5 joint ventures vie for $650M New York lab project

Dive Brief:

Ten major contractors are vying for a contract from New York state to build the $650 million Wadsworth Center, the Department of Health lab, according to the Times Union.
The construction firms have paired up into five joint ventures, according to The Dormitory Authority of the State of New York, which is overseeing the project for the health department. Those teams are AECOM Tishman and Skanska USA; Gilbane Building Co. and Turner Construction; The Pike Co. and McCarthy Building Cos; Walsh Group and Consigli Construction; and Suffolk Construction and McKissack & McKissack. The authority expects to issue an official request for proposals on Sept. 24 and narrow the list of those in the running to three or four after it reviews the proposals, which are due on Jan. 15.
The location of the new consolidated Wadsworth Center, which currently functions from locations spread around different sites, is up in the air. Some potential sites for the facility include the University at Albany Campus in East Greenbush, New York, or next to the Albany Medical Center where Wadsworth maintains labs and office space. The center also has a working relationship with the UAlbany's School of Public Health.

Dive Insight:

The Albany area has several large projects under construction right now, including the Emerging Technology and Entrepreneurship Complex Center (ETEC) on the University at Albany's Harriman Campus in Albany ($180 million); the Park South mixed-use project in Albany ($106 million); the Science and Engineering Building at Union College in Schenectady, New York ($100 million); and a Dollar General distribution center in Florida, New York ($91 million). Consigli and Walsh, two of the contractors in the running for the new Wadsworth Center, are currently underway with the ETEC project.

In order to win and execute large projects, companies that sometimes bid against each other can find themselves working together. This can be for a variety of reasons, including when companies want to pool their bonding capacities or fill in the gaps with each other's expertise. Sometimes a team member who is local to the area can also be a strategic partner with connections to labor and subcontractors. Typically, the company that takes on the most risk, financial or otherwise, will assume the lead role during the bid process and construction.

These relationships can be challenging, however, particularly when the team includes design and engineering firms that usually enter into direct contracts with the owner and are used to looking out for their interests first. In these circumstances, the owner can hire a third party to represent his or her interests.