NYC General Contractor License Proposal May 29, 2020 Goals of new - - PowerPoint PPT Presentation

NYC General Contractor License Proposal

May 29, 2020

Goals of new General Contractor License

• 1. Experience Requirements
• Currently General Contractors are not required to

demonstrate any practical experience or obtain any trainings/certifications

• 2. Background Checks
• Safety Registrants and Insurance Tracking Number holders

are not subject to criminal background or DOB disciplinary record checks

• 3. Discipline General Contractor Businesses
• Hold General Contractor licensees accountable for the

work performed

• General Contractor Businesses can continue to operate by

changing out individual licensee

• 4. Deny, Suspend, Revoke, Deny Renewal
• Currently only General Contractor Registrants are subject

to disciplinary actions

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General Contractor Requirements in other Jurisdictions

Of the 50 largest cities in the US, a licensed or registered general contractor is required for major construction work in 40 cities (80%).

• 1. Albuquerque, NM
• 2. Atlanta, GA
• 3. Baltimore, MD
• 4. Boston, MA
• 5. Charlotte, NC
• 6. Chicago, IL
• 7. Colorado Springs, CO
• 8. Columbus, OH
• 9. Dallas, TX
• 10. Denver, CO
• 11. El Paso, TX
• 12. Fresno, CA
• 13. Fort Worth, TX
• 14. Indianapolis, IN
• 15. Jacksonville, FL
• 16. Las Vegas, NV
• 17. Long Beach, CA
• 18. Los Angeles, CA
• 19. Louisville, KY
• 20. Memphis, TN
• 21. Mesa, AZ
• 22. Miami, FL
• 23. Nashville, TN
• 24. New Orleans, LA
• 25. Oakland, CA
• 26. Oklahoma City, OK
• 27. Omaha, NE
• 28. Philadelphia, PA
• 29. Phoenix, AZ
• 30. Portland, OR
• 31. Raleigh, NC
• 32. Sacramento, CA
• 33. San Diego, CA
• 34. San Francisco, CA
• 35. San Jose, CA
• 36. Seattle, WA
• 37. Tucson, AZ
• 38. Virginia Beach, VA
• 39. Washington, DC
• 40. Wichita, KS

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General Contractor Requirements in other Jurisdictions

Scope of GC license in other jurisdictions:

• Several of the jurisdictions require a GC license for any work that requires a permit
• Some jurisdictions have a dollar amount threshold in determining whether a GC

license is required

• (Range: $500 in Philadelphia, $7,500 for residential projects or $50k for

commercial projects in Louisiana)

• A few jurisdictions require GC License only for certain work (typically residential

projects) such as in NYC

• License/registration can be suspended or revoked
• Home owners, trade licenses (plumbers, electricians, etc.) usually exempted
• Qualifications range:
• Basic: Application, insurance
• In-depth: Plus experience, exam, training

4

Current NYC requirements

• General Contractor Registration required for 1-, 2-, 3- family new building permits
• Safety Registration Number required for all other new building construction,

demolition, or large alteration work permits

• Insurance Tracking Number required for minor alteration work and for all other

non-trade specific work permits

• Home Improvement Contractor License required for those who construct, repair,

remodel, or perform other home improvement work costing more than $200 to any residential building or land in New York City

• License issued by NYC Department of Consumer of Affairs

5

Current Administrative Code Requirements: GC

NYC Administrative Code Section 28-418 sets forth the requirements for a General Contractor Registration General Contractor Registration applicants must provide:

• Business documentation, including records disclosing names of owners and officers
• Proof of Insurance (General Liability, Workers Compensation and Disability Insurance)
• Proof of Financial Solvency (three months of banks statements reflecting contractor

business has a balance of at least $25,000)

• NYC Administrative Code Section 28-418 also requires General Contractor Registrants to

provide warranties to home buyers, provide subcontractor information to the Department and maintain technical reports

6

Current Administrative Code Requirements: GC

General Contractor Registrants are additionally subject to: NYC Administrative Code 28-401, General Licensing Provisions

• Must be at least 18 years old, able to read and write in the English language and be
• f Good Moral Character
• 3 Year License Terms
• Subject to background investigations and ECB checks
• Individual registrant must be an officer in the General Contractor business

7

Current Administrative Code Requirements: SR

NYC Administrative Code Section 28-420 sets forth the requirements for a Safety Registration Number Safety Registration applicants must provide:

• Business records, including documents disclosing names of owners and officers
• Proof of Insurance (General Liability, Workers Compensation and Disability Insurance)

