New York warming to design-build contracts

by David Winzelberg, Long Island Business News
August 17, 2012

Facing tight construction budgets and 30 percent unemployment in the building trades, New York is finally turning to design-build bidding to reduce costs, speed up projects and put hard hats back to work. 

More than 40 U.S. states widely permit the use of design-build contracts for public construction work, but New York's municipal law prohibits the practice, forcing the state Legislature to approve individual projects, including, recently, a half-dozen bridge repairs in Nassau and Suffolk counties.

Also being bid by design-build: the $5.2 billion construction of a new Tappan Zee Bridge. 

The Design Build Institute of America describes design-build as "the time-honored approach of the master builder, in which a single source has accountability for both design and construction." Proponents point out that design-build has been in use for thousands of years, from the pyramids of Egypt to the cathedrals of Europe's Gothic era. 

But it fell out of favor in America for some reason - opinions vary - at the beginning of the last century. The American Institute of Architects, for example, prohibited its members from participating in the building phase of projects beginning in 1909, a ban that would last almost 80 years. 

Nationally, projects built through the design-build method now account for more than 40 percent of all construction work, both public and private, up from 30 percent five years ago, according to a report from RSMeans. The report found design-build is now utilized on more than half of all projects valued at more than $10 million nationwide.

Work on Long Island's design-build projects begins this month with repairs to the Hempstead Turnpike overpass that spans an access road to Belmont Park in Elmont. Farmingdale-based contractor Posillico Civil and engineering firm Greenman-Pederson in Babylon were awarded the $24.2 million contract for the bridge work that is estimated to create 330 jobs by the time the work is finished at the end of 2013.

Engineers and architects have traditionally opposed the design-build method because it presents a potential conflict of interest: They have a responsibility to the project owner to come up with a quality design that protects public health and safety, but they also are beholden to the contractor to control costs for a competitive bid. 

In the case of road and bridge work, however, the state transportation agency uses its own engineers to monitor the process, which is something some engineers insist the design-build process should always have, according to Andrew Haimes, of Haimes Engineering in East Islip, adding that many public agencies hire outside engineers to oversee the contractor's project designers and ensure more control in design-build scenarios. 

Haimes, a professional engineer for more than 30 years, acknowledged that New York is one of the last holdouts when it comes to allowing design-build for public projects, but that the tide is finally turning. 

"The train is coming down the track," he said. "We're going in that direction."

John Cameron, of Woodbury-based Cameron Engineering, agrees the design-build method is gaining steam and that engineers will have to adapt. While he said most engineers would rather work directly for the project owner, construction jobs shouldn't have to be bogged down with separate bidding for design and construction. 

Cameron is a member of the New York Works Taskforce, which recommended using the design-build method for rebuilding the state's infrastructure. 

"We need to jumpstart this," he said. "Engineers need to be able to change with the times." 

Since using design-build can shave months off the bidding process, it's no surprise the road construction unions are fully behind it.

Bill Duffy Jr., who heads the 1,500-member Operating Engineers Local 138, said he supports "anything we can do to speed up the process and get union members back to work." 

Marc Herbst, executive director of the Long Island Contractors Association, is also a fan, although the design-build method will cost contractors more money at the outset and shift the risk of design flaws to the bidders instead of the state. 

But, he told LIBN, "We think it will allow us to do things quicker and more efficiently." 

The state's use of design-build isn't limited to road and bridges. State universities gained design-build authority with passage of last year's budget bill, allowing state-funded schools to use design-build on up to 15 percent of its construction and renovation projects. 

There are bills pending that would extend design-build authority to all state agencies, although passage is far from guaranteed, according to Albany insiders.

Though work on roads and bridges has to comply with Department of Transportation design standards, constructing a building is highly variable in terms of design and materials, and needs to have a preliminary blueprint if it's going to be successful in using the design-build method. Cameron said the owner has to start with engineering plans and specifications with a "30 percent level of detail" so the contractors and their engineers can have a better starting point for bidding. 

Eventually, Cameron said, design-build will become the preferred method for constructing public projects here, as it's been in much of the rest of the country.

"It will happen," he said.

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