GBC Reports..., January 10, 2003

NYS Comptroller: Firms May Not Act as Both CM and Prime on a Public Project
As you may be aware, controversy has arisen of late over the concept of CM firms also bidding and performing work as a prime (usually general) contractor on a project. At the GBC Annual Meeting last July, in fact, the GBC Board took up the question and expressed grave concerns over the practice. 

Recently a local government requested a formal opinion from the NYS Comptroller as to the propriety of such a practice. In Opns St Comp, No. 2002-17 issued December 30, 2002, the New York State Comptroller confirmed the GBC Board's view that such a practice is improper.

Stating that it would be a violation of Section 101 of General Municipal Law in that it would effectively assign coordination and supervision responsibility to one of the primes and of Section 103 of General Municipal Law in that it could impair the competitive bidding process and create "reasonable apprehension" among prospective bidders, the Comptroller concluded:

"…it is our opinion that a firm may not be engaged both as construction manager to act on behalf of a town in the coordinating work of the prime contractors, and as a prime contractor."

For a copy of the full text of the opinion, please contact GBC.


Governor's Message 
Once again, the Governor made his annual message to the Legislature this week. The terrible fiscal crisis was at the top of the agenda. There will be a $2 billion shortfall in the current year's budget and maybe as much as an $8 billion shortfall in next year's. The pressure will be great to cut spending and raise taxes. The Governor stood strongly against any new taxes and for a continuation of existing tax cuts, as did Senate Majority Leader Joe Bruno. Whether they can sustain that position, time will tell. 

There was much talk about economic development successes and plans for the future, especially in the high technology area. There was little else of a specific nature that directly impacted the construction industry. We will look forward to the detailed state budget in late January for much more beef. The tone of the Governor's remarks, though, and the prevailing mood around Albany make it clear this coming year may be one of the more difficult in recent history. We hearken back to the Governor's first year in office in 1995, to the late 1980s when Governor Cuomo faced some real difficulties like this and then the mid-1970s when the City of New York faced bankruptcy and the State was not in much better shape. Stay tuned.

 
GBC Legislative Program
GBC will try in 2003 to work offensively to achieve some positive changes for the Membership and work defensively to stop or modify proposals by others that are not productive to your future, as we have been doing for almost 50 years. 

Labor Law 240: Reform of this statute will be our highest priority in an effort to stem the tide of third party liability suits and bring down astronomical insurance increases. The construction industry is united on this effort and GBC will work to provide a leadership effort for change. While the fight against the trial lawyers and labor is difficult, this year may be our best chance. Membership help will be critical. 

Bonding Prevailing Wage Withholdings: GBC's Legislative Committee has decided to work on improving contractor ability to bond off prevailing wage withholdings, especially if it involves a subcontractor or a cross-withholding. We have tried other approaches in the past without success, but recent litigation success has given us some hope. Too often, a Member's cash flow is crippled as a result of a sudden withholding he knew nothing about. We will try to correct that. 

Alternates in Priority: After Member request and Board approval, we have drafted a bill to ensure that alternates on public work projects be taken in order or blindly selected so as to remove the arbitrariness from the process. 

Alternative Delivery: The GBC Board and the Legislative Committee believe we need to work to establish a better set of rules to allow for alternative method of project delivery. Today, there are some agencies, public owners and quasi-public owners that have no rules or poor rules on this subject. GBC will take some time this year to try to develop a reasonable proposal. This will be a long-term project. 

On other fronts, we will surely have to deal with a variety of other subjects generated by others. As they develop, we will report on them. 


Education Schedule on the Way!
Be on the lookout - your copy of the GBC's Education Schedule for January-June 2003 will be in your fax machine or e-mail in the next week. This schedule will cover GBC educational and safety-related programs STATEWIDE for the first half of the year. It will give you a brief synopsis of the seminars and programs GBC has planned for you and your staff. We have an interesting line-up planned.

Registration forms for each individual event will still be sent to those Members in the appropriate regions. They can also be found in the Calendar section of our website: www.gbcnys.agc.org.