Insurance Tracking Number applicants are only required to submit

• Proof of Insurance (General Liability, Workers Compensation and Disability Insurance)
• Proof of EIN number

8

Disciplinary Actions

DOB is currently only able to discipline General Contractor Registrants. Grounds for discipline are found in NYC Administrative Code Section 28-401.19. Disciplinary and enforcement measures include:

• Deny the individual’s original application
• Deny the renewal of the individual’s GC Registration
• Fine, Suspend or Revoke the individual’s GC Registration
• Requires a hearing at the NYC Office of Administrative Trials and Hearings
• DOB is authorized to immediately suspend a GC registration when public safety is

imminently jeopardized

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Disciplinary Actions: OATH Proceedings

Revocation of a GC registration requires a hearing at the NYC Office of Administrative Trials and Hearings (OATH) per NYC Administrative Code Section 28-401.19.1

• Disciplinary cases are handled by DOB’s Licensee Disciplinary Unit (LDU)
• Formal written charges are presented to GC Registrant
• LDU will conference with GC Registrant prior to OATH hearing
• By stipulation, GC Registrant may agree to voluntary

surrender their Registration, agree to a term of suspension and/or pay a fine

• GC Registrants frequently obtain their own counsel
• On average a conference is scheduled 2-3 months after

charges are presented

• If no stipulation is reached, a hearing will be held

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Disciplinary Actions: OATH Proceedings

• Following the hearing, the OATH Administrative Law Judge provides a written

determination and recommendation. DOB is authorized to adopt or reject the recommendation.

• GC Registrant may challenge DOB’s determination by filing an Article 78 challenge in

NYS State Supreme Court

• Disciplined GC registrants are posted on DOB’s website

https://www1.nyc.gov/site/buildings/industry/registered-individuals.page

• Significantly less than .01% of licensees and registrants are disciplined per year
• 2018: 106 licensees/registrants were disciplined out of 26,727
• 7 of which were GC Registrants out of 2,152
• 2019: 50 licensees/registrants were disciplined out of 29,895
• 6 of which were GC Registrants out of 2,318
• 2020: 9 licensees/registrants disciplined to date out of 33,900
• 3 of which were GC Registrants out of 2,629

11

Licensed Individuals: Disciplinary Cases

Andrew Trombettas (Master Plumber # 1671): Licensed Plumber connected to the March 26, 2015 Second Avenue Gas explosion that resulted in 2 fatalities, 19 injuries and the destruction of 3 buildings. A subsequent audit of the Licensee’s filings revealed a significant number of serious violations involving 22 different sites within a 6 year period. These violations included gas being supplied without inspection or proper authorization, installation of non-compliant equipment, failure to test new or altered installation work and work contrary to submitted

• plans. As a result of the audit and following a hearing at OATH, Trombettas’s license

was revoked.

NY Daily News, 9/3/2017, https://www.nydailynews.com/new-york/manhattan/building-manager-charged-fatal-east-village-gas-explosion-dies-article-1.3465542

Paul Geer (Hoist Machine Operator # 7825): Licensed operator of a crane that collapsed on January 9, 2013, resulting in 7 injured workers. Licensee was found to have overloaded the crane by 85%. Following a hearing at OATH, Greer’s license was revoked.

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Lina De La Hoz (General Contractor # 38518): Contractor was issued 69 ECB violations, including 25 Class One violations, and had amassed $108,000 in outstanding fines. Contractor also refused to cooperate with a Department investigation. Following a hearing at OATH, De La Hoz’s license was revoked. Yoel Roth (Construction Superintendent # 25802): Licensee was convicted of Falsifying Business Records in connection to his involvement in a fraudulent asbestos certification

• scheme. Licensee was found to have referred property owners and contractors to a corrupt

Certified Asbestos Investigator in order for them to circumvent construction safety

• requirements. Based on this criminal conviction and following a conference with LDU, Roth

surrendered his license. Patrick Duffy (Concrete Safety Manager # 2475): Licensee involved in the June 26, 2017 partial collapse of a 8 story building under construction in Long Island City. Duffy failed to report non- conforming concrete work. Following a conference with LDU, Duffy was fined $3,500 and received 2 years of probation. John K. Riley (Hoist Machine Operator # 10021 ): Licensed operator of a crane at 60 Hudson Street that collapsed in February of 2016. One person was killed. A Department investigation found that Mr. Riley failed to take precautionary measures to safeguard the crane during high

• winds. Following an OATH proceeding, Mr. Riley’s license was permanently revoked.

