Senate Bill S6787

                                 BILL NUMBER:  S6787

 TITLE OF BILL :
An act to amend the state finance law and the general municipal law,
in relation to contract change orders


 PURPOSE OR GENERAL IDEA OF BILL :
This bill adds a new subsection 5 to section 139-f of the state
finance law and a new subsection 4 to section 106 b of the general
municipal law to provide that (a) change orders exceeding the original
public contract price shall be considered a new project and (b) when
total unapproved change orders exceed 10% of the original contract,
the contractor or subcontractor shall not be required to proceed with
such change order work until it is approved by the owner

 SUMMARY OF SPECIFIC PROVISIONS :
A new subsection 5 of Section 139 f of the state finance law provides
(a) If at any time during the construction period, the total cost of
all change orders, change directives and contract amendments shall
exceed the original contract or subcontract price, such excess project
work shall be considered a new and separate project subject to this
Article 9 and (b) If at any time during the construction period, the
total cost of all unapproved change orders, change directives and
contract amendments exceed ten (10%) percent of the original contract
or subcontract, the contractor or subcontractor, as the case may be,
              

shall not be required to commence or continue such work until the
proposed changes or amendments have been approved by the public owner.

A new subsection 4 of the general municipal law provides (a) If at any
time during the construction period, the total cost of all change
orders, change directives and contract amendments shall exceed the
original contract or subcontract price, such excess project work shall
be considered a new and separate project subject to this Article 5A
and (b) If at any time during the construction period, the total cost
of all unapproved change orders, change directives and contract
amendments exceed ten (10%) percent of the original contract or
subcontract, the contractor or subcontractor, as the case may be,
shall not be required to commence or continue such work until the
proposed changes or amendments have been approved by the public owner.

 JUSTIFICATION :
Change orders exceeding the original price of a public contract defeat
the intent of the public bidding laws by denying contractors the right
to bid for such work far in excess of the original contract price.
Furthermore, contractors who are compelled to continue work on change
orders while other change orders completed or being worked on have yet
to be approved are placed at a disadvantage and risk of non-payment.
This bill addresses both of these issues.

 PRIOR LEGISLATIVE HISTORY :
New bill.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect immediately and shall apply to all
contracts executed on and after the date of this act.