2023 New York Laws › HAY - Highway › Article 3 - State Highways › 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.