Jan. 31 (Bloomberg) -- A New York law approved last month may speed infrastructure projects such as a new $5.2 billion Tappan Zee Bridge, a priority of Governor Andrew Cuomo, by giving control of design and construction to one consortium.
The Infrastructure Investment Act, passed by the Legislature in a special session with little fanfare, allows the departments of Transportation and Environmental Conservation as well as the Thruway Authority to contract with a single entity to design and build bridges, roads and dams. Previously, with limited exceptions, New York could use only a process whereby state engineers would design a project and then put it out for bids by construction companies.
“Accelerating projects is the linchpin of everything you have heard from the governor,” Deputy Secretary of Transportation Karen Rae said at a Dec. 14 presentation to about 175 designers and contractors from companies including Skanska AB, Bechtel Group Inc. and URS Corp.
New York may announce as soon as today a list of companies qualified to compete to build the bridge, according to a Transportation Department and Thruway Authority schedule issued Nov. 21.
In his budget address this month, Cuomo proposed speeding infrastructure projects by using the so-called design-build process and a $15 billion infrastructure fund. Consisting of state, federal and private money, the fund would be used to repair 2,000 miles (3,217 kilometers) of roads, 90 municipal water systems and 100 bridges.
The project to replace the 56-year-old Tappan Zee will be funded only with public money, not private equity or through a public-private partnership, according to the minutes of the meeting where Rae spoke in White Plains, New York.
The three-mile bridge carries 138,000 vehicles per day across the Hudson River between Rockland and Westchester counties, connecting the lower Hudson Valley with New York City. Replacing it is the centerpiece of Cuomo’s job-creation strategy. The 54-year-old Democrat has compared the project to the 19th century construction of the Erie Canal.
The Thruway Authority spent $389 million from 2007 through 2011 to maintain and improve the Tappan Zee, said Betsy Feldstein, a spokeswoman for the agency. The Federal Highway Administration estimates it will cost from $5.2 to $16 billion to replace the span, depending on whether it has bus lanes and tracks for rail.
President Barack Obama’s administration has listed the Tappan Zee among 14 projects that will travel an expedited federal approval process. New York is moving quickly and plans to start work this summer, Transportation Commissioner Joan McDonald said Jan. 26 in a telephone interview.
With design-build, state engineers, often with help from a private consulting firm, set the parameters for the project and then ask companies or a group of designers and contractors to compete to win a single contract.
Advocates say the process saves money and time because construction can begin without a bidding phase. Also, better coordination allows problems to be solved faster, they say. Governments benefit from contracting with a single entity responsible for guaranteeing price and schedule.
“We manage all of the construction, all of the engineering and all procurement,” said Richard Aquino, vice president of business development in the U.S. for Stockholm-based Skanska, the Nordic region’s biggest builder.
“It’s a much more efficient way to do a project from start to finish,” he said in a Jan. 26 telephone interview.
Skanska’s team includes Kiewit Infrastructure Group, Weeks Marine Inc. and Parsons Brinckerhoff.
Some union critics say design-build won’t save the state money and that quality may suffer because officials may focus on cost and scheduling, rather than quality.
“A contract engineer costs the state $84 an hour; it’s $49 an hour for a state engineer, and that’s including the benefit package,” said Tom Comanzo, vice president of the Public Employees Federation, New York’s second-biggest public union. “By using private contractors for every step of the process, we’re increasing the state’s dependency on them, we’re expanding our use of no-bid contracts and it ends up costing more.”
Design-build projects are completed more quickly than others, according to a 2006 study prepared by the Highway Administration. The study said the impact on project cost was more difficult to establish.
“It has the potential to produce a more cost-effective project in less time than a process that contractually insulates the project participants while leaving the contracting agency with most of the project risk,” the report said.
New York is late to the game in using design-build, said Mike Elmendorf, president of the Albany-based Associated General Contractors of New York State LLC, which represents 1,000 companies.
Every state has some form of authorization for design- build, said Richard Thomas, vice president for advocacy and external affairs for the Washington-based Design-Build Institute of America, an organization that teaches and promotes the method. The federal government has used the process since the early 1990s, according to the group.
The Cuomo administration lent a receptive ear to design- build advocates, who began pushing for the method as soon as he took office last year, Thomas said. Organized labor didn’t mobilize because design-build offered a way to get people on the job six to nine months earlier than a traditional construction schedule, he said.
“Cuomo was open to change,” Thomas said. “He had the political gravitas that he could go in a different direction.”
--With assistance from Carol Wolf in Washington. Editors: Mark Schoifet, Stephen Merelman
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