Statement from Acting Commissioner Gee Regarding the State Comptroller's Recommendation

NYSDOT Had Previously Begun the Process of Terminating the Contract in Question Through a Method That Will Save Taxpayer Money

by New York State Department of Transportation

ALBANY, NY (02/04/2010)(readMedia)-- Today, the Comptroller issued a statement calling for the New York State Department of Transportation (NYSDOT) to terminate a contract with a recently debarred company, Steed General Contractors, Inc. In fact, several days ago, before the Comptroller weighed in, NYSDOT had already begun the process of terminating this contract based on the company's inability to perform.

We are pleased that the Comptroller agrees with our prior decision to terminate this company, but, in the interest of protecting the State's money, the Department is following a more fiscally sound method of termination to assure that the job be done at the original bid price.

Here's how this is assured.

NYSDOT requires that all construction contractors provide a surety bond, which is a form of insurance, to guarantee completion of the project at the price bid by a contractor, should the contractor be unable to perform. The bond assures the State that, regardless of whether or not a contractor is able to perform the work, NYSDOT will still pay at the original low bid price, when a new contractor is called in to do the work. It also means we can save the time and money associated with starting the entire bidding process over again.

Had this contractor been terminated for "convenience," which is what Comptroller recommended, rather than for "cause," which is the action NYSDOT had already begun, the State would have been exposed to the possibility of paying more for the project, and for money spent on the project to date.

Through its comprehensive contracting requirements, NYSDOT assures that the State is protected in the event that a contractor is unable or unwilling to perform the work it promised to do. That protection will kick in here, as we will shortly call upon the surety to complete this contractor's work at no additional cost to the State and ultimately to taxpayers.

In other words, NYSDOT's safeguards are saving the State time and money, while assuring that responsible bidders do our construction work.

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