Inside this Edition: ESSA Lien Discharge Bill Signed Into Law, Governor Signs “Labor Neutrality” Bill, President’s Message, Court Of Appeals To Decide The Scope Of Duty For Subcontractors On Public Works Projects, ESSA To General Electric “Get Rid Of E-Auction”, Calendar Of Events, Welcome New Members, Be Attentive When Accepting Blanket Sales Tax Exemption Certificates
ESSA LIEN DISCHARGE
BILL SIGNED INTO LAW (Go Top)
NESCA’s statewide affiliate,
the Empire State Subcontractors Association, Inc. (ESSA), has secured its 32nd
legislative success since 1975. On
September 24, 2002, Governor Pataki signed ESSA’s “Lien Discharge” bill into
law (Chapter 582 Laws of 2002). This
new law will become effective on January 1, 2003 and will set the amount of an
undertaking required to discharge a public or private improvement lien at 110%
of the lien amount. Up until now,
undertakings to discharge liens in New York State, which are usually in the
form of a bond issued by a surety, have been set by a judge or justice with or
without a stipulated agreement between the surety providing the bond and the
lienor. This new law will eliminate the
time and expense of this procedure for both parties by statutorily setting the
amount of the undertaking at 110% of the lien amount.
GOVERNOR SIGNS “LABOR NEUTRALITY” BILL (Go Top)
On September 30, 2002, Governor Pataki signed Chapter 601, Laws of 2002, a measure that will leverage state purchasing and contracting to help unions organize. The so-called “labor neutrality” law is designed to keep taxpayer funds from being used to counter union organizing efforts. Specifically, the law prohibits the use of state funds and facilities to assist, promote or deter union organizing, and requires employers to keep records of the expenditures of state funds sufficient to show that state funds have not been utilized in this manner.
According to the Business Council of New York State, an organization that vehemently opposed passage and enactment of the bill, while the measure was officially described as a “neutrality” bill, its enactment was aggressively sought by the unions precisely because it will radically tilt the playing field to their advantage. The Business Council objected to the bill because it will:
Ø Require any employer who receives state funds (such as a contractor performing a contract for a state agency) to maintain detailed, audited financial records sufficient to show that state funds were not used in any way to discourage a union organizing drive. This is not only a cumbersome and expensive accounting burden, but is ultimately impossible to achieve because it requires an employer to prove a negative.
Ø Create a new authority for state government to demand access to those records and, in the process, create a powerful new tool for unions to hassle employers targeted in their organizing efforts.
Ø Require any business that receives state funds to affirmatively prove that no state funds were spent to communicate about unions or the merits of organizing.
Ø Effectively limit employers’ First Amendment rights to free speech.
Ø Undermine the National Labor Relations Act and much of the nation’s well-established labor law, which has been crafted over decades by courts, regulators and legislators at many levels to balance workers’ right to organize and employers’ right to offer their opinions on the merits of unions.
Ironically, just as Governor Pataki was signing this new law in New York, a U.S. District Court in California was striking down a similar law in that state, stating that law was preempted by the National Labor Relations Act.
PRESIDENT’S
MESSAGE (Go Top)
Great news! NESCA’s statewide affiliate, the Empire
State Subcontractors Association (ESSA), recently secured enactment of our
“Lien Discharge” bill. This measure
(see page one of the Newsletter for details), was signed by Governor Pataki on
September 24th and represents ESSA’s 32nd legislative
success since 1975. Think about that
for a minute. Since 1975, when NESCA
joined our sister chapters in Buffalo, Rochester, Syracuse and New York City to
form ESSA, we have succeeded in enacting 32 laws, all which benefit
subcontractors and suppliers doing business in New York State. 32 laws!
Can anyone identify another construction organization that has reached this level of legislative success? I know I can’t, and that’s why I get so frustrated when I hear about a fellow subcontractor or supplier who has resigned his membership in NESCA because he “didn’t get anything out of the association”. What? Do we belong to the same organization or is there another NESCA out there that I’m not aware of? Didn’t get anything out of the association? Are you serious? The fact is, month after month, year after year, NESCA and ESSA work diligently on behalf of every subcontractor and supplier in New York State. These efforts are made not just in the Legislature, but also in the courts and with state contracting and regulatory agencies such as OGS, DASNY and the Department of Labor.
