Subcontractors news April 2015
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Bringing New York’s Union Subcontractors Together to Build a Stronger Construction Industry IN THIS ISSUE
2 President’s Message By Robert J. Ansbro 3 Update On the Pacific
Park Project By Arthur Rubinstein
4 For Construction Safety, There is No Time Like the Present By Hank Kita
April 2015
Updates on the Pacific Park Project
6 BTEA Announces New Program By Louis J. Coletti 8 STA Holds First General
Membership Meeting By Samantha Sweeney
12 STA’s 46th Annual
Construction Awards Dinner to be held on May 9 By Samantha Sweeney
14 Association of Master Painters and Decorators Announce 2015 Officers and Directors
16 Can a Subcontractor Sue an Owner Directly? By Henry L. Goldberg 20 The Legal and Financial Consequences of Moving to a More Contractor Friendly No-DamageFor-Delay Clause By Adam J. Paterno, Esq. and Carl Oliveri, C.P.A.
27 STA is Moving Offices! & New Members!
If you would like to receive a hard copy of Subcontractors News in the mail each month, please email your full mailing address to ssweeney@stanyc.com with the subject line “Subcontractors News Hard Copy Request”
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STA STA Subcontractors Subcontractors News News
President’s Message April 2015
I would like to thank our members who have supported the upcoming Annual Awards Dinner on Saturday, May 9 at the Glen Island Harbor Club. The event is coming up quickly, and proving to be a success, thanks in large part to your efforts. We look forward to seeing you. As we quickly approach the month of May, we near Construction Safety Week, a time when our industry recognizes the importance of raising awareness for the need for protocols to prevent onsite accidents. I encourage STA members to participate in the upcoming OSHA-sponsored National Fall Prevention Stand-Down between May 4 and May 15 this year. This initiative is targeted to achieving their goal of reaching over 3 million workers in the United States. We can participate by discussing safety precautions, developing rescue plans and more. A recent development has surfaced on the Pacific Park Project in Brooklyn concerning the STA. I would like to remind our members that there are no lien rights for this project, which is a private improvement on public land and that a “completion guarantee” is in effect for this project. The BTEA announced a new program to increase contract opportunities for minority and women-owned enterprises. This will provide resources to its MWBE members in hopes to boost participation. Both the City and State governments have set high standards and new goals for MWBEs to maximize and encourage them to engage them more in our industry. The STA is excited to share that we are moving offices! We will be co-locating with the BTEA at our new address: Subcontractors Trade Association 1430 Broadway, Suite 1106 New York, NY 10018 We are also proud to welcome two new members to our association: Kelly Masonry Corporation and Gem Roofing & Waterproofing Corporation! We look forward to welcoming them to the STA.
Sincerely, Robert J. Ansbro
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April 2015
Update On the Pacific Park Project (Atlantic Yards) By Arthur Rubinstein, STA Legislative Committee Chairman
Residential buildings are currently out for bid at Pacific
the developer Forest City Ratner, which we are advised
Park Brooklyn. This project was formerly known as
owns 30% of the partnership. The 70% majority
Atlantic Yards.
partner is Greenland, a Chinese-based multinational entity which we are told has other projects and assets
The Subcontractors Trade Association (STA) wishes
in the United States.
to remind its members that there are no lien rights for this project, which is a private improvement on
The officials of the ESDC affiliate told the STA that
public land.
they believe that the completion guarantee is an “undertaking” which satisfies the requirement of the
As you may know, legislation was enacted in New
Lien Law. However, they stated that they do not have a
York State in 2004 which amended the Lien Law
written legal opinion in support of this position.
to require a private developer to post “a bond or other form of undertaking guaranteeing prompt
The STA has been advised that the legal definition
payment of moneys due to the contractor, his or
of an “undertaking” is a guarantee by a third party
her subcontractors and to all persons furnishing
and this “completion guarantee” by the developers
labor or materials to the contractor or his or her
themselves does not meet the Law’s requirements.
subcontractors in the prosecution of the work on the public improvement.” In fact, the STA and its state
There is a clear question here, and the STA wants
affiliate, the Empire State Subcontractors Association,
you to be aware of this issue, and to discuss this with
successfully sought this legislation.
your own attorney if you are considering bidding on this work.