Licensed Individuals: Disciplinary Cases

13

Non-Licensed Contractors – Limitations on Discipline

Unlike General Contractor Registrants, DOB is unable to deny, suspend, revoke or deny renewal Safety Registrations and Insurance Tracking Numbers. Egregious actions involving these non-licensed individuals are not subject to the disciplinary provisions of NYC Administrative Code Section 28-401.19. These incidents include: John Tsampas (Insurance Tracking Number 3365): Contractor involved in a facade repair accident that resulted in a worker fatality at 1 Pierrepoint Street in Brooklyn. On April 10, 2019 a worker fell off the roof of the 13-story building. No work permit had been issued for the façade repair work.

The Real Deal, 3/11/2019, https://https://therealdeal.com/2019/04/10/construction-worker-falls-to-his-death-working-on-brooklyn-rooftop/

Isac Deutch (Safety Registration Number 34833): Contractor/permit holder involved in a construction accident at 859/833 Myrtle Avenue

• n November 21, 2018. One worker was killed

after a prefabricated panel fell off the 3rd story

• f a 10-story residential building under

construction.

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Jorge Espejo (Safety Registration Number 608635): Contractor/permit holder for a new building at 714 39th Street in Brooklyn. On September 13, 2018, a retaining wall collapsed at the site killing one worker. A subsequent audit of Mr. Espejo’s other projects revealed that several of the sites were undergoing work without a required construction superintendent.

Non-Licensed Contractors – Limitations on Discipline

https://therealdeal.com/2018/09/13/construction-worker-trapped-after-wall-collapses-at-brooklyn-site

Note: These contractors are still able to file for construction permits despite fatalities resulting from their extreme negligence.

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GC Proposal: Designee

• Every General Contractor Business or City Agency performing such work must name one individual to

serve as the Designee

• Designee’s name and Designee’s license number are listed on all corresponding permits issued to the

General Contractor Business or City Agency

• Designee must be:
• Sole Proprietorship – Individual Owner
• Partnership – General Partner
• Corporation or Limited Liability – Officer, Member or Shareholder owning 10% or more
• City Agency – Employee
• Designee Duties
• Full Responsibility over General Contractor Work
• Direct supervision of business operations
• Direct supervision of work performed by GC Business or City Agency and by their subcontractors
• General Contractor Business or City Agency must notify DOB before a change to the Designee.
• With the exception of City Agencies, an individual may serve as the Designee for up to two separate

businesses at the same time.

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GC Proposal: Required Information

Applicants for a General Contractor License will be required to provide all such documentation/information requested by the Department. This information will include:

• Designee’s full name, residence address, telephone number, e-mail address
• If the applicant is a corporation:
• The corporate name, address and telephone number of the applicant’s principal office or place of

business

• The name, residence address and residence telephone number of all corporate officers and

registered agents and any person owning an interest of ten percent or more in the corporation;

• If the applicant is a partnership:
• The name, residence address and residence telephone number of all partners
• Proof of financial solvency of GC Business (Bank Statements)
• City Agencies are exempt from this requirement
• Proof of insurance as required by section 28-401.9
• Average number of workers in a three month period on renewal

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GC Proposal: Qualifications

• 1. SST Supervisor Card
• 2. Experience Requirement (must satisfy one)
• a. Bachelor degree (engineering, architecture, construction management) + 1 year
• f practical field experience in general construction
• b. 5 years of practical field experience in construction

c. PE or RA in Good Standing with NYS and NYC DOB

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Key Changes with a General Contractor License

• Required to obtain any Construction, Alteration or Demolition

Work Permit

• All Contractors would be subject to the Qualification and

Disciplinary measures of NYC Admin. Code 28-401 * Background checks, good moral character requirement, OATH trials, etc.

• Increased responsibilities for individual contractor/designee
• Training and experience requirements

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GC Proposal: Remove Section

§28-401.19.4.2 General contractor registration. Any registered general contractor who has defaulted at or been found liable after proceedings before the environmental control board or in an adjudication in criminal court of violations of any provisions of this code relating to a stop work order, public health or safety, structural integrity, building in compliance with approved construction documents or fire safety three times within any twenty-four month period shall be subject to immediate suspension of his or her registration, pending a hearing and determination at

• ffice of administrative trials and hearings (OATH) or its successor agency, as

applicable

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GC Proposal: Grandfathering

• Prior to Renewal, Active GC Registrants and Safety Registrants can continue

to file for permits

• On next Renewal, GC Registrants and Safety Registrants will be issued new

GC License w/out application or training certifications

• Must have held Registration for 5 years
• No background fee
• Subject to ECB and criminal background checks
• Training certifications submitted in subsequent renewals
• Individuals currently holding a GC registration will automatically become

the Designee of the GC Business or City Agency. Safety Registration businesses must appoint a Designee prior to issuance of a new GC License

