Capital procurement in New York involves the processes, laws, and management strategies that state and local agencies use to plan, bid, and construct public infrastructure projects. This page covers CBC’s work on design-build and alternative delivery methods, joint bidding for utility work, prevailing wage mandates, contractor oversight and debarment, and strategies for improving capital project efficiency.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The MTA should publish a $22.8 billion to $25.4 billion plan that identifies projects that can be committed by 2024.
The MTA should publish the planned schedule for the remaining outstanding projects from the 2010-2024 capital plans.
The MTA should develop an ambitious and solidly financed 2025-2029 capital program incorporating projects from prior plans and current needs.
The MTA should increase the efficiency of operations to help eliminate the structural deficit, possibly creating the capacity to issue debt for capital.
The MTA should continue to work with the federal and State governments to implement congestion pricing by 2023 to provide critical revenues.
The MTA should continue capital procurement improvements and reform to increase capacity and better align unit costs with national and international standards.
The MTA should continue to improve capital execution to increase capacity, including Fastrack and partial- or full-line shutdowns to accelerate projects.
Key Data
In December 2024, the CBC highlighted that joint bidding reduced project delays from 28 months to 7 months, avoiding $4.3 million in extra costs per project and generating $1 million in City revenue per project through cost-sharing agreements.
In August 2024, watchdogs noted that the State's fiscal year 2024-25 enacted budget bypassed standard procurement oversight by including $368 million in exemptions from prior approval and $1.5 billion in exemptions from competitive bidding rules.
In March 2020, the CBC reported that applying Wicks Law to design-build projects requires bidding work individually for projects over $3 million in New York City and $1.5 million elsewhere, while prevailing wage expansions increase construction costs by 13% to 25%.
In December 2019, the CBC highlighted that the MTA's automatic debarment rules for projects exceeding budgets or schedules by more than 10% led to 3 vendors refusing to bid on a $38.8 million design-build contract due to excessive risk.
In February 2019, the CBC reported that of the almost $20 billion NYC spent on procurement in fiscal year 2018, only 42% of contracts were competitively bid, and the process faced a median cycle time of 179 days from solicitation to registration.
Extending joint bidding on public works contracts in New York City allows the city to simultaneously bid capital projects and utility relocation work, accelerating project delivery and reducing construction costs. Without this extension, utility interference negotiations would revert to a slower process that often stalls projects, driving up capital costs and ultimately increasing utility bills for ratepayers.
Recommendations related to Capital Procurement Reforms
Governor Hochul should sign S10194-A/A11454 and S10195-A/A11455, which extend authorization of joint bidding on public works contracts in lower Manhattan and in the rest of New York City for one year, respectively.
Proposed legislation requiring prevailing wages for off-site construction would increase costs and timelines for state and local capital projects by discouraging the use of efficient, cost-effective fabrication methods. Mandating these wage standards for off-site factories would likely lead contractors to abandon these methods in favor of more expensive and disruptive on-site production.
Recommendations related to Capital Procurement Reforms
The Governor should veto A2747A/S2536A to prevent increased costs for state and local capital projects.
The State should allow the City and State to continue to use off-site custom fabrication without prevailing wages when it would reduce the time or cost of a capital project.
Key Data
20 percent to 50 percent
— McKinsey estimates that modular building can accelerate project delivery by 20 percent to 50 percent.
20 percent
— Modular building can reduce costs by up to 20 percent.
30 percent
— Projects classified as public works or 'covered projects' receive public subsidies that equal 30 percent or more of total costs.
$1 million
— Prefabricated public restrooms were delivered at a cost of $1 million per structure.
$3.5 million
— Traditional park bathrooms built fully on-site cost $3.5 million per structure.
Extending the authorization of joint bidding on public works contracts allows the City to bid capital projects and utility relocation work simultaneously, which accelerates project delivery and reduces construction costs. This process avoids the costly and inefficient "Schedule U" negotiation process, preventing project delays and mitigating the financial burden passed on to ratepayers.
Recommendations related to Capital Procurement Reforms
The Governor should sign S8404/A8679 and S8405/A8678 to extend the authorization of joint bidding on public works contracts in lower Manhattan and the rest of the city for one year.
New York City mayoral candidates were surveyed on their approaches to the city's $111 billion five-year capital program, with a focus on improving efficiency through better contractor management and administrative reforms. The responses highlight varying strategies for prioritizing capital spending, including balancing state-of-good-repair needs with programmatic expansion and infrastructure investment.
Recommendations related to Capital Procurement Reforms
I will reform capital project delivery to boost efficiency, assess infrastructure costs, and create a debt management policy to meet capital needs and keep debt service below 15% of annual revenues.
Let’s stop borrowing to build political monuments—focus on what’s essential and overdue.
I plan to end corruption and introduce reforms to make our City more efficient.
My first focus will be on cutting waste and inefficiency, using those savings on the most critical needs.
I can’t commit to changing capital spending until we look at details such as cost measures and performance indicators to better assess the effectiveness of the city’s capital program.
Key Data
$111 billion
— The total value of the City’s five-year capital program.
$1.2 billion
— The cost of the CityFHEPS housing voucher program in fiscal year 2025.
50%
— The current share of capital spending allocated to the State of Good Repair lifecycle category.
24%
— The current share of capital spending allocated to the Programmatic Replacement lifecycle category.
26%
— The current share of capital spending allocated to the Program Expansion lifecycle category.
New York City's annual spending exceeds $115 billion, requiring a strategic overhaul of capital projects and procurement processes to ensure fiscal responsibility and service quality. The next mayoral administration must prioritize modernizing these systems to better manage assets, control costs, and foster competition.
Recommendations related to Capital Procurement Reforms
The next mayor should modernize procurement to boost competition and cut costs.
The next mayor should overhaul capital spending to better manage assets and projects, fix procurement, and control costs.
Key Data
$115 billion
— Annual city spending that necessitates efficient service delivery and procurement practices.
New York City's capital projects frequently face costly delays due to outdated procurement rules, particularly regarding utility relocation. Implementing joint bidding, which allows for simultaneous utility and construction work, has proven to reduce project delays and costs while generating additional city revenue.
Recommendations related to Capital Procurement Reforms
The state should enact legislation to permanently authorize joint bidding for public works contracts.
Key Data
$86.7 billion
— Total value of the September Capital Commitment Plan covering fiscal years 2025 to 2028.
$164.8 billion
— Total value of the most recent Ten-Year Capital Strategy covering fiscal years 2024 to 2033.
28 months
— Average delay resulting from utility work for street construction projects using the traditional bidding method.
7 months
— Average delay resulting from utility work for street construction projects using the joint bidding method.
$4.3 million
— Additional cost added to each project without joint bidding due to 21 months of delay.
$1.0 million
— City revenue generated per project under joint bidding cost sharing agreements.
New York City requires legislative approval to utilize efficient procurement methods like joint bidding, design-build, and Construction Manager-Build for capital projects. Signing the pending bills would extend these authorizations, allowing the City to accelerate infrastructure delivery and reduce construction costs.
Recommendations related to Capital Procurement Reforms
The Governor should sign A10401/S9709 and A10400/S9710 to extend authorization of joint bidding on public works contracts for one year.
The Governor should sign A10543/S9849 to authorize New York City to contract for capital projects using design-build and Construction Manager-Build (CM-Build) procurement.
The State should enact future legislation to make joint bidding authorization permanent for capital projects.
New York State's enacted budget included $368 million in appropriations exempt from Comptroller prior approval and $1.5 billion exempt from competitive bidding rules, increasing the risk of wasteful spending. To improve transparency, the Governor is urged to sign legislation requiring state agencies to publish details on emergency and exempt contracts within 30 days of execution.
