NEW YORK CITY—A new report by the Rudin Center for Transportation Policy and Management at New York University shows New York could save taxpayers billions of dollars simply by authorizing widespread use of procurement practices known as design-build on public infrastructure projects.
Design-build is a form of project delivery in which a public agency or private sector entity enters into a single contract for both design and construction of a project.
The report, sponsored by the Association for a Better New York and RBC Capital Markets, highlights the success of design-build projects nationwide and in New York, despite state law dictating that it can only be used on a limited basis. The report calls on Albany to expand the practice to save taxpayers money and shorten the completion time on critical infrastructure projects.
In March of this year, the New York State Legislature only re-authorized five state agencies to use design-build. A subsequent bill created to expand authorization has not been approved in Albany.
“With New York's aging infrastructure, we are at a competitive disadvantage compared to nearly every other state,” declares Mitchell Moss, Henry Hart Rice professor of urban policy & planning at NYU. “When used appropriately, design-build can lower project costs, reduce the time required to complete a project and encourage more innovation in design and construction.”
“Design-Build is a project delivery tool that would enable critical infrastructure projects to be delivered more efficiently,” adds Bill Goldstein, senior advisor to the Mayor for recovery, resiliency and infrastructure.
“It is clear that Design-Build offers a proven record of faster project delivery and for New York City this equals a cost savings of tens of millions of dollars, if not more,” notes NYC DOT commissioner Polly Trottenberg. “New York City needs innovation to fix our roads, bridges and buildings, and Design-Build allows us the needed creativity and flexibility to get these projects done the right way.”
The benefits of design-build procurement can be documented in projects across the country, including several around New York State. The design-build construction of the new Tappan Zee bridge will cost $1.7 billion less than projected and is expected to be completed 18 months ahead of schedule.
The design-build construction of a new Goethals Bridge is projected to cost $1.5 billion, 10% less than its original estimate. The New York State Department of Transportation has saved over $100 million by awarding Design-Build contracts on dozens of bridges and roads, according to the report.
In California, the US Navy authorized design-build procurement for the construction of a new hospital at Camp Pendleton. It was completed six months ahead of schedule and $82 million under budget.
The design-build construction of a new bridge in Minnesota—replacing the I-35W St. Anthony Falls Bridge, which collapsed in 2007—was completed three months earlier than projected and saved more than $50 million of taxpayer money.
“The first duty of policy makers is to build and improve more infrastructure with existing resources. In many instances, Design-Build is a tool that helps accomplish just that,” asserts Chris Hamel, managing director and head of the municipal finance group at RBC Capital Markets.
“Today's report highlights the compelling need for New York State to join with the rest of the nation in bringing our roads, tunnels and bridges into the 21st century,” says Bill Rudin, chairman of the Association for a Better New York. “Design-build will ensure New York's place as a world economic leader while protecting New Yorker's tax dollars.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
