BILL NUMBER:S2860

TITLE OF BILL:  An act to amend the labor law and the general municipal
law, in relation to reciprocity of debarments imposed under the federal
Davis-Bacon Act

PURPOSE:  The purpose of the bill is to ensure that those contractors
who are debarred on the federal level under the Davis-Bacon Act for wage
payment violations, are unable to bid on state public work contracts;
this legislation would close a loophole in the existing law. Under the
current law, contractors who have been debarred from federal job sites
are considered on equal footing with law-abiding contractors.  This bill
would remedy this gross inequity by granting reciprocity to debarments
imposed by the federal government on contractors who have violated the
Davis-Bacon Act. New York courts have long settled that the right to bid
on a public work contract is not a property right.  This privilege to
bid must be subject to certain restrictions, one of which should be the
ability of the bidder to comply with certain prevailing wage provisions.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends § 220-b of the Labor law so that any
contractor who has been debarred from federal job sites for having
disregarded obligations to employees under the Davis-Bacon Act shall
also be debarred under the Labor Law from bidding on or being awarded
similar contracts on public work job sites sponsored by the State or any
              

of its political subdivisions. The contractor may appeal such determi-
nation to the Department of Labor (DOL).

Section 2 of the bill would add a new subdivision 1-c to section 103 of
the general municipal law so that whether or not a contractor is
debarred under the David-Bacon Act will be considered in the selection
of a lowest responsible bidder. This provision will come into play in
the case where a contractor has appealed to DOL and been removed from
the state debarment list; the entity awarding the contract will still be
able to consider the circumstances of the federal debarment.

Section 3 provides for an immediate effective date and that this shall
just apply prospectively.

EXISTING LAW:  As stated above, under the current law, contractors who
have been debarred from federal job sites are considered on equal foot-
ing with law-abiding contractors.

JUSTIFICATION:  Under Article 8 of the Labor Law, contractors or subcon-
tractors who engage in a public work project sponsored by the State of
New York or any of its political subdivisions are required to pay their
laborers, workers and material men not less than the prevailing rate of
wage.

Recent studies indicate that fraud in the construction industry in New
York State has reached epidemic proportions. Dishonest contractors, in
an effort to cut corners and save on labor costs, have engaged in a
number of schemes to avoid paying workers the wage to which they are
statutorily entitled. They include the kickback of wages, dual payrolls
and cash-off-the books schemes.

Under the existing law, a contractor may he debarred from participation
in public work projects if the Bureau of Public Works finds that the
contractor has knowingly committed two violations of the prevailing wage
law within a six-year period, or one violation relating to the falsifi-
cation of payroll records or the kickback of wages or supplements.
Debarments are also imposed when a person or corporation, or any officer
or shareholder who owns or controls at least ten percent of the
outstanding stock of such corporation has been convicted of any of an
enumerated list of felonies for conduct relating to obtaining, perform-
ing or attempting to perform a public work contract with the state, any
municipal corporation, public benefit corporation or public body. Its
federal counterpart, the Davis-Bacon Act, imposes a similar penalty on
contractors who are found to have disregarded their obligations to
employees under federal wage-and-hour laws. At the present time, howev-
er, New York Labor Law fails to recognize debarments imposed by the
United States Department of Labor. Working at a public work job site is
a privilege, not a right. New Yorkers are entitled to expect the highest
standard of integrity from contractors who bid on these projects.

Under this legislation, debarments would run while federal debarment is
in effect and would apply prospectively.

LEGISLATIVE HISTORY:  2010 Session - New Bill 2011 Session - S. 5659-B -
referred to Labor Committee 2012 Session -S. 5659-C - advanced to Third
read calendar and recommitted to Rules.

FISCAL IMPLICATIONS: None to State

LOCAL FISCAL IMPLICATIONS: None

EFFECTIVE DATE:  Immediately and shall apply prospectively to all public
works contracts.