§ 40. Authority of commissioner of transportation with respect to the
performance of contracts for construction, reconstruction or improvement
of state highways, highway projects under the supervision of the
department of transportation, bridges, grade crossing eliminations and
stream channel improvements; completion of work by surety; cancellation
of contract by commissioner of transportation.

The performance of every contract for the construction, reconstruction
or improvement of a state highway, bridge, grade crossing elimination or
stream channel improvement shall be under the supervision and control of
the commissioner of transportation, and it shall be his duty to see that
every such contract is performed in accordance with the provisions of
the contract and with the plans and specifications forming a part
thereof. If the commissioner of transportation shall determine that the
work upon any contract for the construction, improvement, maintenance,
repair or reconstruction, of a state highway, other highway under the
supervision of the department of transportation, bridge, grade crossing
elimination or stream channel improvement, is not being performed
according to the contract or for the best interest of the state, the
execution of the work by the contractor may be temporarily suspended by
the commissioner of transportation, who may then proceed with the work
under his own direction in such manner as will accord with the contract
specifications and be for the best interests of the state; or he may
terminate the contractor's employment under the contract while it is in
progress, and thereupon, proceed with the work, in affirmance of the
contract, by contract negotiated or publicly let, by the use of his own
forces, by calling upon the surety to complete the work in accordance
with the plans and specifications or by a combination of any such
methods; or he may cancel the contract and either readvertise and relet
as provided in section thirty-eight of this chapter, or complete the
work under his own direction in such manner as will accord with the
contract specifications and be for the best interests of the state. Any
excess in the cost of completing the contract beyond the price for which
it was originally awarded shall be charged to and paid by the contractor
failing to perform the work or his surety. Where the estimate for the
completion of a cancelled contract or defaulted contract, or a contract
being completed pursuant to the provisions of this section, is in excess
of the balance of the amount originally set aside by the state to
provide for the construction, reconstruction, improvement, maintenance
or repair of such highway, or other construction project, together with
any amount appropriated by the county, town or village for such
improvement, the commissioner of transportation is authorized to set
aside from any funds available for the construction or reconstruction of
state highways, highway projects under the supervision of the department
of transportation, bridges, grade crossing eliminations and stream
channel improvements, an additional sum equal to such excess including
the proportionate share of the county, town or village; and to pay such
excess in the first instance, including the share of the county, town or
village, pending recovery of excess cost from the defaulting contractor
or his surety, as provided in this section. In the event that the state
fails to recover from the defaulting contractor or surety the excess
cost in completing the contract over the amount for which it was
originally awarded, the county, town, or village shall pay to the state
upon the demand of the commissioner of transportation the same
proportion of such excess cost as was originally appropriated by the
county, town or village, for the improvement, and the board of
supervisors, town board or village trustees shall be subject to mandamus
proceedings by the attorney general to enforce the payment of the share
of the county, town or village of such excess cost. Every contract for
the construction, improvement, maintenance, repair or reconstruction of
a state highway, highway project under the supervision of the department
of transportation, bridge, grade crossing elimination or stream channel
improvement, shall reserve to the commissioner of transportation the
right to suspend or cancel the contract as above provided, and to
complete the work thereunder by contract negotiated or publicly let or
by the use of his own forces, or affirm the contract and thereupon to
complete the work thereunder according to any of the methods above
provided as the commissioner of transportation may determine.