S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5397
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                   February 20, 2015
                                      ___________
       Introduced  by  M.  of  A.  RODRIGUEZ  --  read once and referred to the
         Committee on Ways and Means
       AN ACT permitting authorized state entities to utilize the  design-build
         method for infrastructure projects
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. This act shall be known and may be cited  as  the  "Infras-
    2  tructure investment act".
    3    S 2. The legislature hereby finds and declares as follows:
    4    (1) Our state's aging infrastructure, the on-going economic crisis and
    5  the resulting increase in unemployment in the state have all contributed
    6  to  a  decline  in  our  state's  competitiveness  and  in a significant
    7  decrease in New York state tax revenues.
    8    (2) Sufficient modern infrastructure is of  paramount  importance  not
    9  only  as  a  catalyst  for job creation but also as a key driver for the
   10  state's economic performance and competitiveness and the health, safety,
   11  education and quality of life of our citizens and as the means to ensure
   12  the efficient movement of people and goods.
   13    (3) Expediting the delivery of projects in New York state  would  lead
   14  directly to job creation and increases in the state's competitiveness.
   15    (4) Businesses in New York state have extensive and diverse experience
   16  in alternative project delivery methods for the study, planning, design,
   17  development,  financing, acquisition, installation, construction, recon-
   18  struction, improvement, maintenance and management of public infrastruc-
   19  ture facilities. These  alternative  project  delivery  methods  provide
   20  significant benefits to the public by:
   21    (a)  Reducing the public cost of delivering and obtaining services for
   22  infrastructure assets;
   23    (b) Expediting project delivery;
   24    (c) Encouraging life cycle efficiencies;
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD01024-02-5
       A. 5397                             2
    1    (d) Providing better use and leverage  of  public  human  and  capital
    2  resources, and enhancing capital formation for large projects;
    3    (e) Creating jobs;
    4    (f) Promoting performance efficiencies; and
    5    (g)  Bringing  additional  innovative best practice contracting by the
    6  private sector to bear on public infrastructure needs within the state.
    7    (5) For certain projects, the design-build project delivery method has
    8  the potential to achieve projects delivered on guaranteed or accelerated
    9  schedules, lower costs and risk shifting to the private sector generally
   10  retained in conventional design-bid-build projects as well as to  accel-
   11  erate capital investments throughout the state.
   12    (6)  Recognizing  the  need to repair the state's aging infrastructure
   13  and maximize job creation in New York, the Governor and Legislature seek
   14  to:
   15    (a) accelerate capital investment in New York state's infrastructure;
   16    (b) coordinate among New York  state's  agencies  and  authorities  on
   17  capital investment;
   18    (c) encourage private sector capital investment in New York;
   19    (d) ensure that job creation benefits New York workers; and
   20    (e) assist the use of the most efficient and effective procurement and
   21  project  management  for  infrastructure projects in the transportation,
   22  energy,  environment,  public  facilities,  and   economic   development
   23  sectors.
   24    S 3. For the purposes of this act:
   25    (a)  "authorized  state  entity" shall mean the New York state thruway
   26  authority, the department of transportation, the office of parks, recre-
   27  ation and historic preservation, the department of environmental conser-
   28  vation and the New York state bridge authority.
   29    (b) "best value" shall mean  the  basis  for  awarding  contracts  for
   30  services  to  the  offerer  that  optimize quality, cost and efficiency,
   31  price and performance criteria, which may include, but  is  not  limited
   32  to:
   33    1. The quality of the contractor's performance on previous projects;
   34    2.   The  timeliness  of  the  contractor's  performance  on  previous
   35  projects;
   36    3. The level of customer satisfaction with the  contractor's  perform-
   37  ance on previous projects;
   38    4.  The  contractor's record of performing previous projects on budget
   39  and ability to minimize cost overruns;
   40    5. The contractor's ability to limit change orders;
   41    6. The contractor's ability to prepare appropriate project plans;
   42    7. The contractor's technical capacities;
   43    8. The individual qualifications of the contractor's key personnel;
   44    9. The contractor's ability to assess and  manage  risk  and  minimize
   45  risk impact; and
   46    10.  The  contractor's  past record of compliance with article 15-A of
   47  the executive law.
   48    Such basis shall reflect, wherever possible, objective  and  quantifi-
   49  able analysis.
   50    (c)  "capital  project"  shall  have  the same meaning as such term is
   51  defined by subdivision 2-a of section 2 of the state finance law.
   52    (d) "cost plus" shall mean compensating a contractor for the  cost  to
   53  complete a contract by reimbursing actual costs for labor, equipment and
   54  materials plus an additional amount for overhead and profit.
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    1    (e)  "design-build  contract" shall mean a contract for the design and
    2  construction of a capital project with a single entity, which may  be  a
    3  team comprised of separate entities.
    4    (f) "procurement record" means documentation of the decisions made and
    5  the approach taken in the procurement process.
