STEVEN DEWEY ELECTED NESCA’S 28TH PRESIDENT

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Steven R. Dewey, president of All-Lifts, Inc., was elected president of NESCA for 2000-2001 at the association’s June 8th membership meeting held at the Century House. Steve became NESCA’s 28th president, succeeding Brian Carmer with Stone Bridge Iron & Steel, Inc. He has served as NESCA’s vice president, treasurer and secretary during the last three years respectively, following four years of service on NESCA’s Board of Directors.

All-Lifts, Inc. is a 2nd generation family-owned business located at 400 North Pearl Street, Albany, New York, and has been manufacturing and supplying lifting and rigging equipment since 1967. All-Lifts currently designs and fabricates wire rope, nylon and chain slings which can be tested up to 350,000 lbs. All-Lifts also designs and fabricates lifting beams, spreader bars, bridge cranes, jib cranes and gantry cranes. Among the company’s major customers are International Paper, General Electric, and Carrier Corp. Performing $3 million in business volume annually, All-Lifts also does business with numerous NESCA members. For more information on All-Lifts, you may visit their website at www.all-lifts.com. Steve’s career with All-Lifts began 24 years ago as a cable splicer, and he has been an active member of NESCA for many of those years. At various times he has served on the association’s program, education, retention and ways & means committees. Steve also served on the NESCA website task force, charged with getting the association’s website up and running this past year.

Also elected as 2000-2001 officers at the June 8th meeting were: Robert Kind of Teal, Becker & Chiaramonte, CPA’s, PC as vice president; Jim Elacqua of AFSCO Fence Supply Co., Inc. as treasurer; and Jeffrey Senft of S & O Construction Services, Inc. as secretary.

LIEN DURATION LEGISLATION HEADING TO GOVERNOR Go Top

Legislation which would extend the duration of public improvement liens from the current six months to one year has passed both houses of the NYS Legislature and will be sent to Governor Pataki for his consideration. If the Governor signs this bill, it will represent the 31st legislative success since 1975 for NESCA and its state affiliate, the Empire State Subcontractors Association (ESSA). Sponsored by Senator Kemp Hannon and Assemblyman Eric Vitaliano, the bill passed in the Senate on June 13th and in the Assembly on June 15th.

The extension from six months to one year would result in public improvement liens having the same duration as liens on private projects. The lack of consistency in the lien law (6 months for public improvement liens, one year for private liens) has often resulted in subcontractors and suppliers losing their lien rights on public projects for failing to extend their liens before the six-month period had expired. The one year period will allow a more reasonable initial period of time for subcontractors and suppliers to secure payment or negotiate a suitable settlement without fear of inadvertently losing their lien rights.

The legislation also provides for a three-year cap on extensions for both private and public improvement liens. In other words, after the initial one-year lien duration, liens will be allowed to be extended three times maximum. If signed into law, this bill will take effect on January 1, 2001.

PRESIDENT’S MESSAGE Go Top

My sincere thanks to NESCA’s Board of Directors and to all members for electing me the association’s president for 2000-2001. As we enter NESCA’s 30th year, I can’t help but marvel at the extent of accomplishments subcontractors and suppliers have realized through our collective efforts.

For example, the lead story of this Newsletter reports that NESCA has succeeded in passing yet another bill in the State Legislature which will soon be delivered to the Governor. This bill improves subcontractors’ and suppliers’ lien rights by extending the duration of public improvement liens to one year from the current six months. If Governor Pataki signs this bill into law, we will have been successful in getting 31 laws enacted since 1975, ALL which specifically benefit subcontractors and suppliers! The legislation which NESCA has successfully lobbied for over the last 25 years represents real achievement on the part of our organization, something we can be very proud of, and something which sets NESCA apart from other associations. And that’s only a small fraction of what NESCA does to benefit our members! We help our members to secure payment through our free lien filing service. We help to market our members products and services through our membership directory, our trade show, and now our website. We help educate our members through an extensive array of educational programs. We keep our members informed through our monthly Newsletter and our membership meetings. We help our members save money through our many group programs such as our workers’ compensation safety group. And we do all these things and much more for only $550 per year. In fact, our dues are a downright bargain given the level of representation, advocacy and services provided to members.

NESCA’s continued success as an organization, however, is completely dependent upon the involvement of our members. We need our members to be involved. We need you to serve on our committees. We need you to attend membership meetings. We need you to provide us feedback so that we can continue to move the organization in the right direction. Yes, I know that being more active requires some of your time, and time is at a premium. But we’re not asking for a lot of your time, just a little. What are your greatest business challenges? What do you consider to be your most pressing day-to-day problems? How can NESCA assist you in solving those problems? We need to hear from you in order to help you.