Recommendations related to Capital Procurement Reforms
The Governor should sign bill A10281/S9171 to require State agencies and authorities to publish information related to contracts exempt from prior approval by the Office of the State Comptroller.
The Governor should no longer include procurement oversight exemptions in executive budget bills and reject any proposed by the Legislature.
The use of emergency contract authority should be infrequent, specifically justified, and transparent.
Key Data
$368 million
— Enacted Budget appropriations exempting contracts from section 112 (prior approval) of the State Finance Law.
$1.5 billion
— Enacted Budget appropriations exempt from section 163 (competitive bidding) of the State Finance Law.
5.3 days
— Average time for the Office of the State Comptroller to complete its review of submitted contracts.
$50,000
— The contract value floor above which Comptroller oversight provisions begin to apply.
New York State agencies currently bypass critical oversight and competitive bidding rules for billions of dollars in contracts through exemptions in the enacted budget. Signing legislation A7404/S6941 would mandate the public disclosure of these exempt contracts, providing necessary transparency to prevent potential waste and corruption.
Recommendations related to Capital Procurement Reforms
The Governor should sign A7404/S6941 to require State agencies and authorities to publish contracts that are exempt from prior approval by the Office of the State Comptroller.
The Governor should no longer include exemptions to sections 112 and 163 of State Finance Law in executive budget bills.
The Governor should reject any exemptions to sections 112 and 163 of State Finance Law proposed by the Legislature.
Key Data
5 days
— The average time it takes for the Office of the State Comptroller to complete a prompt review of contracts.
$50,000
— The minimum value floor for contracts that are subject to oversight provisions.
$12.8 billion
— The total value of 14 appropriations in the Executive Budget that were exempt from both sections 112 and 163 of State Finance Law.
$2.6 billion
— The total value of 17 appropriations that were exempt from section 163 of State Finance Law alone.
The Metropolitan Transportation Authority faces a significant backlog of uncommitted capital projects and a funding shortfall, necessitating a more disciplined approach to prioritizing investments. To ensure the system reaches a state of good repair, the authority must publish a clear, prioritized list of projects for the next two years and develop a realistic, transparent 2025-2029 capital plan that aligns with its actual contracting and financing capacity.
Recommendations related to Capital Procurement Reforms
The MTA should publish a $22.8 billion to $25.4 billion plan that identifies projects that can be committed by 2024.
The MTA should publish the planned schedule for the remaining outstanding projects from the 2010-2024 capital plans.
The MTA should develop an ambitious and solidly financed 2025-2029 capital program incorporating projects from prior plans and current needs.
The MTA should increase the efficiency of operations to help eliminate the structural deficit, possibly creating the capacity to issue debt for capital.
The MTA should continue to work with the federal and State governments to implement congestion pricing by 2023 to provide critical revenues.
The MTA should continue capital procurement improvements and reform to increase capacity and better align unit costs with national and international standards.
The MTA should continue to improve capital execution to increase capacity, including Fastrack and partial- or full-line shutdowns to accelerate projects.
Key Data
$52.9 billion
— of projects still uncommitted from the 2020-2024 and two prior five-year capital plans.
$7.1 billion
— average annual capital commitments over the past six years.
$8.2 billion
— forecasted capital commitments for 2022.
$12.0 billion
— of future planned capital financing that is at risk or unaffordable.
$11.5 billion
— of planned spending and borrowing that is unaffordable due to the MTA’s structural deficit.
$500 million
— at risk from lower-than-expected revenue from the new dedicated real estate transfer tax.
The New York City Housing Authority's federal monitorship has led to some operational improvements, but the federal government has failed to provide necessary regulatory relief or additional funding to make these changes fiscally sustainable. Specifically, federal authorities should grant waivers to allow for modern capital procurement methods, such as design-build and best-value contracting, to improve efficiency and reduce costs.
Recommendations related to Capital Procurement Reforms
HUD should grant regulatory waivers that free up funding for NYCHA, such as permission to reinvest savings from reducing energy consumption, and that improve operations, such as waivers from onerous and outdated rules that prohibit the use of design-build, construction manager-build, or best value capital procurement for federally funded capital projects.
The monitor should appeal to HUD for federal regulatory relief that improves operations or frees up funding for implementation.
The monitor should increase focus on identifying and advocating for long-overdue work rule reforms, broader job descriptions, fringe benefit savings, operational changes, and other actions that would boost productivity.
The monitor should publish data on NYCHA’s progress towards meeting specific benchmarks laid out in the agreement.
The monitor should publicly report its approved budget.
Key Data
$1.2 billion
— Amount NYCHA reported spending through calendar year 2021 on agreement implementation.
$933 million
— Total City operating support provided from City fiscal years 2018 through 2021.
$32 million
— Total fees for the monitor and its sub-contractors to date.
42 percent
— Percentage of NYCHA households that report three or more serious maintenance deficiencies.
$53 million
— Amount of energy cost savings that a rejected waiver would have freed up for NYCHA’s operating budget in 2022.
610,000
— Number of outstanding work orders as of April 2022.
47 is the number of people who will have held the office of NYC Comptroller once Brad Lander is sworn in on January 1, 2022. At a breakfast with CBC Trustees, President Andrew Rein sat down for a wide-ranging conversation with the Comptroller-elect, covering subjects including risks to New York’s…
NYCHA faces over $40 billion in capital needs, necessitating significant increases in city funding and the adoption of modern procurement methods like construction manager-build to ensure projects are delivered efficiently. To secure long-term viability, the city must also implement operational reforms and transition units to more stable funding models like Section 8 or the proposed Preservation Trust.
Recommendations related to Capital Procurement Reforms
State lawmakers should act swiftly to grant NYCHA authorization to use construction manager-build or construction manager-at risk procurement methods, even if the Trust is not speedily authorized.
NYCHA’s federal monitor, along with NYCHA and the City, should strongly advocate for HUD to grant waivers from restrictive federal public housing procurement rules for both its annual Section 9 subsidies and any additional federal funding NYCHA receives under the Build Back Better bill.
City and State lawmakers should create the Preservation Trust, since it will provide NYCHA with additional options to finance needed capital investment.
NYCHA must manage the renovated properties well, requiring real changes, such as those outlined in NYCHA’s Blueprint for Change, which proposed new organizational structures, quality controls, staffing plans, and accountability measures in order to operate like a modern and effective property management organization.
Key Data
$40 billion
— NYCHA's total capital needs due to years of underinvestment, mismanagement, and cost inflation.
$4.6 billion
— Planned commitments for NYCHA in the Fiscal Year 2022 Adopted Capital Commitment Plan through fiscal year 2031.
$2.9 billion
— Planned commitments for NYCHA through fiscal year 2025.
$1 billion
— Amount already committed to NYCHA since fiscal year 2016.
$257 million
— Total capital committed to NYCHA in the decade prior to the recent increase (fiscal years 2006 through 2015).
$2.2 billion
— Amount the City was required by the settlement agreement to invest in NYCHA through fiscal year 2027.
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
New York State's fiscal year 2021 budget includes several proposals that would reduce transparency and increase costs for public construction and development projects, such as expanding prevailing wage requirements and limiting competitive bidding for the MTA. These measures, including problematic changes to design-build authority, should be deferred to ensure proper oversight and fiscal responsibility during the pandemic response.
Recommendations related to Capital Procurement Reforms
The state should reject the proposal to require agencies using design-build to comply with the Wicks Law requirement to bid certain construction work individually for projects greater than $3 million in New York City and $1.5 million elsewhere.
