New York State’s Design Build Statute May Pave the Way for Public Private Partnerships

On December 9, 2011, New York became one of a growing number of states to pass legislation to allow design-build delivery for certain infrastructure projects. Given the current trend in repairing and replacing aging infrastructure through public private partnerships (“P3”), which traditionally use the design-build model, the passage of the design-build legislation may be a precursor to formal legislation allowing P3’s in New York.

Under the new law, the Department of Transportation, Thruway Authority, Office of Parks, Recreation and Historic Preservation, Department of Environmental Conservation, and the Bridge Authority will use design-build project delivery for the first time in New York, including on the Tappan Zee Hudson River Crossing Project. Previously, only public universities had legislative authorization to use design-build. The bill also establishes the Infrastructure Investment Act, which creates a $1.3 billion public-private infrastructure fund to seed a $15 billion initiative that includes $3 billion in private sector investment.

The new law took effect immediately but will sunset three years after the date of enactment (although procurements already in process as of the sunset date will be permitted to proceed). As such, the success and potential continuation of the new legislation may impact whether legislation on P3 projects will also be considered. The Port Authority of New York and New Jersey is currently using the P3 model to replace the Goethals Bridge, and in the past several New York school districts have as well, signaling possible support for the eventual passage of formal P3 legislation.

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