SECTION OVERVIEW AND POLICIES

This section outlines the process Business Units should follow to pay contract assignees and sureties.

Business Units are responsible for informing the Office of the State Comptroller (OSC) of all contract assignments and sureties.

Policies

• State Finance Law, Article 7, Section 112 states the State Comptroller must approve (i) Office of General Services contracts exceeding eighty-five thousand dollars in value, and (ii) any other Business Unit contracts exceeding fifty thousand dollars in value, before such contracts shall be executed or become effective.
• State Finance Law, Article 9, Section 138 prohibits contractors from assigning, transferring, conveying or sub-letting contracts without previously receiving consent from contract Business Unit officials.
• State Finance Law, Article 11, Section 163 requires Business Units to conduct formal competitive procurements to the maximum extent practicable.
• Lien Law, Article 2, Section 16 requires contractors to file contract assignments with the originating Business Unit and the State Comptroller within 20 days of the date of assignment.
• Highway Law, Article 3, Section 40 states the Commissioner of Transportation may terminate the contractor’s employment under the contract while the contract is in progress, and thereupon, proceed with the work, in affirmance of the contract, by contract negotiated or publicly let, by the use of his own forces, by calling upon the surety to complete the work in accordance with the plans and specifications, or by a combination of any such methods.

Process and Document Preparation:

The remainder of this section explains the processes Business Units must follow when making payments to contract assignees and sureties once the assignments become effective. Please see Chapter XI, Section 12.B - Contract Assignments and Chapter XI, Section 12.C - Surety Takeovers for the contractual processes related to contract assignments and surety takeovers, respectively.

Contract Assignments

The Business Unit will use the new contractor’s Vendor ID and the new Contract and Purchase Order Numbers for contract assignments. After the assignment and new contract become effective, the Business Unit will process all future contract payments to the assignee under the new contract number.

Please see Chapter XI, Section 12.B - Contract Assignments to review how Business Units should handle outstanding liabilities to the original contractor (assignor).

Surety Takeovers

Under a surety takeover, the existing Vendor ID, Contract Number and Purchase Order number will remain the same. Business Units must process the payment as a regular voucher. OSC will handle Surety Takeovers in a similar manner as liens against funds processed from a joint custody account. For more information on these liens, please refer to Section 9.C - Reissuing or Cancelling a Vendor Check of this Chapter.

After surety takeovers become effective, Business Units must continue make payments to the original contracted vendor. OSC will ensure the appropriate contractor is paid.

QUESTIONS

If you have questions regarding this section, please contact:

For NYS Vendor File Questions:

NYS Office of the State Comptroller
Bureau of State Expenditures – Vendor Management Unit
[email protected]

For Contract Assignment and Surety Takeover Questions:

NYS Office of the State Comptroller
Bureau of Contracts
110 State Street – 11th Floor
Albany, NY 12236
(518) 474-6494

Guide to Financial Operations

REV. 03/19/2012