Lawmakers should reject the proposal to eliminate the pre-qualification step in the design-build bidding process, as it limits the competitive pool to large, well-capitalized firms.
The state should maintain oversight by the State Comptroller’s office and reject the proposal to exempt public authority design-build contracts from such oversight.
The MTA should not reduce its bid solicitation period from 15 business days to five days, as this measure will decrease competition in procurement activities.
The state should reject the proposal to limit MTA bid advertisements to its website, as this will decrease competition.
The state should reject the expansion of prevailing wage requirements to publicly subsidized private projects, as it will increase project costs and make some projects financially infeasible.
Key Data
13 to 25 percent
— Range of increased construction costs on public projects due to prevailing wage mandates.
$3 million
— Threshold for Wicks Law compliance for design-build projects in New York City.
$1.5 million
— Threshold for Wicks Law compliance for design-build projects outside of New York City.
30 percent
— Minimum threshold of public funding for construction projects that would trigger the proposed prevailing wage requirement.
5
— Number of days for the proposed MTA bid solicitation period, reduced from 15 business days.
$5 million
— Value of contracts for 'innovative' technology projects that the MTA could award under a new, less transparent process.
The Metropolitan Transportation Authority's emergency regulations mandating automatic debarment for contractors whose projects exceed budget or schedule by more than ten percent are discouraging competition and creating excessive risk. These regulations should be revised to allow the agency discretion to consider project circumstances and vendor availability rather than enforcing a blunt, automatic penalty.
Recommendations related to Capital Procurement Reforms
The MTA Board should revise the regulations to not mandate automatic debarment for contractors.
The MTA should follow the law to allow the MTA discretion to take into consideration the circumstances of each project and the pool of vendors able to perform the particular work.
Key Data
$55B
— The size of the MTA's largest ever capital plan.
$38.8 million
— The value of a design-build contract for station accessibility upgrades that three vendors declined to bid on.
three
— The number of vendors that did not submit proposals on a design-build contract due to excessive risk from contract terms.
New York City is currently barred by state law from utilizing design-build and other innovative procurement methods, resulting in capital projects that take longer and cost more than necessary. Authorizing these alternative delivery methods would allow the city to select contracting teams that offer the best value to taxpayers, representing a significant improvement in project delivery.
Recommendations related to Capital Procurement Reforms
The Governor should sign A7636B/S6293A to authorize New York City to use design-build and other innovative capital procurement methods.
Future amendments should address concerns regarding the bill's ties to project-labor agreements (PLAs), which could limit the City's ability to evaluate and revise these agreements.
Future amendments should address concerns regarding protections for public sector capital project managers and prohibitions on using outside contractors to maintain assets built through design-build, as these could offset potential efficiencies.
The Metropolitan Transportation Authority should revise its proposed mandatory debarment rule to allow for agency discretion, as rigid penalties could increase costs and reduce the pool of available contractors. Instead of relying solely on punitive measures, the agency should implement incentive-based procurement reforms to encourage efficient contractor performance.
Recommendations related to Capital Procurement Reforms
The MTA should grant the MTA discretion whether to debar a contractor when debarment would disadvantage the MTA.
The MTA should incorporate a debarment remedy as part of an overall reform to the MTA procurement process.
The MTA should introduce incentive-based measures to award the best performing contractors alongside discretionary debarment for the worst performing contractors.
The rule should be modified to allow the MTA to exercise discretion, which may be warranted in circumstances when debarment would disadvantage the MTA.
Key Data
10 percent
— The threshold for exceeding the timeline for substantial completion or submitting invalid claims that triggers mandatory debarment.
five years
— The duration of the proposed debarment period for contractors that violate the new rules.
40 percent
— The portion of an unused contingency account awarded to the contractor for the JFK Airport AirTrain project.
$12 million
— The incentive payment made to the contractor for the JFK Airport AirTrain project upon completion.
The Governor and Comptroller are urged to finalize, publicize, and codify an agreement that restores oversight of state contracts and grants the Inspector General authority to investigate fraud. This reform aims to improve the integrity of the contracting process and restore public trust by requiring contractors to disclose potential conflicts of interest.
Recommendations related to Capital Procurement Reforms
The Governor and Comptroller should finalize the details of the agreement announced earlier this year regarding the restoration of pre-audit authority over certain state contracts.
The Governor and Comptroller should make public the details of the agreement to ensure transparency regarding the oversight of state contracts.
The Governor and Comptroller should support the agreement being codified in law during this legislative session to ensure long-term implementation.
The state should require contractors, vendors, and state agency grantees to certify that contracts contain no conflicts or collusion and disclose any relationships that could create or appear to be conflicts of interest.
The New York City Charter should be amended to expand the capital inventory to include all assets and focus the Borough President's role on identifying needs rather than allocating capital budget funds. Additionally, the city should improve capital project needs assessments and pursue legislative or administrative reforms to increase transparency and efficiency in the procurement process.
Recommendations related to Capital Procurement Reforms
The Charter should be amended to make the City’s capital inventory and needs assessment more comprehensive; that is, to include all assets that meet capital financing eligibility criteria, currently $35,000 and a five-year useful life, owned by an agency or authority that the City controls.
The Charter should be amended to focus the Borough Presidents’ roles on identifying borough-based needs and advising the Mayor and the City Council on how best to address those needs, and to eliminate the capital budget Borough President allocations.
Proposals to require greater transparency during the review process to help identify bottlenecks and allow the Mayor’s Office of Contract Services, elected officials, vendors, and the public to hold reviewers and agencies accountable have merit and are appropriate to pursue legislatively and administratively.
The Charter should be amended to retain the current role of the Comptroller in procurement, as additional review may lengthen an already cumbersome procurement process.
Effective capital planning requires improving the rigor of the needs analysis already mandated for capital projects.
Key Data
$35,000
— The current threshold for capital financing eligibility criteria for assets owned by an agency or authority that the City controls.
5 percent
— The portion of proposed capital budget appropriations that Borough Presidents currently receive, which reduces efficient citywide allocation.
The appointment of a federal monitor for the New York City Housing Authority offers a critical opportunity to address systemic physical deterioration through ambitious performance management, federal policy advocacy, and necessary labor and procurement reforms. By leveraging existing strategic plans like NYCHA 2.0 and securing essential state and federal support, the monitor can drive operational efficiency and improve living conditions for residents.
Recommendations related to Capital Procurement Reforms
The federal monitor should advocate for HUD to loosen rigid procurement rules that block NYCHA from selecting bids based on the best value rather than the lowest price and prohibit alternative procurement methods such as design-build for federally backed projects.
The monitor should urge the State to extend permanent design-build authority to all of NYCHA’s State- and City-funded projects.
The monitor should urge the State to exempt NYCHA from Wicks Law to streamline capital repairs.
NYCHA should continue efforts to bring in outside contractors for routine work to speed the pace of maintenance and repair work.
Key Data
$2.2 Billion
— Amount of capital funding the City committed to NYCHA through 2027.
$972 Million
— Amount of expense funding the City committed to NYCHA through 2027.
66%
— The amount less federal capital funding NYCHA received in 2017 compared to 2002, adjusted for construction cost inflation.
$450 Million
— Amount appropriated by the previous two New York State budgets for NYCHA capital repairs that has not yet been released.
New York City's complex and outdated procurement process, which involves billions of dollars in annual spending, suffers from inefficiencies that drive up costs and delay projects. Implementing reforms such as centralizing purchasing, modernizing digital systems, and changing state construction laws could streamline operations and generate significant taxpayer savings.
Recommendations related to Capital Procurement Reforms
The City should continue to improve e-procurement systems, including e-invoicing and payment, to increase transparency and accountability.
