The Excrement Hits The Fan On New York Public Work
On July 1, 2008, the New Wicks Law goes into effect in New York State. The original Wicks Law was enacted in the early 1920's and required that any public works contract having a value of $50,000 or more be divided into separate contracts for general construction, plumbing, mechanical and electrical. Minor updates to the law were enacted in later years.
The New Wicks law does several things, and this is by no means an all-inclusive list. First, it abolishes the $50,000 overall threshhold, and applies new threshholds based upon the geographic location of the project. The new law applies as follows: (a) New York City (all 5 boroughs) - value of the entire project is $3 Million or more; (b) Nassau, Suffolk and Westchester Counties - value of the entire project is $1.5 Million or more; (c) remainder of New York State - value of the entire project is $500,000 or more. It also provides for the issuance of a "stop-bid order" where it becomes apparent that separate contracts are not being issued based on the new monetary threshholds. Oy!
Next, for projects below the applicable monetary threshhold, the new law requires bidders to submit a sealed envelope with their bid containing the names of the intended mechanical, electrical and plumbing subcontractors for the project as well as the agreed upon subcontract price for each such trade. After announcement of the winning bid, a change in the named subcontractor can be made only with the approval of the project owner based on a "legitimate construction need" as defined in the law.
In an interesting twist, albeit an anti-competitive one, a public owner may opt-out of the New Wicks Law entirely by requiring the use of a Project Labor Agreement ("PLA") in the bid documents. As I have commented here previously, PLAs are problematic for non-union contractors. Among other things, they require the non-union employer to use the union hiring hall to obtain workers, and to observe typically restrictive work rules, job classifications and arbitration procedures imposed by the union. Since the new law applies to public works projects, the usual PLA requirement of paying union wages and benefits for the project is not germane because the prevailing rate of wages and benefits on public work usually mirrors those of the union.
Importantly, if a PLA is used, contractors must have a current apprenticeship program. Inasmuch as most non-union contractors lack such programs, and given New York State's recent moratorium on the approval of new apprenticeship programs, non-union contractors (including many minority contractors and woman-owned business enterprises) essentially will have been legislated out of performing public work in New York.
Another provision of the new law allows public owners to establish qualification requirements (based on an established, but perhaps subjective list of criteria) for bidding and award. This is most onerous for non-union contractors, in my opinion, since it provides wide discretion with respect to qualification denial and is likely to preclude many from performing public work.
The New Wicks Law will be enforced by the New York State Department of Labor. It's my guess that many public owners will simply opt-out of the new law by requiring the use of PLAs on their projects. I wonder how that will square with the holding in Glens Falls Building and Construction Trades Council, 350 NLRB No. 42 (2007), where the National Labor Relations Board held that PLAs constitute prohibited "hot cargo agreements" under Section 8(e) of the National Labor Relations Act because they are not the subject of negotiated, collective bargaining.
At this point, this looks like a win for organized labor ... but I'm not sure that the ballgame is over entirely. Stay tuned.
The New Wicks law does several things, and this is by no means an all-inclusive list. First, it abolishes the $50,000 overall threshhold, and applies new threshholds based upon the geographic location of the project. The new law applies as follows: (a) New York City (all 5 boroughs) - value of the entire project is $3 Million or more; (b) Nassau, Suffolk and Westchester Counties - value of the entire project is $1.5 Million or more; (c) remainder of New York State - value of the entire project is $500,000 or more. It also provides for the issuance of a "stop-bid order" where it becomes apparent that separate contracts are not being issued based on the new monetary threshholds. Oy!
Next, for projects below the applicable monetary threshhold, the new law requires bidders to submit a sealed envelope with their bid containing the names of the intended mechanical, electrical and plumbing subcontractors for the project as well as the agreed upon subcontract price for each such trade. After announcement of the winning bid, a change in the named subcontractor can be made only with the approval of the project owner based on a "legitimate construction need" as defined in the law.
In an interesting twist, albeit an anti-competitive one, a public owner may opt-out of the New Wicks Law entirely by requiring the use of a Project Labor Agreement ("PLA") in the bid documents. As I have commented here previously, PLAs are problematic for non-union contractors. Among other things, they require the non-union employer to use the union hiring hall to obtain workers, and to observe typically restrictive work rules, job classifications and arbitration procedures imposed by the union. Since the new law applies to public works projects, the usual PLA requirement of paying union wages and benefits for the project is not germane because the prevailing rate of wages and benefits on public work usually mirrors those of the union.
Importantly, if a PLA is used, contractors must have a current apprenticeship program. Inasmuch as most non-union contractors lack such programs, and given New York State's recent moratorium on the approval of new apprenticeship programs, non-union contractors (including many minority contractors and woman-owned business enterprises) essentially will have been legislated out of performing public work in New York.
Another provision of the new law allows public owners to establish qualification requirements (based on an established, but perhaps subjective list of criteria) for bidding and award. This is most onerous for non-union contractors, in my opinion, since it provides wide discretion with respect to qualification denial and is likely to preclude many from performing public work.
The New Wicks Law will be enforced by the New York State Department of Labor. It's my guess that many public owners will simply opt-out of the new law by requiring the use of PLAs on their projects. I wonder how that will square with the holding in Glens Falls Building and Construction Trades Council, 350 NLRB No. 42 (2007), where the National Labor Relations Board held that PLAs constitute prohibited "hot cargo agreements" under Section 8(e) of the National Labor Relations Act because they are not the subject of negotiated, collective bargaining.
At this point, this looks like a win for organized labor ... but I'm not sure that the ballgame is over entirely. Stay tuned.
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