I encourage you to take full advantage of your membership in NESCA. There is only one reason our association exists, and that is to assist our members.

Steven R. Dewey

President

CONTRACTORS MUST STRICTLY COMPLY WITH CONTRACT’S NOTICE AND DOCUMENTATION REQUIREMENTS IN ORDER TO PRESERVE CLAIMS Go Top

The New York State Supreme Court, Appellate Division, First Department recently held that when a contract’s notice and documentation requirements for extra work and delay damages are conditions precedent to a contractor’s recovery from the owner or construction manager, the contractor must strictly comply with such contractual requirements or it waives its claims thereunder. F. Garofalo Electric Co., Inc.v New York University, 2000 WL 280578, 705 N.Y.S. 2d 327 (1st Dept. 2000). The Court, in granting defendant’s motion for summary judgment, found plaintiff’s failure to strictly comply with the terms of its contract fatal to its cause of action against the owner and the construction manager.

This action arose out of a dispute concerning the construction of a building at the New York University Medical School (the “Project”). Plaintiff F. Garofalo Electric Co., Inc. (“Garofalo Electric”) was the electrical contractor on the project. New York University (“NYU”) was the owner, and Morse Diesel International (“MDI”) served as the construction manager. Garofalo Electric alleged that as a result of MDI’s failure to coordinate Garofalo Electric’s and other contractor’s work on the project, Garofalo Electric’s work was damaged by other contractor’s work and therefore, Garofalo Electric suffered unanticipated delays on the project. Garofalo Electric alleged that both NYU and MDI required it to perform extra work, labor, and services and to furnish extra materials and equipment, none of which were required under the terms of the contract between Garofalo Electric and NYU. Garofalo Electric alleged that NYU and MDI orally agreed to pay for this extra work and materials, and that Garofalo Electric relied on such representations in performing the additional work and furnishing the additional materials.

Garofalo brought the action in 1993, when it was not compensated according to such alleged oral representations of MDI and NYU. Among various causes of action, Garofalo Electric sought damages for its delays on the project. NYU moved for partial summary judgment, alleging that the plaintiff had failed to comply with the notice requirements of their contract, which required “contemporaneous written notice and documentation” of all claims. NYU further argued that oral modifications to the contract between the parties were barred by the Statute of Frauds (General Obligations Law section 15-301(1)).

In opposition to this motion for summary judgment, Garofalo Electric did not claim that it complied with the notice requirements of the contract and it further did not claim that the contract was modified by a written agreement. Garofalo Electric instead argued that NYU, the owner, through MDI, its “agent”, abandoned, waived or modified the notice and documentation requirements of the contract. Garofalo Electric relied upon deposition testimony of its employees which indicated that MDI had instructed them to keep track of its hours and materials and that “it would be taken care of at the end of the job”. Garofalo Electric further alleged that its foreman and sub-foreman submitted daily reports to MDI and that such reports should have been sufficient to meet the contract requirements.

The lower court, finding issues of fact regarding whether there was a “departure from the specific notice requirements of the contract by both parties”, constituting waiver of the notice and documentation provisions of the contract, denied NYU’s motion for summary judgment.

The Appellate Court reversed the lower court’s decision, granting summary judgment to NYU. The Court found that the contract’s notice and documentation requirements for extra work and delay damages were conditions precedent to Garofalo Electric’s potential recovery for delay damages and that strict compliance with such requirements was essential to its claims. Since Garofalo Electric did not strictly comply with its contract’s requirements, the Plaintiff clearly waived its claim for delay damages under the contract. The Court further found no evidence that NYU gave MDI apparent authority to waive or modify any of the notice or documentation requirements within the contract.

With regard to the Statute of Frauds, the Court held, “when a written contract, as here, provides that it can be modified only by a signed writing, an oral modification of that agreement is not enforceable unless the oral modification is fully executed or there has been a partial performance ‘unequivocally referable’ to the oral modification.” The Court held that summary judgment was appropriate, finding nothing in the record which could be viewed as performance “unequivocally referable” to the contract to modify any of the provisions thereof.

In conclusion, contractors must be certain to strictly comply with the notice and documentation provisions of their contracts in order to preserve any claims for damages they may have on a project.

Terence J. Burke

NESCA Legal Counsel

WELCOME NEW MEMBERS Go Top

General Mechanical Group

138 Sicker Road

Latham, NY 12110

(518) 785-4800; FAX (518) 785-6382

Contact: Dennis Deeb

Hudson Valley Electrical Construction & Maintenance, Inc.

