In New York, all public construction projects (with very few limited exceptions) must be separately specified and bid out so that various different contracts for various trades can be awarded rather than allowing the public entity to hire the classic general contractor who can then hire all of the various trade subcontractors itself. Wicks law is frequently the topic of hot debate with many wondering whether it is the most effective way to manage public construction in New York (and prevent corruption) or whether it simply makes projects more expensive and poorly managed?
When does Wicks Law apply?
Pursuant to General Municipal Law Section 101, any public entity entering into a contract for erection, construction, reconstruction, or alteration of buildings, when the cost of such project exceeds:
- $3,000,000.00 in New York City (Queens, Bronx, Kings, New York and Richmond Counties); or
- $1,500,000.00 in Nassau County; or
- $1,500,000.00 in Suffolk County; or
- $1,500,000.00 in Westchester County; or
- $500,000.00 in any other County in New York
then Wicks Law applies and Municipal Law Section 101 must be followed.
What does Wicks Law require?
When Wicks Law is applicable, the following three groups of trades must be broken into different contracts:
- 1. Plumbing and gas fitting;
- 2. Steam heating, hot water heating, ventilating and air conditioning apparatus; and
- 3. Electric wiring and standard illuminating fixtures
In other words, the three trades must be done by three different contractors (one plumbing contractor, one HVAC contractor and one electrical contractor). The responsibility for then overseeing these contractors falls back to the public entity.
Is Wicks Law effective?
Maybe. It certainly depends on what entity is running the project and in which County the work is being performed. If the entity running the project is not familiar with construction management it could end up being a negative for the project since there is no general contractor overseeing the work and reporting to the public entity. Without a central control, there can be communication and coordination problems between the three trades that can lead to delays and cost overruns.
Repealing Wicks Law could allow public entities to do what every other construction developer does: bid a project out and award the contract to the most qualified, most cost efficient and effective option rather than breaking the contract into separate trades that could significantly increase the overall costs.
Those in favor of Wicks Law argue that it prevents corruption and allows the government to get the “wholesale” price rather than paying a markup through a general contractor. But is the added hassle of dealing with four separate contractors (the three trades and then the general contractor overseeing the remaining work) really worth the cost savings? Doesn’t the additional overhead on the government end to oversee the trades directly cut out any potential savings?
While the Wicks Law debate rages on, and calls in Albany for change have become much louder the past couple of years, I wonder what experiences, positive and/or negative, each of you have had with Wicks Law? I am also curious whether upstate contractors, where the Wicks Law threshold is much less, feel differently about the law than downstate contractors?
Vincent T. Pallaci is a partner in the New York law firm of Kushnick Pallaci, PLLC and practices primarily in the area of construction law. He can be reached at firstname.lastname@example.org or (631) 752-7100.