• Insurance Tracking Number holders must apply for the GC License and

meet all experience and training certification requirements

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Proposed Implementation: Active Permits

General Contractor and Safety Registrants:

• Active permits automatically changed over to the new GC

License number Insurance Tracking Numbers:

• Active permits expire one year after effective date
• Active Permits not renewable
• No new permits issued after effective date

22

Proposed Implementation: Current Registrants

Safety Registration 1950 General Contractor Registration 2629 Insurance Tracking Number 5237

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Top DOB Permittees February 2, 2018 – February 4, 2020

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GC size/volume Vs. Violations Class 1s Upheld February 2018 – February 2020

Safety Registrants

No indication that higher job #’s results in higher number of Imm. Hazardous Violations issued and upheld at OATH No indication that higher construction area results in higher rate of Imm. Hazardous violations issued and upheld at OATH

Total Construction Floor Area Upheld Class-1s Upheld Class-1s per 100,000 square feet 143165842 61 0.0 78128691 12 0.0 32170633 5 0.0 28794845 8 0.0 18012920 23 0.1 16518358 0.0 13886377 3 0.0 8088730 13 0.2 4018827 6 0.1 3920856 96 2.4 3886681 1 0.0 2982695 1 0.0 2733452 37 1.4 2467668 1 0.0 2239770 0.0 2167236 21 1.0 2011973 2 0.1 2006838 3 0.1 1619840 0.0 1364120 3 0.2 1356195 1 0.1

Count Distinct Job Number Upheld Class-1s Upheld Class-1s per 100 jobs 684 5 0.7 639 37 5.8 438 12 2.7 419 0.0 369 10 2.7 347 0.0 326 11 3.4 297 3 1.0 293 96 32.8 286 1 0.3 282 11 3.9 274 2 0.7 270 0.0 266 1 0.4 263 61 23.2 263 0.0 249 5 2.0 248 21 8.5 238 7 2.9 222 10 4.5 221 1 0.5 213 6 2.8 212 15 7.1

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GC size/volume Vs. Construction Incidents/ Fatalities Current Statistics (last 2 years) – Safety Registrants

• Some indication that more incidents are reported amongst

safety registrants with the highest floor construction area.

• No indication that more jobs translate to more incidents.
• There were NO fatalities among the highest active-permittees

Total Construction Floor Area Construction Incidents Last 2 years Fatalities Last 2 years 143165842 39 78128691 24 32170633 2 28794845 21 18012920 15 16518358 7 13886377 5 8088730 7 4018827 3920856 3886681 2982695 2733452 2467668 2239770 2167236 2011973 2006838 3 Count Distinct Job Number Construction Incidents Last 2 years Fatalities Last 2 years 684 2 639 438 24 419 7 369 347 3 326 297 5 286 5 282 274 270 266 263 39 174 15 144 7 123 21

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GC size/volume Vs. Violations Class 1s Upheld February 2018 – February 2020 – GC 123 Registrants

No indication that the # of jobs filed has a direct connection to the # or rate of Imm. Hazardous Violations issued and upheld at OATH

Count Distinct Job Number Upheld Class-1s Upheld Class- 1s per 100 jobs 644 45 7.0 419 0.0 347 24 6.9 347 1 0.3 304 3 1.0 250 21 8.4 236 3 1.3 216 1 0.5 204 5 2.5 201 20 10.0 201 1 0.5 201 0.0 200 13 6.5 199 2 1.0 198 14 7.1 191 0.0 189 0.0 186 3 1.6 185 0.0 184 0.0 183 3 1.6 Total Construction Floor Area Upheld Class- 1s Upheld Class-1s per 100,000 square feet 56509592 5 0.0 24339275 10 0.0 20319963 0.0 8357672 44 0.5 7243200 1 0.0 3912424 1 0.0 3294108 12 0.4 3191152 45 1.4 2960590 0.0 2871286 24 0.8 2136950 6 0.3 1919054 0.0 1855419 20 1.1 1800696 4 0.2 1719135 18 1.0 1402838 0.0 1319361 6 0.5 1278487 21 1.6 1261157 1 0.1 1255539 24 1.9 1146586 28 2.4

No indication that a high total construction area translates to a higher rate of Imm. Hazardous violations issued and upheld at OATH

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GC size/volume Vs. Construction Incidents/Fatalities February 2018 – February 2020 – GC 123 Registrants

No indication that the more the construction area, the more resulting construction site fatalities

