Senate Bill S5770

                                 BILL NUMBER:  S5770A

 TITLE OF BILL :
An act to amend chapter 738 of the laws of 1988, amending the
administrative code of the city of New York, the public authorities
law and other laws relating to the New York city school construction
authority; and to amend the public authorities law, in relation to
extending certain provisions regarding the award of construction
contracts by the New York city school construction authority

 PURPOSE OR GENERAL IDEA OF BILL :
This bill extends certain provision relating to contracts of the NYC
construction authority.

 SUMMARY OF SPECIFIC PROVISIONS :
Section one amends Section 19 of Chapter 738 of the Laws of 1988 to
extend the exemption from section 101 of the General Municipal Law to
June 30, 2014.

Section two amends Subdivision 1 of section 1735 of the public
Authorities Law to extend the exemption from section 101 of the
General Municipal Law to June 30, 2014.

Section three makes the act effective immediately.

 JUSTIFICATION :
              

Section 101 of the General Municipal Law (Wicks Law) requires school
districts to prepare specifications that allow separate and
independent bidding for four contracts including subdivisions of work
on public construction projects: electrical; plumbing; and heating,
ventilating and air conditioning as well as a general contract. New
York is the only state to impose these requirements on building
projects. The NYC School Construction Authority (SCA) has been exempt
from the wicks Law since the' SCA's inception in 1988. However, the
SCA's Wicks Law exemption is set to expire June 30, 2009. without a
Wicks exemption, the SCA will incur substantially greater costs for
the design and construction of schools in New York City (where costs
are already higher than those in the rest of the state) and longer
construction schedules that will delay the delivery of desperately
needed new capacity to the public school system. The Wicks mandate of
multiple prime contractors complicates construction coordination on
projects, adds layers of expensive construction oversight, fragments
the delivery of construction services, and promotes delays and
disruptions in the construction process which, in turn, drives up
costs. The extension of the wicks exemption is essential because it
allows the SCA to maximize the use of limited capital resources in the
construction of public schools in New York City.

A 1999 analysis of the impact of the Wicks Law on public school
construction in New York City (Wicks Law Economic Analysis by
Price-Waterhouse Coopers) concluded that projects built under the
wicks Law cost significantly more and took longer to construct than
similar projects not subject to the wicks requirements. Other studies
and reports (NYSSBA, 1991; NYS Division of Budget, 1987; Niagara
School District, 1996) presented similar findings of increased costs
of Wicks projects ranging from twenty (20%) to thirty (30%) percent.
In addition to the marked increase in the direct costs of
construction, the extended construction durations resulting from
compliance with the wicks Law adds to the final project cost in less
apparent ways, such as the extra interest and the cost of leasing
space for longer periods of time.

In 2008, the State adopted reforms to the wicks Law for the first time
since 1964, raising the threshold above which contracts would be
subject to its requirements. The thresholds were increased to $3
million in New York City, $1.5 million in the downstate suburbs, and
$500,000 upstate. These reforms amounted to a sixty (60)-fold increase
in the threshold in NYC, a thirty (30)-fold increase in downstate
suburbs, and ten (10)-fold increase for upstate. The prior $50,000
threshold had never been adjusted for inflation. The adoption of these
reforms presents clear evidence that the wicks Law adds costs to
public construction. Yet these changes in no way provide the relief
from the Wicks law that the SCA has always had and needs to have
extended. If the Wicks exemption is not extended, the SCA would be
required to award multiple prime contracts, thereby creating a need
for additional personnel or consultants to coordinate effectively the
contractors' activities on site. The SCA would literally be forced to
suspend its operations for a time to reorganize its operations, hire
or retain consultants to provide the appropriate construction
management resources, modify the plans and specifications of already
designed projects, dividing them into multiple trade packages, and
re-bid all pending projects that had not yet commenced. In addition to
the burgeoning construction costs, this would delay the creation of
new public school seats, adversely impacting the children attending
New York City public schools in already overcrowded districts.  As the
SCA works to implement the capital plan adopted as part of the
settlement of the Campaign for Fiscal Equity lawsuit, it needs to
ensure that every dollar is used to implement this agreement. Any
lapse in the SCA's Wicks Exemption will result in less funding
available and far more time necessary to achieve this plan.

 PRIOR LEGISLATIVE HISTORY :
New bill.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect immediately.