    6    S  4. Notwithstanding the provisions of section 38 of the highway law,
    7  section 136-a of the state  finance  law,  section  359  of  the  public
    8  authorities  law,  section 7210 of the education law, and the provisions
    9  of any other law to the contrary, and in conformity  with  the  require-
   10  ments  of  this act, an authorized state entity may utilize the alterna-
   11  tive delivery method referred to as design-build contracts  for  capital
   12  projects  related to the state's physical infrastructure, including, but
   13  not limited to, the  state's  highways,  bridges,  dams,  flood  control
   14  projects,  canals,  and  parks, including, but not limited to, to repair
   15  damage caused by natural disaster, to correct health and safety defects,
   16  to comply with federal and state laws, standards,  and  regulations,  to
   17  extend  the  useful  life  of  or replace the state's highways, bridges,
   18  dams, flood control projects, canals, and parks or to improve or add  to
   19  the state's highways, bridges, dams, flood control projects, canals, and
   20  parks;  provided  that  for  the contracts executed by the department of
   21  transportation, the office of parks, recreation and  historic  preserva-
   22  tion, or the department of environmental conservation, the total cost of
   23  each  such  project shall not be less than one million two hundred thou-
   24  sand dollars ($1,200,000).
   25    S 5. An entity selected by an authorized state entity to enter into  a
   26  design-build  contract  shall  be selected through a two-step method, as
   27  follows:
   28    (a) Step one. Generation of a list of entities that have  demonstrated
   29  the  general capability to perform the design-build contract.  Such list
   30  shall consist of a specified number of entities,  as  determined  by  an
   31  authorized  state  entity, and shall be generated based upon the author-
   32  ized state entity's review of responses to a publicly advertised request
   33  for qualifications. The authorized state entity's request for qualifica-
   34  tions shall include a general description of the  project,  the  maximum
   35  number  of entities to be included on the list, and the selection crite-
   36  ria to be used in generating the list.  Such  selection  criteria  shall
   37  include the qualifications and experience of the design and construction
   38  team,  organization, demonstrated responsibility, ability of the team or
   39  of a member or members of the team to comply  with  applicable  require-
   40  ments,  including  the  provisions  of  articles 145, 147 and 148 of the
   41  education law, past record of compliance with the labor  law,  and  such
   42  other qualifications the authorized state entity deems appropriate which
   43  may  include  but  are  not  limited to project understanding, financial
   44  capability and record of past performance. The authorized  state  entity
   45  shall evaluate and rate all entities responding to the request for qual-
   46  ifications.   Based upon such ratings, the authorized state entity shall
   47  list the entities that shall receive a request for proposals in  accord-
   48  ance  with  subdivision  (b) of this section.   To the extent consistent
   49  with applicable federal law, the authorized state entity shall consider,
   50  when awarding any contract pursuant to this section,  the  participation
   51  of: (i) firms certified pursuant to article 15-A of the executive law as
   52  minority  or  women-owned businesses and the ability of other businesses
   53  under consideration to work with minority and women-owned businesses  so
   54  as  to  promote  and  assist  participation by such businesses; and (ii)
   55  small business  concerns  identified  pursuant  to  subdivision  (b)  of
   56  section 139-g of the state finance law.
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    1    (b) Step two. Selection of the proposal which is the best value to the
    2  state.  The  authorized state entity shall issue a request for proposals
    3  to the entities listed pursuant to subdivision (a) of this section.   If
    4  such  an  entity  consists  of a team of separate entities, the entities
    5  that comprise such a team must remain unchanged from the entity as list-
    6  ed pursuant to subdivision (a) of this section unless otherwise approved
    7  by  the  authorized  state  entity.  The request for proposals shall set
    8  forth the project's scope of work, and other requirements, as determined
    9  by the authorized state entity.  The request for proposals shall specify
   10  the criteria to be used to  evaluate  the  responses  and  the  relative
   11  weight  of  each  such  criteria.    Such  criteria  shall  include  the
   12  proposal's cost, the quality of the proposal's solution, the  qualifica-
   13  tions  and  experience  of  the  design-build  entity, and other factors
   14  deemed pertinent by the authorized state entity, which may include,  but
   15  shall  not be limited to, the proposal's project implementation, ability
   16  to complete the work in a timely and  satisfactory  manner,  maintenance
   17  costs  of  the  completed  project, maintenance of traffic approach, and
   18  community impact. Any contract awarded pursuant to  this  act  shall  be
   19  awarded  to  a  responsive  and  responsible  entity  that  submits  the
   20  proposal, which, in consideration of these and other specified  criteria
   21  deemed  pertinent to the project, offers the best value to the state, as
   22  determined by the authorized  state  entity.  Nothing  herein  shall  be
   23  construed  to  prohibit  the  authorized  entity  from negotiating final
   24  contract terms and conditions including cost.
   25    S 6. Any contract entered into pursuant to this act  shall  include  a
   26  clause  requiring  that  any professional services regulated by articles
   27  145, 147 and 148 of the education law shall be performed and stamped and
   28  sealed, where appropriate, by a professional licensed in accordance with
   29  such articles.