The City should centralize more procurement under the Department of Citywide Administrative Services to leverage staff expertise and increase efficiency.
The City should streamline the approval process for capital projects and change orders to reduce project timelines and generate savings.
The City should urge the State to change construction procurement laws, specifically to permit best value awards for capital projects, grant design-build authority for all City capital projects, and eliminate the Wicks Law.
Key Data
$20 Billion
— Total value of goods and services purchased by New York City in fiscal year 2018.
179 days
— Median cycle time for the City's procurement process from solicitation to registration in fiscal year 2018.
42 percent
— Portion of City contracts that were initial competitive bids.
$80 million
— Potential annual savings from greater centralization of contracting under the Department of Citywide Administrative Services.
86 percent
— Portion of City contracts that were $100,000 or less.
60 percent
— Share of City goods purchases managed by the Department of Citywide Administrative Services.
New York State has failed to enact substantial clean contracting reforms despite the rigging of over $1 billion in economic contracts by top aides and contributors. Legislative leaders and the Governor are urged to fulfill campaign promises by establishing a database of business subsidies and prohibiting campaign contributions from state vendors.
Recommendations related to Capital Procurement Reforms
The Governor should establish a Database of Deals to list all business subsidies received by companies.
The Governor should ban campaign contributions by vendors doing business with the State.
The Governor should honor his campaign commitments and act on clean contracting.
Speaker Heastie and Senate Majority Leader Stewart-Cousins should pass legislation to reform the state’s contracting.
Senate Majority Leader Stewart-Cousins should put the procurement legislation on the floor for a vote this session.
Key Data
$1B
— Amount of state economic contracts rigged by top aides and campaign contributors.
The Metropolitan Transportation Sustainability Advisory Workgroup, which operated over a 16-week lifespan, highlighted necessary fiscal and managerial improvements for the Metropolitan Transportation Authority, including the need for procurement reforms and independent audits of capital costs. These measures aim to address the authority's fiscal health and improve the efficiency of construction and maintenance projects.
Recommendations related to Capital Procurement Reforms
The MTA should implement procurement reforms to improve cost containment and transparency.
The MTA should conduct an independent audit of capital costs and state of good repair needs.
The MTA should allow flexibility in closing subway lines for construction and maintenance to improve project efficiency.
New York State's infrastructure network is aging and failing, requiring over $100 billion in new investment to address critical needs and modernize systems. To improve project delivery and funding, the state should establish a centralized Office of Infrastructure to coordinate planning, prioritize investments based on clear criteria, and explore alternative funding sources like congestion pricing.
Recommendations related to Capital Procurement Reforms
The state should establish a New York State Office of Infrastructure to institutionalize long-term, cross-agency planning and serve as a public face for the state's infrastructure vision.
The Office of Infrastructure should articulate a set of criteria to prioritize infrastructure investment, ensuring projects are aligned with statewide policy objectives such as economic growth, resiliency, and equity.
The Office of Infrastructure should balance competing goals between maintaining a State of Good Repair for existing assets and delivering transformative projects that expand capacity and incorporate new technology.
The Office of Infrastructure should act as a clearinghouse for project transparency and reporting by maintaining publicly available dashboards that track project metrics like cost and schedule across all agencies.
The Office of Infrastructure should create a Center of Excellence for state infrastructure investment to address systemic cost drivers, recommend appropriate project delivery methods, and facilitate knowledge sharing.
New York should pursue alternate funding sources, such as congestion pricing and value capture, to appropriately fund the state's infrastructure needs as existing sources like the gas tax plateau.
Key Data
$100 billion
— Estimated new investment required to meet the state’s infrastructure needs.
50%
— Portion of New York State infrastructure investment delivered through public authorities, which limits comprehensive planning.
2.5 times
— The cost of MTA projects compared to even the most expensive projects in peer cities.
$807 million
— Construction cost per track mile for Phase II of the MTA’s Second Avenue Subway.
$1.1 billion
— Amount budgeted by New York State to support the Gov. Mario M. Cuomo Bridge project.
$155 million to $605 million
— Estimated annual revenue from a for-hire vehicle (FHV) congestion pricing charge.
The New York City Housing Authority faces $32 billion in capital needs, with nearly all properties requiring substantial rehabilitation at an average cost of $181,000 per unit. To address this crisis, the city must integrate the authority into its broader affordable housing strategy, leverage underutilized land assets, and reform construction management practices to ensure long-term viability.
Recommendations related to Capital Procurement Reforms
The City should fully integrate NYCHA into its affordable housing strategy.
NYCHA should transition from being a landlord to an affordable housing steward that manages fewer buildings.
NYCHA should leverage underutilized land assets to fund repairs and facilitate development.
NYCHA should improve operations and construction management to ensure the long-term viability of its units.
Key Data
$32 billion
— Total capital needs identified for the New York City Housing Authority.
$181,000
— Average cost per unit for substantial rehabilitation of properties.
90 percent
— Portion of NYCHA’s 176,000 units that could deteriorate to the point of being no longer cost-effective to repair by 2027.
$1.5 billion
— Potential funding raised by selling 10 percent of NYCHA’s air rights.
$300 million to $600 million
— Goal set by NextGen NYCHA for raising funds from mixed income infill development.
New York City's capital construction projects are governed by Project Labor Agreements that have not been independently evaluated for their promised cost savings or effectiveness in supporting minority and women-owned businesses. With the city's capital commitment plan exceeding $82 billion, it is critical to assess these agreements and other productivity measures to mitigate the impact of rising construction inflation.
Recommendations related to Capital Procurement Reforms
The City should commission evaluations of the four expiring Project Labor Agreements while there is still time to decide if it is in the City’s interest to amend or renew them.
It is important that decisions regarding Project Labor Agreements be made with transparency and be based on a detailed, independent analysis of performance and experience.
The Mayor’s Office of Contract Services should identify and evaluate other City efforts to boost construction productivity.
Key Data
$347 million
— Projected savings on construction work from the Project Labor Agreements.
$8 billion
— Total value of construction work covered by the Project Labor Agreements.
$82 billion
— Total value of the City's current Capital Commitment Plan.
4 to 5 percent
— Average annual rate of construction inflation since the City signed the four Project Labor Agreements.
The New York City Housing Authority faces a $32 billion capital funding gap that threatens the viability of its housing stock, requiring a shift toward a more sustainable stewardship model. To address these needs, the authority should leverage underutilized land, expand public-private partnerships, and adopt more flexible procurement and management practices to lower operational costs.
Recommendations related to Capital Procurement Reforms
NYCHA should work with the City and State to use more flexible procurement arrangements, such as design-build, and improve construction management to lower costs.
NYCHA should increase the pace of public-private partnerships to convert public housing units to the more stable Section 8 funding stream, which will address more than $2 billion in capital needs through 2022.
NYCHA should tap underutilized land assets by selling air rights and allowing infill development to generate cash and facilitate cost-effective renovations.
NYCHA should reduce the number of units it operates by transferring senior housing to qualified nonprofit organizations and selling its small, inefficient buildings with fewer than 200 units.
NYCHA should be fully integrated into the City’s affordable housing strategy, which would provide an additional $1 billion through fiscal year 2022 if given one-third of the City's planned capital commitments.
Key Data
$32 billion
— The total amount of capital needs for NYCHA over the next five years.
90 percent
— The portion of NYCHA’s housing units at risk of deteriorating past the point of cost-effective repair by 2027 without dramatic changes.
39 percent
— The amount by which NYCHA’s costs of operations are higher than those of other landlords operating rent-stabilized buildings.
$1.5 billion
— The potential revenue that could be raised by selling 10 percent of NYCHA’s air rights.
