Senate Bill S6844

                                 BILL NUMBER:  S6844A

 TITLE OF BILL :

An act to amend the general municipal law, in relation to contracts
for public work projects and accommodation of private facilities or
structures, in connection with the water tunnel capital program of the
city of New York within a specified area of New York county; and
providing for the repeal of such provisions upon expiration thereof


 SUMMARY OF PROVISIONS :

This bill amends General Municipal Law §103 to authorize the City of
New York to include in a contract for any public work project relating
to or in furtherance of the City's water tunnel capital program within
the area of New York county south of and including 72nd Street any
work deemed necessary or desirable to maintain, support, protect or
otherwise accommodate, energy, telecommunications and other private
facilities or structures not owned by the municipality which are
located within, traversing or adjacent to the construction area of
such project. The bill permits the public agency to award a contract
to the lowest responsible bidder for all of the work, including the
utility interference work, with the proviso that if the cost of the
agency work is more than twenty percent below the average of the next
two lowest bids, the new authorization would not apply. The bill also
              

provides that the costs of utility interference work shall not be
borne by the municipality, but leaves intact the provisions for
allocation of costs involving certain gas facilities as provided for
in Chapter 357 of the Laws of 1988 (Gas Facility Cost Allocation Act),
as well as the provisions that apply to projects subject to the
Coordinated Construction Act for Lower Manhattan (Chapter 259 of the
Laws of 2004, as amended).  If the utility interference work is
included in the agency contract, the agency would monitor and, to the
extent necessary, participate in resolution of disputes between the
contractor and the utility.  The bill would apply notwithstanding any
inconsistent laws, including section 103 of the General Municipal Law.
Applicable provisions of section 103 that are not inconsistent with
this bill would continue to govern. The bill would expire on December
31, 2014 but would apply to contracts advertised or otherwise formally
solicited before that date.

 REASONS FOR SUPPORT :

Public rights of way generally contain not only municipally-owned
utility services like water mains and sewers but also utility lines
for the transmission of energy and telecommunications. These private
facilities often must be moved or protected in order for the municipal
work to proceed. The municipal work can be delayed or stopped if the
utility is required to negotiate the price of protecting or moving the
utility facility with the contractor for the municipal work or, locate
another contractor to do the work.  Because bringing in a second
contractor is costly and time consuming, negotiations often stall when
the  DE FACTO  monopoly position of the municipal contractor leads to
prices that the utility believes to be far in excess of the value of
the work. Delay of the municipal work not only adversely affects the
public at large but also has a significant impact on local businesses.

In an effort to reduce the inconvenience resulting from construction
delays as a result of utility interference work, in 1992 the City of
New York began the practice of "joint bidding." This practice required
bidders to provide, within a single bid, separate prices for the
municipal work and the private utility work, with the contract awarded
to the lowest responsible bidder for the combined work. The utilities,
by separate agreement, reimbursed the City for the additional cost of
the City's share of the overall low bid if the low bidder on the
municipal work was not the same as the low bidder on the combined
work. Thus, the cost to the City was never more than the lowest bid
for the municipal work. Taxpayers therefore benefited from the
conveniences of joint bidding at no additional cost.

The City's joint bidding practices ended in 1998, however, when a
contractor who had bid the lowest price for the municipal portion of a
project, was not awarded the contract because its bid was not the
lowest bid overall, challenged the City's practice of joint bidding.
The Court of Appeals determined that private utility interference work
is not "public work" and cannot be included in a contract for
municipal work bid pursuant to General Municipal Law §103 unless
specifically authorized by the Legislature.   SEE DIAMOND ASPHALT V.
SANDER, 92 NY2D 244 (1998) .ct.

