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STA ADVOCATES FOR ITS MEMBERS THROUGH PROPOSED “DAMAGES FOR DELAY” LEGISLATION

By Hank Kita, STA Executive Director

The STA has a rich and successful legacy of developing and passing state legislation that is beneficial to construction subcontractors here in New York State.  The STA hopes to add to that record of legislative accomplishment again this year!

Our STA Legislative Committee chaired by Arthur Rubinstein has once again developed and designated priority legislation for enactment in Albany.

As the New York State Senate and Assembly enter the last month of their legislative session, the STA is again working hard to pass legislation that will be of benefit to our members.  Specifically, the STA has been strongly advocating for a “Damages for Delay” bill that is poised to pass the State Senate in the next few weeks and was recently “reported out” by the Assembly Ways and Means Committee to the Assembly floor, which represents significant progress on the bill.  The Delay Damages bill, A.7945/S.6686, sponsored by Assemblyman Ron Kim and Senator Mike Ranzenhofer, would provide for delay damages to contractors in public works projects, where such delay was both unreasonable and the fault/responsibility of a public owner.  This bill passed the full State Senate last year but was held up in the Assembly Ways and Means Committee.  While legislative rules require that the Senate pass this bill again, the process in the Assembly allowed the bill to proceed from the Ways and Means Committee this year.

In proposing this legislation, the STA maintains that public construction contracts should be uniform and equitable in their treatment of delay damages occurrences, especially where the delay in performance is not the fault of either the general contractor or subcontractor.  The Court of Appeals in Kalisch-Jarcho, Inc. v. City of New York in 1983 held that in order to recover delay damages from a public owner, a contractor must prove that the owner acted in bad faith and with deliberate intent.  This standard is extremely difficult, if not impossible at times to prove, thus providing public owners with an unfair advantage.  Our bill would correct this.

Some public owners do recognize the payment of delay damages.  The New York State Office of General Services (OGS) has modified its own standard contract to allow for delay damages in state construction contracts where the delay was not the fault of the contractor or subcontractor.  A.7945/S.6686 applies the OGS Standard Contract language across the board to all public-sector construction contracts throughout New York State. In effect, this legislation would require all public contracts to include a clause authorizing contractors to recover damages for delays, under appropriate circumstances.

The STA has been able to garner the backing of over 15 state and local construction contractor organizations, representing both subcontractors and general contractors, in support of this legislation.  With this coalition and the hard work of the STA legislative team, I hope that there will be good news to report in our next STA newsletter.  In the meantime, look for communications from the STA calling for your letters to Assembly Speaker Carl Heastie in support of this STA legislation.