Many of you know that recently NESCA has been very involved in seeking improvements at DASNY, particularly in connection with the processing and payment of change orders and project closeout and the release of retainage. Even more recently, NESCA filed an amicus brief with the NYS Court of Appeals on a case that could have a significant impact on the entire construction industry (see Terry Burke’s legal message on page three of the Newsletter).
In short, there isn’t a subcontractor or supplier in New York State who has not profited from the work done by NESCA and ESSA. It doesn’t matter if you can’t attend our membership meetings or educational seminars. It doesn’t matter if you haven’t taken advantage of our free lien filing service. It doesn’t matter if you haven’t contacted the NESCA office for direct assistance with a specific business issue. Even if you haven’t participated in any way at all, NESCA and ESSA deserve your continued membership and support because of all the things the association accomplishes for the good of all subs and suppliers.
Shifting
gears, I would like to congratulate Dick McNitt and the Suppliers Committee for
once again organizing another fantastic trade show! This year’s trade show was held on October 10th, and I
know all who attended had a great time.
The show also provided our exhibitors with a nice opportunity to visit
with many customers and prospective customers.
Hundreds of contractors, subcontractors and suppliers attended the show,
which featured great food, lots of prizes, and a 50/50 worth over $1,700 to the
winner!
I
hope to see you at NESCA’s November 14th membership meeting.
James M. Elacqua
President
COURT OF APPEALS TO DECIDE THE SCOPE OF DUTY FOR
SUBCONTRACTORS ON PUBLIC WORKS PROJECTS (Go Top)
On October 8, 2002 the New York State Court of Appeals heard oral argument in the case of Church v. Callanan Industries. In his action, plaintiff, a minor, was rendered a quadriplegic when the car driven by his mother crashed at the bottom of an embankment as a result of her falling asleep behind the wheel. Plaintiff commenced a lawsuit against, inter alia, San Juan Construction and Sales Company, the subcontractor who installed a portion of guardrail at the accident site on the New York State Thruway, alleging that its failure to install the contracted-for length of guardrail caused his injuries. The Appellate Division (Third Department) of State Supreme Court, however, refused to expand the limits of tort liability and dismissed the complaint, holding that San Juan owed no duty of care to plaintiff.
Plaintiff appealed to the Court of Appeals, and numerous interested groups have received permission to join the action, including the Empire State Subcontractors Association, Inc., which has submitted an amicus curiae appellate brief in support of affirming the Third Department’s decision.
In its amicus brief, ESSA noted that the project called for a guardrail of a certain length, but during construction the length of guardrail was altered on site and the length installed by San Juan was short of that required in the original project specifications. The State’s engineering inspectors were aware of the difference between the original specifications and the actual construction, yet they never ordered the remaining length to be installed. Rather, they approved the construction and advised the State that the project had been completed properly. In the almost five years that intervened before the accident, the state never raised any objections to the missing guardrail, notified San Juan of the missing guardrail, or took any steps to replace the guardrail.
ESSA argued that if tort liability was imposed in these circumstances, subcontractors would be liable in perpetuity to a limitless class of potential litigants. Consequently, insurance, already expensive and scarce, would become cost prohibitive and virtually impossible to obtain, thereby preventing many subcontractors from bidding upon public works and, even worse, forcing many subcontractors out of business.
Subcontractors should take note of this case because the forthcoming decision could have a grave impact upon the construction industry in New York State.
Terence J. Burke, Esq.
NESCA Legal Counsel
ESSA TO GENERAL ELECTRIC “GET RID OF E-AUCTION” (Go Top)
The Empire State Subcontractors Association (ESSA) has gone on record in opposition to General Electric’s “e-auction” process, a practice under which bidders on G.E. construction projects are provided the opportunity to revise their proposals in a real-time web based environment.
