N.Y. Highway Law § 38: Contracts for construction or improvement of highways

§ 38. Contracts for construction or improvement of highways. State

highways shall be constructed or improved by contract. Upon the

completion and final adoption or approval, as provided by law, of the

plans and specifications for the construction or improvement of a state

highway, contracts therefor shall be executed as provided herein.

1. Advertising for proposals. The commissioner of transportation shall

advertise for proposals for the construction or improvement of such

highways or sections thereof according to the plans and specifications

prepared therefor. The advertisement shall be limited to a brief

description of the work proposed to be done, with an announcement

stating where the maps, plans and specifications may be seen, the terms

and conditions under which proposals will be received, the time and

place where the same will be opened, the amount of the draft or

certified check to accompany the proposal, and such other matters as the

commissioner of transportation may deem advisable to include therein.

Such advertisement shall be published at least once in each week for two

successive weeks in a newspaper published in the county in which such

highway or section thereof is to be constructed or improved, and in such

other newspapers as the commissioner of transportation may designate. If

no newspaper is published in the county, the publication of the

advertisement shall be in such newspaper or newspapers in an adjoining

county as may be selected by the commissioner of transportation. Failure

of such newspaper, published in such county or adjoining county, to

publish such advertisement as provided in this subdivision or as

directed by the commissioner of transportation shall not invalidate the

publication of advertisement for proposals provided such advertisement

is published in another newspaper or trade publication, which will be

most likely to give adequate notice to contractors of the work

contemplated and of the invitation to submit proposals therefor, at

least once in each week for any two successive weeks preceding the date

on which proposals described in such advertisement are to be received

and opened.

2. Proposals. Each proposal shall specify the correct gross sum for

which the work will be performed and shall also include the amount to be

charged for each item specified on the proposal estimate sheet. The

commissioner of transportation may prescribe and furnish forms for the

submission of such proposals and may prescribe the manner of submitting

the same which shall not be inconsistent herewith. Accompanying each

proposal there shall be either a certified check or bank cashier's check

for the amount of the bid deposit, to be fixed by the commissioner of

transportation and specified in the advertisement for proposals or such

other security from the bidder as may be acceptable to the commissioner

of transportation. The checks of the two low bidders shall be deposited

by the commissioner of transportation in a special account. Provided,

however, that if prior to or upon receipt of said checks by the

commissioner of transportation a bidder who is one of the two low

bidders shall have duly filed a bond as hereinafter provided the

commissioner of transportation shall forthwith return to said bidder his

aforesaid check without depositing the same. If alternate proposals are

taken, the checks of the two low bidders of all alternate proposals

shall be deposited. All checks other than those of the two low bidders

shall be returned promptly by the commissioner of transportation.

Notwithstanding the provisions of any general or special law, the money

represented by the checks of the two low bidders shall be paid from the

special account when the contractor has duly executed and delivered to

the commissioner of transportation the contract and the bond or bonds,

if any, required by law for the performance of the work of a public

improvement for the state of New York, or upon the rejection of all

bids. The low bidder, in the discretion of the commissioner of

transportation, and the second low bidder, as a matter of right, may at

any time after the opening of the respective proposals, file with the

commissioner of transportation a bond, the principal amount of which

shall at least equal the amount of the respective bidder's check,

theretofore deposited with his proposal, in the form prescribed by the

commissioner of transportation, with sufficient sureties, to be approved

by the commissioner of transportation, conditioned that the said bidder

will execute a contract and furnish such performance or other bonds as

may be required by law in accordance with the terms of the bidder's said

proposal. If a bidder complies with the aforesaid provision, the

commissioner of transportation shall forthwith return the money

represented by the check of such bidder. In case the bidder to whom the

contract shall be awarded shall fail to execute such contract and bond

if required, the moneys represented by such check shall be regarded as

liquidated damages and shall be forfeited to the state and shall be

deposited by the commissioner of transportation with the commissioner of

taxation and finance to the credit of the general fund. Provided,

however, that although a performance bond or a payment bond or both may

be accepted from a bidder by the commissioner of transportation, a

requirement to furnish such bond or bonds may be dispensed with where

the aggregate gross sums of the contracts to be awarded for the project

is under fifty thousand dollars and provided further, that in a case

where a single contract is issued for a project which is not subject to

the multiple contract award requirements of section one hundred

thirty-five of the state finance law, such requirements may be dispensed

with where the commissioner finds it to be in the public interest and

where the aggregate amount of the contract awarded or to be awarded is

less than two hundred fifty thousand dollars. The gross sums indicated

on the proposals when opened shall be publicly read. The commissioner

shall keep the bids for the several items of the proposals confidential

until an award of the contract is made, after which the proposals shall

be subject at all reasonable times to public inspection.

