Northeastern Subcontractors Association
Vol 18, No. 6 (518) 869-9800 December 1999
Inside this edition: ESSA Adopts Five-Bill Legislative Program * President's Message * New Members * Legal: Bid Document Clarification * Lien Rights On Public Jobs * New York State Motor Carrier Agencies * Federal Motor Carrier Information
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ESSA ADOPTS PRIORITIES FOR 2000 LEGISLATIVE SESSION (Go Top)
The Empire State Subcontractors Association (ESSA) has adopted a five-bill legislative program for the 2000 session, with legislation which would allow contractors to recover delay damages once again receiving top billing. At its legislative planning session held October 22-23, 1999 in Syracuse, representatives of the five ESSA chapters located in Buffalo, Rochester, Syracuse, Albany and New York City approved a legislative program intended to benefit subcontractors in such areas as retainage, hold harmless clauses, and payment protection in addition to delay damages. The five bills which are expected to be introduced in both the Senate and Assembly in early 2000 are:
Delay Damages - This legislation would impact on all public works projects in New York State by allowing contractors and subcontractors to recover delay damages where such delay is for an unreasonable period of time and is the fault or responsibility of the public owner. Since the 1983 Court of Appeals decision Kalisch-Jarcho, Inc. v. City of New York, in order for a contractor to recover delay damages from a public owner, it has had to prove that the owner acted in bad faith and with deliberate intent, a standard which is almost impossible to meet.
Retainage Reduction - This legislation would require a 50% reduction in retainage on all public works projects upon completion of 50% of the project. Retainage held on state and local public works projects can amount to a significant amount of money for many subcontractors. This bill would get a large portion of the money held as retainage by the public owner into the pockets of subcontractors sooner than it now is.
Hold Harmless - This legislation would close a long-standing loophole in the law by prohibiting hold harmless clauses which require subcontractors to indemnify the general contractor for damages caused by the negligence of 3rd parties.
Payment Bonds - This legislation would require a payment bond be posted on certain "hybrid" projects in New York State such as those where a private owner leases property from a public entity and then constructs a building on this property for the benefit of the private owner. Currently, subcontractors and suppliers have no lien rights on these hybrid projects. This bill would provide payment bond protection to subs and suppliers.
Bid Listing/Standard Subcontract/Direct Pay - This is "back burner" legislation only intended to be pushed if it appears the Wicks Law is in jeopardy. It would require bid listing of subcontracts in excess of $25,000, a standard form subcontract, and direct payment to listed subcontractors by public owners.
For the second year in a row, NESCA's December 9, 1999 membership meeting will be a special holiday version dinner meeting and reception. Instead of conducting a lot of 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 "program" on December 9th will be one I know you'll really enjoy because we'll be bringing in Jim Snack, a well known motivational speaker and magician to entertain us. This holiday meeting will feature an open bar until 9:30 along with lots of great food! We encourage all members to bring your spouses with you because spouses are invited to come for free! Also, please remember to bring a toy with you to the meeting for our traditional Toys for Tots campaign in conjunction with the United States Marine Corps. NESCA has been involved in this very worthwhile program for 20 years, and we encourage you to help make the holidays happier for local kids through your toy donation. 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 9th on your calendar and bring your spouse to the holiday meeting and reception. You're absolutely guaranteed to have a great time! On another matter, NESCA's 15th Annual Frank Campito Memorial Car/Cash Giveaway will be held on February 24, 2000 at the Century House from 7:00 - 9:30 p.m. Over the last fourteen years, this event has proven to be one of NESCA's most exciting, and a great fund raiser for the association as well! Once again, all ticket holders and their guests will be invited to enjoy the drawing at the February 24th cocktail reception. This year, prizes awarded will total more than $34,000, with the grand prize being the winner's choice of a 3-year lease on a new BMW 5 Series plus cash, a 3-year lease on a new Audi TT plus cash, a two week deluxe Hawaiian vacation for two plus cash, or simply $25,000 cash! Tickets for the Car/Cash Giveaway remain at $200. Flyers are being mailed to all members, and you may purchase a ticket directly from the NESCA office or from a member of the Board of Directors. Remember, this is an important fund raiser for your association. The money raised is vital non-dues revenue which helps NESCA to continue to effectively watchdog the interests of subcontractors and suppliers in New York State. Please help our efforts by purchasing a ticket to this event. At NESCA's November 11th membership meeting, John Frizalone and Diane Fontana with Allied Safety Management, Inc. walked away $100 richer after winning our membership meeting attendance incentive drawing. Come to the December membership meeting, and if your name is pulled in the drawing you'll win $50! I wish you all a safe, healthy and happy holiday season, and a very prosperous Y2K!
