NY State Fin L § 139-F (2021)
2021 New York Laws STF - State Finance Article 9 - Contracts 139-F - Payment on Public Work Projects.

§   139-f.  Payment  on  public  work  projects.  Notwithstanding  the   provisions of any other law to the contrary, except  the  provisions  of   section  thirty-eight of the highway law, all contracts made and awarded   by the state, or by any public department,  or  by  any  public  benefit   corporation  or by any public corporation or official thereof, hereafter   referred to as the public owner,  for  construction,  reconstruction  or   alteration  of  any public work project shall provide for payment by the   public owner to the contractor and payment  by  the  contractor  to  the   subcontractor in accordance with the following:1.  Payment  by  public  owners  to  contractors. The contractor shall   periodically, in accordance with the terms of the  contract,  submit  to   the  public  owner and/or his agent a requisition for a progress payment   for the work performed and/or materials furnished to  the  date  of  the   requisition,  less  any  amount  previously  paid to the contractor. The   public owner shall in accordance with the terms of the contract  approve   and promptly pay the requisition for the progress payment less an amount   necessary  to  satisfy  any  claims,  liens  or  judgments  against  the   contractor which have not been suitably discharged and less any retained   amount as hereafter described. The public owner shall  retain  not  more   than  five  per centum of each progress payment to the contractor except   that the public owner may retain in excess of five per  centum  but  not   more  than  ten  per  centum  of each progress payment to the contractor   provided that there are no requirements by  the  public  owner  for  the   contractor  to  provide a performance bond and a labor and material bond   both in the full amount of the contract. The  public  owner  shall  pay,   upon  requisition  from  the  contractor, for materials pertinent to the   project which have been  delivered  to  the  site  or  off-site  by  the   contractor  and/or  subcontractor  and  suitably  stored  and secured as   required by the public owner and the  contractor  provided,  the  public   owner  may  limit  such  payment  to  materials in short and/or critical   supply and materials  specially  fabricated  for  the  project  each  as   defined  in  the  contract.  When  the work or major portions thereof as   contemplated by the terms of the contract are  substantially  completed,   the  contractor  shall  submit  to  the  public owner and/or his agent a   requisition for payment of the remaining amount of the contract balance.   Upon receipt of such requisition the  public  owner  shall  approve  and   promptly pay the remaining amount of the contract balance less two times   the value of any remaining items to be completed and an amount necessary   to  satisfy  any claims, liens or judgments against the contractor which   have not been suitably discharged. As the remaining items  of  work  are   satisfactorily  completed  or corrected, the public owner shall promptly   pay, upon receipt of a requisition, for these remaining  items  less  an   amount  necessary  to satisfy any claims, liens or judgments against the   contractor which have not been suitably discharged.  Any  claims,  liens   and  judgments  referred to in this section shall pertain to the project   and shall be filed in  accordance  with  the  terms  of  the  applicable   contract and/or applicable laws.1-a.  Not  later than forty-five business days after the date when the   project has reached substantial completion, as such term is  defined  in   the  contract or as it is contemplated by the terms of the contract, the   public owner shall submit to the contractor a  written  list  describing   all  remaining  items  to be completed by the contractor. Not later than   five business  days  after  receiving  a  written  list  describing  all   remaining  items to be completed by the contractor, the contractor shall   submit to each subcontractor from whom  the  contractor  is  withholding   retainage a written list of all remaining items required to be completed   by  the  subcontractor. Such list may include items in addition to those   items on the public owner's list. 1-b. Notwithstanding any  other  provision  of  this  section  to  the   contrary,  payment  of  the moneys due under a contract awarded (i) by a   state agency as defined in article eleven-A of this chapter or (ii) by a   corporation as  defined  in  subdivision  one  of  section  twenty-eight   hundred  eighty  of  the  public authorities law which is subject to the   provision  of  this  section  shall  be  made  in  accordance  with  the   provisions of such article eleven-A, in the case of such state agencies,   or  such  section  twenty-eight  hundred  eighty,  in  the  case of such   corporations, 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  such   contractor.2. Payment by contractors to  subcontractors.  