2-a. Contracts; rubber-modified asphalt materials. In regard to

contracts for construction or improvement of highways incorporating the

use of asphalt construction materials after May first, nineteen hundred

eighty-nine, the commissioner may require that the paving materials

incorporate a percentage of scrap rubber derived from motor vehicle

tires discarded in the state. Such percentage of rubber additives may be

established by the commissioner subsequent to the completion of a

rubber-modified asphalt pilot project to be conducted pursuant to

section twenty-three of this chapter.

3. Award of contracts. The contract for the construction or

improvement of such highway or section thereof shall be awarded to the

lowest responsible bidder, as will best promote the public interest. No

contract shall be awarded to a bidder other than the lowest responsible

bidder without the written approval of the comptroller. The lowest bid

shall be deemed to be that which specifically states the lowest gross

sum for which the entire work will be performed, including all the items

specified in the estimate thereof. The lowest bid shall be determined by

the commissioner of transportation on the basis of the gross sum for

which the entire work will be performed, arrived at by a correct

computation of all the items specified in the estimate therefor at the

unit prices contained in the bid.

4. Rejection of proposals. The commissioner of transportation may

reject any or all proposals and may advertise for new proposals as

provided in this section, if, in his opinion, the best interests of the

state will thereby be promoted.

5. Form of contract. The commissioner of transportation shall

prescribe the form of contract and may include therein such matters as

he may deem advantageous to the state.

6. Bond of contractor. Each contractor, before entering into a

contract for such construction or improvement, shall execute a bond in

the form prescribed by the commissioner of transportation, with

sufficient sureties, to be approved by the commissioner of

transportation, conditioned that he will perform the work in accordance

with the terms of the contract and the plans and specifications, and

that he will commence and complete the work within the time prescribed

in the contract. The bond shall also provide against any direct or

indirect damages that shall be suffered or claimed on account of such

construction or improvement during the time thereof, and until the

highway is accepted.

7. Payments on contract, state taxes. The contract shall provide for

partial payments as the work progresses as hereinafter provided:

(c) Whenever a contract shall in the judgment of the commissioner of

transportation be substantially completed, the commissioner of

transportation may, provided the regional director certifies that the

essential items in the contract have been completed in accordance with

the terms of the contract and the provisions of this chapter, direct the

regional director to include in the final account such uncompleted items

and pay therefor at the item prices in the contract upon the contractor

depositing with the commissioner of transportation a certified check

drawn upon a legally incorporated bank or trust company equal to at

least double the value of such uncompleted work or, with the approval of

the state comptroller, securities as are listed in subdivision three of

section one hundred thirty-nine of the state finance law, equal to at

least double the value of such uncompleted work. The deposit may be used

by the commissioner of transportation to complete the uncompleted

portion of the contract and shall be returned to the contractor if he

completes the uncompleted portion within a specified number of working

days after he has been notified to proceed with the work.

(d) No certificates approving or authorizing a partial or final

payment shall be made by the commissioner of transportation until he is

satisfied that all laborers employed on the work have been paid for

their services for the last payroll period preceding the said partial or

final payment. The commissioner of transportation may, if he deems

necessary, require an affidavit to such effect from the contractor or he

may depend on any other source which he deems proper for such

information.

(e) No such certificate approving or authorizing the first partial

payment or any final payment to a foreign contractor shall be made

unless such contractor shall furnish satisfactory proof that all taxes

due the state tax commission by such contractor, under the provisions of

or pursuant to a law enacted pursuant to the authority of article nine,

nine-a, twelve-a, sixteen, sixteen-a, twenty-one, twenty-two,

twenty-three, twenty-eight, twenty-nine or thirty of the tax law or

article two-E of the general city law have been paid. The certificate of

the state tax commission to the effect that all such taxes have been

paid shall be, for purpose of this paragraph, conclusive proof of the

payment of such taxes. The term "foreign contractor" as used in this

subdivision means, in the case of an individual, a person who is not a

resident of this state, in the case of a partnership, one having one or

more partners not a resident of this state, and in the case of a

corporation, one not organized under the laws of this state.

