Industry Seeks Disaster Response Legislation and Terms
In the first two days after Sandy's devastating blow on Oct. 29, 2012, several of the region's largest general contractors began a massive mobilization effort throughout the areas hit the hardest. Through the newly formed New York City Rapid Repairs program, 10 GCs sent teams of subcontractors to homes; talked with owners, renters and other storm victims; and figured out how, if and when they could restore power, heat and hot water so displaced victims who had been through a nightmare could return home.
But what the 10 didn't know then but have learned since is that the initial storm response may have been the easy part.
Nearly two years after Sandy, some of the 10 GCs have not been fully paid. Also, similar to what their peers who rushed to help after 9/11 discovered, the Sandy contractors lacked any promise of indemnification for their work from the city or state.
While many of the GCs praise the city for its quick response in the face of such a massive disaster, they say something must be done to change the working dynamics for contractors before another disaster hits.
"The first big issue was the schedule, because we were in a race against the elements, and the political pressure was there to mobilize and move fast to save lives," says William DeCamp III, vice president and district manager at Gilbane Building Co., one of the 10 GCs managing Rapid Repairs. "The second biggest was the contract, because it was ill-suited to the scope and nature of the work and, more importantly, it was constantly changing and increasing [project] administrative and bureaucratic requirements."
Gilbane's costs exceeded $90 million for its work, but it reached an agreement with the city for $83 million. Roughly $3 million of that remained outstanding as of July, 21 months after the storm. "There was no mobilization payment, so immediately we were behind the eight ball," DeCamp says.
Industry groups are continuing efforts started last year to address the issues. The New York Building Congress is leading a push for New York to pass the Emergency Responder Act, legislation it helped to craft after the storm. The bill, which includes indemnification language, is sponsored by state Sen. Diane J. Savino (D-Staten Island/Brooklyn) and Assemblyman Michael Cusick (D-Staten Island). Representing some of the hardest hit regions, they have first-hand knowledge of industry efforts, says Richard Anderson, Building Congress president. The bill is to be reintroduced in Albany next year.
Meanwhile, groups including the General Contractors Association (GCA) want the city to adopt a standardized disaster response contract with features that include an immediate mobilization payment process. They have met with both the Bloomberg and de Blasio administrations "and talked about the issue," says Denise M. Richardson, GCA managing director and board secretary. "We've been asked to put together—using the city's standard contract language and process—what terms and conditions we think need to be changed for disasters."
The groups are working to develop payment recommendations for various types of disaster responses "that will be ready to be plugged into a contract," Richardson says. While this "doesn't mean our ideas will be accepted, the fact that we're having this dialogue [shows] that they understand the problem," she says. "As we move ahead, we have the benefit of hindsight. I'm hopeful."