523 South Road

Milton, NY 12547

(914) 795-1135; FAX (914) 795-1137

Contact: Sharon Serini

The Printing Outlet

30 Fuller Road

Albany, NY 12205

(518) 437-9070; FAX (518) 437-9073

Contact: Peter Rosenberger

Rainbow Sheet Metal

33 Brookside Avenue

Endwell, NY 13760

(607) 754-3550; FAX (607) 757-9387

Contact: Bill Edwards

SAFECO

3 Speen Road, Suite 350

Framingham, MA 01701

(508) 620-7500; FAX (508) 620-7540

Contact: Trevor Hash

Slocum, DeAngelus & Assoc., P.C.

4 Computer Drive West

Albany, NY 12205

(518) 482-2522; FAX (518) 482-2699

Contact: Gerald DeAngelus

Oncall Plumbing, Heating & A/C

99 Walworth Street

Saratoga Springs, NY 12866

(518) 584-2300; FAX (518) 584-2843

Contact: Michael Mulholland

Allied Environmental Services, LLC

Hilton Industrial Park, 10 Forbes Road

Rensselaer, NY 12144

(518) 443-1599; FAX (518) 443-1597

Contact: Richard Pierre

KHM, Inc.

P.O. Box 2672

Binghamton, NY 13902

(607) 773-0076; FAX (607) 771-0380

Contact: Kathy Hall

International Fidelity Insurance Co.

80 Washington Street, Building J-39

Norwell, MA 02061

(800) 388-1143; FAX (781) 871-5430

Contact: Henrietta Kahler

Telergy, Inc.

20 Corporate Woods Blvd., Suite 100

Albany, NY 12211

(518) 427-1660; FAX (518) 462-9525

Contact: Marco Pezzuto

BPI Piping

P.O. Box 311, 123 Hudson River Road

Waterford, NY 12188

(518) 238-2383; FAX (518) 233-0123

Contact: Joseph Burniche

OVERVIEW OF SELECTED OSHA 1926 CONSTRUCTION STANDARDS

MEDICAL SCREENING AND SURVEILLANCE REQUIREMENTS Go Top

Depending on the type of work engaged in, subcontractors may have to provide employees with certain medical and surveillance to comply with several OSHA standards. The following table can help to identify and compare some of the various OSHA requirements. This table is not all-inclusive, there may be other standards with medical screening and surveillance requirements. This table provides a general overview of selected standards that could apply to a variety of work activities. Subcontractors should refer to each individual standard for detailed requirements.

Noise Respiratory HAZWOPER Lead Asbestos

1926.52 Protection 1926.65 1926.62 1926.101(m)

1926.103

Pre-Placement Audiometric Evaluation or Yes Yes. Initial Yes

Exam testing exam blood tests

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Periodic Audiometric Yes - in some yes - annual or at Yes Yes - annual or

Exam testing situations physician’s discretion more frequent

___________________________________________________________________________________________________________

Emergency or No No Yes Yes No

Exposure Exam

___________________________________________________________________________________________________________

Termination Audiometric No Yes - if no exam No No

Exam testing within 6 months

___________________________________________________________________________________________________________

Exam Emphasis On No Yes - see standard Yes - as determined Yes Yes

Certain Body Systems ___________________________________________________________________________________________________________

Work and No Yes Yes Yes Yes

Medical History

___________________________________________________________________________________________________________

Chest X-Ray No As determined No - unless determined No Yes

___________________________________________________________________________________________________________

Pulmonary No As determined No - unless determined No - unless Yes

Function Test determined

___________________________________________________________________________________________________________

Other Required Initial and As determined No - unless determined Yes - various No

Tests annual

audiometric

testing

___________________________________________________________________________________________________________

Evaluate Ability to No Yes Yes Yes Yes

Wear a Respirator

___________________________________________________________________________________________________________

Additional Tests Yes Yes Yes Yes Yes

as Necessary

___________________________________________________________________________________________________________

Written Medical No Yes Yes Yes Yes

Opinion

___________________________________________________________________________________________________________

Employee Yes Yes Yes Yes Yes

Counseling

___________________________________________________________________________________________________________

Medical Removal No No No Yes No

Plan

___________________________________________________________________________________________________________

CIRB RECOMMENDS 2.5% DECREASE IN WORKERS’ COMP. PREMIUMS Go Top

The Compensation Insurance Rating Board (CIRB) has recommended an average decrease in workers’ compensation rates of 2.5 percent and an increase in “administrative assessments” of 2.6 percent. If the NYS Insurance Department accepts CIRB’s recommendation, the changes would leave average overall workers’ compensation costs largely unchanged from last year. These new rates would keep New York’s workers’ compensation costs more than 20 percent above the national average.

