By now, most NESCA members know that Governor Pataki has signed legislation that will allow public owners to require contractors and subcontractors to participate in Department of Labor registered apprenticeship training programs as a condition of contract award. With his signature of Chapter 571 Laws of 2001, the Governor opened the door to a new bidding requirement on public works construction.

This new law does not mandate that public owners require apprenticeship training programs, but it does provide state agencies, public authorities, municipalities and school districts the option of requiring them. What this means is that NESCA members should soon expect to see public works bid specifications that may contain apprenticeship program participation requirements. How many public owners decide to adopt these requirements remains to be seen, but given the immediate effective date of the law, it could happen at any time.

While NESCA strongly supports employee education and training, including apprenticeship training programs, we are concerned that this new law may do more to eliminate qualified contractors and subcontractors from the public works marketplace than it will to bring new apprentices into the construction workforce. That’s because the law does not require apprentices to actually be hired and trained by employers on public works projects that have the apprenticeship program requirement. It simply allows public owners to require that employers have a DOL registered program.

Since there are many public works contractors and subcontractors throughout New York who do not currently have an apprenticeship program registered with DOL, public owners who adopt this requirement may unwittingly succeed in doing nothing more than eliminating large numbers of contractors and subcontractors from bidding their work. Reduced competition usually means higher prices, so owners who require apprentice programs may find themselves unhappy with bid results.

In the coming months, NESCA will be working with other construction organizations to educate public owners on what this new law says, and what it doesn’t say, and will be cautioning owners to give proper thought and analysis to this issue when considering the adoption of apprentice program requirements. In the meantime, NESCA members who engage in public works projects are advised to at least begin the process of looking into whether establishing a DOL registered program is feasible for your company. NESCA has been engaging in discussions with the Department of Labor’s apprenticeship training office in an effort to gain a better understanding of the application and approval process. To help members better understand what applying for an apprenticeship program entails, enclosed with this Newsletter is a special bulletin on the DOL apprenticeship program requirements. Members who have questions should contact the NESCA office.

NESCA’s 17^th Annual Frank Campito

Memorial Car/Cash Giveaway Go Top

February 21, 2002

Century House, Latham

7:00 – 9:30 pm

1^st Prize Your Choice of:

× 2002 Audi A4 Quattro ×

× 2002 Toyota MR2 Spider Convertible ×

× Luxury Spa Vacation for Two in France

Plus $10,000 Cash ×

× $25,000 Cash ×

Tickets Still Available at the

NESCA Office!

$200.00 Per Ticket

PRESIDENT’S MESSAGE Go Top

In last month’s Newsletter, it was announced that NESCA had launched its membership recruitment campaign for 2002. The membership committee came up with the idea to get as many members involved as possible and is urging all NESCA members to assist the association through a small level of participation. We’re not asking for a lot of your time because we know everyone is busy. All we ask is two basic things of each member. First, we ask that you give us the name, address and phone/fax numbers of a supplier or subcontractor you either know personally or is on one of your jobsites and who is not currently a member of NESCA. Once you give us a name, we’ll send your prospect information about NESCA and do most of the follow-up work. The second thing we ask you to do is to invite your prospect to attend a NESCA membership meeting. As an incentive, your prospect will receive a free dinner and you’ll get ten 50/50 tickets free of charge. For 30 years, NESCA has defended the rights of all subcontractors and suppliers doing business in New York State. Our association has been able to make great strides legislatively and with the various regulatory and contracting agencies in this state while operating on a modest budget. One of the reasons we’ve been so successful over the years is due to the large number of subs and suppliers we represent. To continue to be successful in the future we must increase our membership to include as many subs and suppliers as possible. So please do this one little thing. Give us the names of subcontractors and suppliers who are not currently members of NESCA…..but should be.

Those of you who attended NESCA’s January 10^th joint membership meeting with NAWIC heard our featured speaker, Tim McGrath with the New York State Dormitory Authority, discuss doing business with DASNY as well as provide members with information on upcoming DASNY projects. For the first time during 2001-2002 we had a winner of our monthly attendance drawing! Rich Gabriels with CPSS Electrical Construction, Inc. attended this meeting and his company’s name was pulled in the drawing, so CPSS Electrical has won a free membership in NESCA during our 2002-2003 fiscal year! Congratulations Rich! One last thing concerning our membership meetings. Beginning last September, NESCA lowered the cost of its membership meetings and at the same time went from an open bar to a cash bar. Other than our most recent meeting, we have been able to find members willing to sponsor the bar, thereby keeping it an open bar. We are looking for members who would like sponsor the bar at future meetings. Sponsors will be recognized by a sign at the bar and will also receive recognition during the meeting. If you are interested in sponsoring the bar at a future membership meeting, please contact the NESCA office. Only during those months that we are able to find a sponsor will we have an open bar.

Finally, please remember NESCA will be holding our 17^th Annual Car/Cash Giveaway on February 21^st in lieu of our regular monthly membership meeting. I hope to see you there!

Bob Kind

President

CONTRACTOR’S ACTION ON SUBCONTRACTOR’S BOND NOT TIMELY COMMENCED Go Top

On October 18, 2001, the Supreme Court of New York, Appellate Division, First Department handed down its decision in Jorge Alvarez, et al. v. Attack Asbestos, Inc., et al., 731 N.Y.S. 2d. 431.

