STA BACKED MATERIAL PRICE ESCALATION BILL PASSES STATE LEGISLATURE

With the New York State Assembly and Senate having recently wrapped up their legislative session in Albany, I am pleased to inform you that the STA in concert with some of its industry partners including the New York Electrical Contractors Association, successfully lobbied for the passage of a Material Price Escalation Bill.  Recognizing the stress that our member contractors were under because of the continued volatility in the price of construction supplies, the STA pushed for passage of this bill.

This priority bill for the STA in this legislative session, S.8844 Reichlin-Melnick/A.10109 Zebrowski, passed in both legislative chambers on June 3.  In a “nutshell” this bill allows certain pre-pandemic public works contracts with State agencies, to be adjusted where material prices have escalated as a result of the tumultuous supply market conditions associated with COVID-19’s impact on the national and world supply chain, specifically as it affected the distribution of construction materials and related commodities.  If the state or a public benefit corporation awarded a construction contract that requires a contractor or subcontractor to furnish materials based upon bids submitted to the state prior to April 1, 2020, under this legislation the contract costs may be adjusted for materials purchased or invoiced after March 1, 2020, if there was an increase in the cost of material or commodities in excess of 5%.

This bill now awaits the approval or veto of Governor Hochul sometime later this year.  Among the options available to Governor Hochul is the fact that she could sign this bill subject to mutually agreed upon changes in the bill language via a legislative device known as a chapter amendment.  In that regard, the STA will be pushing for a chapter amendment that extends the bid cut-off date from April 1, 2020, to April 1, 2021.  This would provide even more relief for our contractors doing business with state agencies.  Pushing the present bid cutoff date forward will be of even greater assistance to subcontractors who submitted bids on public contracts with artificially low bid prices, through no fault of their own.

If STA members have any information that they can share regarding the escalation of the supplies and commodities that they use, please send it to me at hkita@stanyc.com.  This information will be useful in our lobbying efforts with the Governor to change the bid cutoff dates in this legislation.

The STA will keep you informed of further developments regarding this legislation as events warrant.