In a recent conversation with officials of the Empire State Development Corporation’s (ESDC) affiliate in charge of this project, the Atlantic Yards Community Development Corporation, the STA was advised that a “completion guarantee” is in effect for this project. This is basically a corporate guarantee by the developers, Greenland Forest City Partners, and the parent companies of the partners. Many of you know
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STA Subcontractors News
For Construction Safety, There is No Time Like the Present By Hank Kita, STA Executive Director
As we approach the observance of Construction Safety
Fall prevention safety standards were among the top 10
Week in early May, it is time for contractors and their
most frequently cited OSHA standards during 2014.
employees to take stock of the need for safety vigilance at each and every construction worksite in New York City.
OSHA’s Stand Down last year proved to be an
The robust local construction market with the pressure
overwhelming success, reaching more than 1 million
to finish jobs quickly makes it all the more important
workers across the country. In 2015, OSHA’s goal is for
for management and labor alike to review their safety
more than 20,000 separate Stand Downs involving more
protocols and renew their commitment to safety.
than 3 million workers to take place from May 4 to 15, 2015. Reaching that goal, the Stand Downs would have
While education and awareness of construction-related
included almost 4 of every 10 construction workers
safety practices have never been stronger, construction
throughout the United States.
sites remain as dangerous as ever. 2015 has already proven to be a very deadly year for the New York City
STA contractors can conduct a Safety Stand-Down by
construction industry. So far, there have been at least
taking the time to have a toolbox talk or other related
eight deaths at construction sites compared to eight in
activities such as conducting safety equipment inspections,
all of 2014. If this trend continues, we may be looking at
developing rescue plans, or discussing job specific hazards.
the deadliest year for the local construction industry over
Contractors are urged to plan a stand-down that works
the past decade. Construction accidents have increased
best for their specific workplace. Contractors will be able
by more than 50 percent since 2008 with 231 accidents in
to provide information and feedback about their Stand-
2014 compared to 151 in 2008.
Down and download a Certificate of Participation signed by United States Secretary of Labor Thomas E. Perez
It is time for contractors to become even more
following the Stand-Down.
vigilant about safety at their worksites. One way to raise awareness is the OSHA-sponsored National Fall
I urge the subcontractor members of the STA to mark
Prevention Stand-Down scheduled to be held between
Safety Week by participating in the OSHA Stand-Down
May 4 and 15, 2015. Its purpose is to raise awareness of
initiative. There is no time like the present to renew your
preventing fall hazards in construction. Fatalities caused
commitment to safety and your commitment to returning
by falls from elevation continue to be a leading cause of
your workers safely home to their families after each and
death for construction workers, accounting for 279 of
every workday!
806 construction deaths recorded nationally since 2012.
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STA Subcontractors News
BTEA Announces New Program to Increase Contract Opportunities for Minority and Women-Owned Businesses By Louis J. Coletti, President & CEO of the BTEA
The BTEA has created a new program to increase access
New York’s political leaders have set ambitious goals
to contracts for its MWBE members, and for the whole
for the participation of minority and women-owned
construction industry. The “Access to Construction
business. Governor Andrew Cuomo has set a 30%
Contracts
provide
MWBE goal for state contracting. In New York City,
resources to minority and women-owned contractors
Mayor Bill de Blasio’s administration currently set
and increase their participation in the marketplace
its goal for the participation of MWBE companies
Today”
(ACCT)
program
will
at 37% of all contracts. This new program will help The BTEA’s MWBE Leadership Council is led by Co-
contractors striving to meet the ambitious goals for
Chairs Stephanie Burns of Turner Construction,
the participation of minority and women owned
Christine Donaldson-Boccia of JD Traditional Interiors,
business.
Linda Christenson-Sjogren of Lend Lease, and Paul Viera of IDL Communications and Electric Inc. The
Our new program will make accessing contracting
Council includes BTEA prime contractors and MWBE
opportunities better for both MWBE firms looking for
firms who will oversee each of these new initiatives.
work, and the prime contractors looking to engage
Charles Williams of Peckar & Abramson will serve as
them, by streamlining the pre-qualification forms,
General Counsel to the new leadership group.
increasing the opportunities for interaction between them, and providing data about who can do what jobs.
As part of the program, the BTEA created a 35-member
This database of certified firms will include volume of
MWBE Leadership Council that will: 1) oversee the
work and largest contract performed. This will expand
creation of a uniformed pre-qualification form for
efforts in determining the size and scope of contracts
all BTEA contractors; 2) create a database of certified
to maximize MWBE participation.
