Vol 21, No

NESCA OPPOSES INFLEXIBLE OGS SUBCONTRACTING LIMITS (Go Top)

NESCA has contacted the NYS Office of General Services to express concern over that agency’s adoption of fixed subcontracting limits on OGS projects. OGS has recently added a provision to its supplementary conditions that prohibits the prime contractor from entering into subcontracts totaling a dollar amount that is more than a stated percentage of the total contract price. The percentage of subcontracting allowed has generally ranged from 30-70%. OGS reportedly adopted this provision to prevent “brokers” from winning OGS contracts.

NESCA’s Board of Directors addressed the new subcontracting provision at its November 7, 2002 meeting after a number of members had complained that the fixed percentages were too inflexible, and often, simply too low. The Board ultimately decided that while NESCA should support the goal of preventing pure brokers from engaging in OGS projects, the arbitrary establishment of rigid subcontracting limits should be opposed. Members of the Board identified many instances where it has become the industry norm to subcontract certain specialty items that may indeed exceed 30 percent of the total value of a contract.

In a letter to William O’Connor, OGS Deputy Commissioner for Design & Construction, NESCA executive director Mike Misenhimer asked that OGS reexamine its subcontracting policy and look for alternative ways to achieve the goal of preventing pure brokers from engaging in OGS contracts. Misenhimer suggested that perhaps something as simple as providing flexibility in the percentages and/or allowing a bidder to make a logical argument for a higher subcontracting limit would fix the problem.

Until we hear back from OGS, NESCA members who bid OGS work are advised to pay attention to any subcontracting limitations contained in the supplementary conditions, and notify the NESCA office if you believe such limitations are too low.

EMPLOYERS FACE EVEN HIGHER HEALTH CARE INCREASES IN 2003 (Go Top)

Employers nationwide face the fourth consecutive year of double-digit increases in health-care costs in 2003, with the increase likely to be the highest since the early 1990s, a prominent human resources consulting firm is projecting.

Hewitt Associates, a global outsourcing and consulting firm, is projecting a 15.4 percent average increase in health-care costs in 2003, compared to 2002 increases of 13-16 percent depending on the type of plan. In 2001, the average rate hike was 10.2 percent.

“Health care costs will continue to increase at a double-digit pace for the next few years unless there is a fundamental change in the way health care is delivered,” said Jack Bruner, national health care practice leader for Hewitt Associates. “This is a major concern for senior management as it impacts the bottom line of companies across the country.”

Hewitt is forecasting 2003 cost increases of 13 percent for preferred provider organizations (PPOs) and point-of-service (POS) plans, 15 percent for traditional indemnity plans, and 18 percent for health maintenance organization plans (HMOs).

PRESIDENT’S MESSAGE (Go Top)

NESCA had an interesting and educational membership meeting on November 14^th, which featured a panel debate on a topic that has become quite prevalent in recent years. The panel debate addressed the many factors subcontractors should consider when deciding whether to participate in a workers’ compensation trust as opposed to staying with a more conventional fully insured program. We invited Tim O’Brien with First Cardinal Corp to debate this issue with Jack Frazier with The Allied Group. First Cardinal Corp is the largest administrator of self-insured workers’ compensation programs in New York, and The Allied Group provides administration for ESSA’s State Fund workers’ compensation safety group. These two gentlemen examined and compared issues such as cost, potential risk, joint and several liability and other important considerations of trusts versus traditional plans. I can’t say enough how informative and educational NESCA’s monthly membership meetings are. Members who attended the November meeting were provided with valuable workers’ compensation information they normally wouldn’t receive on their own. Not only that. Our meetings provide members a great opportunity to network with many other subcontractors and suppliers of various trades, all who have similar business issues to deal with. I strongly encourage all members to attend NESCA’s meetings, or to send someone else from your company if you can’t attend.

For the fifth year in a row, NESCA’s December 12^th membership meeting will be a special holiday version dinner meeting and reception. Instead of conducting our normal business, we’ll be getting into the holiday spirit by giving our members an opportunity to socialize with your friends and peers within the association. Our holiday meeting will feature a 3-hour open bar, fantastic hors d’oeuvres, and a first-class dinner! We encourage all members to bring your spouses (or significant others) with you because spouses are invited to come to the holiday meeting and reception for free! Also, please remember to bring a toy with you to the meeting for our traditional Toys for Tots campaign in cooperation with the United States Marine Corps. The Marines will be represented at our meeting, and we’d sure like to be able to present them with lots of toys again this year. So mark December 12^th on your calendar and bring your spouse to this meeting. I know the 210 of you who attended last year don’t have to be convinced to come again this year! For the rest of you, you’re absolutely guaranteed to have a great time!

James M. Elacqua

President

NESCA’s December 12^th Membership Meeting is our Annual Toys for Tots Night!

Please remember to bring an unwrapped toy with you to donate to the U.S. Marine Corps Toys for Tots Campaign. Toys for Tots was started in 1947 by Major Bill Hendricks, USMCR, and NESCA has participated in the campaign every year since 1978. Let’s bring the Marines lots of toys this year!

COURT DISMISSES ACTION TO FORECLOSE ON MECHANIC’S LIEN BECAUSE OF IMPROPER SERVICE (Go Top)

On October 15, 2002, the Appellate Division, First Department, issued a decision in Tadir Air, Inc. v FGH Realty, Inc., et al. (746NYS2d 160). In this case, the plaintiff, Tadir Air, Inc., was a subcontractor who filed a notice of mechanic’s lien against certain property stating that the owner thereof was FGH Realty. This notice, and the subsequent summons and complaint, however, were never delivered to FGH. Rather, each of these documents was served upon Cushman & Wakefield, who occupied an office on the property. FGH moved to dismiss the action contending that Tadir failed to properly serve it with the notice of lien and summons and complaint. The trial court denied the motion, but on appeal the First Department reversed, finding that Tadir failed to acquire jurisdiction over FGH.