In an October 2, 2002 letter to Carol L. Wine, Contracts Facilitator of GE Corporate Properties and Services, ESSA Executive Director Mike Misenhimer urged GE to rethink its e-auction policy, calling it a “high-tech form of bid shopping.” He explained that bid shopping has long been considered to be an unethical practice in the construction industry and that it stirs resentment and mistrust, denigrates the estimating process and weakens the projects upon which it is practiced. ESSA specifically questioned the potential utilization of an e-auction process in connection with bids taken for structural steel work on General Electric’s Corporate Research and Development Center in Niskayuna, New York.
Misenhimer further explained that bid shopping discourages subcontractors from supplying “real” price quotes upfront. In situations where bid shopping is practiced, subcontractors will rarely quote their best price on the bid date. Instead, the original inflated price quoted and the final price agreed upon after bid shopping has taken place are arbitrary, which essentially defeats the owner’s intent of receiving the lowest responsible price. Bid shopping often leads to mistakes, costly for both the owner and the subcontractor, because of last minute rushing and changing of numbers. He added that bid shopping tends to attract those subcontractors who are willing to participate in that practice. Those who refuse to play the bid shopping game are generally the subcontractors most likely to do the best job.
As of the date of this Newsletter, ESSA had not yet received a response from General Electric.
CALENDAR OF EVENTS (Go Top)
November 5,
2002
Niko’s
Char Pit, Binghamton 8 am
November 7,
2002
Board of
Directors Meeting
Century House, Latham, 6 pm
November 13,
2002
NESCA/GBC/ECA
Seminar
Notary
Public
Building
Industry Center, 12 Noon
November 14,
2002
NESCA
Membership Meeting
Century House, Latham, 6 pm
December 5,
2002
Board of
Directors Meeting
Century House, Latham, 6 pm
December 12,
2002
NESCA
Membership Meeting
Century House, Latham, 6 pm
POSITION WANTED
Individual with over 20
years experience in the construction industry seeking position. Background includes supervision, safety,
contracts, collections, environmental, service manager and sales. Excellent references. Contact Charles G. Kross at
(518) 238-2611, e-mail at nkross@nycap.rr.com, or the NESCA office.
WELCOME NEW
MEMBERS (Go Top)
Condor Constructors, LLC
4 Norman Drive
Albany, NY 12205
(518) 452-8790; Fax (518)
458-8817
Contacts: John Barry, Peter Hanley
Conklin’s Tech Mechanical, Inc.
5 Parker Avenue
Poughkeepsie, NY 12601
(845) 473-1470; Fax (845) 473-7543
Contacts: Bill Conklin, Dennis Duncan
KJM Construction of Albany, Inc.
PO Box 11038
Albany, NY 12211
(518) 862-2085; Fax (518) 862-2085
Contacts: Craig Murray, Kevin Murray
James L. Lewis
PO Box 38, 194 Richards Road
Chenango Forks, NY 13746
(607) 648-8526; Fax (607) 648-8880
Contacts: James Lewis, Robert Hall
Satch Sales Mobil Solutions
63 Broadway
Albany, NY 12204
(518) 426-5002; Fax (518) 426-5146
Contacts: Ed Malone, Kip Walsh
Schenectady Hardware & Electric
PO Box 338
Schenectady, NY 12301
(518) 346-2369; Fax (518) 372-7549
Contacts: Lawrence Spraragen, Kevin Finn
BE
ATTENTIVE WHEN ACCEPTING BLANKET SALES TAX EXEMPTION CERTIFICATES (Go Top)
Members are cautioned to be attentive before accepting a “blanket” sales tax exemption certificate from a manufacturer or other customer. Manufacturers often use an “Exempt Use Certificate” (NYS Department of Taxation and Finance Form ST-121) for purchases of machinery and equipment, parts, tools, and supplies used or consumed in the production of tangible personal property for sale. An ST-121 Form may be used as a “blanket certificate” covering the first and subsequent purchases of the same general type of product so long as each subsequent sales slip or purchase invoice based on the blanket certificate shows the purchaser’s name, address and Certificate of Authority identification number. A purchaser may use its own in-house blanket certificate in lieu of an ST-121. However, the in-house produced certificate must clearly state on the form that it is a substitute for the ST-121 form.
Back by Popular Demand! Mark Your Calendar!
The NESCA Valentine Dinner
Dance is Returning After an 8-Year Absence!
Saturday, February 15, 2003!
Be on the Lookout for More
Information to Come!