$1.4 billion
— The potential revenue that could be raised by accelerating the pace of infill development to build an additional 10,000 units.
$7 billion
— The total amount of capital needs that could be addressed over the next five years through the implementation of the proposed recommendations.
New York City's capital commitment plan is currently unrealistic in its ambition and lacks the necessary transparency and accountability to ensure efficient project completion. To address these issues, the city must implement comprehensive reforms, including adopting life-cycle cost analysis, improving needs assessments, and pursuing procurement changes like the use of design-build.
Recommendations related to Capital Procurement Reforms
The City should pursue procurement reform, including the ability to use design-build and the repeal of Wicks Law, in order to reduce project costs and accelerate capital projects.
The City should incorporate a life-cycle cost analysis that includes the cost of operating, maintaining, and ultimately replacing capital assets.
The City should require the use of discrete project codes to replace lump sum project codes, which offer little transparency into how and where agencies plan to commit funds.
The City should add performance metrics to the capital plan, such as per-unit costs or benchmarks to measure progress toward project milestones.
The City should make actual spending on capital projects public to facilitate oversight and accountability by allowing observers to monitor the progress and total cost of individual projects.
The City should improve the City’s needs assessment by incorporating thorough assessments conducted by the Departments of Transportation and Education and aligning them more closely with the capital plan.
The City should reflect more accurate timelines in the capital plan to improve project coordination, budgeting, and monitoring.
The City should make smart and targeted capital investments, ensuring projects billed as 'economic development' demonstrate greater benefits than costs.
The City should improve capital management by identifying and addressing the root causes of delays, cost overruns, and inflated construction budgets.
The City should use pay-go financing to offset the expected increase in borrowing costs as interest rates rise.
Key Data
$79 billion
— The total value of the Preliminary Capital Commitment Plan for Fiscal Years 2018 to 2022.
The Project Labor Agreement between the New York City Housing Authority and the Building and Construction Trades Council, which aimed to reduce costs and improve repair speeds, requires an independent evaluation of its actual impact on budget, operations, and resident employment before any renewal or modification is considered. This assessment should specifically analyze whether the projected 3% labor cost savings and apprenticeship goals have been realized since the agreement's 2015 inception.
Recommendations related to Capital Procurement Reforms
An independent evaluation of the PLA's impact on NYCHA's budget and operations, including speed and quality of work and cost of renovation and rehabilitation projects, should be conducted and made public before any decision is made regarding the renewal or modification of the agreement.
The evaluation should also examine the extent to which NYCHA residents have participated in BCTC pre-apprenticeship and apprenticeship programs annually since the PLA went into effect in 2015.
Key Data
3%
— Projected savings in labor costs expected from the Project Labor Agreement.
100 to 120
— Number of union apprenticeship positions the BCTC would provide annually for NYCHA residents.
New York City's capital planning and procurement processes require significant reform to address high debt burdens, inefficient contracting rules, and inadequate asset maintenance. The city should adopt a "fix it first" strategy, prioritize state of good repair projects, and implement more cost-effective contracting methods like "best value" procurement to improve infrastructure outcomes.
Recommendations related to Capital Procurement Reforms
The next administration should enact clear guidelines or directives for performing routine maintenance and regular replacement of assets to prevent the state of good repair backlog from growing.
All city agencies and component units should undertake a comprehensive needs assessment that details the condition of major asset classes and the cost to fix those in disrepair.
The City should adopt a “fix it first” strategy, in which state of good repair projects receive priority at each agency.
The City should renew its Project Labor Agreements to reduce labor costs and improve managerial flexibility.
City leaders should advocate for a repeal of Wicks Law and an expansion of the city’s toolbox for effective contracting, including the latitude to award construction contracts on a “best value” basis.
Key Data
$750,000
— The average cost of a design change order for city capital projects.
$130 million
— The total value of design change orders in fiscal year 2013, which constituted almost 20 percent of the original contract values.
$500 million
— The value of construction change orders in fiscal year 2013, which grew from $210 million since fiscal year 2006.
$300 million
— The estimated capital budget savings over four years achieved through Project Labor Agreements.
The Citywide Savings Program aims to improve operational efficiency and reduce expenses through initiatives like digitizing procurement processes and optimizing fleet management. While the Office of Management and Budget has identified significant savings, broader agency participation is necessary to maximize the program's impact on the city's budget.
Recommendations related to Capital Procurement Reforms
The City should implement procurement reforms to move paperwork to an online system, accelerating contract processing and reducing vendor overhead.
Individual city agencies should follow the lead of the Office of Management and Budget by reviewing their operations to enhance productivity and reduce expenses.
The City should consider reinstating savings requirements for agencies to ensure broader participation in efficiency programs, as voluntary participation has resulted in limited engagement.
Key Data
$90 Million
— The projected four-year total savings from the <b>procurement reform</b> initiative.
$20 Million
— The savings generated by <b>procurement reform</b> in fiscal year 2019.
$40 Million
— The savings generated by <b>procurement reform</b> by fiscal year 2021.
$378 Million
— The potential savings in fiscal year 2018 if all agencies achieved efficiencies worth 1 percent of their city-funded expenditures.
CBC's Director of State Studies David Friedfel joins Liz Benjamin on Capital Tonight with Alex Camarda of Reinvent Albany and Ron Deutsch of the Fiscal Policy Institute to discuss the chances of passing "clean contracting" bills and other measures to make state procurement and contracting more transparent and accountable. This program originally…
New York City's capital construction process for libraries and cultural institutions is plagued by excessive delays and high costs, with median projects taking over four years to complete and costing $930 per square foot. To address these inefficiencies, the report advocates for systemic reforms including the adoption of design-build contracting, the implementation of value-based bidding, and the streamlining of multi-agency approval processes.
Recommendations related to Capital Procurement Reforms
The mayor should convene a task force to examine the current capital construction approval and management system.
The city should leverage its existing Capital Projects Dashboard and expand it to systematically track the real costs and timelines of all capital construction projects.
The city should streamline project approval practices and reduce redundancies between OMB and DDC.
DDC should simplify the design review process by establishing a common review process and agreeing to achievable timetables for feedback and approval.
The city should fund an expanded agency-wide data and analytics team within DDC to develop and implement data analytics tools for capital construction management.
The city should institute a process for nonprofits to prequalify for discretionary capital funds to ensure they are able to meet established criteria.
The city council should adopt and fund a fixed five-year capital program, aligned with the city’s required ten-year capital strategy.
OMB should create a handbook providing an easy-to-understand summary of all capital eligibility rules and requirements to improve the efficiency and transparency of the approval process.
The city should allow appropriate capital projects to be contracted through a design-build process to reduce delays and control costs.
City agencies should expand the use of pass-throughs for libraries and large cultural organizations, including both major capital construction and more modest renovation and maintenance projects.
Key Data
$930 per square foot
— The median cost for new library and cultural buildings in the sample.
1,550 days
— The median time it took for a capital project to be completed.
$523 per square foot
— The average cost of construction for self-managed NYPL projects.
$883 per square foot
— The average cost of construction for DDC-managed NYPL projects.
$1,272 per square foot
— The average cost of ground-up construction projects when managed by the city.
$641 per square foot
— The average cost of ground-up construction projects when managed by the New York Public Library.
To improve transparency and reduce conflicts of interest in state contracting, the state should implement competitive bidding requirements and empower the comptroller to oversee contracts exceeding $250,000. Additionally, the state should centralize economic development awards, prohibit business dealings between authorities and their board members, and establish a public database to track subsidies.