Within  seven  calendar   days of the receipt of any payment from the public owner, the contractor   shall  pay  each of his subcontractors and materialmen the proceeds from   the  payment  representing  the  value  of  the  work  performed  and/or   materials   furnished   by  the  subcontractor  and/or  materialman  and   reflecting the percentage of the subcontractor's work completed  or  the   materialman's material supplied in the requisition approved by the owner   and  based  upon  the  actual value of the subcontract or purchase order   less an amount necessary to  satisfy  any  claims,  liens  or  judgments   against  the  subcontractor  or materialman which have not been suitably   discharged and less any retained amount as hereafter described.  Failure   by  the  contractor to pay any subcontractor or materialman within seven   calendar days of the receipt of any payment from the public owner  shall   result  in  the  commencement  and accrual of interest on amounts due to   such subcontractor or materialman for the period beginning  on  the  day   immediately  following  the expiration of such seven calendar day period   and ending on the date on which payment is made  by  the  contractor  to   such  subcontractor  or  materialman. Such interest payment shall be the   sole responsibility of the contractor, and shall be paid at the rate  of   interest  in  effect  on  the  date  payment  is made by the contractor.   Notwithstanding any other provision of law  to  the  contrary,  interest   shall   be  computed  at  the  rate  established  in  paragraph  (b)  of   subdivision one of section seven  hundred  fifty-six-b  of  the  general   business  law. The contractor shall retain not more than five per centum   of each payment to the subcontractor and/or materialman except that  the   contractor may retain in excess of five per centum but not more than ten   per  centum  of each payment to the subcontractor provided that prior to   entering into a subcontract with the contractor,  the  subcontractor  is   unable  or  unwilling  to  provide  a  performance  bond and a labor and   material bond, both in the  full  amount  of  the  subcontract,  at  the   request  of the contractor. However, the contractor shall retain nothing   from those payments representing proceeds owed the subcontractor  and/or   materialman  from  the public owner's payments to the contractor for the   remaining amounts of the contract balance as provided in subdivision one   of this section. If the contractor has failed to  submit  a  requisition   for  payment  of  the  remaining  amounts of the contract balance within   ninety days of substantial completion as provided in subdivision one  of   this  section, then any clause in the subcontract between the contractor   and the subcontractor or materialman which states that  payment  by  the   contractor  to  such  subcontractor  or  materialman  is contingent upon   payment by the owner to the contractor shall be deemed  invalid.  Within   seven  calendar  days of the receipt of payment from the contractor, the   subcontractor and/or materialman shall pay each  of  his  subcontractors   and  materialmen  in  the  same  manner  as  the contractor has paid the   subcontractor, including interest  as  herein  provided  above.  Nothing    provided  herein  shall  create any obligation on the part of the public   owner to pay or to see to the payment of any moneys to any subcontractor   or materialman from any contractor nor shall  anything  provided  herein   serve  to  create  any relationship in contract or otherwise, implied or   expressed, between the  subcontractor  or  materialman  and  the  public   owner.3. In the event that the terms of payment on a public works project as   provided in this section are pre-empted or superseded as a result of the   provisions  of any federal statute, regulation or rule applicable to the   project, the terms of this section shall not apply.4. Notwithstanding any other provision of this section or  other  law,   requirements  for the furnishing of a performance bond or a payment bond   may be dispensed with at the discretion of the head of the state  agency   or  corporation,  or  his  or  her designee, where the public owner is a   state agency or corporation  described  in  subdivision  one-a  of  this   section  and  the  aggregate  amount  of  the  contract awarded or to be   awarded is under fifty  thousand  dollars  and,  in  a  case  where  the   contract  is  not subject to the multiple contract award requirements of   section one hundred thirty-five of this article, such  requirements  may   be  dispensed  with  where  the  head of the state agency or corporation   finds it to be in the public interest and where the aggregate amount  of   the  contract  awarded  or  to  be awarded is under two hundred thousand   dollars. Provided further, that in a case where a performance or payment   bond is dispensed with, twenty per centum  may  be  retained  from  each   progress  payment  or  estimate  until the entire contract work has been   completed and accepted, at which time the head of the  state  agency  or   corporation shall, pending the payment of the final estimate, pay not to   exceed seventy-five per centum of the amount of the retained percentage.