MWBE contractors that include each company’s volume of work and largest contract performed; 3)
The BTEA held its first technical assistance session
hold networking events and educational programs
with MWBE contractors in partnership with the New
for MWBE firms, and 4) provide support through
York City Department of Small Business Services on
the creation of a Project Labor Agreement Hotline.
April 29, 2015.
Specifically, the Hotline will help users understand the terms and conditions of the PLA’s and provide MWBE firms free assistance and guidance for those awarded NYC and NYS contracts under the PLA’s.
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STASubcontractors SubcontractorsNews News STA
STA Holds First General Membership Meeting of 2015 with Public Agency Officials By Samantha Sweeney, STA
The STA held its first General Membership Meeting of
(SCA) Five-Year Capital Plan for 2015-2019. In 2010-
2015 on Wednesday, March 25th. The seminar, which
2014, the SCA invested $11.2 billion, and plan on raising
took place in the morning at the Steelcase Worklife
that number to $12.8 billion in their 6th Five-Year Plan.
Center in Manhattan’s Columbus Circle, featured
Making up that number are the Capacity Program with
the heads of various New York City public agencies
$4.4 billion, the Capital Investments Program with $4.9
including
Commissioner
billion and the Mandated Program with $3.5 billion.
at the New York City Department of Design and
Mr. Toma reported that within that $12 billion, the SCA
Construction,
of
plans on spending $210 million for the creation of 2,100
Construction Management and Operations at the
new Pre-K seats and $310 million for the reconstruction
New York City School Construction Authority, Vincent
of existing buildings that currently hold approximately
Sapienza, Deputy Commissioner for Design and
3,100 Pre-K seats. That $12 billion will also fund the
Construction at the New York City Department of
removal of all transportation classroom units and will
Environmental Protection, and Stephen Plate, Deputy
ensure that all middle school students have access to
Chief of Capital Planning and Director of World Trade
science labs and facilities.
Andrea
Glick,
George
Deputy
Toma,
Vice
President
Center Construction at the Port Authority of New York and New Jersey. The seminar was moderated by
The SCA New Capacity Program includes an estimated 58
Henry Goldberg, Managing Partner at Goldberg and
new buildings, 53 which are PS and PS/IS schools that will
Connolly and STA Legal Counsel.
hold over 28,000 new seats in all five boroughs of New York City, and four IS/HS schools with over 3,000 seats.
The panelists made presentations on their respective agency’s Capital Plans and answered questions
Their Capital Investment Plan includes building
from both Mr. Goldberg and the audience, which
systems (exterior, interior and site improvements),
consisted of over 70 construction professionals
transportable classroom unit removals and athletic
from subcontractors, insurance companies, general
field upgrades. School enhancements will be allocated
contractors, and other New York City public agencies
$1.6 billion for reconstruction, safety upgrades, middle
and associations.
school science lab upgrades, accessibility, physical fitness, library, and auditorium upgrades, bathroom
Mr. Toma presented the School Construction Authority’s
upgrades and technology infrastructures. continued on page 10
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10 10
STASubcontractors SubcontractorsNews News STA
continued from page 8 Mandated Programs will spend an estimated $3.5
contractors will be among those subcontractor
billion on PCD lighting replacements ($480 million),
companies mainly required for this project.
boiler conversions ($750 million), wrap up insurance ($650 million) and prior plan completion of 5th plan
The DDC PowerPoint presentation with detailed
projects ($650 million).
figures and more information can be found on the STA website. Please click here for DDC’s direct website. Ms.
Mr. Toma also shared numerous opportunities for
Glick can be contacted at DDC at 718-391-2884 and Mr.
subcontractors that can be found on the SCA website
Goddard can be contacted at 718-391-2838 with any
for
questions or comments.
bid
opportunities
and
for
prequalification
information. Contractors can find more information on qualification by calling the qualification hotline
Mr. Plate, who is the Deputy Chief of Capital Planning
at 718-472-8777 or by contacting Barbara Gavasto,
and the Director of World Trade Center Construction
Director of Operations for Prequalification at 718-472-
at the Port Authority of New York and New Jersey
8594. Mr. Toma’s entire SCA PowerPoint presentation
showed a powerful slideshow of pictures of the
can be downloaded on the STA website.
construction of One World Trade Center, and of the construction of the National September 11th Memorial
Deputy Commissioner Andrea Glick presented on the
and Museum, which features one of the largest man
Department of Design & Construction’s (NYC DDC)
made water features in the world. It has already
Capital Plan along with her colleague John Goddard,
become one of the most visited sites in New York
who is the agency’s Chief Contracting Officer.
