New York City's Board of Education wants to spend $11 billion to repair 231 crumbling public schools and build new classroom space—primarily in Queens—for 74,000 additional students. It's a bad idea. Not that the city's public schools don't need fixing: overcrowded classrooms, gas leaks, and cracked floors are commonplace. But the Board of Ed's plan will be a high-priced fiasco if the School Construction Authority spends the money.

Like its predecessor, the Board of Ed's Division of School Facilities, the SCA has failed miserably. As its second five-year mandate closes, the authority has completed only one-third of its big repair jobs, and it is infamous for dangerously shoddy work and lax safety at building sites. Cost overruns and wildly miscalculated estimates have needlessly bled the city budget of tens of millions of dollars. (See "Why New York Can't Build Schools," Spring 1998.)

Dale Hemmerdinger, president of ATCO Properties and Management, sums up the SCA's biggest problem: "As it stands, there's no economic incentive involved—no one is held responsible if something goes wrong, and no one benefits if things go right." Like all unaccountable bureaucracies, the SCA sags heavily with apathetic workers. And despite claims to the contrary, the SCA only apparently escapes the pernicious Wicks Law, which forces public agencies to subcontract needlessly, jacking up expenses nearly 30 percent and guaranteeing delays in trying to coordinate different contractors. Giving billions to the SCA guarantees a prodigious waste of money and continued failure.

So how do we fix Gotham's decrepit schools? The Board of Ed should adopt a "turnkey" model of public contracting. In a turnkey system, the board hires a private-sector developer to build a school, with all the efficiencies private developers enjoy. When the job is done, the developer hands over the front door key to the Board of Ed. If the board likes what it sees, it can reward the developer with new contracts—a healthy incentive to work efficiently and for a fair price.


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