Late last year, Governor Andrew Cuomo vetoed legislation to amend the state finance law (Senate Bill Number 6686) requiring every contract for design and construction of any public works to include a “damage for delay” clause. Such a clause would allow any contractor, subcontractor or supplier to seek costs from the public entity due to excusable delay, disruption, interference or inefficiencies in the performance of the contract as a result of the act or omission of the public entity.

In his disapproval memorandum, the governor noted that, while many public construction contracts contain “no damage for delay clauses,” which provide that a contractor will not be entitled to additional compensation or reimbursement for losses stemming from construction delays, certain exceptions have been recognized by the courts, such as delays arising from a public owner’s bad faith, interference, intentional abandonment, breach of contract or delays which were not contemplated, and that those exceptions give protection to contractors without the need for legislation. He stated: “Overturning well-settled law at this juncture would have the impact of increasing the liability to the public entities.”