2023 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.