(f) Payment of the moneys due under a contract shall be made in

accordance with the provisions of article eleven-A of the state finance

law, provided failure to make such payment, as heretofore prescribed,

shall not be due to any fault, neglect, or omission on the part of the

contractor or by reason of the filing of any lien, attachment, or other

legal process against the money due said contractor.

(g) For the purpose of making a final payment on a highway

construction contract, the date to be used for determining the receipt

of an invoice in subdivision two of section one hundred seventy-nine-f

of the state finance law shall be the date on which the contract work

has been accepted as completed by the commissioner of transportation.

8. Contingencies and extra work. Whenever the commissioner of

transportation determines that from any unforeseen cause the terms of

any contract should be altered to provide for contingencies or extra

work, he may, if funds are available for payment of the cost thereof,

issue an order on contract therefor to the contractor, a copy of which

shall be filed with the director of the budget and the state

comptroller. The estimated expenditure pursuant to the order on contract

shall not increase the total amount of the primary contract until the

estimated expenditure shall have been approved by the commissioner of

transportation and a duplicate of such approval shall have been filed

with the comptroller. No such extra work shall be commenced or

undertaken until the commissioner of transportation has issued an order

on contract as herein provided.

When such order on contract provides for similar items of work or

materials which increase or decrease the itemized quantity provided for

in the primary contract, the price to be paid therefor shall not exceed

the unit bid price in the primary contract for such items. Agreed prices

for new items of work or materials may be incorporated in the order on

contract as the commissioner of transportation may deem them to be just

and fair and beneficial to the state.

Whenever the commissioner of transportation also determines that in

the cases herein provided it is impracticable for him to ascertain in

advance the just and fair price to be paid by the state for new items of

work or materials, the order on contract therefor may provide for

performance of the work and the furnishing of the materials and

equipment, in which event the contractor shall keep and shall make

available at all times to the commissioner of transportation such

accounting records, data and procedure as may be required by the

commissioner of transportation. An estimate of the value of such work

and the furnishing of materials and equipment shall be submitted by the

commissioner of transportation to the state comptroller who is hereby

empowered to approve such estimate. Partial and final payments shall be

made upon proper records and data itemized as hereinbefore indicated.

Before any final accounting shall become effective, a supplemental

contract and final agreement shall first be approved by the comptroller,

and filed in his office. The director of the budget may at his

discretion require the commissioner of transportation to submit periodic

summaries of and reports on the scope and status of highway projects in

such form and at such intervals as he may require, including any and all

contract documents.

9. Adjustment of disputes. Notwithstanding the provisions of any

general or special law, and in case of a dispute between a contractor

and the commissioner of transportation concerning questions of fact

which may arise under a contract, the contractor may, at any time before

the final estimate is rendered, petition the commissioner of

transportation for a hearing in relation thereto, provided (1) the

amount involved therein as shown by such petition does not exceed five

thousand dollars or five per centum of the final estimate of the

completed contract, whichever is greater, (2) the contractor has

complied with all provisions of the contract that relate to the filing

of any protest and also of any statement concerning the subject-matter

thereof, and (3) the contractor shall expressly agree in such petition

that any determination as hereinafter provided, shall be final and

conclusive upon all parties thereto. If the commissioner of

transportation grants such petition, he shall, within a reasonable time,

mail a notice to the contractor which shall specify the place of such

hearing and the date thereof which shall be within thirty days after the

mailing of such notice. Within ten days after such mailing, the

commissioner of transportation shall also mail a copy of the petition

and of such notice of hearing to the attorney general, who together with

the commissioner of transportation, shall constitute a board to (a) hear

such dispute, either personally or by any duly authorized officer or

employee of their respective departments, and (b) determine the issues

thereof.

Any amount fixed in the determination to be paid to the contractor

shall be deemed to be a special item to be incorporated in a final

supplemental contract and shall be payable from monies available for

construction and reconstruction of state highways, on the audit and

warrant of the comptroller on vouchers approved by the commissioner of

transportation.