S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5758
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 23, 2023
                                ___________
 
 Introduced by M. of A. ZEBROWSKI, DeSTEFANO -- read once and referred to
   the Committee on Governmental Operations
 
 AN  ACT  in  relation  to  amending  state  construction  and  commodity
   contracts  to  provide  equitable  relief  to  contractors  who   have
   sustained  unanticipated  expenses by reason of construction materials
   price escalation; and providing for the repeal of such provisions upon
   the expiration thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Declaration of policy and statement of purpose. It being in
 the  vital interest of the general public that public works in the state
 of New York be administered efficiently and at a reasonable and  equita-
 ble  cost;  and, the unforeseen emergency of unanticipated escalation in
 construction materials prices having imposed substantial  inequity  upon
 contractors  who  have  heretofore  been  awarded contracts after public
 bidding; and, such inequity having threatened the ability of contractors
 to fulfill contracts so awarded; and, in order to perpetuate  the  bene-
 fits  derived  by  the general public from the existing system of public
 bidding, and to assure the continuance of  the  orderly  performance  of
 contracts heretofore awarded as a result of such public bidding; and, it
 being in the best interest to provide equitable relief to those contrac-
 tors who, having been awarded public contracts, have sustained damage by
 reason  of  such  construction  materials  price escalation, this act is
 hereby enacted.
   § 2. Whenever the terms and  conditions  of  a  construction  contract
 awarded  by  the state of New York or a public benefit corporation based
 upon bids submitted prior to December 31, 2021 but only for which  mate-
 rials were purchased or invoiced after March 1, 2020, require a contrac-
 tor   to   furnish   materials  in  such  contract  pertaining  to  such
 construction materials may be adjusted upon a determination made by  the
 officer  of  the department, board, agency or public benefit corporation
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09570-04-3
              

 A. 5758                             2
 
 that awarded such contract that there has been an increase in  the  cost
 of acquisition by the contractor, subcontractor or supplier of materials
 of  such  materials in excess of five percent, determined as of the time
 of  the  award.  Such  a determination shall be based upon the available
 evidence, including but not limited to, an appropriate nationally recog-
 nized economic index published by the United States department of  labor
 or  other  appropriate organization. In the case of any state department
 or agency any such increase in contract price shall be  subject  to  the
 approval  of  the  state comptroller.   Any contractor, subcontractor or
 supplier  of  materials  who  receives  an  increase  in  the  cost   of
 construction materials shall also be subject to a downward adjustment in
 construction  materials  prices  for  subsequent de-escalation which may
 result in a price being lower than the original bid price. Any  contrac-
 tor  requesting  an adjustment shall make application in writing submit-
 ting documentary evidence to the office of the department, board, agency
 or public benefit corporation that  awarded  the  contract  establishing
 such  increase  in  accordance  with the requirements of the department,
 board, agency or public benefit corporation,  which  evidence  shall  be
 subject  to  public inspection during regular business hours. Any subse-
 quent decrease or de-escalation shall be made upon  a  determination  by
 the  officer  of  the department, board, agency or public benefit corpo-
 ration that awarded such contract  that  there  has  been  a  subsequent
 decrease  in  the  cost of acquisition of such construction materials by
 the contractor, subcontractor or supplier of materials. Such a  determi-
 nation  shall  be  based  upon the available evidence, including but not
 limited  to,  an  appropriate  nationally  recognized   economic   index
 published  by the United States department of labor or other appropriate
 organization.  Upon the agreement of the parties, the  contract  may  be
 amended  in writing to reflect the increased or decreased cost of acqui-
 sition of such materials insofar as it exceeds five percent thereof  and
 such  contract  amendment  shall  state the amount of adjustment and the
 basis therefor, but in no event shall  direct  labor  costs,  additional
 profit  or  overhead  be  part  of  such  adjustment.  To  the  extent a
 construction contract is subject to approval by the  state  comptroller,
 and  as  to  the  form and manner of execution, by the attorney general,
 every such contract amendment shall be subject to the  approval  of  the
 state comptroller, and as to form and manner of execution, by the attor-
 ney general. No adjustment shall be granted in an amount which, together
 with  any other sum obligated under the contract, shall exceed the money
 appropriated or otherwise lawfully available for the project.
   § 3. (a) The commissioner  of  general  services  in  contracting  for
 commodities  is  authorized, with the approval of the state comptroller,
 to terminate or suspend for a part of its term any state contract  award
 for the purchase of commodities upon written application for such termi-
 nation  or  suspension by the vendor, where extraordinary and unforeseen
 general market conditions have caused increases in  the  vendor's  costs
 for  construction  materials  or  other  physical elements consisting of
 construction materials to be sold under the contract, where the contract
 covers materials which were purchased or invoiced after March  1,  2020,
 and  the  commissioner  of  general  services  determines  upon evidence
 furnished by the vendor as required and deemed to be sufficient  by  the
 commissioner that as the direct and sole result of such increases during
 the  term of the contract, which exceed five percent of the contractor's
 aggregate acquisition costs determined as of the time of the award,  the
 contractor  has  incurred  or  will  incur  an  actual  net loss on such
 contract from the estimated  sales  made  under  the  contract  and  the
 A. 5758                             3
 
 contractor  would  continue to incur such net losses unless the contract
 is suspended or terminated. Such a determination shall be based upon the
 available  evidence,  including  but  not  limited  to,  an  appropriate
 nationally  recognized  economic  index  published  by the United States
 department of labor or other appropriate organization.
   (b) The  commissioner  of  general  services  is  further  authorized,
 following  the determination made pursuant to the provisions of subdivi-
 sion (a) of this section that the contractor has incurred or will  incur
 an  actual  net  loss  on  such  contract  from the sales made under the
 contract, to grant an increase or increases in the prices of the commod-
 ities specified by the contract, in amounts necessary to prevent further
 net losses to the contractor on such contract from deliveries to be made
 thereafter under the contract, as compensation  for  and  not  exceeding
 increases  of  the  contractor's  acquisition  costs during the contract
 term. Any such increase in contract  prices  shall  be  subject  to  the
 approval  of  the  state  comptroller.  Any  contractor  who receives an
 increase in the price of the commodities shall  also  be  subject  to  a
 downward  adjustment  in  the  price  of  the commodities for subsequent
 de-escalation which may result in a price being lower than the  original
 bid price. Any subsequent decrease or de-escalation shall be made upon a
 determination  by the officer of the department, board, agency or public
 benefit corporation that awarded such contract that  there  has  been  a
 subsequent  decrease  in  the  cost  of acquisition of such construction
 materials by the contractor, subcontractor  or  supplier  of  materials.
 Such a determination shall be based upon the available evidence, includ-
 ing  but  not  limited to, an appropriate nationally recognized economic
 index published by the United States department of labor or other appro-
 priate organization.
   (c) All records, books and  documents  of  the  contractor  which  are
 related  or  useful  to  the  determinations made by the commissioner of
 general services and to the approval of the state comptroller  hereunder
 shall be subject to audit and examination by the state comptroller.
   §  4.  This  act shall take effect immediately and shall expire and be
 deemed repealed June 30, 2024.