The State Legislature recognized the value of appropriate joint
bidding arrangements when it authorized them in the Coordinated
Construction Act for Lower Manhattan (Chapter 259 of the Laws of 2004,
as amended by Chapter 231 of the Laws of 2004). The provision in this
bill is modeled upon section 4(d) of that Act. By enacting the Act,
the Legislature sought to ensure a productive revitalization process
for the area of New York City devastated by the events of September
11, 2001. In recognition of that goal, the Legislature expressly
stated in section 1 that the purpose of the Act was to promote the
fast, safe and fair redevelopment of lower Manhattan. To date, the
City of New York has awarded four contracts under the Act and these
projects are currently under construction. Moreover, on more than
twenty other contracts let prior to  DIAMOND ASPHALT V.  SANDER ,
experience has shown that jointly-bid contracts establish more
reasonable prices for utility interference work and speed street
construction jobs, thereby reducing the adverse impact on the public
and local businesses. In addition, they do not inflate the costs of
the municipal work.

Currently, the revitalization of lower Manhattan is directly
benefiting from the projects in construction and these projects
include Beekman Street, Harrison Street, Liberty Street, and Fulton
Street. The Beekman Street project is the furthest along in
construction and has shown significant savings in time by reducing, if
not altogether eliminating, delays from work to be performed in the
street. Furthermore, having the City include the utilities' work in a
single contract has resulted in better coordination and scheduling of
all work by reducing or eliminating days when no work is performed as
the contractor and a utility argue over a scope of work item; this
results in a savings of time for the overall project.  Having the
utility work included in one contract has benefited the City in that
the utilities are now paying their respective shares of costs that the
City used to bear when the projects were delayed while the utility and
contractor negotiated. Finally, by having a single entity - the City -
manage the job, with the utilities creating a special office to deal
with these contracts, the joint bidding arrangement is more efficient
in resolving issues in the field. This centralization of
accountability is more likely to result in an on or ahead of schedule
completion date. The bottom line outcome is that projects bid with
joint bids minimize disruption to the community and return the
affected streets to the residents and businesses faster than projects
that do not utilize this approach. This experience was reflected by
projects in the City that benefited from joint bidding before the
Court of Appeals decision, including Columbus Avenue in Manhattan, 9th
Street and Tompkins Avenue in Brooklyn, Booth Memorial Avenue and
Baisley Boulevard in Queens, and the Carpenter Avenue area of the
Bronx. Conversely, projects such as Hudson Street, Boston Road and
Queens Village did not include joint bidding and were subject to
significant construction delays due to utility interference work.


The City of New York has initiated plans for infrastructure
improvements that involve work related to the construction of the
City's third water tunnel, which includes the construction of the
trunk water mains, water regulation distribution systems and sewers,
and their connection to the shafts. Limited use of the third water
tunnel, a critical public project that has been the focus of many
years of great expense and effort, cannot begin until this work is
completed. The work, which will take place in many locations in
Manhattan south of 72nd Street, includes engineering challenges that
involve key transportation access points, such as tunnels, including
the Holland Tunnel, Mid-town Tunnel, and Lincoln Tunnel, and bridges,
including the 59th Street Bridge. The work further includes main areas
of business and tourist attractions such as Lincoln Center and Times
Square. In addition, the work involves intersections that are already
congested, as well as side streets that support these access points.
Furthermore, in a post-September 11, 2001 environment, there are
security concerns involving the locations of the projects and it is
essential that these sites and adjoining areas are built in the most
efficient and safest way possible. By enabling the City of New York to
invite bids for both the municipal work and the necessary utility work
on a joint basis for these projects, this bill will achieve the goal
of completing the work fast and safely.

Enactment of this legislation would enable the City of New York to
obtain reimbursement for the cost of the work, in relation to critical
water tunnel related projects within the specified area, from the
utilities so that there will be no negative cost impact to the public
agency for jointly bidding work; to the extent that the cost of the
utility interference work is reasonable, utility customers, including
residents and businesses, will benefit. Further, the great
inconvenience to the public and local businesses caused when streets
are opened in furtherance of these projects will be minimized as a
result of the shortened duration of the construction.

 EFFECTIVE DATE :
This act shall take effect immediately, and shall apply to contracts
entered into or otherwise formally solicited on or after such
effective date; provided that this act shall expire and be deemed
repealed December 31, 2014; and provided further, that this act shall
also apply to any contract to which this act would otherwise apply
that has been advertised or otherwise formally solicited on or after
the effective date of this act and on or before December 31, 2014.