In this case, the plaintiff’s employees sought to recover damages for alleged prevailing wage violations against the subcontractor and the project’s general contractor. In August of 1997, the general contractor and its surety company asserted cross-claims against the subcontractor’s insurance company based on the subcontractor’s performance bond. At issue here was whether the action against the subcontractor’s insurance company was timely commenced. In pertinent part, the performance bond provided that any suit thereunder must be “instituted before the expiration of one year from the date on which the final payment under the subcontractor falls due”. The subcontract, in turn, provided that the final payment thereunder became due “thirty (30) days after final completion and acceptance of the prime contract and receipt of final payment by the contractor.” The court found undisputed documentary evidence establishing that the project had been completed in April, 1996 and that the Owner had made final payment under the prime contract on or before May 6, 1996, and that in as much as the date 30 days thereafter (June 5, 1996), when final payment under the subcontract became due, it was more than one year prior to the commencement of the action against the subcontractor’s surety. Consequently, the Court found that the one-year limitation period under the bond had expired prior to the commencement of the action on the subcontractor’s bond by the general contractor and the general contractor’s surety company.

The lesson to be learned here is that contractors and subcontractors who intend to commence an action on a bond should be aware of the time limitation for commencing such an action. These limitations may be found in the bond itself or in the case of New York public projects, in the State Finance Law Section 137.

Terence J. Burke, Esq.

NESCA Legal Counsel

PROMPT PAYMENT BILL VETOED BY GOVERNOR PATAKI Go Top

On December 26, 2001, Governor Pataki vetoed a bill that would have required that prompt payment provisions apply to all private construction contracts exceeding $125,000. The “Prompt Payment of Construction Contracts” bill would have: (1) required payments by owners, contractors and subcontractors for labor and materials on construction contracts to be made within statutorily prescribed time periods; (2) permitted parties to construction contracts to suspend work or terminate such contracts if payments were not made in a timely manner; (3) mandated that disputes involving construction contracts be resolved through binding arbitration; and (4) prohibited parties to construction contracts from voluntarily agreeing to contrary provisions. The bill would have exempted contracts with government entities and contracts for one or two family homes from its provisions. In other words, the bill would have applied primarily to private commercial projects.

More specifically, under this bill payments on commercial projects would be made according to a statutory payment schedule that would require owners to make progress payments to contractors on contracts of more than 60 days and would establish a thirty-day billing cycle. The bill would have required an owner to make progress payments to the contractor within seven (7) days after the date a billing by the contractor was approved by the owner. It would have also required the contractor to likewise make progress payments to its subcontractors and suppliers within seven (7) days of receipt of payment by the owner. Failure to make prompt payment would have resulted in an interest penalty of 1 1/2 percent per month.

In his veto message, the Governor expressed support for the purpose of the bill, but also expressed concern that the bill went too far in “limiting freedom to contract, in prescribing detailed payment schedules and record-keeping requirements and in imposing draconian interest penalties.”

The Governor also expressed a willingness to work with interested parties to “explore other alternatives”. Given this invitation, NESCA intends to meet with the Governor’s staff in the coming weeks to seek his support of a bill that is part of ESSA’s 2002 legislative program. The ESSA bill is far less intrusive than the prompt payment bill just vetoed, and would simply require private owners to deposit retainage in an interest-bearing escrow account for the benefit of contractors and subcontractors from who retainage is being held.

WELCOME NEW MEMBER Go Top

Matco Electric Corporation

320 North Jensen Road

Vestal, NY 13850

(607) 729-4921; Fax (607) 729-0932

Contact: Ronald Barber

At the January 10^th Membership Meeting, CPSS Electrical was pulled in the Monthly Attendance Drawing and Won a Free Membership for 2002-2003!

BUSH ADMINISTRATION REVOKES BLACKLISTING REGULATION Go Top

The Federal Acquisition Regulatory Council (FAR Council) has canceled a Clinton Administration rule that barred companies from federal work for violations of labor, environmental and other laws. Dubbed a “blacklisting” rule by business groups, the regulations were withdrawn on December 27, 2001. This action permanently removes the blacklisting regulations from the federal acquisition regulations, the rules for federal procurement. The Federal Acquisition Regulatory Council is comprised of the Department of Defense, General Services Administration and National Aeronautics and Space Administration.

In 1997, the Clinton White House announced plans to change the federal acquisition regulations by including language stating contracting officers must consider a satisfactory compliance with tax, labor and employment, environmental, antitrust, and consumer protection laws before awarding a company a federal contract. An initial proposal was issued in July 1999, and the rule took effect on January 19, 2001. Business and contractor groups blasted the regulation, saying it was subjective and invited abuse from disgruntled employees, labor unions, competitors and others. They contended that the rule gave government agents blanket discretion to blacklist federal contractors using subjective and arbitrary notions of satisfactory compliance with any federal or state law, and that mere allegations of wrongdoing could prevent a business from winning a federal contract. They also pointed out that even the procurement professionals in the Department of Defense, the General Services Administration and the Environmental Protection Agency opposed the regulation. On December 22, 2000, the U.S. Chamber of Commerce, The Business Roundtable, and several contractor associations sued to block the regulation, but later withdrew their petition when the Bush White House said it would review the rule.

NESCA ASKS DASNY TO IMPROVE CONTRACT ADMINISTRATION PROCEDURES Go Top

On January 8^th, NESCA’s Government Relations Committee met with officials of the New York State Dormitory Authority to discuss concerns over DASNY’s contract administration procedures and to address ways that agency might improve its practices.

One primary concern discussed is the length of time DASNY takes to process and make payments on change orders. As it has in the past, NESCA again pushed DASNY to adopt a field order system for handling small changes similar to the system used by the Office of General Services. DASNY reported it would be discussing the field order system with OGS. DASNY also reported that it had recently made changes in its management structure that they believe will help resolve issues on a more expedited basis. DASNY further agreed to provide NESCA with their step-by-step change order procedures in writing so that NESCA members can better understand the process.

Other issues discussed at the meeting included (1) personal information on certified payrolls, (2) whether DASNY will require contractors and subcontractors to have registered apprenticeship programs and (3) DASNY project closeout procedures.