Relates to notice provisions in public works contracts; requires certain language in contracts; requires a showing of material prejudice

(2) provides that notwithstanding anything to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, a provision or provision equally favorable that failure to give any notice required to be given by such contract within the time prescribed therein shall not invalidate any claim made by the contractor or other claimant, unless the failure to provide timely notice has materially prejudiced the public owner.

(3) provides clarification regarding material prejudice.

Section 2 - adds a new section 109-c to the General Municipal Law that (1) adds definitions applicable to the section;

(2) provides that notwithstanding anything to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, a provision or provision equally favorable that failure to give any notice required to be given by such contract within the time prescribed therein shall not invalidate any claim made by the contractor or other claimant, unless the failure to provide timely notice has materially prejudiced the public owner;

(3) provides clarification regarding material prejudice.

Section 3 - adds a new section 28 to the Public Service Law that (1) adds definitions applicable to the section;

(2) provides that notwithstanding anything to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, a provision or provision equally favorable that failure to give any notice required to be given by such contract within the time prescribed therein shall not invalidate any claim made by the contractor or other claimant, unless the failure to provide timely notice has materially prejudiced the public owner;

(3) provides clarification regarding material prejudice.

Section 4 - adds a new section 179-ff to the State Finance Law that (1) adds definitions applicable to the section;

(2) provides that notwithstanding anything to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, a provision or provision equally favorable that failure to give any notice required to be given by such contract within the time prescribed therein shall not invalidate any claim made by the contractor or other claimant,

unless the failure to provide timely notice has materially prejudiced the public owner;

(3) provides clarification regarding material prejudice.

Section 5 - provides that the act shall take effect one hundred eighty days after it shall have become law.

Justification

Some public works contracts across the state have begun to contain provisions that if any notice is not given within a specific time, which can be as little as five days, or notice is not reserved on a regular basis, such as each month thereafter, the contractor or claimant is totally stopped from claiming, and being paid for, any work related to the notice. While failure to receive timely notice can materially prejudice a public owner in some cases, it is more often the case that the owner, its employees and agents were well aware of the issue, and even when they were not aware, a delay in receiving technical notice does not harm them in any way. These clauses are simply being used by some public owners to receive free work, especially on change orders that prove to be expensive to complete. This bill simply gives contractors their "day" in court or arbitration to prove their claims, and allows the public owner to defend against unjust claims or to claim material prejudice when appropriate.

Prior legislative history

New bill.

Fiscal implications

None

Effective date

This act shall take effect on the one hundred eightieth day after it shall have become law, and shall apply to all contracts entered into on and after such date.