The New York State 2013 Budget Bill and Its Effects on Design Build

This following is a summary of the design build provisions set forth in Governor Cuomo’s 2013 Budget and how they impact on the Design Build delivery system in New York State prepared by Mark C. Kriss, Esq. (NYSSPE Legislative and Legal Counsel). Additionally, proposed amendments are detailed below.

The Governor’s budget proposal (S 2605/A 3005 – 2013) respecting design-build in large measure mirrors the Governor’s 2011 design build legislation (S 50002/A 40002 – 2011).  However, the 2013 Budget Bill applies to all state agencies and other state entities, with the exclusion of SUNY and CUNY.  (The original statute authorized design-build for a limited number of state entities including the State Thruway Authority, the Department of Transportation, the Office of Parks, Recreation and Historic Preservation, the Department of Environmental Conservation and the State Bridge Authority.)  Additionally, the original law applied to projects greater than 1.2 million dollars.  The 2013 proposal eliminates the 1.2 million dollar threshold, except for projects undertaken by the Department of Transportation, Parks and Recreation and Environmental Conservation.

NYSSPE originally voiced concerns over the Governor’s 2011 proposal, insofar as it failed to adequately insure that qualifications based selection (QBS) would be utilized for all professional design services.  In defining “best value” the 2011 law focused upon the general contractor’s qualifications, and, while referencing the need to consider the qualifications of a design firm, the statute emphasized the qualifications of the general contractor.  The present proposal should be amended to specifically add to the definition of “best value” consideration of the qualifications of all firms providing professional design services.

Consideration should be given to adding a number of additional quality assurance safeguards to the law.  While many of these safeguards were included in the procurement process employed in the wake of the 2001 law, the absence of express statutory requirements can compromise the design-build process.  Consideration should be given to requiring that the project owner (state entity) retain a “bridging engineer”, or “project managing engineer” to act as the entity’s expert.  Such a requirement would mitigate concerns regarding the ability of the contractor to exert undue influence upon the principal design firm.  Additionally, the legislation should be amended to require inspections and testing (by properly credentialed inspectors and testing firms), and require that testing and inspection contracts be independent from the primary design build contract (i.e. such contracts should be executed directly between the project owner and the inspection and testing firms). Test results must be forwarded directly to the owner and its bridging engineer or project managing engineer in addition to the primary design firm.  Further, an additional quality assurance provision should be added wherein the primary design firm is afforded unrestricted access to the project owner and the owner’s expert (“bridging engineer” or “project managing engineer”).

Finally, the legislation could be improved by incorporating a mandatory indemnification agreement , which provides for fair and balanced contractual indemnification.  Presently, many governmental contracts place an undue burden upon consulting firms for both damages and costs (including, without limitation, attorneys’ fees).  In the alternative, consideration should be given to a provision, which simply bars contractual indemnification between the parties.  Such a prohibition would not apply to common law indemnity or bar the purchase of general liability and design liability polices by the respective parties.  Further, design firms responding to design build RFPs devote substantial time and incur significant expenses in the procurement process. These proposals include valuable information to the state and all qualified firms participating in the process should receive fair compensation for their work.

Note: This post was prepared by Mark C. Kriss, Esq. (NYSSPE Legislative and Legal Counsel).  None of the information contained herein should be construed as legal advice or the practice of law.  If you need legal advice, please seek the advice of independent legal counsel.

NYSSPE facilitates posting on this blog, but the views and accounts expressed herein are those of the author(s) and not the views or accounts of NYSSPE, its officers or directors whose views and accounts may or may not be similar or identical.  NYSSPE, its officers and directors do not express any opinion regarding any product or service by virtue of reference to such product or service in this blog.


  1. John Przepiora, PE NSPE says

    The suggested added safeguard that the primary design firm be afforded unrestricted access to the project owner and the owner’s expert (“bridging engineer” or “project managing engineer”) does not seem to go far enough. The design firm/design professional should have a direct contractual relationship to the agency (owner) and be obligated to serve the interests of the owner as it relates to the project. Otherwise the DB contractor, who likely will not be a design professional, will be providing design services in violation of the education law. NYSSPE should not back off from the position that QBS procedures be utilized in the selecting of the design professional, establishing the scope of work and setting the fees and budget for the professional services necessary for the design, construction, and commissioning phases.

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