City with over a million visitors in the year it has been opened. He also presented photos from the building
Ms. Glick and Mr. Goddard went through the eight
of the new Transportation Hub in lower Manhattan.
Pre-Qualified Lists (PQLs) of contractors for furnishing
One World Trade Center is the tallest building in
all labor, materials and equipment necessary to
the western hemisphere, standing at an astonishing
perform construction repair work for 1-4 family
height of 1,776 feet.
homes that were damaged or destroyed by Hurricane holding
Mr. Sapienza spoke about subcontractor opportunities
contracts with DDC for its “Build it Back” project
and different construction plans forthcoming at the
will be required to procure all construction contracts
Department of Environmental Protection (DEP).
Sandy.
Construction
management
firms
from these prequalified lists. By establishing a PQL, subcontractors will have shorter contract procurement
The STA would like to thank all those who attended and
times and their bids will be the only ones received by
participated in the March 25th General Membership
DDC and the construction managers.
Breakfast Meeting and for their continued support of the association. Please look out for information on
The DDC anticipates the areas of work in their
the next STA General Membership Meeting, which will
“Build it Back” program to be in structural repair,
take place on Wednesday, June 17th.
interior and exterior repair, utility service equipment and accessibility for eligible homeowners. General construction, electrical, plumbing and mechanical
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April 2015
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STA Subcontractors Subcontractors News News STA
STA’s 46th Annual Construction Awards Dinner to be held on May 9 By Samantha Sweeney, STA
With one week to go, the STA is looking forward to the
For the first time, the STA is offering a free year of
46th Annual Construction Awards Dinner on Saturday,
membership with the purchase of a platinum page
May 9th. The event will take place at Glen Island
advertisement in the 46th Annual Awards Journal
Harbour Club in New Rochelle, New York, where four
to those union subcontractors who are not currently
distinguished individuals in the construction industry
members. Please share this offer with any professional
will be honored for their contributions to New York
contacts and colleagues you may know who are not STA
City’s skyline.
members. As the association and its membership grow, so will its strength and representation within New York
The STA is also excited to announce that highly popular
City’s construction industry.
New York City and New Orleans based jazz ensemble, Ted Hefko’s New Orleans Band, will be providing the
To register for the event or to purchase an advertisement
entertainment and music that night.
in the journal, please contact Samantha Sweeney at the STA via email to ssweeney@stanyc.com or by calling the
On May 9th, the STA and the many guests who will
STA office at 212-398-6220.
be attending the awards ceremony will recognize four New York City construction professionals who
Click here for the full awards dinner invitation and
are highly respected and who have dedicated much
form.
of their lives to our industry including Milo E. Riverso of STV Group, Inc. who will be receiving the Michael Mazzucca Lifetime Achievement Award, David Worsley of Silverstein Properties who will be receiving the Silver Shovel Award, Scott DeMatteis of DeMatteis Organizations who will be receiving the Builder of the Year Award, and Weir Welding who will be presented with the Ronald Berger Subcontractor of the Year Award. The STA is very honored and humbled to posthumously recognize Mr. Charles J. Weir who led Weir Welding until his passing in January of this year.
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STA Subcontractors Subcontractors News News STA
Association of Master Painters and Decorators Announce their 2015 Officers and Directors
The Association of Master Painters and Decorators of New York City, who is a part of the Subcontractors Trade Association, have announced their Officers and Directors for the 2015 year. The results of an election held by the membership during a December 2014 meeting are as follows: 2015 Officers: • Rad Jelcic, President, R.A. Target • Dino Erbeli, First Vice President, Manhattan Painting Company • Todd Nugent, Second Vice President, T.F. Nugent, Inc. • Stuart Feld, Treasurer, Bond Painting • Peter Cafiero, Chairman of the Board of Directors, Island Painting 2015 Members of the Board of Directors: • Faisal Almahdi, Member, Newport Painting • Arnold Bell, Member, Roebell Painting Co. • John Caruso, Member, JTC Painting • Peter Culkin, Member, Sherry Hill Painting • Michael Giarraputo, Member, KP Organization, Inc. • John Gisondi, Member, Peter Gisondi & Co. • Jerry Haber, Member, W&W Glass System • Randy Pearlman, Member, Albert Pearlman • Gordon Roth, Alternate Member, Roth Painting • David Zack, Member, Zack Painting Co., Inc. • Michael Levine, Alternate Member, L&L Painting Co. • JoAnn Sanchez Miano, AlternateMember, Carabie Corp. • Peter Silverstein, Member, Herman Levin Dec. • David Stross, Member, Premium Painting For more information about the Association of Master Painters and Decorators of New York, visit www.masterpaintersny.com.
