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The AIA Project Delivery Knowledge Community (PD) promotes the architect’s leadership role in all project delivery methods by assembling and distributing knowledge and best practices for a variety of project delivery methods, e.g. design-build (DB), integrated project deliveries (IPD), and public-private partnerships (P3).
  

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Public Project Delivery Reform in New York State

By Burton L. Roslyn posted 05-05-2016 12:25 PM

  

Before the election of Governor Andrew Cuomo in 2010, late budgets, large deficits, unemployment, political scandal and a public perception of widespread dysfunction paved the way for a powerful mandate to rattle the status quo.New York State’s inability to undertake transformational public construction projects was quickly adopted into the dysfunction narrative put forth by Governor Cuomo when he entered office. In an effort to turn “dysfunction” into “construction”, the governor pushed the passage of the Infrastructure Investment Act, which gave certain State agencies and public authorities the ability to use design-build. 

While the Legislature agreed to authorize design-build for certain projects, its members are still leery of expanding its use to all public entities for both horizontal and vertical projects. Laws requiring multi-prime contracting and project labor agreements present significant obstacles, and are fiercely defended by those interests who have historically benefitted from them. In 2015 the governor proposed to extend design-build to all public entities, but ended up settling for a straight extension of its limited use when the Legislature blocked the measure. 

This year’s budget continues the piecemeal approach to project delivery reform with the authorization to use design-build for the redevelopment of Pennsylvania Station, the James A. Farley Post Office and the Javits Convention Center. The design-build language used in the budget bill mirrors the language included in the Infrastructure Investment Act of 2011. 

The current law is by no means perfect and improvements must be made before the law sunsets next year. The law lacks an understanding of contractual relationships, best procurement practices and laws governing the licensed design professions. With this in mind, AIANYS and its partners in the design and construction community have come together to work on comprehensive legislation to give the State the tools it needs to deliver quality public projects on-time, on-budget and in a collaborative manner.    

The introduction of Construction Manager-at Risk (CM at-Risk) into the debate will be the driving force behind advocacy efforts. AIANYS and its partners envision a final product akin to the Massachusetts model—whereby CM at-Risk is used for vertical projects and design- build for horizontal. 

Guidance documents produced by the AIA have been instrumental to laying the foundation for this effort.   

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About the Author:

Burton Roslyn, FAIA is a recognized leader in the discussion on Project Delivery. He has worked continuously since 2004 to bring change to New York State's Public Procurement Laws. In addition he has drafted model legislation, testified before legislatures and lectured extensively on the need for change on a State & National level.



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1 comment
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Comments

Eugene D. Ninnie AIA
07-08-2016 01:02 PM

This is good news for NYS, but you might want to consider another aspect with the money management.
I did many D/B projects for municipalities and one with bridging to save even more for the municipality out here in the western states. D/B CMaR may try to save money but there is no open book to give savings back to the owner since most GMP’s are deliberately high.
In a CMAR the price obtained is based on construction documents at 45-50%. not 100% design drawings the price is based upon. When a construction price is based on less than 100% design drawings the contractor will apply/ manage risk of using dollars added to various divisions of construction for not having 100% design to account for risk from a lack of 100% DD. In doing so the CMAR will invariably he high for obvious reasons.
For example if a CMAR is retained on a project and his price is based on 60% design drawings and they provide a 7,000,000 GMP not to exceed. But being based on less than 100% risk money is applied to the price. When the project comes in at a completed a total of 6,800,000 the contractor is a hero. The reality is that the constructed cost with applied 15-20% Overhead and profit added is really 5,500,000.
Without open book pricing no-one really knows, except the contractor, what the actual cost is. In addition the owner does not have a lot of control of the formulation of the design and cost under the CMAR, contrary to what they may have stated.
We use Open book pricing on Bridging contracts and CMaR. We apply caps on overhead and profit, contingencies and design fees all in the contract. For pay requests the contractor provides all invoices, receipts, bills of lading , job sign in sheets, certified payroll etc. to a third party auditor (CPA) for review in compliance of the monetary aspects of the contract
These costs are tracked. If the price of a 7,000,000 project comes in at 5,500,000 under the bridging/CMAR contract the cost difference is given back to the Owner NOT the contractor . This takes the cost accounting away from the owner and contractor who are both are not in a good position to monitor such costs.
In the end the owner gets his cost savings and if the D/B CMaR team is good they will make their profit but not at the percentages they have been making in the past. I suggest NYS adopt this IF they REALLY want to save money on their capital projects.