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Legislative Information
The following letter is from
New York State Pipe Trades, Secretary-Treasurer, Larry S. Bulman WHAT IS THE WICKS LAW? The Wicks Law, often called the Separate Contracts Law, is actually a series of laws contained in the General Municipal Law, the Public Housing Law and the State Finance Law. It requires public entities, such as the State and municipalities, to separately bid the plumbing, heating and electrical and HVAC work on public construction projects which exceed $50,000. It permits these contractors to bid directly to the public entity for this work, and assures them of receiving the work if they are the lowest responsible bidder. In a single bid system, all subcontractors’ bids are combined and include as part of the General Contractor single bid for the project. HOW DOES THE WICKS LAW BENEFIT THE PUBLIC? It primarily protects all of us as taxpayers by protecting against corruption, cronyism and influence peddling by the General Contractors. Prior to Wicks, after getting a construction contract, general contractors could and often would go back and “squeeze” the subcontractors to take less than their original bid, or else they wouldn’t get the job. After going back and squeezing the subcontractors, the general contractors then would pocket the difference as profit. What this resulted in is subcontractors artificially inflating their initial bids, knowing the general contractors will try to squeeze them. This resulted in an increased cost to the taxpayers throughout the state.
The Separate Contracts Law (a/k/a Wicks) has been the law of this state for many years. As previously stated, the law makes it possible for contractors involved in plumbing and steam fitting and electrical work to bid jobs directly to the public entity, whether it be the City or the State. These contractors are then assured of receiving the work if they are the lowest responsible bidder. As a result of this system, Union Contractors have been able to do quality work and still pay their work force. Where the Wicks Law does not apply, contractors are forced to squeeze labor – when their bid gets squeezed by the General Contractors. This gives an advantage to a non-union contractor, who is not bound by a contract and who can squeeze his labor force, forcing them into unsafe labor practices, so that he can make a profit on the now lowered amount he was forced to give the general contractor. WHY DO GENERAL CONTRACTORS WANT TO REPEAL WICKS The obvious reason is to put more money in their own pocket at the expense of both the taxpaying public and responsible union contractors and members. Without Wicks, these general contractors would be able to increase their profit margin on each public works project by squeezing their subcontractor and pocketing the difference. As it is more likely that non-union contractors, who can ignore certain safety and union regulations, will be more able to afford to do the work at these squeezed prices, the taxpayer gets low quality work at inflated costs and the General Contractor’s increase their profit margin. WHAT DOES THE PRIVATE SECTOR DO ON JOB BIDDING There is much misinformation around that Wicks increases prices on public works construction jobs. If this were so, Wicks would never be used for private sector construction. However, private developers like Donald Trump and Olympia and York, as well as corporate developers like IBM, Xerox, Kodak and Nynex all use separate contract systems. They are not required to, but choose to use separate bidding systems on their construction jobs. This is proof that the use of separate bidding saves money, as in private business, the bottom line means success or failure. Obviously, private business will opt for the most cost effective means to build. As the private developers use the separate bidding principals on their jobs, it obviously costs less. STUDIES HAVE SHOWN THE SEPARATE BIDDING REQUIREMENT RESULTS IN SUBSTANTIAL SAVINGS TO STATE AND LOCAL GOVERNMENT AND THEIR AGENCIES Studies throughout the nation, including in New Jersey, Washington, Oregon, Pennsylvania, Minnesota, Mississippi, Ohio, Illinois, North Dakota, North Carolina, Montana, Wisconsin, Louisiana and Virginia have consistently shown in comparative studies between the single and separate bidding procedures that separate bidding procedures, such as the Wicks Law, save taxpayer money. Contrary to what the General Contractors say, there is overwhelming evidence that the Wicks Law results in substantial net savings for the state, local government and its agencies. As you can see, opponents of Wicks often distort the real impact of separate bidding. The well-financed organizations behind the repeal of Wicks, including the Building Contractors Association and the General Building Contractors of New York, spend huge amounts of money each year in an attempt to repeal Wicks. But, this just shows how important Wicks is to the state. They wouldn’t be spending these enormous amounts of money, if their profits wouldn’t increase to cover these costs. Maintenance of the Wicks Law has and will continue to be one of our most important legislative goals. As you can see, we are faced with tough opposition. But, it only strengthens our resolve to maintain this vital law.
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