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Design-build makes legislative inroads

The Design-Build Institute of America (DBIA) reported major legislative victories recently in New York and Ohio, states that have been historically hostile to design-build. DBIA had made these states top legislative priorities over the last two years, with several visits to meet with top elected officials. Last fall’s elections resulted in a dramatically altered political landscape with new administrations and legislative majorities in both states.

In New York, all state universities gained design-build authority with passage of the New York State budget bill. The bill allows state universities to use design-build on construction and renovation projects, not to exceed 15 percent of their construction budget. The bill will also allow state universities to enter into public-private partnership (P3) agreements. It remains to be seen if there will further expansion of design-build authority this year. There are several bills pending that would extend design-build authority to all state agencies as well. New York law has historically relied on a multiple-prime project delivery system, which the DBIA considers the most costly and inefficient project delivery method. Liberty Northeast Region President Phil White said, “This is good news, but we still have work to do."

The historic design-build victory in Ohio came through the budget bill as well. The bill significantly expands the Ohio Department of Transportation’s (ODOT) design-build authority. ODOT is now authorized to use design-build on up to $1 billion worth of projects annually. Previously there was a $250 million cap on design-build projects. These design-build projects may now be procured using the “best value” method. Previously, ODOT could only select bidders that had the lowest and best bid. This change will give ODOT greater flexibility in choosing the best design-build teams. The bill also codifies stipends on design-build projects. ODOT has been a proponent of stipends on its design-build projects, but its legality was challenged last year. Its inclusion in the bill ensures that this best practice will remain. The final design-build provision was the inclusion of provisions authorizing P3s for transportation projects. These provisions will greatly enhance Ohio’s ability to fund new projects, according to DBIA.

State agencies in Ohio are still required to use the multiple prime delivery method on building projects but there may be legislation introduced yet this session to address that as well. DBIA meetings with the new administration went very well last fall and this spring, the group says, and the Kasich administration seems determined to move Ohio forward in the delivery of its capital projects.
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