§ 139-F — Payment on public work projects

§ 139-f. Payment on public work projects. Notwithstanding the\nprovisions of any other law to the contrary, except the provisions of\nsection thirty-eight of the highway law, all contracts made and awarded\nby the state, or by any public department, or by any public benefit\ncorporation or by any public corporation or official thereof, hereafter\nreferred to as the public owner, for construction, reconstruction or\nalteration of any public work project shall provide for payment by the\npublic owner to the contractor and payment by the contractor to the\nsubcontractor in accordance with the following:\n 1. Payment by public owners to contractors. The contractor shall\nperiodically, in accordance with the terms of the contract, submit to\nthe public owner and/or his agent a requisition for a progress payment\nfor the work performed and/or materials furnished to the date of the\nrequisition, less any amount previously paid to the contractor. The\npublic owner shall in accordance with the terms of the contract approve\nand promptly pay the requisition for the progress payment less an amount\nnecessary to satisfy any claims, liens or judgments against the\ncontractor which have not been suitably discharged and less any retained\namount as hereafter described. The public owner shall retain not more\nthan five per centum of each progress payment to the contractor except\nthat the public owner may retain in excess of five per centum but not\nmore than ten per centum of each progress payment to the contractor\nprovided that there are no requirements by the public owner for the\ncontractor to provide a performance bond and a labor and material bond\nboth in the full amount of the contract. The public owner shall pay,\nupon requisition from the contractor, for materials pertinent to the\nproject which have been delivered to the site or off-site by the\ncontractor and/or subcontractor and suitably stored and secured as\nrequired by the public owner and the contractor provided, the public\nowner may limit such payment to materials in short and/or critical\nsupply and materials specially fabricated for the project each as\ndefined in the contract. When the work or major portions thereof as\ncontemplated by the terms of the contract are substantially completed,\nthe contractor shall submit to the public owner and/or his agent a\nrequisition for payment of the remaining amount of the contract balance.\nUpon receipt of such requisition the public owner shall approve and\npromptly pay the remaining amount of the contract balance less two times\nthe value of any remaining items to be completed and an amount necessary\nto satisfy any claims, liens or judgments against the contractor which\nhave not been suitably discharged. As the remaining items of work are\nsatisfactorily completed or corrected, the public owner shall promptly\npay, upon receipt of a requisition, for these remaining items less an\namount necessary to satisfy any claims, liens or judgments against the\ncontractor which have not been suitably discharged. Any claims, liens\nand judgments referred to in this section shall pertain to the project\nand shall be filed in accordance with the terms of the applicable\ncontract and/or applicable laws.\n 1-a. Not later than forty-five business days after the date when the\nproject has reached substantial completion, as such term is defined in\nthe contract or as it is contemplated by the terms of the contract, the\npublic owner shall submit to the contractor a written list describing\nall remaining items to be completed by the contractor. Not later than\nfive business days after receiving a written list describing all\nremaining items to be completed by the contractor, the contractor shall\nsubmit to each subcontractor from whom the contractor is withholding\nretainage a written list of all remaining items required to be completed\nby the subcontractor. Such list may include items in addition to those\nitems on the public owner's list.\n 1-b. Notwithstanding any other provision of this section to the\ncontrary, payment of the moneys due under a contract awarded (i) by a\nstate agency as defined in article eleven-A of this chapter or (ii) by a\ncorporation as defined in subdivision one of section twenty-eight\nhundred eighty of the public authorities law which is subject to the\nprovision of this section shall be made in accordance with the\nprovisions of such article eleven-A, in the case of such state agencies,\nor such section twenty-eight hundred eighty, in the case of such\ncorporations, provided failure to make such payment, as heretofore\nprescribed, shall not be due to any fault, neglect, or omission on the\npart of the contractor or by reason of the filing of any lien,\nattachment, or other legal process against the money due such\ncontractor.