Bill Text: NY A05758 | 2023-2024 | General Assembly | Introduced
Bill Title: Relates to amending state construction and commodity contracts to provide equitable relief to contractors who have sustained unanticipated expenses by reason of construction materials price escalations.
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-01-03 - referred to governmental operations [A05758 Detail]
Download: New_York-2023-A05758-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5758 2023-2024 Regular Sessions IN ASSEMBLY March 23, 2023 ___________ Introduced by M. of A. ZEBROWSKI, DeSTEFANO -- read once and referred to the Committee on Governmental Operations AN ACT in relation to amending state construction and commodity contracts to provide equitable relief to contractors who have sustained unanticipated expenses by reason of construction materials price escalation; and providing for the repeal of such provisions upon the expiration thereof The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Declaration of policy and statement of purpose. It being in 2 the vital interest of the general public that public works in the state 3 of New York be administered efficiently and at a reasonable and equita- 4 ble cost; and, the unforeseen emergency of unanticipated escalation in 5 construction materials prices having imposed substantial inequity upon 6 contractors who have heretofore been awarded contracts after public 7 bidding; and, such inequity having threatened the ability of contractors 8 to fulfill contracts so awarded; and, in order to perpetuate the bene- 9 fits derived by the general public from the existing system of public 10 bidding, and to assure the continuance of the orderly performance of 11 contracts heretofore awarded as a result of such public bidding; and, it 12 being in the best interest to provide equitable relief to those contrac- 13 tors who, having been awarded public contracts, have sustained damage by 14 reason of such construction materials price escalation, this act is 15 hereby enacted. 16 § 2. Whenever the terms and conditions of a construction contract 17 awarded by the state of New York or a public benefit corporation based 18 upon bids submitted prior to December 31, 2021 but only for which mate- 19 rials were purchased or invoiced after March 1, 2020, require a contrac- 20 tor to furnish materials in such contract pertaining to such 21 construction materials may be adjusted upon a determination made by the 22 officer of the department, board, agency or public benefit corporation EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD09570-04-3A. 5758 2 1 that awarded such contract that there has been an increase in the cost 2 of acquisition by the contractor, subcontractor or supplier of materials 3 of such materials in excess of five percent, determined as of the time 4 of the award. Such a determination shall be based upon the available 5 evidence, including but not limited to, an appropriate nationally recog- 6 nized economic index published by the United States department of labor 7 or other appropriate organization. In the case of any state department 8 or agency any such increase in contract price shall be subject to the 9 approval of the state comptroller. Any contractor, subcontractor or 10 supplier of materials who receives an increase in the cost of 11 construction materials shall also be subject to a downward adjustment in 12 construction materials prices for subsequent de-escalation which may 13 result in a price being lower than the original bid price. Any contrac- 14 tor requesting an adjustment shall make application in writing submit- 15 ting documentary evidence to the office of the department, board, agency 16 or public benefit corporation that awarded the contract establishing 17 such increase in accordance with the requirements of the department, 18 board, agency or public benefit corporation, which evidence shall be 19 subject to public inspection during regular business hours. Any subse- 20 quent decrease or de-escalation shall be made upon a determination by 21 the officer of the department, board, agency or public benefit corpo- 22 ration that awarded such contract that there has been a subsequent 23 decrease in the cost of acquisition of such construction materials by 24 the contractor, subcontractor or supplier of materials. Such a determi- 25 nation shall be based upon the available evidence, including but not 26 limited to, an appropriate nationally recognized economic index 27 published by the United States department of labor or other appropriate 28 organization. Upon the agreement of the parties, the contract may be 29 amended in writing to reflect the increased or decreased cost of acqui- 30 sition of such materials insofar as it exceeds five percent thereof and 31 such contract amendment shall state the amount of adjustment and the 32 basis therefor, but in no event shall direct labor costs, additional 33 profit or overhead be part of such adjustment. To the extent a 34 construction contract is subject to approval by the state comptroller, 35 and as to the form and manner of execution, by the attorney general, 36 every such contract amendment shall be subject to the approval of the 37 state comptroller, and as to form and manner of execution, by the attor- 38 ney general. No adjustment shall be granted in an amount which, together 39 with any other sum obligated under the contract, shall exceed the money 40 appropriated or otherwise lawfully available for the project. 41 § 3. (a) The commissioner of general services in contracting for 42 commodities is authorized, with the approval of the state comptroller, 43 to terminate or suspend for a part of its term any state contract award 44 for the purchase of commodities upon written application for such termi- 45 nation or suspension by the vendor, where extraordinary and unforeseen 46 general market conditions have caused increases in the vendor's costs 47 for construction materials or other physical elements consisting of 48 construction materials to be sold under the contract, where the contract 49 covers materials which were purchased or invoiced after March 1, 2020, 50 and the commissioner of general services determines upon evidence 51 furnished by the vendor as required and deemed to be sufficient by the 52 commissioner that as the direct and sole result of such increases during 53 the term of the contract, which exceed five percent of the contractor's 54 aggregate acquisition costs determined as of the time of the award, the 55 contractor has incurred or will incur an actual net loss on such 56 contract from the estimated sales made under the contract and theA. 5758 3 1 contractor would continue to incur such net losses unless the contract 2 is suspended or terminated. Such a determination shall be based upon the 3 available evidence, including but not limited to, an appropriate 4 nationally recognized economic index published by the United States 5 department of labor or other appropriate organization. 6 (b) The commissioner of general services is further authorized, 7 following the determination made pursuant to the provisions of subdivi- 8 sion (a) of this section that the contractor has incurred or will incur 9 an actual net loss on such contract from the sales made under the 10 contract, to grant an increase or increases in the prices of the commod- 11 ities specified by the contract, in amounts necessary to prevent further 12 net losses to the contractor on such contract from deliveries to be made 13 thereafter under the contract, as compensation for and not exceeding 14 increases of the contractor's acquisition costs during the contract 15 term. Any such increase in contract prices shall be subject to the 16 approval of the state comptroller. Any contractor who receives an 17 increase in the price of the commodities shall also be subject to a 18 downward adjustment in the price of the commodities for subsequent 19 de-escalation which may result in a price being lower than the original 20 bid price. Any subsequent decrease or de-escalation shall be made upon a 21 determination by the officer of the department, board, agency or public 22 benefit corporation that awarded such contract that there has been a 23 subsequent decrease in the cost of acquisition of such construction 24 materials by the contractor, subcontractor or supplier of materials. 25 Such a determination shall be based upon the available evidence, includ- 26 ing but not limited to, an appropriate nationally recognized economic 27 index published by the United States department of labor or other appro- 28 priate organization. 29 (c) All records, books and documents of the contractor which are 30 related or useful to the determinations made by the commissioner of 31 general services and to the approval of the state comptroller hereunder 32 shall be subject to audit and examination by the state comptroller. 33 § 4. This act shall take effect immediately and shall expire and be 34 deemed repealed June 30, 2024.