Bill > A4718

Introduced Session

This bill provides equitable relief to State contractors who have sustained unanticipated expenses due to price escalation for construction materials. The unforeseen emergency of unanticipated escalation in construction material prices has imposed substantial inequity upon State contractors awarded contracts after public bidding. Such inequity has threatened the ability of contractors to fulfill the contracts awarded to them. It is in the best interest of the State to provide equitable relief to those State contractors who have sustained damage from the unforeseen escalation of construction material prices. This bill allows for the terms and conditions for certain State contracts to be amended to adjust for the rising costs of construction materials. The contractors would be required to provide evidence, in writing, to the State Contract Manager for such contract establishing such increase in costs. The determination of the adjustment would be made by the director of the appropriate division in the Department of the Treasury and would be based upon the available evidence, including, but not limited to, an appropriate nationally recognized economic index published by the United States Department of Labor or another appropriate organization. The adjustments would be made in writing and agreed to by both parties and would not exceed five percent of the cost of acquisition of the materials determined as of the time of the awarding of such contract. The adjustments would apply only to contracts awarded by a contracting agency based upon bids submitted prior to April 1, 2020, but only for materials purchased or invoiced after March 1, 2020. This bill also authorizes the director to terminate or suspend for a part of its term any State contract award for the purchase of commodities upon written application for such termination or suspension by the vendor, where extraordinary and unforeseen general market conditions have caused increases in the vendor's costs for construction materials or other physical elements consisting of construction materials to be sold under the contract. The vendor would submit, in writing, evidence that as the direct and sole result of such increases during the term of the contract, which exceed five percent of the contractor's aggregate acquisition costs determined as of the time of the award, the contractor has incurred or will incur an actual net loss on such contract from the estimated sales made under the contract and the contractor would continue to incur such net losses unless the contract is suspended or terminated. The director would also be authorized to grant an increase or increases in the prices of the commodities specified by the contract, in amounts necessary to prevent further net losses to the contractor on such contract from deliveries to be made thereafter under the contract, as compensation for and not exceeding increases of the contractor's acquisition costs during the contract term. The adjustments would apply only for such contracts that cover materials which were purchased or invoiced after March 1, 2020. The provisions of this bill would expire on June 30, 2023.

AI Summary

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Verlina Reynolds-Jackson (D)*,  Sterley Stanley (D)*,  Anthony Verrelli (D)*, 

Introduced, Referred to Assembly State and Local Government Committee (on 10/11/2022)

Official Document