\n 2. Payment by contractors to subcontractors. Within seven calendar\ndays of the receipt of any payment from the public owner, the contractor\nshall pay each of his subcontractors and materialmen the proceeds from\nthe payment representing the value of the work performed and/or\nmaterials furnished by the subcontractor and/or materialman and\nreflecting the percentage of the subcontractor's work completed or the\nmaterialman's material supplied in the requisition approved by the owner\nand based upon the actual value of the subcontract or purchase order\nless an amount necessary to satisfy any claims, liens or judgments\nagainst the subcontractor or materialman which have not been suitably\ndischarged and less any retained amount as hereafter described. Failure\nby the contractor to pay any subcontractor or materialman within seven\ncalendar days of the receipt of any payment from the public owner shall\nresult in the commencement and accrual of interest on amounts due to\nsuch subcontractor or materialman for the period beginning on the day\nimmediately following the expiration of such seven calendar day period\nand ending on the date on which payment is made by the contractor to\nsuch subcontractor or materialman. Such interest payment shall be the\nsole responsibility of the contractor, and shall be paid at the rate of\ninterest in effect on the date payment is made by the contractor.\nNotwithstanding any other provision of law to the contrary, interest\nshall be computed at the rate established in paragraph (b) of\nsubdivision one of section seven hundred fifty-six-b of the general\nbusiness law. The contractor shall retain not more than five per centum\nof each payment to the subcontractor and/or materialman except that the\ncontractor may retain in excess of five per centum but not more than ten\nper centum of each payment to the subcontractor provided that prior to\nentering into a subcontract with the contractor, the subcontractor is\nunable or unwilling to provide a performance bond and a labor and\nmaterial bond, both in the full amount of the subcontract, at the\nrequest of the contractor. However, the contractor shall retain nothing\nfrom those payments representing proceeds owed the subcontractor and/or\nmaterialman from the public owner's payments to the contractor for the\nremaining amounts of the contract balance as provided in subdivision one\nof this section. If the contractor has failed to submit a requisition\nfor payment of the remaining amounts of the contract balance within\nninety days of substantial completion as provided in subdivision one of\nthis section, then any clause in the subcontract between the contractor\nand the subcontractor or materialman which states that payment by the\ncontractor to such subcontractor or materialman is contingent upon\npayment by the owner to the contractor shall be deemed invalid. Within\nseven calendar days of the receipt of payment from the contractor, the\nsubcontractor and/or materialman shall pay each of his subcontractors\nand materialmen in the same manner as the contractor has paid the\nsubcontractor, including interest as herein provided above. Nothing\nprovided herein shall create any obligation on the part of the public\nowner to pay or to see to the payment of any moneys to any subcontractor\nor materialman from any contractor nor shall anything provided herein\nserve to create any relationship in contract or otherwise, implied or\nexpressed, between the subcontractor or materialman and the public\nowner.\n 3. In the event that the terms of payment on a public works project as\nprovided in this section are pre-empted or superseded as a result of the\nprovisions of any federal statute, regulation or rule applicable to the\nproject, the terms of this section shall not apply.\n 4. Notwithstanding any other provision of this section or other law,\nrequirements for the furnishing of a performance bond or a payment bond\nmay be dispensed with at the discretion of the head of the state agency\nor corporation, or his or her designee, where the public owner is a\nstate agency or corporation described in subdivision one-a of this\nsection and the aggregate amount of the contract awarded or to be\nawarded is under fifty thousand dollars and, in a case where the\ncontract is not subject to the multiple contract award requirements of\nsection one hundred thirty-five of this article, such requirements may\nbe dispensed with where the head of the state agency or corporation\nfinds it to be in the public interest and where the aggregate amount of\nthe contract awarded or to be awarded is under two hundred thousand\ndollars. Provided further, that in a case where a performance or payment\nbond is dispensed with, twenty per centum may be retained from each\nprogress payment or estimate until the entire contract work has been\ncompleted and accepted, at which time the head of the state agency or\ncorporation shall, pending the payment of the final estimate, pay not to\nexceed seventy-five per centum of the amount of the retained percentage.\n