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STA STA Subcontractors Subcontractors News News
Can a Subcontractor Sue an Owner Directly? By: Henry L. Goldberg, Managing Partner, Goldberg & Connolly, STA Legal Counsel
It’s pretty basic . . . before you can sue for breach of
to its subcontract and to foreclose upon its mechanic’s
contract, there needs to be a contract.
liens.
Consistent with this, when a dispute arises, a
The defendant/owner moved to dismiss the complaint.
subcontractor, generally, may not sue a project’s owner
Subsequently, the lower court rendered a decision
directly for breach of contract because, typically, subs
agreeing with the general contractor, and dismissing
are not in “privity” of contract with project owners.
the subcontractor’s causes of action against the owner.
However, with the right set of unique circumstances,
The lower court reasoned that the subcontractor was
courts have “bridged” the owner-subcontractor
not party to the prime contract with the owner, and
privity gap to provide an alternate legal route from a
that the subject matter in dispute was solely governed
subcontractor directly to an owner.
by the subcontractor’s subcontract with the general contractor.
In a recent New York appellate court decision, this issue was confronted.
The Appellate Decision The appellate court reversed the lower court’s decision.
Underlying Facts
The court reasoned that generally, “a subcontractor
A subcontractor entered into a contract with a general
may not assert a cause of action to recover damages
contractor, pursuant to which the subcontractor
for breach of contract against a party with whom it
was to provide certain construction services in
is not in privity of contract.” Nevertheless, the court
connection with a condominium conversion project in
observed that “a subcontractor can sometimes state a
Brooklyn. The general contractor acted as the owner’s
cause of action alleging breach of contract, or unjust
construction manager.
enrichment against an owner where direct dealings between
the
owner
and
subcontractor
justify
Approximately one year later, the subcontractor
imposing an obligation on the owner, despite the lack
commenced an action against numerous parties,
of contractual privity between them.”
including the owner of the project. The subcontractor sought half a million dollars in damages for funds it
On appeal, the subcontractor successfully alleged
allegedly expended for labor and material pursuant
that its contract with the construction manager continued on page 18
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STASubcontractors SubcontractorsNews News STA
continued from page 16 was executed by the latter “as agent for the owner.” Additionally, the subcontractor submitted
Henry L. Goldberg may be reached at (516) 764-2800 or via email at hlgoldberg@goldbergconnolly.com
documentary evidence establishing that the owner, at times, directly paid the subcontractor. The court held that these facts provided proof that the owner “was the true principal and the real party in interest.”
Jeffrey I. Scott, an associate with Goldberg & Connolly, assisted in the preparation of this article. ©Goldberg & Connolly 2015
The appellate court held that the lower court should
This article has been prepared for informational purposes only.
not have dismissed the subcontractor’s action against
It is not a substitute for legal advice addressed to particular
the owner, and should have given the sub its day in
circumstances. You should not take or refrain from taking any
court. The plaintiff/subcontractor would, of course,
legal action based upon the information contained herein
still have to prove its case after its revival, but, significantly, it was not automatically precluded from proceeding directly against the owner.
without first seeking professional, individualized counsel based upon your own circumstances. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.
G&C Commentary One of the more venerable quotes in construction law is . . . “it ain’t necessarily so.” We keep this in mind, daily, as we seek to address client issues. This appellate court decision, yet again, demonstrates its validity. Misconceptions concerning construction law are rampant, and the operative facts in each situation are highly project specific and unique. It’s small wonder that innovative approaches often need to be called upon to find that loop-hole or strategy necessary to achieve victory. It is true that mechanic’s liens are another way to get a “hook” into an owner. However, they are merely security devices (although valuable ones), and do not result in an adjudication on the merits regarding liability or the amount of damages actually due. Similar to the rarity of a direct right of action by a subcontractor against an owner, there are often “other ways” to obtain what is rightfully yours.
