Substantial Completion Requisition, as per NYC STD Construction Contract + Procurement Policy Board NYC Agency directs to submit a Substanti...

Question

Substantial Completion Requisition, as per NYC STD Construction Contract + Procurement Policy Board

NYC Agency directs to submit a Substantial Completion Requisition.

This SC Requisition transmittal was postponed since June 2013, because the Agency's Auditor reduced a Contract Item Bid Price. Hence, complying + submitting SC Requisition will result in a deduction, almost 7-figure $ amount.

The matter was filed w/ Agency Commissioner, no response was issued. Now it sits at The Comptroller's.

Primary concern is: the Agency has threaten to default if this SC Requisition + 3 other required packages are not submitted.

Secondary concern is: this disputed $ amount is considered already as a DEFICIT / DEDUCTION, by the Agency; hence, this SC Requisition will withdrawal $ funds BACK OUT to The Agency.

Question 1: should SC Requisition package be submitted?

Question 2: what are steps be taken to prevent Default based on Article 54 Chapter X?

Answer

To give you a definitive answer, I would need to review the precise language of your contract, and know whether the city agency you're referring to is the New York City Housing Authority, the NYC Department of Design and Construction or the School Construction Authority.

However, June 2013 to April 2015 is a very long delay in submitting the substantial completion requisition, and you need to take measures to ensure that your claim is not extinguished. In particular, if the amount of the deduction is disputed, and you're concerned the city will not pay you the full amount you believe you are entitled to, you need to comply with the statutory notice of claim requirements and the notice of claim requirements in the contract. The statutory notice of claim requirements (Public Authorities Law 1744; Public Housing Law 157; General Municipal Law 50-e; NYC Admin. Code 7-201) will depend on which agency is involved.

If you fail to strictly comply with the notice of claim requirements, your claim could be extinguished, regardless of its substantive validity. If you would like to email me a complete copy of the contract, including any general conditions, special conditions, riders, etc., I would be happy to look it over and give you my thoughts after reviewing the applicable contract language. I am guessing it substantially conforms to this (http://www.buildingcongress.com/pdf/ConstructionContract2013December.pdf), in which case the commissioner has broad authority to complete any uncompleted punch list work and deduct the cost against your contract. However, if you follow the notice of claim requirements and other applicable contractual and statutory provisions, you still have a right to contest the amount of these deductions.

Given the amount in dispute, you should definitely seek the advice of an attorney to ensure that you are in compliance with all applicable contractual and statutory requirements to avoid having your claim be extinguished. I have almost exclusively represented contractors, construction managers and developers over the last seven years, often in relation to public works projects such as this, and I would be happy to give you my thoughts if you would like my input.