Recommendations related to Capital Procurement Reforms
Require competitive and transparent contracting for the award of state funds by all state agencies, authorities, and affiliates.
Transfer responsibility for awarding all economic development awards to the Empire State Development Corporation (ESDC), and end awards by state non-profits and SUNY.
Empower the comptroller to review and approve all state contracts over $250k.
Prohibit state authorities, state corporations, and state non-profits from doing business with their board members.
Create a ‘Database of Deals’ that allows the public to see the total value of all forms of subsidies awarded to a business.
Key Data
$250k
— The threshold for state contracts that the comptroller should be empowered to review and approve.
six
— The number of states that have already created a 'Database of Deals' to track subsidies awarded to businesses.
six months
— The duration of the ban on campaign contributions by vendors following the restricted period of a contract.
A recent bid-rigging scandal involving over $1 billion in public funds has exposed systemic flaws in how New York awards large contracts and subsidies through non-profits and SUNY. To prevent future abuse, the state is urged to centralize subsidy awards under the ESDC, mandate competitive contracting, empower the Comptroller to approve all contracts, and increase transparency through a public database.
Recommendations related to Capital Procurement Reforms
The state should require competitive and transparent contracting for the award of state funds, regardless of the contracting entity, using agency procurement guidelines as a uniform minimum standard.
The state should transfer responsibility for awarding all business subsidy awards to ESDC and end the use of state non-profits and SUNY in awarding these subsidies.
The state should empower the Comptroller to review and approve all state contracts.
The state should create a Database of Deals that allows the public to see the total value of all forms of subsidies awarded to a business.
The state should seek to reduce the potential for conflicts of interest by exploring options to limit campaign contributions from anyone who has or is seeking a state contract.
Key Data
$1 billion
— The amount of public funds affected by the state bid rigging scandal.
six states
— The number of states that currently have a Database of Deals to track business subsidies.
Nineteen states and NYC
— The number of jurisdictions that have 'pay to play' laws to limit campaign contributions from those seeking state contracts.
Tony Guida sits down with the CBC's Vice President, Maria Doulis, to discuss why New York City's mega-projects run over budget and how the public sector can build better.
The state budget proposal includes expanding design-build authorization to more agencies and creating a new oversight board for large capital projects, both of which impact how infrastructure is procured and managed. While design-build authority should be expanded to all state agencies and New York City to improve efficiency, the proposed oversight board should be rejected as it creates redundant layers of bureaucracy that blur accountability.
Recommendations related to Capital Procurement Reforms
The authority to pursue public-private partnerships and design-build arrangements should be extended to all State agencies and the City of New York.
The proposal to create a new entity to review capital projects that exceed $50 million should be rejected because it would blur lines of accountability and give new powers to politically appointed individuals.
One-time financial settlements should be used to provide long-term benefits such as pay-as-you-go capital investments that replace borrowing, enhanced reserves, or accelerated debt payments.
Key Data
$50 million
— Threshold for capital projects that would be subject to review by the proposed new New York Design and Construction Corporation.
$590 million
— Amount the Executive Budget proposes to dedicate to capital housing projects, which is an appropriate use of one-time financial settlements.
$2.5 billion
— Total amount of one-time financial settlements available in the current year that should be used for capital investments rather than operating expenses.
The Citywide Savings Program includes procurement reforms valued at $55 million annually, though these initiatives remain unspecified in the current financial plan. The program overall is criticized for being unambitious and lacking sufficient efficiency initiatives compared to previous administrations.
Key Data
$55 million
— Annual value of procurement reforms previously planned but still unspecified.
New York City's bridge infrastructure projects frequently suffer from delays and cost overruns, with current projects running 45 percent over budget due to the limitations of traditional design-bid-build contracting. Granting the city statutory authority to utilize design-build contracting could streamline project delivery and potentially save $2 billion over the next decade.
Recommendations related to Capital Procurement Reforms
State legislators should enable New York City to benefit from design-build contracting to improve infrastructure project delivery.
The legislature should honor the request from City officials and include design-build authority for the New York City Department of Transportation in the budget bills.
Key Data
$4.6 billion
— Amount New York City has committed to its bridges since 2006.
$7.7 billion
— Amount New York City plans to spend on bridges over the next 10 years.
$2 billion
— Potential savings for the City over 10 years if design-build contracting is implemented.
45 percent
— Amount by which current NYCDOT bridge projects are over budget.
20 percent
— Cost increase of NYCDOT contracts in fiscal year 2015 due to design change orders.
40 days
— Average processing time for change orders on NYCDOT contracts.
The Metropolitan Transportation Authority's current capital plan fails to bring all subway stations to a state of good repair, with over 3,000 structural components remaining in disrepair despite significant spending. To address this, the agency should reallocate funds from expansion projects, improve project management to reduce cost overruns, and leverage public-private partnerships to secure additional capital.
Recommendations related to Capital Procurement Reforms
The MTA should reallocate available capital funds from new expansion projects to state of good repair work.
The agency should improve the management of station projects to lower costs and permit more progress with available funds.
The MTA should experiment with new models of public-private partnerships at selected stations to secure additional capital and implement projects more efficiently.
The agency should introduce station conservancies to marshal resources to rehabilitate and maintain stations on an ongoing basis.
The MTA should assign to a private firm or consortium responsibility for financing and implementing capital work and maintaining those stations over their expected useful life.
Key Data
$5.5 billion
— Total funding allocated for expansion projects across the mass transit system in the proposed 2015-2019 capital plan.
3,195
— Number of structural components that will not be in a state of good repair after completion of projects in the 2010-2014 plan.
21 percent
— Share of structural components that will not be in a state of good repair after completion of projects in the 2010-2014 plan.
$210 million
— Value of subway station improvements to be completed by the developer as part of the 2014 agreement with SL Green for One Vanderbilt.
$1.3 billion
— Funding allocated in the proposed capital plan for structural and architectural station component work.
$997 million
— Funding allocated in the proposed capital plan for investments in elevators, escalators, and accessibility improvements.
The Metropolitan Transportation Authority's current capital planning strategy fails to bring subway stations to a state of good repair, with 21% of structural components remaining deficient even after recent investment cycles. To address this, the agency should shift funding from large-scale expansion projects toward station rehabilitation, improve project management to reduce cost overruns, and leverage public-private partnerships to secure additional capital.
Recommendations related to Capital Procurement Reforms
The agency should reallocate available capital funds from new expansion projects to state of good repair work to address the backlog of station needs.
The agency should improve the management of station projects to avoid delays and cost overruns, allowing more progress with available funds.
The agency should experiment with new models of public-private partnerships at selected stations to secure additional capital and implement projects more efficiently.
The agency should identify opportunities for introducing station conservancies to marshal resources for ongoing rehabilitation and maintenance.
The agency should invite private partners into station-related public-private partnerships to leverage private sector expertise and capital.
Key Data
$5.5 billion
— Total funding allocated for expansion projects across the mass transit system in the proposed 2015–2019 capital plan.
21%
— Share of structural components that will not be in a state of good repair after the completion of projects in the 2010–2014 capital plan.
$1,338 million
— Proposed funding in the 2015–2019 capital plan for projects to improve station components.
$210 million
— Value of subway station improvements to be completed by the developer as part of the 2014 agreement for One Vanderbilt.
$997 million
— Proposed investments in the 2015–2019 capital plan for elevators, escalators, and accessibility improvements.
$43 million
— Cost per station for ADA accessibility projects in the proposed 2015–2019 capital plan.
The MTA's 2015-2019 capital plan requires a shift away from debating City versus State funding contributions toward a more unified regional revenue strategy. To achieve necessary efficiencies, the plan should incorporate alternative project delivery methods like design-build and public-private partnerships while increasing funding through congestion pricing and vehicle-related fees.
