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PR- 012-05
January 06, 2005


Agreements to Produce Up to $500 Million Savings in School Construction Costs over Five Years

Mayor Michael R. Bloomberg, Schools Chancellor Joel I. Klein, and Building and Construction Trades Council (BCTC) President Edward Malloy today announced two landmark agreements between the Department of Education (DOE) and the BCTC. The first is an historic Project Labor Agreement (PLA) that will produce $500 million in savings for school construction projects over the next five years, and the second is a Memorandum of Understanding (MOU) that all construction projects in facilities leased by the DOE must comply with School Construction Authority’s (SCA) high standards and rigorous requirements.  Deputy Chancellor Kathleen Grimm, SCA President William H. Goldstein, and Building Trades Employers Association President Lou Coletti joined the Mayor and Chancellor for the announcement at the Tweed Courthouse, DOE headquarters.

“Over the past two years, we have dramatically improved the school construction process, and today’s agreements are the next great step in our reform efforts,” said Mayor Bloomberg. “By uniformly reducing premium rates and holding contractors to SCA requirements and standards, these agreements will produce tremendous savings for the City and improve the quality of construction in our schools.  I’d like to thank Ed Malloy and the BCTC for working with us on these two landmark agreements that will benefit greatly benefit our City’s schoolchildren.”

“This historic announcement proves how effectively everyone in our City's public school system can work together when we focus on serving our children,” said Chancellor Klein. “In addition to contributing to our overall school construction effort by assuring quality work at a lower cost, these agreements will help us create new schools and opportunities for our children and thus ensure that students will continue to benefit from our reform of the City's public schools.”

“These agreements represent a landmark in the relationship between the City and our industry,” said Edward Malloy. “Enormous savings and improved safety for school construction will be achieved by utilizing the best qualified contractors and highest skilled labor. The winners here are City taxpayers, working men and women in our affiliated unions and, most importantly, the children in our public schools.”

The PLA will govern the relationship between the SCA, its contractors, and labor with respect to existing school buildings that are scheduled for rehabilitation and renovation projects under the DOE’s $13.1 Billion Five Year Capital Plan, which began in July of 2004.  The PLA will provide one consistent set of guidelines that will govern all work rules, holidays, scheduling, and, most importantly, a 5% premium rate for work at night and during off-peak hours.  In the past, collective bargaining agreements have varied for each construction trade, and premium rates could range from 12% to as much as 27%.  These new guidelines, which will apply to all projects valued at over $1 million, are estimated to result in a savings of $500 million over the next five years, which will be reallocated towards capital needs as part of the yearly Capital Plan amendment process.  In addition, the PLA increases the ratio of apprentices on covered projects, likely increasing apprenticeship opportunities for public high school students who enter through the Construction Skills 2000 program.

Under today’s MOU, the SCA will commit that all contractors performing work on DOE leased buildings, whether working for the SCA or working directly for the building landlord, must comply with all SCA requirements and standards.  These contractors will be required to qualify through the SCA’s rigorous prequalification process, including background investigations by the Inspector General.  In addition, contractors will be required to have an approved apprenticeship program and pay workers prevailing wages.  In the past there was no consistency or oversight for standards, and as a result, projects were often delayed facilities were often sub-standard.  SCA is currently building 95 new schools under the five-year plan.  Of the more than 1,200 existing school buildings in New York City, 105 are currently leased by DOE.  As part of this effort, SCA expects to spend more than $1 billion on creating new schools from facilities that the SCA does not own but will be leasing in the future.


Edward Skyler/ Robert Lawson   (212) 788-2958


Jerry Russo   (Department of Education)
(212) 374-5141

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