S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7902

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             April 28, 2009
                               ___________

Introduced by M. of A. ABBATE -- 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  copper price esca-
  lations; and providing for the repeal of such provisions upon  expira-
  tion thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Declaration of policy and statement of purpose. It being in
the vital interest of the general public that the public  works  in  the
state  of  New  York be administered efficiently and at a reasonable and
equitable cost; and, the unforeseen  emergency  of  unanticipated  esca-
lation  in  copper  prices  having  imposed  substantial  inequity  upon
contractors who have heretofore  been  awarded  contracts  after  public
bidding; and, such inequity having threatened the ability of contractors
to  fulfill  contracts so awarded; and, in order to perpetuate the bene-
fits derived by the general public from the existing  system  of  public
bidding,  and  to  assure  the continuance of the orderly performance of
contracts heretofore awarded as result of such public bidding;  and,  it
being in the best interest to provide equitable relief to those contrac-
tors who, having been awarded public contracts, have sustained damage by
reason of such copper price escalation, this act is hereby enacted.
  S  2. (a) Whenever the terms and conditions of a construction contract
awarded by the state of New York or a public benefit  corporation  based
upon  bids  submitted prior to May 15, 2006 but only for which materials
were purchased or invoiced after December 1, 2005, require a  contractor
to  furnish  materials  containing  copper  products, line items in such
contract pertaining to such copper  products  may  be  adjusted  upon  a
determination  made  by  the officer of the department, board, agency or
public benefit corporation that awarded such  contract  that  there  has

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11490-01-9
              

A. 7902                             2

been  an  increase in the cost of acquisition by the contractor, subcon-
tractor or supplier of materials of such materials  in  excess  of  five
percent,  determined  as  of the time of the award. Such a determination
shall  be  based  upon the available evidence, including but not limited
to, an appropriate nationally recognized economic index published by the
United States department of labor or other appropriate organization.  In
the  case  of  any  state  department  or  agency,  any such increase in
contract price shall be subject to  the  approval  of  the  state  comp-
troller.  Any  contractor,  subcontractor  or  supplier of materials who
receives an increase in the  cost  of  copper  products  shall  also  be
subject  to a downward adjustment in copper prices for subsequent de-es-
calation which may result in a price being lower than the  original  bid
price. Any contractor requesting an adjustment shall make application in
writing submitting documentary evidence to the office of the department,
board,  agency  or  public benefit corporation that awarded the contract
establishing such increase in accordance with the  requirements  of  the
department,  board, agency or public benefit corporation, which evidence
shall be subject to public inspection during regular business hours. Any
subsequent decrease or de-escalation shall be made upon a  determination
by the officer of the department, board, agency or public benefit corpo-
ration  that  awarded  such  contract  that  there has been a subsequent
decrease in the cost of acquisition  of  such  copper  products  by  the
contractor, subcontractor or supplier of materials. Such a determination
shall  be  based  upon the available evidence, including but not limited
to, an appropriate nationally recognized economic index published by the
United States department of labor  or  other  appropriate  organization.
Upon  the agreement of the parties, the contract may be amended in writ-
ing to reflect the increased or decreased cost of  acquisition  of  such
materials  insofar  as it exceeds five percent thereof and such contract
amendment shall state the amount of adjustment and the basis  therefore,
but  in no event shall direct labor costs, additional profit or overhead
be part of such adjustment. To the extent  a  construction  contract  is
subject  to  approval  by  the state comptroller, and as to the form and
manner of execution, by the attorney general, every such contract amend-
ment shall be subject to the approval of the state comptroller,  and  as
to  form and manner of execution, by the attorney general. No adjustment
shall be granted in an amount which, together with any other  sum  obli-
gated  under the contract, shall exceed the money appropriated or other-
wise lawfully available for the project.
  (b) Any local government may, acting  through  its  legislative  body,
enact  by  local  law, ordinance or resolution provisions and procedures
which have been submitted to the state comptroller by such local govern-
ment and as to which there is in effect a  determination  by  the  state
comptroller  that  such  provisions  and  procedures  and the continuing
implementation thereof are substantially equivalent  to  the  provisions
and procedures set forth in this section.
  S  3.  (a)  The  commissioner  of  general services in contracting for
commodities is authorized, with the approval of the  state  comptroller,
to  terminate or suspend for a part of its term any state contract award
of the purchase of commodities upon written application for such  termi-
nation  or  suspension by the vendor, where extraordinary and unforeseen
general market conditions have caused increases in  the  vendor's  costs
for  copper  or component parts or other physical elements consisting of
copper of the commodities to be  sold  under  the  contract,  where  the
contract  covers materials which were purchased or invoiced after Decem-
ber 1, 2005, and the commissioner of general  services  determines  upon

A. 7902                             3

evidence furnished by the vendor as required and deemed to be sufficient
by  such  commissioner  that  as  the  direct  and  sole  result of such
increases during the term of the contract, which exceed five percent  of
the  contractor's  aggregate acquisition costs determined as of the time
of the award, the contractor has incurred or will incur  an  actual  net
loss  on  such contract from the estimated sales made under the contract
and the contractor would continue to incur such net  losses  unless  the
contract is suspended or terminated. Such a determination shall be based
upon  the available evidence, including but not limited to, an appropri-
ate nationally recognized economic index published by the United  States
department of labor or other appropriate organization.
  (b)  The  commissioner  of  general  services  is  further authorized,
following the determination made pursuant to the provisions of  subdivi-
sion  (a) of this section that the contractor has incurred or will incur
an actual net loss on such  contract  from  the  sales  made  under  the
contract, to grant an increase or increases in the prices of the commod-
ities specified by the contract, in amounts necessary to prevent further
net losses to the contractor on such contract from deliveries to be made
thereafter  under  the  contract,  as compensation for and not exceeding
increases of the contractor's  acquisition  costs  during  the  contract
term.  Any  such  increase  in  contract  prices shall be subject to the
approval of the  state  comptroller.  Any  contractor  who  receives  an
increase  in  the  price  of  the commodities shall also be subject to a
downward adjustment in the  price  of  the  commodities  for  subsequent
de-escalation  which may result in a price being lower than the original
bid price. Any subsequent decrease or de-escalation shall be made upon a
determination by the officer of the department, board, agency or  public
benefit  corporation  that  awarded  such contract that there has been a
subsequent decrease in the cost of acquisition of such  copper  products
by the contractor, subcontractor or supplier of materials. Such a deter-
mination  shall  be based upon the available evidence, including but not
limited  to,  an  appropriate  nationally  recognized   economic   index
published  by the United States department of labor or other appropriate
organization.
  (c) All records, books and  documents  of  the  contractor  which  are
related  or  useful  to  the  determinations made by the commissioner of
general services and to the approval of the state comptroller  hereunder
shall be subject to audit and examination by the state comptroller.
  (d)  Any  local  government  may, acting through its legislative body,
enact by local law, ordinance or resolution  provisions  and  procedures
which have been submitted to the state comptroller by such local govern-
ment  and  as  to  which there is in effect a determination by the state
comptroller that such  provisions  and  procedures  and  the  continuing
implementation  thereof  are  substantially equivalent to the provisions
and procedures set forth in this section.
  S 4. This act shall take effect immediately and shall  expire  and  be
deemed repealed on June 30, 2011.