NYS Wicks Law
The Long Island Chapter supports the Wicks Law because:
The Law in Brief
The Wicks Law was enacted in 1924 by the New York State Legislature. It mandates separately bid contracts for Construction, Electrical, HVAC and Plumbing on publicly funded projects over $50,000.
Single vs. Separate Prime Contracting:
A National Study by Professor Brian E. Becker, Ph.D.
School of Management, State University of New York at Buffalo
Position Favoring Separate Prime Contract
The proponents of separate prime bidding policies argue that such a policy results in lower costs and better quality projects. They claim that bid costs are lower because there is more competition for each prime contract. First, better specialty contractors are attracted to separate prime jobs because they will not have their bids shopped by a general contractor and they can count on prompt payment from the public owner when their work is completed. Second, the bidding is open to all qualified contractors rather than a few subcontractors favored by a particular general contractor. Furthermore, they point to evidence from states where both single and separate bids are taken on the same project, which indicates that separate prime bids were uniformly lower than single prime bids.
As for the cost of additional plans, the proponents of separate prime contracts point out that the separate detailed plans for each contractor are in fact a positive feature of the system since it encourages more accurate planning at the design stage and prevents “short cuts” during the construction phase. Finally, they note that when change orders and claims do occur, they are more expensive on a single prime project since the cost includes a general contractor’s markup. This is particularly true in cases where smaller general contractors are little more than brokers in a transaction between the public owner and the specialty contractors doing the real work on the job.
Those in favor of separate prime contracting agree that management and coordination of the construction process is a crucial issue in this debate, but it is the absence of capable management by public owners that is the problem, not the bidding process. On projects where problems develop, it is not the self-serving and litigious attitudes of the separate prime contractors that cause delays, but rather the inadequate design that requires construction through change orders or the absence of capable construction management by the public owner. The supporters of separate prime bidding argue that if public owners do not have such staff capability, they should contract for these services with a construction manager or architect who will not have the inherent conflict-of-interest posed by the general contractor in a single prime system.
The results from prior research are mixed. Some earlier state studies show that separate prime contracting results in lower bid costs, and as a result lower total construction costs. Other studies report evidence indicating that separate prime contracting has higher direct and indirect costs. Based on a statistical analysis of project bid and final costs from a national sample of state construction projects, this study finds separate prime contracting to have lower direct project costs. Comparing final project costs to estimated costs, separate prime jobs were more than 5 percent cheaper than single prime jobs, and the overwhelming share of that difference (83 percent) was due to relatively lower bid costs. This same pattern of results was observed in individual state analyses in both New York and California.
A Closer Look At Wage Laws
An eye-opening study offers compelling data to show adverse economic impact of repeal of wage laws. The study, titled “The Adverse Economic Impact from Repeal of the Prevailing Wage Law,” was authored by the Dept. of Economics at the University of Missouri-Kansas City.
Analyzing data for 1993 through 2002, the authors found “no statistically significant difference in mean cost of construction between the eight wage law states and four states without such statutes.”
“Their work is the most comprehensive and well documented study of this subject that COCKSHAW’s has uncovered in a long time.”