August 19, 2008 Recent Amendment to the Wicks Law

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KEEPING YOU INFORMED…

We would like to make you aware of several significant changes to the Wicks Law, the New York State statute obligating municipalities to comply with various mandates during the construction of public work projects. Enacted in 1912, the Wicks Law previously required separate and independent bidding for each component of a public project when the cost involving the erection, construction, reconstruction or alteration of buildings exceeds $50,000, and the work to be performed included: (1) plumbing and gas fitting; (2) steam heating, hot water heating, ventilating and air conditioning; and/or (3) electric wiring and standard illuminating fixtures. These construction and bidding mandates have long been criticized as unnecessarily increasing costs, as well as delaying and sometimes completely preventing the completion of public work projects.

On April 9, 2008, Governor David Paterson signed a bill that included reforms to the Wicks Law. The new rules took effect on July 1, 2008, and apply to all contracts covered by the Wicks Law that are advertised or solicited for bid on or after the effective date. The most significant changes include:

    • Increased Thresholds -Projects in NYC costing less than $3 million, projects in Nassau, Suffolk and Westchester counties costing less than $1.5 million and projects in all other counties within the State costing less than $500,000 are now exempt from the Wicks Law’s separate and independent bidding requirements. Previously, such bidding requirements applied to all public work projects throughout the State that exceeded a cost of $50,000.
    • Project Labor Agreements – As an alternative to compliance with the Wicks Law’s bidding requirements, public entities with jurisdiction over a public work project may now choose to require that contractors enter into a project labor agreement (“PLA”). PLA is statutorily defined as “a pre-hire collective bargaining agreement between a contractor and a bona fide building and construction trade labor organization establishing the labor organization as the collective bargaining representative for all persons who will perform work on a public work project.” A PLA must also require that only contractors and subcontractors which sign the agreement with the labor organization can perform work on the project. If a public entity compels entry into a PLA for a specific project, that project is exempt from the Wicks Law requirement of separate bidding with respect to each specification of work described above. However, a public entity may only require a PLA if it determines that “its interest in determining the best work for the lowest possible price, preventing favoritism fraud and corruption, and other considerations such as the impact of delay, the possibility of cost savings and any local history of labor unrest, are best met by requiring a project labor agreement.”
    • Presentation of Bids – All bidders on a public work contract where separate and independent bidding is not required must submit a sealed list naming each subcontractor that the bidder will use and the amount the subcontractor will be paid to perform work in one of the three subdivisions of work generally covered by the Wicks Law. After the lowest bid is announced at the bid opening, the sealed list accompanying the low bid must be opened and the names of the subcontractors made known to those in attendance. No changes to the subcontractor or the amount to be paid can occur without the public owner’s approval, and only upon a showing to the public owner that there a legitimate construction need for the change.
    • Prequalification of Bidders -The law now allows local governments with populations in excess of 50,000 to require contractors to be pre-qualified for any projects or for specific projects pursuant to guidelines set by the law. Municipalities may elect to maintain a list of qualified contractors and limit bidding for public work projects to those on the list. Public entities with populations of fewer than 50,000 may use a list of qualified bidders maintained by their local county. Prequalification guidelines that may be considered include a prospective bidder’s ability to undertake work, its financial capability, responsibility and reliability, compliance with labor standards and equal employment opportunity requirements and the contractor’s recent safety record.
    • Enforcement – The Commissioner of Labor has been granted the authority to issue a stop-bid order in those circumstances where the Wicks Law requirement of separate and independent bidding is not met. Once served, the stop-bid order remains in effect until the Commissioner determines that it can be removed.

Please do not hesitate to contact us if you have any specific questions about these amendments to the Wicks Law.

THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.

© Lamb & Barnosky, LLP, 2008