S T A T E O F N E W Y O R K
________________________________________________________________________
5758
2023-2024 Regular Sessions
I N A S S E M B L Y
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:
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 December 31, 2021 but only for which mate-
rials were purchased or invoiced after March 1, 2020, require a contrac-
tor to furnish materials in such contract pertaining to such
construction materials may be adjusted upon a determination made by the
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.
LBD09570-04-3
A. 5758 2
that awarded such contract that there has been an increase in the cost
of acquisition by the contractor, subcontractor 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 recog-
nized 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 comptroller. Any contractor, subcontractor or
supplier of materials who receives an increase in the cost of
construction materials shall also be subject to a downward adjustment in
construction materials prices for subsequent de-escalation which may
result in a price being lower than the original bid price. Any contrac-
tor requesting an adjustment shall make application in writing submit-
ting 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 subse-
quent 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 construction materials by
the contractor, subcontractor or supplier of materials. Such a determi-
nation 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 writing to reflect the increased or decreased cost of acqui-
sition 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 comptroller,
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 attor-
ney 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
A. 5758 3
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 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.