2016: A Landmark Year for Design-Build Legislation
by Andrew Ausel | June 14, 2015
It is in no way an overstatement to claim that 2016 has been a landmark year for design-build and DBIA. Across geographic regions, and regardless of state political affiliation, 2016 was a year when legislators recognized the need for time and cost saving project delivery methods, which also didn’t skimp on quality. They affirmed design-build as an appropriate solution. The legislation that has passed will help reshape the way projects are delivered across the country, and it is important to highlight our victories to point out where implementation through proper education needs to occur. The state of design-build is no doubt in a better place than it was in 2015, however, our assessment is not yet fully complete as some states continue the fight for design-build throughout the summer and fall.
Missouri: The biggest victory for DBIA this session among the many was undoubtedly the passage of local design-build authorization in Missouri, making Missouri the 25th state to have full design-build authorization (that’s half the states!). HB 2376 enables any local political subdivision to use design-build project delivery at their discretion. The bill also ensures that community development block grants are properly allocated to water and wastewater projects that are delivered using design-build. Our regional leadership was exemplary on this bill, by building a coalition and rebutting the opposition on all fronts. The effort spanned three years and two different legislative sessions, but in the end resulted in a crucial expansion of design-build authority in the Midwest. The Governor has still not signed the legislation, but is expected to in a short time.
New York: Once again, design-build authorization made it into the New York budget bill and the result will help ensure Governor Andrew Cuomo’s huge infrastructure package is done via design-build. The budget included a provision this year that expanded design-build authority to include the New York State Urban Development Corporation and the New York Convention Center Development Corporation. In the Governor’s original budget announcement during the state of the state address, he outlined a significant portfolio of design-build and Public-Private Partnership projects including Penn Station and the Farley Post Office Redevelopments. This authorization gives permission to the necessary entities to deliver these projects through design-build making good on a promise that will save the New York taxpayers significant time and money in delivering these projects.
Transportation Sector: The transportation design-build market is growing rapidly, and legislation followed suit this year. Alabama and Nebraska both passed comprehensive design-build authorization for their respective transportation agencies. The Nebraska bill also created a transportation infrastructure bank and was championed by Governor Pete Ricketts who made this bill one of his highest priorities for the session. As a state with little to no additional design-build authority, Alabama advanced tremendously by granting full authority to the state’s Department of Transportation (DOT), who is now able to utilize design-build on almost any transportation project. In addition, New Mexico also authorized design-build as an option for all Federal-Aid Highway projects in the state.
Public-Private Partnerships (P3): The authorization of P3s expanded significantly this session with major legislation passing in Kentucky, Tennessee, Louisiana and New Hampshire. All four states authorized P3s for the transportation sector; however, some were more specialized than others. Tennessee, for example, amended their original proposal down to include only mass transit projects. Louisiana, on the other hand, sought to more evenly distribute the use of P3s by the DOT by requiring 25 percent of P3s to be outside of a Metropolitan Planning Area. The legislation in New Hampshire and Louisiana have not yet been signed by their respective governors, however Tennessee and Kentucky signed their reforms into law relatively early in the session. This fight will continue into weeks to come as Massachusetts and California both still have key P3 legislation pending.
Design-Build Done RightTM: Virginia and Florida also passed key design-build reforms that will help to better refine their already robust design-build authorizations. Virginia passed legislation by unanimous approval to authorize ATCs for transportation projects. This reform was welcomed by the Virginia Department of Transportation (VDOT) who partnered with DBIA and Virginia Transportation Construction Alliance (VTCA) to see the legislation through. Florida also passed two key reforms through HB 7027 which created a financing bureau within the Florida Department of Transportation, and SB 124 which ensured that unsolicited P3 proposals are not made public record until they are accepted. Both bills were celebrated by our members in the region as key reforms to the procurement of P3s in the state.
Extending Authorization: Key design-build authorizations were extended in Mississippi and maintained in Iowa. Mississippi was in danger of losing design-build authorization for the Port of Gulfport on July 1, 2016, however, legislation extending this until July 1, 2019, passed by near unanimous approval. In Iowa, design-build authority for the Board of Regents (BOR) was once again threatened by industry groups with the desire to remove authority entirely. Through carefully managed efforts, the authorization for the BOR was maintained for the second year in a row, as similar efforts were in play last session.
Although the session has drawn to a close in most states nationwide, many are only at the half-way point of the session. Pennsylvania, Illinois and California all actively meet throughout the summer and fall, and all have key legislation before them for consideration. California seeks to extend design-build for healthcare districts and P3s for water storage projects, while Illinois’ SB 3020 would provide a boost to the transportation sector there. As these bills continue to move throughout the rest of the year, the successes that have already been enacted will keep us busy reaching out, educating and championing Design-Build Done Right in a new batch of design-build states.