Recommendations related to Capital Procurement Reforms
The MTA should specify which projects will utilize alternative project delivery methods including design-build, public-private partnerships, and procurement improvements in the revised capital plan.
Leaders should drop the “City/State” frame of reference and develop a concrete plan to put the necessary funding in place.
The MTA should implement a vehicle-miles traveled fee system to fund transportation infrastructure in the longer term.
Immediate funding should be generated through East River bridge tolls and other congestion pricing mechanisms or higher vehicle registration fees.
Key Data
$2.2 billion
— Estimated savings from 6 percent to 8 percent efficiency improvements in the capital plan.
$9.8 billion
— The funding gap between the City and State for the MTA capital plan.
$580 million
— Annual operating and capital support provided by New York City taxpayers to the MTA.
73 percent
— The portion of the MTA’s $1.3 billion regional payroll tax paid by New York City firms.
New York State's reliance on outdated design-bid-build procurement laws has hindered the efficiency of public capital projects, whereas design-build contracting has proven to deliver projects faster and more cost-effectively. To modernize infrastructure development, the state should permanently authorize design-build authority for all agencies and public authorities while expanding its use to include public building projects.
Recommendations related to Capital Procurement Reforms
The State should permanently authorize and extend design-build authority as a first key step in modernizing the State’s approach to public projects.
The State should expand design-build authority to all State agencies and public authorities, the City University of New York, and the State University of New York and make public buildings projects eligible.
The State should make feasibility studies for all projects public so their underlying assumptions can be evaluated.
New York should approve a permanent design-build statute as the first step toward moving toward more complex arrangements like public-private partnerships.
Key Data
29 percent to 39 percent
— increase in non-residential construction projects using design-build between 2005 and 2013
41 states
— where design-build is a widely permitted option as of 2014
$1 billion
— cost of the Houston beltway construction project
$266 million
— cost of Minnesota’s St. Anthony Falls Bridge
47 weeks
— time taken to complete the St. Anthony Falls Bridge
10 percent
— amount below budget for the emergency reconstruction of State Route 42
New York should permanently extend design-build authorization for all state agencies, a method used by 41 states and the District of Columbia to produce better-designed and lower-cost capital projects. Additionally, the state should prioritize high-yield infrastructure investments, such as the $1.3 Billion allocated to the Thruway Authority and $750 Million for bridge and road projects, to address significant unfunded capital needs.
Recommendations related to Capital Procurement Reforms
The Legislature should permanently extend design-build authorization for all state agencies to allow architects and contractors to produce better-designed and lower-cost projects.
Key Data
41
— Number of states and the District of Columbia that allow design-build procurement.
$1.3 Billion
— Allocation to the Thruway Authority for capital infrastructure needs.
$750 Million
— Allocation for bridge and road projects to address unfunded capital needs.
$400 Million
— Allocation for the Access to Penn Station project and development near commuter rail stations.
On November 12, 2014, the Citizens Budget Commission co-sponsored a conference titled Modernization of New York's Built Environment Laws: If Not Now, When? in Albany, New York. This panel discussion examined the problems with New York's "low-bid" and "design-bid-build" procurement rules and how "alternative" delivery methodologies, such as design-build,…
New York State should extend its authorization for design-build procurement, a method that has already reduced project costs by 27 percent and accelerated infrastructure repairs like the Kosciuszko Bridge. Expanding this authority to local governments and incorporating broader public-private partnership strategies is essential for managing the state's $12 billion highway and bridge construction pipeline.
Recommendations related to Capital Procurement Reforms
New York should continue, and preferably expand, its ability to capture the benefits of P3 approaches.
The state should make the temporary design-build authority permanent and expand it to local governments.
The state should utilize 'design-build-maintain' and 'design-build-maintain and operate' contracts for capital facilities to significantly reduce asset life-cycle costs.
Key Data
$171.2 Million
— Value of completed contracts using the design-build procurement method.
$750 to $850 Million
— Value of design-build contracts currently in process.
27 percent
— Estimated reduction in costs on projects awarded pursuant to design-build.
42 months
— Time by which the planned completion of repair on the Kosciuszko Bridge was accelerated.
$12 Billion
— Value of highway and bridge construction projects planned over the next five years.
4 percent
— Statutory debt limit set as a percentage of personal income.
This presentation was given during CBC's Conference on The Most Important Economic and Fiscal Decisions Facing the Next Mayor , which took place on December 6, 2013.. CBC provides a framework for curbing expenditures effectively and provides 8 options for savings: Implementing health insurance premium-sharing; Consolidating union welfare funds;…
New York City's capital planning and spending during the Bloomberg administration resulted in significant asset growth but was hampered by high debt burdens, insufficient maintenance, and inefficient procurement practices. To improve future capital strategies, the city should prioritize 'fix it first' maintenance, adopt 'best value' contracting, and implement clearer guidelines for debt and pay-as-you-go capital.
Recommendations related to Capital Procurement Reforms
The next administration should enact clear guidelines or directives for performing routine maintenance and regular replacement of assets to prevent the state of good repair backlog from growing.
The City should adopt a “fix it first” strategy, in which state of good repair projects receive priority at each agency.
City leaders should advocate for changes to contracting rules, such as a repeal of Wicks Law and the latitude to award construction contracts on a “best value” basis.
The City should renew its Project Labor Agreements to reduce labor costs and improve managerial flexibility.
The administration should develop criteria for paying for some capital expenses from the operating budget to help keep the long-run debt burden manageable.
Key Data
31%
— Percentage of school capital improvement projects that are completed late.
29%
— Percentage of school capital improvement projects that are over-budget.
$300 million
— Estimated capital budget savings over four years achieved through Project Labor Agreements.
$750,000
— Average cost of a design change order for capital projects.
200%
— Amount by which mandated prevailing wage rates can exceed mean hourly wages in the New York City metropolitan area.
Prevailing wage mandates in New York City often result in compensation levels significantly higher than private sector averages, with supplemental fringe benefits adding at least 30 percent to total labor costs. To improve fiscal efficiency and transparency, the calculation methodology for these wages should be reformed to use a broader standard than the current 30 percent rule and require public disclosure of the underlying collective bargaining agreements.
Recommendations related to Capital Procurement Reforms
Efforts should be undertaken to ensure wage surveys are inclusive and widely administered, and the definition of prevailing wage should be broadened to a standard greater than 30 percent.
The State Labor Commissioner and the City Comptroller should take steps to improve transparency in the determination of prevailing wage.
The State Labor Commissioner and the City Comptroller should exercise their discretion to re-examine the criteria for establishment of titles to simplify the schedules and reduce the cost burden.
Collective bargaining agreements used to set prevailing wage rates should be identified on the schedules.
Contractual agreements relevant to the determination of the prevailing wage should be posted online.
Key Data
75 - 79%
— Supplemental rate as a percent of wage rate for boilermakers.
91 - 99%
— Supplemental rate as a percent of wage rate for truck drivers.
$47.32 - $47.98
— New York City prevailing wage for boilermakers.
$28.72
— NYC regional mean hourly private sector wage for boilermakers.
Public-private partnerships offer a viable mechanism for New York to improve infrastructure management by leveraging private sector expertise and capital to enhance lifecycle maintenance and reduce long-term costs. To be successful, these arrangements must be pursued selectively for appropriate projects, with the public sector maintaining robust oversight and management capacity to ensure accountability and performance.
Recommendations related to Capital Procurement Reforms
State and local entities in New York should focus PPPs on achieving efficiencies in the life cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public sector operation.
