S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5684
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 20, 2023
                                ___________
 
 Introduced  by  M.  of  A.  ZEBROWSKI  --  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:
 
   Section 1. Declaration of policy and statement of purpose. It being in
 the vital interest of the general public that public works in the  state
 of  New York be administered efficiently and at a reasonable and equita-
 ble cost; and, the unforeseen emergency of unanticipated  escalation  in
 construction  materials  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 a 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 construction materials  price  escalation,  this  act  is
 hereby enacted.
   §  2.  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 April 1, 2021 but only for which materials
 were purchased or invoiced after March 1, 2021, require a contractor  to
 furnish materials in such contract pertaining to such construction mate-
 rials  may  be  adjusted upon a determination made by the officer of the
 department, board, agency or public  benefit  corporation  that  awarded
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09570-01-3
              

 A. 5684                             2
 
 such contract that there has been an increase in the cost of acquisition
 by  the contractor, subcontractor or supplier of materials of such mate-
 rials in excess of five percent, determined as of the time of the award.
 Such a determination shall be based upon the available evidence, includ-
 ing  but  not  limited to, an appropriate nationally recognized economic
 index published by the United States department of labor or other appro-
 priate 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 comptroller.  Any contractor, subcontractor or supplier of materi-
 als who receives an increase in the cost of construction materials shall
 also be subject to a downward adjustment in construction materials pric-
 es for subsequent de-escalation 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  corporation that awarded such contract that
 there has been a subsequent decrease in the cost of acquisition of  such
 construction  materials  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 recog-
 nized  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  writing 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 therefor, 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 comp-
 troller,  and  as  to  the form and manner of execution, by the attorney
 general, every such contract amendment 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 obligated under the contract,  shall  exceed
 the money appropriated or otherwise lawfully available for the project.
   §  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
 for 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 construction materials or  other  physical  elements  consisting  of
 construction materials to be sold under the contract, where the contract
 covers  materials  which were purchased or invoiced after March 1, 2020,
 and the  commissioner  of  general  services  determines  upon  evidence
 furnished  by  the vendor as required and deemed to be sufficient by the
 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
 A. 5684                             3
 
 is suspended or terminated. 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.
   (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  construction
 materials  by  the  contractor,  subcontractor or supplier of materials.
 Such a determination shall be based upon the available evidence, includ-
 ing but not limited to, an appropriate  nationally  recognized  economic
 index published by the United States department of labor or other appro-
 priate 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.
   § 4. This act shall take effect immediately and shall  expire  and  be
 deemed repealed June 30, 2024.