A court cannot exercise authority over a corporation unless it is properly served pursuant to CPLR 311 (a)(1), which provides that the documents must be delivered to “an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law.” Here, there was not evidence that Cushman & Wakefield was appointed or authorized by FGH to accept service on its behalf, thus the First Department was constrained to dismiss the action.

Subcontractors should be aware of the decision as a cautionary tale demonstrating the importance of strict compliance with New York State’s rules regarding the service of legal papers. This seemingly technical error can severely delay the granting of the relief requested as another action must be commenced and properly served or worse, if the applicable Statute of Limitations has lapsed, the error is a fatal defect killing an otherwise meritorious claim. Notably, however, be advised that regardless of whether the corporate defendant has authorized an agent to accept service, a corporation may also be served upon the Secretary of State, who is an authorized agent for service by operation of law pursuant to sections 306 and 307 of the Business Corporation Law.

Terence J. Burke, Esq.

NESCA Legal Counsel

ENERGY COST SAVINGS AND ASSISTANCE AVAILABLE TO NEW YORK BUSINESSES (Go Top)

In recent years, the New York State Public Service Commission (PSC) has overseen a transition to competitive energy markets in New York. Instead of purchasing energy only from their local utility, businesses now have the ability to buy electricity and natural gas from other suppliers in a competitive market.

Until recently, New York State’s electric and natural gas utilities operated as regulated monopolies by providing and delivering energy to your business. Now the combined services that were offered by the utilities are split into two parts – supply and delivery – with the supply portion open to competitive pricing. Businesses, individually or aggregated into a buying group, can purchase their energy supply or enter into financial agreements providing fixed or variable energy pricing from the various energy service companies (ESCOs). The PSC monitors complaints about ESCOs, but does not resolve them. However, the PSC has the right to revoke an ESCO’s eligibility to do business in New York if an excessive number of legitimate complaints against an ESCO are registered. The PSC requires that ESCOs offer reasonable consumer protections, such as:

Ø A statement disclosing the ESCO’s complaint resolution process.

Ø A 15-day notice before discontinuing service.

Ø Choice of service from another ESCO or the utility when an ESCO discontinues service.

Ø Clear procedures for switching suppliers.

Ø Convenient complaint handling.

The Public Service Commission’s Business Advocates can provide you with additional energy savings assistance and information as well as assistance related to economic development, dispute resolution and competitive energy and telecommunications markets. Contact the PSC’s Business Advocates at 1-877-661-9223 or you may e-mail the PSC at: business_advocacy@dps.state.ny.us.

Enclosed with this Newsletter is a list of ESCOs that have met PSC and utility requirements to provide service in the Niagara Mohawk Power Corp. service territory. A listing of ESCOs for all New York State utilities is available on the PSC’s website, www.AskPSC.com.

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.

NESCA will donate $2,100 to the U.S. Marine Corps Toys for Tots Campaign at the December 12^th Membership Meeting!!

RECRUIT A NEW MEMBER……..WIN $100!

Would you like to win $100 from NESCA? Just recruit a new member into the association, and that’s just what you’ll get! NESCA’s 2002-03 membership recruitment campaign is a program that will reward each and every member who recruits and sponsors a new member into the association. The “Member Get a Member” campaign is designed to get as many NESCA members involved in recruiting a new member as possible – and then rewarding you for your efforts. For every new member you sponsor during 2002-03, NESCA’s Membership Committee will reward you with $100 cash!

Members are reminded that NESCA is a full-service organization committed to serving the needs of commercial, industrial and institutional subcontractors, specialty contractors and material suppliers located in the Capital District, Hudson Valley, North Country and Binghamton areas. NESCA concentrates exclusively on the payment and other business issues commonly affecting all specialty trade subcontractors and material suppliers. All members are encouraged to participate in the Member Get a Member campaign and help NESCA to grow and accomplish even more!

TAKE ADVANTAGE OF THESE NESCA SERVICES (Go Top)

Free Lien Filing Service - One of NESCA’s most important and most utilized services for over 20 years. This past year, NESCA filed 378 liens for 124 different members on both public and private construction projects. Contact NESCA at 518-869-9800.

Workers’ Compensation Safety Group - Offered through Allied Safety Services, Inc., NESCA members may take advantage of the safety group concept to reduce your premiums and have access to professional loss control and claims management services. Contact John Blackmore at 516-733-9200.

Statutory DBL Program - Another popular advantage to membership is NESCA’s Group Statutory DBL Program. This program is administered by Corporate Benefit Planning and offers low monthly rates to help members save on their DBL costs. Contact Bob Bowman at 518-785-0115.

Paychex Discount Program – All NESCA members who currently use or who are new enrollments with Paychex receive 15% off their payroll processing charges. Contact Debbie Hall at 518-435-7135.

Business Practices Interchange – NESCA maintains a data base of over 500 contractors who have done work with NESCA members. Call the NESCA office for a referral to another member to receive first-hand information about the contractor’s payment practices and other business information. Call NESCA at 518-869-9800.

Many Thanks to Schenectady Steel Co., Inc. for Sponsoring NESCA’s November 14, 2002 Membership Meeting. If Your Company Would Like to Sponsor a Future Meeting, Please Contact the NESCA Office.

Vol 21, No. 6

(518) 869-9800

December 2002