[minti_headline font=”font-special” size=”fontsize-xxxl” color=”#ffffff” weight=”fontweight-700″ lineheight=”lh-12″ class=”lowercase”]Claims Against City Agencies[/minti_headline]
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Andrew Richards
Co-Managing Partner(LI),
Kaufman Dolowich Voluck,
Attorneys at Law
Legal Counsel, STA

There are different forums for bringing claims against city agencies depending on the nature of the claim.  One set of claims must be adjudicated pursuant to the New York City Procurement Policy Board (PPB) rules and others are to be brought as ordinary lawsuits before the courts of the State of New York.

The PPB rules set forth the rules for filing certain claims under City of New York public improvement contracts. Under section 4-09 of the PPB rules, the adjudicatory requirements for claims for construction and construction related services only apply to: disputes concerning scope of work; Interpretation of contract documents; the amount to be paid for extra work or disputed work; the conformity of the vendor’s work to the contract; and the acceptability and quality of the vendor’s work.

The PPB rules do not apply to disputes regarding a termination of the contract for cause or other than for cause.  In addition, the PPB rules do not apply to delay claims.  Termination of contract and delay damage disputes must be brought in a court of law.  The Agency will not entertain them because they are not within the purview of the PPB rules.

Why does this matter?

To file a claim, the PPB rules require the contractor to first submit the claim to the Agency Head.  Assuming the claim is denied, the claim then goes to the City Comptroller.  If the city Comptroller does not issue a favorable decision in the contractor’s favor, the contractor may file a petition to the city’s Contract Dispute Resolution Board (CDRB).  If the CDRB issues a determination against the contractor, the contractor’s only recourse is to file an Article 78 proceeding pursuant to the New York Civil Practice Law and Rules.

The problem with an Article 78 proceeding is the contractor must prove that the CDRB’s decision was made in violation of lawful procedure, affected by an error of law, arbitrary and capricious, or an abuse of discretion.  This is a high standard of proof that is not applied to customary lawsuits.

In an ordinary lawsuit the standard of proof to prove a claim is “the preponderance of the evidence.”  This is the standard of proof that would be applied in a lawsuit for delay claims and claims concerning the termination of a contract brought directly to a New York State court.  In addition, while a delay claim may be submitted to the Comptroller immediately, the Comptroller’s office will first review and attempt to settle those claims for which a lawsuit has already been brought.  Thus, a contractor should always commence the lawsuit for delay damages before it seeks to have the Comptroller settle the claim.

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