New York State could save billions on public infrastructure projects by authorizing design-build procurement practices widely used across the country, a report says.
Design-build, in which one team from a public agency or private sector handles a project from start to finish, has produced savings in 41 states that fully utilize the practice, according
The report, sponsored by the Association for A Better New York and RBC Capital Markets, calls on New York to expand design-build to both reduce construction costs and improve efficiencies. The New York Legislature re-authorized five agencies to use design-build in March, which the Rudin Center says is not enough.
"With New York's aging infrastructure, we are at a competitive disadvantage compared to nearly every other state," said Mitchell Moss, a professor of urban policy & planning at NYU. "When used appropriately, design-build can effectively lower project costs, reduce the time required to complete a project and encourage more innovation in design and construction."
The Rudin Center report said limited use of the design-build practice in New York has led to $1.7 billion in savings on a replacement of the Tappan Zee Bridge, with the project completion expected to come 18 months ahead of schedule. Construction of a new Goethals Bridge connecting Staten Island and New Jersey will cost $1.5 billion, which is 10% less than originally projected, according to the study. The New York State Department of Transportation has already saved over $100 million by awarding design-build contracts on dozens of bridges and roads, the study shows.
The Rudin Center report highlights the replacement of the I-35W St. Anthony's Fall Bridge in Minnesota as an example of a successful design-build project. Following the 2007 collapse of the original bridge in 2007 that killed 13 people, the design-build construction of its replacement was completed three months earlier than projected and saved more than $50 million.
"As documented in the study, design-build procurement has been used effectively across the country," said Chris Hamel, managing director and head of the municipal finance group at RBC Capital Markets. "The study demonstrates that New York would be able to improve more infrastructure with existing resources."
The press offices for Cuomo, Assembly Speaker Carl Heastie, D-Bronx, and Senator Majority Leader John Flanagan, R-East Northport, did not immediately respond to requests for comment on the Rudin Center's recommendation. A bill introduced this spring that would expand design-build authorization has not yet been approved in Albany.
"It is meaningful to me that 41 other states have approved this method for broad application to address their respective infrastructure needs," said Hamel. "The municipal finance industry should be looking for ways beyond its expertise in debt issuance to identify other solutions to the infrastructure challenge of state and local government."