February is Coming - Post Your 300 Logs 
All contractors with more than ten employees must post their Annual Summary Form, OSHA 300A, in a visible area from February 1st through April 30th. The new recordkeeping standards have many changes. Make sure your company is maintaining these documents in the proper manner. 

Contact Krista at GBC for information as to how these forms are to be completed. 


2002 Economic Census
The U.S. Bureau of the Census recently mailed questionnaires to about 360,000 businesses in New York State. If you have received one, please complete it and return it to the Census Bureau by the February 12 deadline. Businesses, trade associations and government use the data for marketing and competitive analysis, so it is important to get the highest response rate possible. Additional details about the Economic Census can be found at www.nylovesbiz.com/nysdc/default.asp.


NYS Labor Department Developments
Bonding Withholdings: Recently, we told you of a legal case that allowed for bonding of prevailing wage withholdings with the approval of a Supreme Court judge. The DOL has taken the position that withholdings are the legislatively preferred method to secure funding for payment of wages due workers. They acknowledged the recent legal case, but were emphatic that they would only do so at the direction of a court. The message is clear: If you want to bond a withholding, you need to see a judge and it is clear the DOL will oppose that motion. GBC's legislative proposal will try to make that right clearer. 

Annualization: The NYS DOL has refused to further extend the date (12/31/02) after which the failure to annualize benefits on public work will be considered a willful violation. This rule had been continuously extended since April 1999. There are still no clear rules on the issue from the state. However, if you continue to pay benefits into a plan on something other than an annualized basis, you could have a problem or you could become responsible for a subcontractor who does so. GBC is working with others to try to clarify the situation.

Governor Vetoes Prevailing Wage Bill: In late December the Governor vetoed a bill (Veto #42 - S.7741) that would have increased the funding for prevailing wage enforcement and would have mandated that all projects over $1 million have regular inspections. The Governor thought it ill advised to sign a bill that would prevent the state from managing its programs in an efficient and effective manner, especially at a time of fiscal uncertainty.


GBC Works with DEC on Stormwater Regulations Training
On February 28, 2003 the NYS Department of Environmental Conservation, with the assistance of the GBC, will be offering statewide training on the new Phase II stormwater requirements that take effect on March 10, 2003. The new Phase II Stormwater Permit will now cover all NY construction activities that affect anything over one acre of land (basically all construction sites). 

The program will involve a live satellite broadcast for approximately two hours in each of the DEC regions. The morning program will provide details to your superintendents and project managers as to what is expected of them when it comes to filing the Notice of Intent as well as creating and maintaining a stormwater plan. The afternoon program will be more design related and is geared towards the design professional. Be on the lookout for more details.


AGC at Work
AGC of America has engaged in several recent activities of note. In December, AGC Executive Vice President Stephen Sandherr met with U.S. Secretary of Labor Chao on several subjects to include regulatory and legislative subjects such as protecting the unemployment insurance fund, and important rules under the Family and Medical Leave Act and the Fair Labor Standards Act. 

In early January, AGC had a high-level meeting with the presidents of the seven basic trades unions. The agenda included several important issues such as development involving the carpenters' reaffiliation with the Building and Construction Trades Department, jurisdictional matters and several common legislative issues, especially funding ones. AGC has also been deeply involved in several federal tax issues of note. 

Finally, a report is now being finalized on the issue of mold, which is critically important to building contractors. The report is a proposed model guideline for owners, designers and contractors on how to avoid mold infestation in structures and, in turn, avoid litigation. These guidelines should be available in March at the AGC Convention. 


GBC Safety Program
GBC's two safety professionals, Jim Redmond and Bill Howard, have completed another successful year of services and training to the Membership. Please remember them, if you have any kind of consultative or training need. GBC will have a series of training programs as noted above, but Jim and Bill are available for ad hoc service when and where time permits. 

The value of a good safety program is regularly exhibited. The staff was very successful recently in helping a couple of Members deal with an OSHA problem. GBC staff was the only one of several people consulted that had an accurate opinion on an OSHA citation. In another situation, we were able to question the accuracy of an OSHA inspector's position in a conference situation with great success. Jim and Bill can be helpful - call them.


Upcoming Events
Please check the GBC Calendar for a complete list of upcoming events, with links to registration forms.