What's happening
This bill requires public works contracts to allow late claim notices unless the public owner is materially prejudiced, shifting the burden of proof based on timing.
Why it matters
Protects contractors and subcontractors from losing claims due to technicalities. The bill ensures that if a contractor misses a notice deadline in a public works contract, their claim can't automatically be invalidated unless the public owner can show it was "materially prejudiced" by the delay. This prevents forfeiture of legitimate claims over late paperwork, making it less likely that minor administrative errors will result in major financial losses for contractors.
Shifts the burden of proof based on timing. If the late notice is given within 180 days of the contractual deadline, the public owner must prove it suffered material prejudice. After 180 days, the burden shifts to the contractor to prove the owner was not prejudiced. This tiered approach balances the interests of timely notification with fairness for both parties.
Applies across all levels of government and public entities. The new requirements are inserted into multiple laws, covering not just state agencies, but also local governments, authorities, school districts, public corporations, and more. This broad application means that contractors working on virtually any public works project in New York State would benefit from these protections.
Limits defense options for public owners when they have actual knowledge. The definition of "material prejudice" specifically states that if the public owner had actual knowledge of the problematic events, they cannot claim to be prejudiced by a lack of notice. This prevents public owners from using lack of notice as a technical defense when they were already aware of the issue, encouraging more substantive resolution of disputes.
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Who cares
Public works contractors
The bill would prevent late contractual notice from invalidating a claim unless the delay substantially impaired the public owner's ability to investigate or defend it.
Subcontractors and material suppliers
Those providing notice more than 180 days after the contractual deadline would bear the burden of proving the public owner was not materially prejudiced.
State agencies and public authorities
They would have to prove material prejudice when notice arrived within 180 days after the contractual deadline, and actual knowledge of the events would preclude that argument based on missing notice.
Municipalities, school districts and BOCES
Their public works contracts would have to contain, or be presumed to contain, the bill's late-notice protection or a provision equally favorable to contractors.
Headline styles
Protect Contractor Claims Rights
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4271
2019-2020 Regular Sessions
IN SENATE
March 6, 2019
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the public authorities law, the general municipal law, the public service law and the state finance law, in relation to notice provisions in public works contracts
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The public authorities law is amended by adding a new section 2882 to read as follows:
§ 2882. Notice provisions in public works contracts. 1. For purposes of this section, the following terms shall have the following meanings:
(a) "Public owner" shall mean any state or local authority, as defined by section two of this chapter.
(b) "Contract" shall mean any contract made and awarded by a public owner for construction, reconstruction, demolition, alteration, repair or maintenance of any public work project.
(c) "Contractor" shall mean any person, firm, partnership, corporation, association, company, sub-contractor, materialman secured by a contractor or a subcontractor, or other entity or combination thereof, which enters into a contract to provide services to a public owner.
(d) "Materially prejudice" shall mean to substantially impair the ability of the public owner to investigate or defend the claim, provided that the public owner's actual knowledge of the events in question shall preclude a claim of material prejudice due to lack of any required notice.
2. Notwithstanding any other law to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, the following provision or a provision that is equally favorable to the contractor:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10310-01-9
S. 4271 2
The 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 any other claimant, unless the failure to provide timely notice has materially prejudiced the public owner.
3. In any action in which a public owner alleges that it was materially prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on:
(a) the public owner to prove that it has been prejudiced, if the notice was provided within one hundred eighty days of the time required under the contract; or
(b) the contractor or any other claimant, to prove that the public owner has not been prejudiced, if the notice was provided more than one hundred eighty days after the time required under the contract.
§ 2. The general municipal law is amended by adding a new section 109-e to read as follows:
§ 109-e. Notice provisions in public works contracts. 1. For purposes of this section, the following terms shall have the following meanings:
(a) "Public owner" shall mean any political subdivision, municipal corporation, school district, district corporation or board of cooperative educational services.
(b) "Contract" shall mean any contract made and awarded by a public owner for construction, reconstruction, demolition, alteration, repair or maintenance of any public work project.
(c) "Contractor" shall mean any person, firm, partnership, corporation, association, company, sub-contractor, materialman secured by a contractor or a subcontractor, or other entity or combination thereof, which enters into a contract to provide services to a public owner.