Employers’ workers’ compensation costs reflect both premiums and assessments. New York State sets “manual rates” for nearly 800 different job classifications. The premiums employers actually pay are based on the total of the manual rates for all jobs on the payroll, modified by the employer’s experience. After an employer’s total premium is calculated in this way, an additional percentage, the so-called administrative assessment, is added to the bill. Money collected from assessments covers the administrative costs of the Workers’ Compensation Board and ensure that several special funds administered by the Board are adequately funded. The current assessment rate is 13.6 percent, and the proposed new assessment would be 16.2 percent. CIRB recommends both manual rates and assessments each May, subject to review by the State Insurance Department. The Insurance Department generally announces the final rate change in July, to take effect in October.

Because workers’ compensation costs in New York remain considerably higher than the national average, the business community, led by the Business Council of NYS, has made further workers’ comp reform a top legislative priority. The Business Council is pushing for two specific reforms which could reduce costs significantly. One is a cap on permanent partial disability benefits, and the other is the adoption of medical guidelines to determine the degree of disability in these cases. Cases of permanent partial disability are important because they account for more than half of New York’s workers’ compensation claims costs. Both of these reforms have already been enacted in most other states.

CONTACT GOVERNOR PATAKI ABOUT TORT REFORM Go Top

New Yorkers face over 300 new lawsuits every business day. It’s a virtual litigation explosion affecting every commercial, professional and industrial endeavor in New York State. Add to that list, schools, local governments, volunteers and the clergy, and you begin to understand the breadth of the problem.

And even if you’re not the direct target, frivolous litigation affects you because everyone ends up paying for the impact of the lawsuit lottery. The estimate of this cost is $800 per year, paid by every New Yorker in every product and service they buy.

But you can do something to help end the legal nightmares. Write a letter to the Governor now. Supporters of tort reform in New York State have long awaited some public sign from the Governor of his support for the cause. While the Governor has indicated he believes in the need for reform of the civil justice system, he has not yet acted publicly.

New Yorkers for Civil Justice Reform (NYCJR), with more than 1,100 member organizations and businesses statewide including the Empire State Subcontractors Association, has been working for more than three years on a comprehensive tort reform measure. The Civil Justice Reform Act (S.2277/A.4509) would restore balance and fairness to New York’s tort laws, through common sense changes like letting employers share honest job references provided in good faith, reforming sections 240/241 of the Labor Law by replacing the absolute liability standard with a standard based on negligence, and placing a reasonable limit on non-economic damages.

The numbers tell the story. While New York’s population has grown by a mere one percent, annual tort case filings grew by 60% (from 53,104 in 1988 to 84,089 in 1996). During the same period, California’s tort filings fell by 42% even though that state had significant population growth. It costs New Yorkers $400 more than the national average to have a baby because of the outrageous liability costs, and our $960 average auto insurance rate is 40% above the national average. It is estimated that Labor Law 240/241 cases costs the construction industry $150-$300 million each year!

You can write your own letter to the Governor or use NYCJR’s new Internet e-advocacy page at www.nycjr.org. Using the Internet, NYCJR will automatically send a fax of the letter of your choice to the Governor and your state senator and assembly member.

FINAL ERGONOMICS RULE EXPECTED BY YEAR END Go Top

Calling the science “sound” and the problem of work-related musculoskeletal disorders the most widespread occupational health hazard facing the nation, OSHA administrator Charles Jeffress told a congressional subcommittee that after ten years studying the problem, OSHA believes now is the time for action.

Reviewing the history of OSHA’s efforts to address ergonomics, Jeffress described the agency’s two-year process of consulting stakeholders and small businesses. He pointed out numerous changes made in draft versions of the proposal in response to concerns raised by these groups. He also noted that during its hearings on ergonomics, OSHA has been giving hearing participants an opportunity to question agency staff and expert witnesses.

The ergonomics proposal was published in November 1999, and OSHA has received more than 7,000 comments during the 100-day comment period, and has scheduled more than 1,000 witnesses to testify during nine weeks of hearings. According to Jeffress, OSHA is targeting the end of 2000 for publication of a final standard.

Business organizations, however, have expressed great concern with the proposed standard. The National Small Business United stated that OSHA has significantly underestimated the hardship, both financial and operational, for small business. In the same vein, the National Association of Manufacturers has released a survey showing that the proposed rule would burden small and medium-sized manufacturers with an aggregate cost of $6.7 billion.