As the state legislature heads toward an April 1 budget deadline, New York City is pushing for state approval of design-build project delivery for the city.
While the General Assembly has approved city use of design-build projects on a limited basis, notably for troubleshooting the New York City Housing Authority crisis, city officials want to use the method full throttle.
“Applying the design-build approach would shave hundreds of millions of dollars from the cost of projects and reduce completion times by 18 months on average,” city budget director Melanie Hartzog told members of the City Council’s finance committee and capital budget subcommittee on Tuesday.
“We would increase the speed of providing critical NYCHA repair work.”
Overall, said Hartzog, the city could save a minimum of 6% on project orders, with innovation and design savings a variable. “The saving are in the hundreds of millions,” she said, citing a list of priority projects. The city is still estimating costs and savings related to Rikers and NYCHA.
The state itself and some cities already use design-build, a simplified procurement that combines bidding for the design and construction into one contract that a single entity manages. The Mario Cuomo (nee Tappan Zee) and Kosciuszko bridges are examples of such state execution.
The Design-Build Institute of America favors city use. According to the institute, all states now permit such use for public projects. Design-build is now the delivery method of choice in nearly 40% of non-residential projects nationwide.
Gov. Andrew Cuomo jump-started the debate recently, saying he favors expedited contracting to repair and replace boilers and other equipment at NYCHA units following a winter in which residents in up to 80% of NYCHA’s 176,000 units lacked heat and hot water.
Cuomo also cited the city’s need to construct borough-based jails to close Rikers Island prison and repair parts of the Brooklyn-Queens Expressway.
Hartzog said design-build could trim two years off the timeline for triple-cantilever rehabilitation work on the BQE from Atlantic Avenue to Sands Street in Brooklyn. “We would also reduce construction-related disruption on our already-crowded roads and bridges,” said Hartzog.
She said the administration could specify overall design-build savings when Mayor Bill de Blasio releases his executive budget in late April. The mayor’s proposed $88.7 billion preliminary budget is now before the council.
NYCHA has an estimated capital-needs backlog of roughly $17 billion to $20 billion. Its latest physical needs assessment, which determines funding requests, is overdue.
A tenants group, meanwhile, is suing the city over NYCHA and has threatened for further legal action that would hold up the state budget unless the state selects an independent contractor to coordinate the emergency work.
Cuomo, who favors the independent contractor, has pledged an additional $250 million in the fiscal 2019 state budget for, on top of a previous $300 million commitment.
Mayor Bill de Blasio, meanwhile, has accused the state of withholding a combined $250 million from previous budgets he said is supposedly earmarked for NYCHA. “I have seen a lot of bait and switches out of Albany, and, you know, what is it? Fool me once, shame on you – fool me twice, shame on me.”
Council members, though guarded in some of their responses, favor design-build conceptually.
“While design-build, of course, is an important tool for our capital toolkit, it’s not a cure-all for every agency and every type of project,” said Speaker Corey Johnson.
Barry Grodenchik, who chairs the council’s parks committee, said the city must streamline its cumbersome procurement process.
"We are really not doing well by New Yorkers,” he said. “It has taken, in some cases, a dozen years to get a bathroom installed in New York City Parks.”
