The Mandate: : The Wicks Law - a construction mandate dating back to 1912 - was put into place to promote competition and protect workers' rights. Named for Senator Arthur Wicks who sponsored a bill to expand the law in 1946, the Wicks Law requires that, under General Municipal Law §101, state and local government construction projects (including school district construction projects) costing more than $3 million in New York City, $1.5 million in Nassau, Suffolk and Westchester counties, and $500,000 in the rest of the state are subject to separate plumbing, heating/ventilation/air conditioning and electrical contracts. This requirement has proven to be one of the most onerous mandates facing local governments.

The fundamental problem with the Wicks Law stems from the fact that the responsibility for coordinating the various subcontractors and the overall construction process lies with the public entity which typically has little expertise in this area. These coordination problems often result in costly delays. Most private developers and nearly every other state in the nation employ a single contract method, where the authority to coordinate the project is vested in a general contractor, who has a financial interest in ensuring that the project is completed in a cost efficient and effective manner.

The Wicks Law raises costs in other ways as well. Lawsuits are often brought against municipalities for losses that developers incur as a result of the project delays. The courts have upheld the government's liability in several of these cases, even when the delays are the fault of another contractor. Additionally, there are increased administrative expenses associated with preparing, bidding and awarding separate contracts, as well as the added costs resulting from contractors who automatically increase initial bids for projects subject to Wicks, to compensate for the anticipated delays and other problems common among Wicks Law projects.

Local governments and school districts have traditionally supported initiatives to reform or repeal the Wicks Law. Despite these efforts and the reports and analyses reinforcing their position, the influence of special interest groups that benefit from the Wicks Law (contractors and construction unions) had, until last year, consistently obstructed any efforts to reform this antiquated mandate. In 2008, the State Legislature finally amended the statute. These changes included a long-awaited increase to the former $50,000 threshold - now $3 million in New York City, $1.5 million in Nassau, Suffolk and Westchester counties, and $500,000 in the rest of the state. In addition, projects for which the public entity requires the contractor to enter into a project labor agreement (PLA) are exempt from the Wicks requirements. Such agreement is defined as "a pre-hire collective bargaining agreement between a contractor and a trade labor organization establishing the labor organization as the collective bargaining representative for all persons working on the project," and provides that only contractors and subcontractors who sign a pre-negotiated agreement with the labor organization can perform project work.

Other reforms include new requirements governing the presentation of bids, an authorization for the prequalification of bidders, and prompt payment provisions that require contractors to pay subcontractors within seven days of receiving payment. Additionally, with respect to projects for which a PLA is entered into, each contractor and subcontractor must participate in apprentice training programs that have been approved by the Department of Labor for at least three years; have graduated at least one apprentice in the last three years; have at least one apprentice currently enrolled in its program; and have made significant efforts to attract and retain minority apprentices.

Although most would agree that changes to the Wicks Law were long overdue, the reforms that were ultimately enacted have been met with mixed reviews. While the threshold increases will undoubtedly assist several of the state's smaller communities, given the rising cost of construction projects, particularly in recent years, many municipal projects will still be subject to the multiple bidding requirements under the Wicks Law. Furthermore, several of the labor-related provisions that were included in the 2008 reforms have been criticized as being disadvantageous to non-union labor, and as a result, have posed some significant problems for upstate municipalities and small businesses.

Individual project-specific exemptions from the Wicks Law have been granted by the Legislature for specific school districts (Buffalo, Niagara Falls and Rensselaer) as well as the New York City School Construction Authority and various state public authorities. This piecemeal and inconsistent method should be replaced with a comprehensive and equitable solution to this issue.

The Cost: This requirement has the effect of increasing state and local construction costs, delaying projects and in some cases, preventing projects from going forward at all. Previous studies estimate that the Wicks Law adds anywhere from 8% to 30% to project expenses. New York City projects that repeal of the Wicks Law would reduce debt service costs by $11 million in the first year of savings, and would generate $3 billion in capital savings over the life of the City's ten-year capital plan.

The Solution: Enact legislation to repeal the Wicks Law. Eliminating this onerous mandate will help stimulate our languishing local economies by allowing municipalities to utilize a more cost-effective approach to executing public projects, thereby removing a major impediment to communities investing in much-needed infrastructure and other capital improvements. Additionally, the elimination of this requirement would produce savings for New York State as well.