The Case Against Extending Joint Bidding: A Call to Protect New York City Taxpayers

By New York Road Contractors Association | April 11, 2024

Despite the City’s efforts to control spending, root out waste, and create jobs, the current procurement process for city construction projects, called Joint Bidding and a relic from the previous administration, stands as a glaring failure. The New York Road Contractors Association (NYRCA), representing the leading small businesses that maintain and improve the roads New Yorkers use every day, vehemently opposes the extension of Joint Bidding, as the current process poses a significant financial burden on New York City taxpayers, needlessly delays projects, and prevents small businesses like ours from creating jobs.

We share Mayor Adams and Comptroller Lander’s commitment to eliminating waste and speeding up delivery, and there is an easy way to start – don’t extend joint bidding. It hasn’t worked and has made all the issues we are collectively trying to solve worse.

We are a group of hard-working New Yorkers committed to strengthening our city and growing our economy. We perform more than 70 percent of all the projects administered by the Department of Design and Construction. We play by the rules and go above and beyond to engage our MWBE partners to ensure they are at the table on every project. Unfortunately, the current bidding process and rules have evolved, and we are forced to charge the city far more than needed to get our projects done due to a cap on the costs for private multinational companies whose work we do for them.

The inception of the current version of Joint Bidding (J.B. 4.0) was an attempt to fix the process after the failures of 1.0 through 3.0, aiming to streamline the procurement process for city contracts. However, the reality of its implementation has revealed a fatal flaw that significantly favors multinational company’s shareholders at New York City taxpayers’ expense. An extensive review and analysis conducted by NYRCA has uncovered that J.B. 4.0 facilitates a process where contractors are forced into a low-bid system, disproportionately allocating costs to the public.

This misalignment has led to an alarming cost shift, with more than $276 million taken off the books of the private companies and onto New York City taxpayers. This is a tremendous missed opportunity to direct these dollars toward countless local projects that have lingered or been completely neglected by the current system. Now, the Department of Design and Construction has J.B. 5.0 with slight adjustments that still don’t fix the problems.

One of the most concerning aspects of J.B. 4.0 is its impact on project timelines. Our analysis indicates that a majority (70 percent) of joint-bid projects fail to meet their original deadlines, causing significant delays and further financial repercussions for the city. Additionally, the lack of pre-engineering requirements under J.B. 4.0 has left the city and contractors without reliable cost estimates, exacerbating the duration of budget overruns.

Moreover, J.B. 4.0 contradicts the city’s efforts to promote diversity and inclusion within its contracting processes. Despite repeated requests from NYRCA, the City’s private vendor partners have shown little to no commitment to participating in the Minority and Women-Owned Business Enterprise (MWBE) program for joint bid projects. This refusal not only undermines the city’s diversity goals but also limits opportunities for MWBE firms to contribute meaningfully to our city’s infrastructure projects.

Leaders of the New York City Council and labor unions have all expressed their outrage at the J.B. 4.0. system as they recognize taxpayer money should be treated with respect and only used to improve the lives of all New Yorkers.  In addition, a recent New York State Supreme Court ruling found clear flaws with the legality and ethical standing of the joint bidding process with the judge’s findings, which still stand even with the case on appeal, that the program is unconstitutional and a waste of the taxpayer fisc. We believe it is imperative that the city adheres to legal standards and ensures that its procurement processes are beyond reproach to maintain public trust.

The existing Section U procurement system serves as a proven alternative that could replace Joint Bidding. This system was cited by the same State Supreme Court for its effectiveness in safeguarding the public fisc and has a track record of success dating back to its establishment in 1999.

As we stand at a crossroads, the extension of J.B. 4.0, or even a J.B. 5.0, looms as a critical decision that will shape the future of our city’s infrastructure and its financial health. The NYRCA urges Governor Hochul, Leader Stewart-Cousins and Speaker Heastie to oppose any extension of the current failed system. Instead, we urge for a return to procurement methods that ensure transparency, fairness, and fiscal responsibility, such as the Section U system. Let us not miss this opportunity to rectify a flawed system that, if left unchecked, will continue to divert valuable resources away from where they are most needed.

The NYRCA stands ready to support a transition towards a more equitable, efficient, and taxpayer-friendly procurement process.

New York Road Contractors Association.

ADC Construction, LLC

CAC Industries, Inc.

DiFazio Industries, LLC

Huicatao Corp. (Certified MBE Firm)

JLJ IV Enterprises, Inc.

JR Cruz Corp.

J Pizzirusso Landscaping Corp.

MFM Contracting Corp.

Northeast Remsco Construction Inc. (Certified MBE Firm)

Perfetto Contracting Corp.

Triumph Constriction Corp.