Brian B. Carmer President
Clifton Park True Value 1658 Route 9 Clifton Park, NY 12065 (518) 371-1708; FAX (518) 371-5214 Contact: Anthony Casale
BID DOCUMENT CLARIFICATION MUST BE PROVIDED TO ALL PROSPECTIVE BIDDERS (Go Top)
The New York Supreme Court, Appellate Division, Third Department, recently held that public agencies must communicate to all prospective bidders its reply to an inquiry from a prospective bidder when the inquiry regards the interpretation of drawings or specifications. Dobco, Inc. v. Facilities Development Corporation (693 N.Y.S. 2d 276 (3d Dep't. 1999)) involved a public works contract for asbestos abatement at the Mohawk Valley Psychiatric Center in Utica, New York. Dobco, Inc. ("Dobco"), in formulating its bid, read the project description and specifications to require removal of the white surface layer of plaster from the walls and ceiling of the facility. Dobco was awarded the job. At a preconstruction meeting, the contractor was advised that Facilities Development Corporation ("the Corporation") expected the contractor to remove both the surface material and the subsurface material from the walls and ceiling of the facility and, further, to clean the wood lathing to which the plaster adhered. Dobco completed the project under protest and then commenced an action against the Corporation, seeking the costs of completing additional work. In the court below, the Corporation moved for summary judgment, which was granted. Dobco appealed, contending that the contract between the parties was ambiguous, which resulted in material questions of fact regarding the interpretation of such contract, and alleging breach of contract by the Corporation, precluding an award of summary judgment in the matter. The Appellate Court agreed with Dobco and reversed the lower court's decision. In its appeal, Dobco alleged that the Corporation breached the contract between the parties for failing to provide clarification of the contract documents to Dobco, while providing the same to competing prospective bidders throughout the bid solicitation process. The relevant portion of bid documents stated: Direct all questions regarding the intent or meaning of the drawings or specifications to the Chief, Bureau of Contract Awards, Division of Contract Administration......... Such an inquiry may be telephoned or submitted in writing. The reply to such an inquiry, when deemed necessary, will be communicated by Addendum to all persons who have obtained drawings and specifications. Dobco claimed that other bidders, uncertain as to the scope of the work required on the project, made inquiries regarding the asbestos removal specifications. Dobco claimed that such inquiries were answered directly to the inquiring bidder, but that no addendum was issued to the other prospective bidders. The lower court, in denying Dobco's motion for summary judgment, held that, according to the bid document clause quoted above, the issuance of an addendum was purely discretionary and that any failure of the Corporation to communicate its answers to all prospective bidders could not form a basis for liability. The Appellate Court disagreed with this line of reasoning, stating that although the bid documents make clear that the issuance of addenda to all prospective bidders is discretionary, "[I]f, however, a reply is made to an inquiring bidder then, a fortiori, a response was deemed necessary and must be communicated by addendum to all prospective bidders". The Corporation clearly could not use the discretionary language contained in the bid documents to justify the denial of information to certain prospective bidders on the project. The Court added, "[a]ny other interpretation would deny plaintiff and any other bidder not making such inquiry the opportunity to understand the scope of the work and would place at a disadvantage to those competitors who made such inquiry and received clarification as to the meaning of the specifications". Such disclosure of relevant information to all prospective bidders ensures fairness and equity in the bidding process.
SUBS AND SUPPLIERS SHOULD PROTECT LIEN RIGHTS
Subcontractors and suppliers engaged on public works projects are often faced with the question of when their lien rights on such projects will expire. The lien law provides that lien rights on public projects, which include work performed for state agencies, cities, counties, towns, school districts and other political subdivisions of the State, will expire 30 days after completion and acceptance of the project by the public owner. The practical problem then becomes determining when the public owner accepts the project as complete. To assist subcontractors and suppliers to more easily make this determination, NESCA's state affiliate, the Empire State Subcontractors Association, was able to get legislation passed over 20 years ago which requires public owners to provide certain information upon request. Section 11-a of the New York State Lien Law requires that upon request and within five days of the completion and acceptance of a project, the public owner must provide the subcontractor or supplier making such request with the date of completion and acceptance. Since lien rights expire 30 days after such completion and acceptance date, receiving this information from the public owner in accordance with the law will provide enough time for a lien to be filed in cases of non-payment. This information is particularly important for late finishing subcontractors and suppliers, who may not even yet have a recognizable payment problem, but nevertheless run the risk of losing their lien rights shortly after the project is completed. NESCA members are encouraged to routinely make a request, at the beginning of each project, for notification of project acceptance on all New York State public projects. To assist members in this regard, enclosed with this Newsletter is a sample form for requesting such information.
COMMERCIAL MOTOR CARRIER INFORMATION SOURCES
NEW YORK STATE AGENCIES (Go Top)
( Commercial Driver's License (CDL) or Vehicle Registration, contact the NYS Department of Motor Vehicles at:
Commercial Driver's Licenses (CDL) - Phone: (518) 474-0855 General DMV Information, including vehicle registration/international registration program - Phone: (800) CALL DMV
( Traffic Tickets/Summons issued or inspections performed by the New York State Police - Phone: (518) 457-3258. If you have been issued a Uniform Traffic Ticket, you must contact the specific court listed on the ticket.
( General MCSAP Information or questions on inspections performed by NYSDOT - Phone: (518) 457-3406.
( Highway Use Tax (HUT) and Fuel Tax/IFTA, contact the NYS Department of Tax and Finance - Phone: (518) 457-3653.
( Hazardous Waste Transporter Permits, Hazardous Waste Manifests or to obtain an application to haul such waste or materials, contact the NYS Department of Environmental Conservation - Phone: (518) 457-0603.
( For a copy of the NYS Motor Truck Regulations, write, fax or E-mail to: Truck & Bus Safety Section - Phone (518) 457-1010 NYS Department of Transportation - Fax (518) 457-2512 Bldg. 7A, Room 501A - E-mail: jbrunet@gw.dot.state.ny.us 1220 Washington Ave., State Campus Albany, NY 12232-0880
FEDERAL MOTOR CARRIER INFORMATION (Go Top)
( Questions regarding USDOT numbers of the Federal Motor Carrier Safety and Hazardous Materials Regulations, contact USDOT, Federal Highway Administration, Office of Motor Carriers:
Albany - Phone: (518) 431-4145 Buffalo - Phone: (716) 551-4701 New York City - Phone: (212) 466-1936 Syracuse - Phone: (315) 448-0311
( To obtain copies of the Federal Motor Carrier Safety or Hazardous Materials Regulations, contact Superintendent of Documents - Phone (202) 512-1803.