(d) "Materially prejudice" shall mean to substantially impair the ability of the public owner to investigate or defend the claim, provided that the public owner's actual knowledge of the events in question shall preclude a claim of material prejudice due to lack of any required notice.
2. Notwithstanding any other law to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, the following provision or a provision that is equally favorable to the contractor:
The 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 any other claimant, unless the failure to provide timely notice has materially prejudiced the public owner.
3. In any action in which a public owner alleges that it was materially prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on:
(a) the public owner to prove that it has been prejudiced, if the notice was provided within one hundred eighty days of the time required under the contract; or
(b) the contractor or any other claimant, to prove that the public owner has not been prejudiced, if the notice was provided more than one hundred eighty days after the time required under the contract.
§ 3. The public service law is amended by adding a new section 28 to read as follows:
§ 28. Notice provisions in public works contracts. 1. For purposes of this section, the following terms shall have the following meanings:
(a) "Public owner" shall mean the state, or any state agency, public department, public corporation, board, bureau, or subdivision thereof,
S. 4271 3
any public benefit corporation, or a commission appointed pursuant to law.
(b) "Contract" shall mean any contract made and awarded by a public owner for construction, reconstruction, demolition, alteration, repair or maintenance of any public work project.
(c) "Contractor" shall mean any person, firm, partnership, corporation, association, company, sub-contractor, materialman secured by a contractor or a subcontractor, or other entity or combination thereof, which enters into a contract to provide services to a public owner.
(d) "Materially prejudice" shall mean to substantially impair the ability of the public owner to investigate or defend the claim, provided that the public owner's actual knowledge of the events in question shall preclude a claim of material prejudice due to lack of any required notice.
2. Notwithstanding any other law to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, the following provision or a provision that is equally favorable to the contractor:
The 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 any other claimant, unless the failure to provide timely notice has materially prejudiced the public owner.
3. In any action in which a public owner alleges that it was materially prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on:
(a) the public owner to prove that it has been prejudiced, if the notice was provided within one hundred eighty days of the time required under the contract; or
(b) the contractor or any other claimant, to prove that the public owner has not been prejudiced, if the notice was provided more than one hundred eighty days after the time required under the contract.
§ 4. The state finance law is amended by adding a new section 179-ff to read as follows:
§ 179-ff. Notice provisions in public works contracts. 1. For purposes of this section, the following terms shall have the following meanings:
(a) "Public owner" shall mean the state, or any state agency, public department, public corporation, board, bureau, or subdivision thereof or any political subdivision, municipal corporation, public benefit corporation, public authority, school district or a commission appointed pursuant to law.
(b) "Contract" shall mean any contract made and awarded by a public owner for construction, reconstruction, demolition, alteration, repair or maintenance of any public work project.
(c) "Contractor" shall mean any person, firm, partnership, corporation, association, company, sub-contractor, materialman secured by a contractor or a subcontractor, or other entity or combination thereof, which enters into a contract to provide services to a public owner.
(d) "Materially prejudice" shall mean to substantially impair the ability of the public owner to investigate or defend the claim, provided that the public owner's actual knowledge of the events in question shall preclude a claim of material prejudice due to lack of any required notice.
2. Notwithstanding any other law to the contrary, any contract made and awarded by a public owner for any public work project shall contain, or be presumed to contain, the following provision or a provision that is equally favorable to the contractor:
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The 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 any other claimant, unless the failure to provide timely notice has materially prejudiced the public owner.
3. In any action in which a public owner alleges that it was materially prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on:
(a) the public owner to prove that it has been prejudiced, if the notice was provided within one hundred eighty days of the time required under the contract; or
(b) the contractor or any other claimant, to prove that the public owner has not been prejudiced, if the notice was provided more than one hundred eighty days after the time required under the contract.
§ 5. This act shall take effect on the one hundred eightieth day after it shall have become a law, and shall apply to all contracts entered into on and after such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public authorities law, the gener- al municipal law, the public service law and the state finance law, in relation to notice provisions in public works contracts
Purpose or general idea of bill
To regulate arbitrary notice provisions.
Summary of specific provisions
Section 1 - adds a new section 2882 to the Public Authorities Law that:
Read the full memo (714 words)
(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; a (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 preju- dice 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 preju- dice when appropriate.
Prior legislative history
2016 - S6906/A.10136 - P.S.-VETOED/P.A.-Vetoed
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.
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