One of our previous alerts provided notice of a bill passed by the New York State legislature requiring any contract awarded for public work include a provision that the contractor's failure to give a notice within 180 days of the time prescribed in the contract would not invalidate any claim unless the public entity could demonstrate that it was materially prejudiced by the failure to provide notice. The new year, however, brought news from Albany when it was learned that the Governor, Andrew Cuomo, vetoed the bill with a message that included the following justification:
Appropriate notice provisions in public works contracts permit public owners to manage projects more efficiently. They also ensure that information is promptly provided to stakeholders if necessary to evaluate a change order or to resolve a problem on a project.
The Governor further commented that such a bill would
fundamentally change well-established law and eliminate a public
owner's ability to mitigate project delays, adhere to plan work
schedules and – quoting here – "would require
public owners to accept and pay for work that was unnecessary and
otherwise unauthorized." Throwing more gas on the fire, the
memo in support of the veto further stated that, "[m]oreover,
litigating whether a public owner has been materially prejudiced
will undoubtedly lead to increased claims and costs. For these
reasons, I am therefore constrained to veto this bill."
The Governor, evidently in an attempt to placate the trade groups
and other organizations in support of the bill as well as the
majority of the legislature, suggested that the Council of
Contracting Agencies conduct a review of the notice and
"forfeiture" – his words – provisions and to
issue a report with their proposed recommendations in September of
this year. The committee purpose apparently is an attempt to create
uniform notice provisions throughout the state public contracts.
However, it does not appear that uniformity in notice provisions
was the prime driver of the proposed bill but, rather, their
forfeiture aspects.
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