   30    S 7. Construction for each capital project undertaken by  the  author-
   31  ized  state  entity pursuant to this act shall be deemed a "public work"
   32  to be performed in accordance with the provisions of article  8  of  the
   33  labor  law,  as well as subject to sections 200, 240, 241 and 242 of the
   34  labor law and enforcement of prevailing wage  requirements  by  the  New
   35  York state department of labor.
   36    S  8.  If  otherwise  applicable,  capital  projects undertaken by the
   37  authorized state entity pursuant to this act shall be subject to section
   38  135 of the state finance law and section 222 of the labor law.
   39    S 9. Each contract entered into by the authorized state entity  pursu-
   40  ant to this section shall comply with the objectives and goals of minor-
   41  ity and women-owned business enterprises pursuant to article 15-A of the
   42  executive  law or, for projects receiving federal aid, shall comply with
   43  applicable federal requirements for disadvantaged business enterprises.
   44    S 10. Capital projects  undertaken  by  the  authorized  state  entity
   45  pursuant  to  this act shall be subject to the requirements of article 8
   46  of the  environmental  conservation  law,  and,  where  applicable,  the
   47  requirements of the national environmental policy act.
   48    S  11.    If  otherwise applicable, capital projects undertaken by the
   49  authorized state entity pursuant  to  this  act  shall  be  governed  by
   50  sections 139-d, 139-j, 139-k, paragraph f of subdivision 1 and paragraph
   51  g of subdivision 9 of section 163 of the state finance law.
   52    S 12.  The submission of a proposal or responses or the execution of a
   53  design-build  contract pursuant to this act shall not be construed to be
   54  a violation of section 6512 of the education law.
   55    S 13. Nothing contained in this act shall limit  the  right  or  obli-
   56  gation  of  the authorized state entity to comply with the provisions of
       A. 5397                             5
    1  any existing contract, including any existing contract with or  for  the
    2  benefit  of the holders of the obligations of the authorized state enti-
    3  ty, or to award contracts as otherwise provided by law.
    4    S  14. Alternative construction awarding processes.  (i) Notwithstand-
    5  ing the provisions of any other law  to  the  contrary,  the  authorized
    6  state entity may award a construction contract:
    7    1. To the contractor offering the best value; or
    8    2.  Utilizing  a cost-plus not to exceed guaranteed maximum price form
    9  of contract in which the authorized state entity shall  be  entitled  to
   10  monitor  and  audit  all project costs. In establishing the schedule and
   11  process for determining a guaranteed maximum price, the contract between
   12  the authorized state entity and the contractor shall:
   13    (a) describe the scope of the work and the  cost  of  performing  such
   14  work;
   15    (b) include a detailed line item cost breakdown;
   16    (c)  include a list of all drawings, specifications and other informa-
   17  tion on which the guaranteed maximum price is based;
   18    (d) include the dates for substantial and final  completion  on  which
   19  the guaranteed maximum price is based; and
   20    (e) include a schedule of unit prices; or
   21    3.  Utilizing  a  lump  sum contract in which the contractor agrees to
   22  accept a set dollar amount for a contract which comprises a  single  bid
   23  without  providing a cost breakdown for all costs such as for equipment,
   24  labor, materials, as well as such contractor's profit for completing all
   25  items of work comprising the project.
   26    (ii) Capital projects undertaken by an  authorized  state  entity  may
   27  include  an  incentive  clause  in  the contract for various performance
   28  objectives, but the incentive clause shall not include an incentive that
   29  exceeds the quantifiable value of the benefit received by the state. The
   30  authorized state entity shall establish  such  performance  and  payment
   31  bonds as it deems necessary.
   32    S   15.   Prequalified  contractors.  (a)  Notwithstanding  any  other
   33  provision of law, the authorized state entity may  maintain  a  list  of
   34  prequalified  contractors who are eligible to submit a proposal pursuant
   35  to this act and entry into such list shall  be  continuously  available.
   36  Prospective  contractors  may  be prequalified as contractors to provide
   37  particular types of construction, in accordance  with  general  criteria
   38  established  by the authorized state entity which may include, but shall
   39  not be limited to, the experience, past performance, ability  to  under-
   40  take the type and complexity of work, financial capability, responsibil-
   41  ity, compliance with equal employment opportunity requirements and anti-
   42  discrimination  laws,  and  reliability. Such prequalification may be by
   43  categories designed by size and other factors.
   44    (b) A contractor who is denied prequalification or whose prequalifica-
   45  tion is revoked or suspended by the authorized state entity  may  appeal
   46  such  decision  to  the  authorized  state  entity. If such a suspension
   47  extends for more than three months, it shall be deemed a  revocation  of
   48  the  prequalification.  The authorized state entity may proceed with the
   49  contract award during any appeal.
   50    S 16. Nothing in this act shall affect existing  powers  of  New  York
   51  state public entities to use alternative project delivery methods.
   52    S 17. This act shall take effect immediately.