New York’s leaders should give high priority to assets that are currently in poor condition and have a history of poor maintenance when selecting opportunities for effective PPPs.
The public sector must develop an enhanced capacity for contract design, performance measurement and monitoring in order for PPPs to be successful.
A group of planned new schools and/or school renovation projects should be considered for a PPP modeled on the British experience with “strategic partnerships,” in which local governments forge a long-term relationship with private partners to create a strategic framework for building or renovating a number of smaller capital assets.
Public officials should decide the extent to which they share labor concerns and, if they are willing to sacrifice some of the benefits of PPPs, they can provide protections for unionized public servants.
Key Data
$1.6 trillion
— Investment necessary in the next five years to bring the nation’s infrastructure to a good condition, according to the American Society of Civil Engineers.
$3.2 billion
— Critical maintenance backlog identified for the City University of New York system.
$1.7 billion
— Critical maintenance backlog identified for the State University of New York system.
$999 million
— Total amount to be paid to New York City by Cemusa, Inc. over the life of the 20-year street furniture partnership agreement.
$1.8 billion
— Total cost of the contract to build the Airtrain from John F. Kennedy International Airport to the Jamaica Station of the Long Island Railroad.
$1.4 billion
— Total cost of rebuilding JFK Terminal Four.
The Metropolitan Transportation Authority's capital planning process suffers from significant delays and cost overruns, largely due to a lack of transparency and inadequate management information systems. Future capital plans must be based on realistic assessments of project feasibility and include improved oversight to ensure accountability and effective use of public funds.
Recommendations related to Capital Procurement Reforms
The MTA should commit to an improved management information system for tracking capital projects and to greater transparency in informing the public about the status of its capital projects.
The MTA should improve its capacity to manage mega-projects and improvements in signaling and communications systems.
The next five-year plan should be based on a realistic assessment of what can be accomplished.
Key Data
$18.6 billion
— The total estimated cost of the 798 capital projects examined for the 2005-2007 period.
$5.7 billion
— The amount allocated for mega-projects in the proposed 2010-2014 capital plan.
$2.8 billion
— The amount allocated for signaling and communications improvements in the proposed 2010-2014 capital plan.
$4.8 billion
— The value of projects from the 2000-2004 capital plan that had not reached the expected stage by the end of the plan period.
$1.4 billion
— The most recent cost estimate for the Fulton Street Transit Center, which is nearly double the original estimate.
Public-private partnerships offer a mechanism to improve infrastructure delivery and maintenance by leveraging private sector expertise for life-cycle management, provided they are structured to avoid short-term budgetary fixes. Effective implementation requires focusing on assets in poor condition, ensuring rigorous contract management, and maintaining labor protections rather than treating these arrangements as new revenue sources.
Recommendations related to Capital Procurement Reforms
PPPs should be focused on achieving efficiencies in the life-cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public-sector operation.
PPPs need not be limited to large facilities; smaller assets can work as well when several similar assets are grouped together for a partnership with a single private partner.
New York’s leaders should focus on assets that are in poor condition and have a history of poor maintenance.
Large up-front payments should be avoided, as the temptations to use the proceeds for political expedient purposes or short-term budgetary balance, rather than for infrastructure investment, are too great.
The public sector does not abdicate its responsibilities with a PPP; rather, these partnerships demand enhanced its management capacity – particularly with respect to contract negation, design of performance outcomes and monitoring – in order to be successful.
The desire to innovate should not lead to the design of PPPs in ways in which integral responsibilities are divided.
Any labor concerns can be addressed in PPP contracts, by offering protections to workers for prevailing wages, similar terms of employment or guaranteeing employment in other city agencies.
PPPs are well-suited to revenue-generating facilities, but user fees are not essential for a PPP.
Key Data
$1.8 billion
— The contract value to build the Airtrain from Kennedy Airport to the Jamaica Station of the Long Island Rail Road.
20-year
— The duration of the partnership to rebuild and operate JFK Airport Terminal Four.
20-year
— The duration of the partnership with Cemusa, Inc. for the design, construction and maintenance of street furniture.
Public-private partnerships offer a mechanism to improve infrastructure management by focusing on life-cycle costs and maintenance standards, provided they are applied selectively to assets in poor condition. To succeed, the public sector must enhance its capacity for contract design and monitoring while avoiding the pitfalls of inappropriate revenue tapping and divided responsibilities.
Recommendations related to Capital Procurement Reforms
PPPs should be focused on achieving efficiencies in the life cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public sector operation.
New York’s leaders should give high priority to assets that are currently in poor condition and have a history of poor maintenance when selecting opportunities for effective PPPs.
In most cases, the PPPs should be initiated as pilot programs and viewed as benchmarks for project delivery times and maintenance standards.
A group of planned new schools and/or school renovation projects should be considered for a PPP modeled on the British experience with 'strategic partnerships'.
The public sector must develop an enhanced capacity for contract design, performance measurement and monitoring in order for PPPs to be successful.
Key Data
$509 billion
— Total value of 1,109 PPP projects launched globally between 1985 and 2007.
$3.2 billion
— Critical maintenance backlog identified for the City University of New York system.
$1.7 billion
— Critical maintenance backlog identified for the State University of New York system.
95
— Total number of PPP projects in the United States from 1985 to 2007.
$1.8 billion
— Total cost of the contract to build the Airtrain from JFK Airport to the Jamaica Station.
New York City's procurement process for construction, goods, and services is hindered by long cycles, excessive paperwork, and inefficient management, costing the city significant resources. Implementing a centralized procurement entity, an advanced e-procurement system, and a revised legal framework could streamline operations and generate substantial annual savings.
Recommendations related to Capital Procurement Reforms
Replace the Mayor’s Office of Contracts with a new procurement entity that offers 'one-stop' oversight, a central place for vendors to interact with the City, and improved agency support services.
Implement an advanced e-procurement system that includes a central web site, an option for vendors to submit bids and other materials electronically, online access to pre-negotiated contracts for agency buyers, a central contract management system, and annual subscription and transaction fees for vendors to streamline procurement processes.
Change the legal framework for procurement to give the Procurement Policy Board more independence and to permit new cost-effective procurement techniques.
Key Data
$8.6 billion
— Amount spent by the City of New York for construction, goods, and services in fiscal year 2001.
12 million
— Estimated number of sheets of paper used annually in the procurement process.
$11 million
— Estimated annual savings from implementing an advanced e-procurement system.
15 percent
— Projected price reductions from vendors that would save $186 million annually.
$197 million
— Total estimated annual savings from streamlining procurement.
New York City's procurement process is hampered by excessive paperwork, fragmented oversight, and outdated technology, resulting in long, inefficient contract cycles. Implementing a centralized procurement entity, adopting an advanced e-procurement system, and modernizing the legal framework could save the city between $135 million and $200 million annually.
Recommendations related to Capital Procurement Reforms
Replace the Mayor’s Office of Contracts with a new procurement entity that offers “one-stop” oversight, a central place for vendors to interact with the City, and improved agency support services.
Implement an advanced e-procurement system similar to those functioning in several other jurisdictions.
Change the legal framework for procurement to give the Procurement Policy Board more independence and to permit new, cost-effective procurement techniques.
Small purchase limits for all goods and services should be increased to $100,000.
Public hearings for non-competitively bid purchases should be required only for procurements above $500,000.
Key Data
$8.6 billion
— Total spending by the City of New York on construction, goods, and services in fiscal year 2001.
12 million sheets
— The latest estimate of paper produced to execute procurements in the City.
$135 million
— The minimum estimated annual savings from implementing the proposed procurement reforms.
$75
— The estimated savings per transaction from implementing an advanced e-procurement system.
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