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STASubcontractors SubcontractorsNews News STA
The Legal and Financial Consequences of Moving to a More Contractor Friendly No-Damage-For-Delay Clause By Adam J. Paterno, Esq. and Carl Oliveri, Grassi & Co., CPAs
According to the New York City Building Congress,
New York’s highest court affirmed the enforceability
Manhattan is poised to add roughly nine million
of no-damage-for-delay clauses in Corinna Civetta
square feet of new office space to its inventory
Constr. Corp. v. City of New York, but also outlined
between 2013 and 2015. If realized, this would be
certain exceptions to their use whereby a contractor
the highest volume of new office space added to New
would be permitted to recover damages. The four
York City over any three-year period since 1990. New
exceptions are: (1) delays that are uncontemplated
construction, plus renovations to older offices, will
at the time of contract; (2) delays so unreasonable
undoubtedly lead to increased activity in all facets
they amount to abandonment of the contract; (3)
of the New York metropolitan area’s construction
delays caused by breach of a fundamental obligation
industry. Since most projects encounter delays, in at
under the contract; and (4) delays due to bad faith,
least some form, a well-drafted construction contract
fraudulent misrepresentation or willful or grossly
that addresses delay damages is critical to keeping a
negligent conduct. 67 N.Y.2d, 502 N.Y.S.2d 681 (1986).
project on time and on budget.
In a separate case, New York’s highest court also made it clear that any type of clause that limit one’s liability
No-Damage for Delay Provision
for willful or grossly negligent acts is void under public
A no-damage-for-delay provision is one way to address
policy. Kalisch-Jarcho, Inc. v. City of New York., 58
delay damages. This type of provision excuses a party
N.Y.2d 377, 461 N.Y.S.2d 746 (1983).
to a construction contract from certain liabilities that it would otherwise incur in the event of a project
Since Corinna, New York courts have revisited the
delay. Owners often use no-damage-for-delay clauses
question of how narrowly these exceptions should be
to shield themselves from unexpected increased
interpreted several times. In Plato Gen. Constr. Corp. v.
costs that arise as a result of project delays. In return,
Dormitory Auth. of State of New York, a no-damage-
contractors also often include such clauses to protect
for-delay clause was difficult to defeat by invocation
themselves from similar exposure in their subcontracts.
of an exception. 89 A.D.3d 819, 932 N.Y.S.2d 504 (2d
Recently, the City of New York introduced a new no-
Dep’t 2011), app denied 19 N.Y.3d 803, 946 N.Y.S.2d
damage-for-delay clause in its standard construction
106 (2012). In Plato Gen. Constr. Corp., Plato (the
contract that makes it easier for contractors to claim
contractor) contracted to work on renovations at
delay damages.
the Brooklyn College Library for the Dormitory
continued on page 22
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April 2015
21
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STASubcontractors SubcontractorsNews News STA
continued from page 20 Authority of the State of New York (DASNY). Due to a
notable circumstances are:
number of owner and non-owner caused delays Plato
• extended delays caused by the City in reviewing
completed renovations on the library over 17 months
or issuing change orders, or in reviewing and
after the anticipated completion date. As a result,
approving shop drawings or delays resulting from
Plato, believing the delays were primarily caused by
the cumulative impact of multiple change orders,
the actions and inactions of DASNY, sued DASNY to
if such delays have a verifiable impact on Project
recover approximately $16 million in delay damages.
costs; • Extended site unavailability that significantly
Relying on the no-damage-for-delay clause, DASNY denied liability and counterclaimed for approximately
affects the scheduled completion of the Contract; • Differing
site
conditions
not
reasonably
$400,000 in liquidated damages measured from the
ascertainable on a pre-bid inspection of the Site
completion date to the date the library was turned
or review of the bid documents or other publicly
over, less a 115-day extension granted by DASNY
available sources and not ordinarily encountered
through the approval of change orders submitted
in the geographical area of the site or the type of
by Plato. On appeal, the Court held that Plato’s
work being performed; and
allegations regarding DASNY’s failure to properly schedule and coordinate the work amounted to
• Failure of the City to take reasonable measures to coordinate and progress the work.
poor planning and administration, which in and of itself would not defeat the enforceability of the no-
In doing so, the City incorporates more than just
damage-for-delay clause. The Court also held that
the four exceptions to enforcement of no-damage-
the project’s change-order requirements meant that
for-delay clauses enunciated in Corrino Civetta, a
the parties had contemplated delays at the time of
welcomed change for contractors.