Count Distinct Job Number Construction Incidents Last 2 years Fatalities Last 2 years 644 419 347 347 304 250 236 216 1 204 13 201 201 201 200 199 198 191 189 186 185 2 184 183 Total Construction Floor Area Construction Incidents Last 2 years Fatalities Last 2 years 56509592 13 24339275 1 20319963 8357672 7243200 3912424 1 3294108 1 1 3191152 2960590 2871286 2136950 1919054 1855419 1800696 1719135 1402838 2 1319361 1278487 1261157 1255539 1146586

No indication that the # of jobs filed is connected to the # of construction incidents

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• No correlation between volume of jobs filed and # of Immediately

Hazardous Violations issued and upheld at OATH

• No correlation between total construction area and # of Immediately

Hazardous Violations upheld at OATH

GC size/volume Vs. Violations Class 1s Upheld Current Statistics (last 2 years) – Tracking Numbers

Total Construction Floor Area Upheld Class-1s Upheld Class- 1s per 100,000 square feet 313599176 0.0 8072487 1 0.0 4024561 1 0.0 3007501 0.0 1796332 3 0.2 1792671 0.0 1281606 23 1.8 1280126 12 0.9 912230 1 0.1 503159 0.0 458110 6 1.3 414818 0.0 382367 0.0 340480 3 0.9 316030 10 3.2 291147 7 2.4 249173 0.0 217766 4 1.8 139231 3 2.2 115204 3 2.6

Count Distinct Job Number Upheld Class-1s Upheld Class- 1s per 100 jobs 2885 0.0 2813 0.0 2113 1 0.0 1232 0.0 1092 3 0.3 988 2 0.2 931 10 1.1 900 23 2.6 886 0.0 855 7 0.8 767 7 0.9 752 4 0.5 690 0.0 660 0.0 627 0.0 497 1 0.2 465 0.0 461 3 0.7 449 5 1.1 448 6 1.3 444 0.0 441 2 0.5 439 0.0 421 12 2.9

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• No correlation between # of jobs filed/Square Footage and # of

Construction Incidents or Fatalities

GC size/volume Vs. Incidents Current Statistics (last 2 years) – Tracking Numbers

Count Distinct Job Number Total Construction Floor Area Construction Incidents Last 2 years Fatalities Last 2 years 2885 313599176 2813 16646 2113 24450 1232 1792671 1092 1796332 1 988 1 931 316030 900 1281606 886 7902 855 291147 767 4872 1 1 752 217766 690 2205 660 111227 627 6579 497 465 9905 461 4073 1 449 54005 448 6439 1

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COMPARISON - ALL CONTRACTORS

Data over a recent 2-year period for All GC’s with valid Permits shows:

• 66% of ALL GCs regardless of type and size of work performed received

no violations

• GC 1-2-3 Registrants and GC Safety Registrants across the board

show equal percentage in receiving NO VIOLATIONS:

• GC 1-2-3 – 57%
• GC Safety Registrants – 58%
• GC Tracking Numbers have a significantly better record – 87%
• Tracking number holders are only permitted to file applications

for smaller and more limited types of jobs such as equipment use and interior work.

• Few incidents/fatalities amongst top DOB permit holders

31

Proactive Monitoring Inspections (NB/ALT1/DM) Comparison Across GC types February 2018 – February 2020

• Among the top most active GCs - No indication that higher job #’s

equates to higher number of average proactive monitoring inspections

• Safety Registrants - 2.8 insp/job
• GC 123 Registrants - 2.3 insp/job
• Tracking Numbers - 0.07 insp/job (these are limited in

NB/ALT1/DM)

• Excluding Complaint inspections

32

Conclusions

Among the top permit holders over the last two years:

• Few incidents reported and violations issued to top DOB permit holders,

including top 50 Safety Registrants

• Data reflects no significant distinction between size of contractor
• peration and DOB enforcement with regards to violations issued
• Data reflects no significant distinction between size of contractor
• peration and incident/accident rate
• The above applies to all contractors

33

Conclusions (cont’d)

General findings:

• Majority GCs holding active permits, regardless of type/size, receive no

violations

• No notable distinctions in the number of violations upheld amongst

different sized contractors.

• The percentage of violations upheld is consistent amongst all contractor

types at an average of approximately 85%

• Safety Registrants have a double percentage of violations issued as

immediately hazardous as compared to the other two contractor types. This is most likely attributed to the scale of jobs being performed, frequency of DOB inspections and the effect of those violating conditions

• n life, safety and the public.
• DOB is limited by it’s inability to hold non-registered contractors

accountable for poor construction practices.

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General Contractor License: Questions?

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