NYS Legislature Attempts to Clarify “Substantial Completion” in State Contracts
On Monday, June 14, 2021, Governor Cuomo signed into law NYS Senate Bill S880 (Assembly Bill A967), which amends § 139-f of the State Finance Law and § 106-b of the General Municipal Law, and revises the previous statutory language relating to the definition of “substantial completion” in connection with public construction projects and contracts.
If you contract with any New York State entities for construction services, this new bill impacts your projects.
Previously, these statutes contained a confusing, legislatively-created definition for “substantial completion” as “the state in the progress of the project when the work required by the contract with the public owner is sufficiently complete in accordance with the contract, so that the public owner may occupy or utilize the work for its intended use; provided further, that ‘substantial completion’ shall apply to the entire project or a portion of the entire project if the contract with the public owner provides for occupancy or use of a portion of the project.”
Under the newly signed legislation, which takes effect immediately, the legislature removed this bulky and confusing language and now defines “substantial completion” to mean “[w]hen the work or major portions thereof as contemplated by the terms of the contract are substantially completed.”
Pursuant to the justification for the bill, which was sponsored by Senator Neil Breslin (44th Dist.) and Assemblyperson Cusick (63rd Dist.), the Bill is meant to “allow for public contracts to be the defining authority on what constitutes substantial completion, by referring to substantial completion, as it appears within the terms of the contract.”
The legislation further amends the above-referenced statutes by revising the time allotted for contractors and subcontractors to complete punchlist tasks – or, “a written list describing all remaining items to be completed” – from “seven calendar” days to “five business” days. According to the Bill’s justification, this “technical change from seven calendar days to five business days, would provide essentially the same amount of time without contract deadlines falling on holidays or the weekends.”
Simplifying and clarifying this language ideally will allow “substantial completion” to be set forth in the original contract documents. Allowing both parties to be in agreement at the outset, and with the same understanding of timelines for project completion.
We are here to help answer specific questions and offer advice on your options. Feel free to contact any member of our Construction & Public Contracts attorneys.