NYSSPE February 2015 Position Statement on Design Build Budget Proposal

The following was written by Mark C. Kriss, Esq., The New York State Society of Professional Engineers (NYSSPE) Legislative and Legal Counsel.

Private Sector

Design Build (an alternative project delivery methodology used in lieu of Design-Bid-Build) is permitted to be employed on private sector projects in New York State, provided that the scope of design services and the amount to be paid for such services is clearly set forth in a contract executed by the project owner, the contractor and the design professional. While many, particularly in the general contractor community, maintain that the use of a three-way contract is not required and that a general contractor can contract with a design professional on project owned by a third party, the NYS Education Department unequivocally maintains that this type of an arrangement runs afoul of the State Education Law and Rules governing the design professions. A design professional should consider the potential for professional disciplinary action (e.g. fee splitting and aiding and abetting the illegal practice of engineering) before participating in a Design Build project.

Public Sector

With regard to the public sector projects in 2011 legislation was enacted on a pilot basis to permit specially named state agencies to utilize Design Build. (See position statement below for specific governmental entities authorized to use design build.) NYSSPE along with others in the design professional community, as well as the State Education Department, voiced concern regarding the failure of the 2011 legislation to expressly include quality assurance safeguards in the legislation. The original statute expired in early December 2014 (with an exemption for ongoing projects) and new legislation has been proposed by Governor Cuomo as part of his executive budget. The Society has issued, and broadly disseminated, a position statement which renews our concerns regarding the 2015 Governor’s Budget Proposal which proposes some amendments to the pilot program. A copy of the NYSSPE’s position statement is set forth below. (For additional information please consult the NYSSPE website FAQ addressing Design Build.

New York State Society of Professional Engineers

(NYSSPE) – Position Statement 2015-16 Executive Budget Proposal – [Read more…]

Frequently Asked Questions on Design-Build Matters in New York State

Note: Please note that this post was recently updated on 3-18-15 and FAQ numbers 11, 12 & 13 were added based on questions received.

  1. Can a contractor and design professional provide design-build services to a third-party in New York?
    1. Answer
      1. Design-build services in New York can only be provided when the project owner, contractor, and design professional sign a three-way contract.  The contract must expressly segregate design services and provide for payment to the design professional for such services (See question 11 regarding payment methodologies.).
      2. As further described in the responses to questions below, a design professional who provides professional services while under contract with the contractor could be charged with professional misconduct for aiding and abetting the offering of professional services by a party (the contractor) not authorized to offer or provide such services.
      3. To apply case law and to better ensure they are not offering professional design services illegally, some contractors are including the design professional’s name and fee in their contract with the project owner.  However, this practice does not assure that by entering into a contract with only the contractor, the design professional will not be charged with professional misconduct as described in responses to questions below. [Read more…]