contract and evidence of concurrent delays presented at trial further precluded recovery by Plato. The Court
Moving to a more contractor-friendly no-damage-
concluded that Plato was not entitled to an award of
for-delay
delay damages and awarded DASNY $179,000 on its
consequences for both parties. In the absence of an
counterclaim.
owner-friendly, stringent no-damage-for-delay clause,
clause
carries
a
number
of
financial
contractors will no longer have as great of a need Contractor Friendly No Damage for Delay Clause
to factor in contingencies for such costs, which may
Up until the end of last year, the City of New York’s
incentivize contractors to undertake projects in a more
standard construction contract also contained a
efficient manner. Alternatively, contracts that include
stringent no-damage-for-delay clause. However, the
clauses for shared savings, milestone awards and
City of New York and its various agencies are now using
other contract specific incentives, will better position
a new standard construction contract that contains a
contractors to proactively make timely decisions that
no-damage-for-delay clause that is more contractor-
lead to delivering projects on time and on budget.
friendly that provides for nine circumstances that entitle the contractor to delay costs. Some of the more
Moving away from an owner-friendly no-damage-
continued on page 24
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STASubcontractors SubcontractorsNews News STA
continued from page 22 for-delay clause may also lead to fewer illegitimate
As Manhattan enters another construction boom,
or frivolous claims by contractors, increasing the
the City’s move away from an owner-friendly no-
likelihood that those claims that are made will be
damage-for-delay could not have occurred at a better
legitimate, opening up dispute resolution resources
time. Overall, the authors of this article believe that
and allowing all parties to focus on assessing actual
the City’s move is a welcomed development for all
losses.
parties, but especially for contractors. As some private owners have already learned, allowing recovery for
As some private owners have already learned, using a
certain delay items is likely to lead to less litigation and
more contractor-friendly no-damage-for-delay clause
more equitable outcomes, leaving all parties better
carries benefits as well. First, there will be less initial
positioned to compete in an increasingly competitive
cash outlay by owners, enabling them to control and
marketplace.
monitor funds more closely. This will improve the bid process by lowering costs and allowing proposals to
About the Authors:
reflect true project costs. Another potential benefit
Carl Oliveri is a Partner and the Construction
to owners is that premium construction firms may
Practice Leader at Grassi & Co. Carl possesses over
be enticed to re-enter the market, giving owners an
15 years of experience working with clients in the
opportunity to work with name brand contractors and
Construction Industry, particularly with regards to
subcontractors as well as to build their resumes with
financial statement preparation (audit, reviews and
stronger contractors and higher profile projects.
compilations), income tax preparation, cash flow and operations forecasting as well as litigation and cost
From the external audit perspective, there are various
claim support with related negotiations. Carl can be
benefits from moving away from an owner-friendly
reached at coliveri@grassicpas.com.
no-damage-for-delay clause. When undertaking the cost confirmation process, there are usually instances
Adam J. Paterno is an Associate in Holland & Knight’s
whereby the owner and contractor may not agree
New York office practicing in the area of commercial
to an adjusted contract value, amount billed to date
litigation, with a concentration in construction law.
and corresponding receivable balances. In order to
In particular, Mr. Paterno has significant experience
reconcile these discrepancies, an outside auditor has
representing large academic, medical and commercial
to undertake a number of procedures that can be
institutions and advises clients on a wide array of
time consuming and a drain on the internal resources
public and private projects. Adam can be reached at
needed to obtain the proper documentation, resulting
adam.paterno@hklaw.com
in additional audit fees. Moving away from a stringent no damage-for-delay provision may make owners more inclined to respond to the cost confirmations and agree to the contractor’s figures. Lastly, taxpayers and other end-users may benefit from this move as the flow through cost to the public for infrastructure, private office, residential or any other project will likely be lower.
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April 2015
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STA Subcontractors News
ADVERTISEMENT
4 6 T H
A N N U A L
CONSTRUCTION AWARDS DINNER SATURDAY, MAY 9, 2015 7:00PM GLEN ISLAND HARBOUR CLUB Glen Island Park, New Rochelle, New York
CELEBRATE WITH US and Honor the Accomplishments of Our 2015 Industry Leaders THE SILVER SHOVEL AWARD DAVID WORSLEY Silverstein Properties
THE BUILDER OF THE YEAR AWARD SCOTT DEMATTEIS DeMatteis Construction Corp
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THE MICHAEL MAZZUCCA LIFETIME ACHIEVEMENT AWARD MILO E. RIVERSO STV Group, Inc. EVENT CONTACT Call Samantha Sweeney at 212.398.6220 or email her at ssweeney@stanyc.com.
