have demonstrated general capability to perform the contract. The authorized entity would then issue a request for proposals to these entities, and pick the proposal providing the best value, based on a clearly stated evaluation. The entity would be authorized, but not required, to use a cost-plus not to exceed guaranteed maximum price contract or lump sum contract.
The design-build method includes certain requirements including:
  • A requirement that project labor agreements must:
    • be in accordance with Section 222 of the Labor Law; and
    • provide critical public employee protections including non-displacement safeguards.
  • Contracts would be subject to applicable federal, state, and local requirements for disadvantaged business enterprises and minority and women-owned business enterprises.
  • The authorization includes a threshold for projects of $10 million for the agencies with blanket authorizations, and $1.2 million for certain other projects.
The design-build method has previously been used successfully in the private sector as well as at the State agency level.
The bill became effective immediately upon signing. Starting on June 30, 2020, agencies must submit an annual report with information regarding each design-build contract procured under the NYC Act. The report must include:
  • A description of each design-build contract.
  • Information regarding the procurement process.
  • The total cost of the contract.
  • An explanation of the estimated savings.
  • The participation rate of and total value of monies paid to minority- and women-owned business enterprises after the design-build contract.
The NYC Act is set to expire after three years with a caveat that public works with requests for qualifications issued prior to the repeal will be permitted to continue under the NYC Act notwithstanding the repeal.
For more information on design-build and how it is used to develop large-scale infrastructure projects, see Practice Notes, Public Private Partnerships: Issues and Considerations: Design-Build (DB) , Selecting the Right Private Project Delivery System: Selecting Design-Build, and Construction Pricing: Understanding Pricing Structures: Fixed Price in Design-Build.