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SPECIAL “THANK YOU” INCENTIVE For every $5,000 or more of solicited journal advertising or dinner reservations, you will receive a free dinner ticket.
SUPPORT OUR AWARDS JOURNAL The 46th Annual Construction Awards Dinner Journal will be exclusively offered electronically. Ads should be emailed to Samantha at ssweeney@stanyc.com. PLATINUM PAGE: $1,250 GOLD PAGE: $800 FULL COLOR: $600 Journal advertisement dimensions are 10” x 7.5”
FEATURED POSITION $2,750 Featured ads will be placed in preferred positions and run more frequently in the electronic journal. Feature advertisers will also have their logos positioned within the ad journal in addition to their advertisement.
JOURNAL DEADLINE IS MAY 6, 2015 Ads will be displayed on the evening of the dinner. The journal will also be available on the STA website following the event.
CLICK HERE FOR FULL INVITATION
April 2015
The STA is Moving Offices!
The STA will be moving offices as of May 1, 2015, and will be co-locating with the Building Trades Employers’ Association (BTEA). Please make note of the new address: 1430 Broadway, Suite 1106 New York, NY 10018 The STA’s phone numbers and emails will be staying the same: Phone: 212-398-6220 Fax: 212-398-6224 General Information Email: info@stanyc.com Please contact the STA with any questions.
27
STA Subcontractors News
New Members!
The Subcontractors Trade Association is proud to welcome its newest members, Kelly Masonry Corporation and Gem Roofing & Waterproofing Corporation. Kelly Masonry Corporation
Gem Roofing & Waterproofing Corp.
Masonry Contractors
Masonry Contractors
366 Sagamore Avenue
1414 Summit Avenue
Mineola, NY 11501
Union City, NJ 07087
516-739-8110
201-862-7673
ramassina@kellymasonry.net
tmergola@gemorg.com
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STA Subcontractors News
Subcontractors Trade Association 1430 Broadway Suite 1106 New York, NY 10018 T: 212.398.6220 F: 212.398.6224 e-mail: info@stanyc.com website: www.stanyc.com
Hank Kita Executive Director Subcontractors Trade Association Henry Goldberg Legal Counsel Goldberg & Connolly Active Past Presidents Greg S. Fricke, Jr. Leonard Powers, Inc.
Officers Robert J. Ansbro President The New York Roofing Company Robert Weiss 1st Vice President A.J. McNulty & Co. Inc.
John A. Finamore Treasurer Jordan Panel Systems Joseph Leo Secretary Atlantic Contracting & Specialties, LLC
Board of Directors Joseph Azara Jr. C.D.E. Air Conditioning Christine Boccia JD Traditional Industries Dan J. DeVita Penava Mechanical Corp.
Jerry Liss A. Liss & Co. Inc.
John Dierks Dierks Heating Company, Inc
Alan Nathanson (Honorary) Forsythe Plumbing & Heating Corp.
Andrew Drazic ATJ Electrical
Lawrence Roman WDF, Inc.
Peter Cafiero 2nd Vice President Island Painting
Scott Rives Woodworks Construction Co, Inc.
Brent Fleisher Environet Systems
Arthur Rubinstein Skyline Steel Corp.
James Flynn Independent Temperature Control
Robert Samela A.C. Associates
Patrick Gallagher BP Mechanical Corp.
Gary Segal (Honorary) Five Star Electric Corp.
Stephen Gianotti Arcadia Electrical Co., Inc.
Lawrence Weiss A.J. McNulty & Co., Inc.
Craig Gilston Gilston Electrical Contracting Gloria Kemper Recon Construction Corp. Randy Rifelli United Iron, Inc. Guy VandeVaarst Firecom Inc. John Villafane Eldor Electric Upcoming Events STA 46th Annual Construction Awards Dinner: Saturday, May 9, 7:00pm Annual STA General Membership Meeting Wednesday, June 17
O U R M I S S I O N S TAT E M E N T trengthen New York’s construction industry each member firms to increase business opportunities dvocate to preserve subcontractors’ rights
Sandra Milad Gibson Milad Contracting Corporation
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For more than 30 years, Grassi & Co.’s Construction Practice has been assisting contractors, engineers, suppliers and distributors minimize their tax liability, uncover potential savings, and build a successful future. Manhattan 212-661-6166
Long Island
516-256-3500
www.grassicpas.com