The state can't force a company to honor its affirmative action goals by withholding money from a contract, a state judge said recently in a lawsuit brought by a Niagara Falls-based company.
Court of Claims Judge Louis C. Benza has disallowed an attempt by the state Thruway Authority to withhold money from Sevenson Environmental Services Inc.
The Thruway Authority had refused to pay $88,372.45 because it claimed the Niagara Falls firm did not make a "good faith" effort to hire minority-owned companies as subcontractors.
Six years ago, Sevenson Environmental won a $6.1 million contract for work associated with the refurbishing of the Grand Island bridges. A clause in the agreement stipulated that the company try to hire women and minority-owned firms to perform some of the work.
After the project was completed, the Thruway Authority determined that Sevenson Environmental had failed to meet these minority-subcontracting goals and deducted money from the contract's price. The Niagara Falls business subsequently sued to recover the lost revenue.
Judge Benza ordered the Thruway Authority to pay the withheld amount because provisions of its affirmative action policy don't allow for such penalties.
A Thruway Authority spokeswoman said the state agency had no choice but to withhold money because it didn't discover Sevenson Environmental's breach of the affirmative action provision until after the project was completed.
This isn't the first time Sevenson Environmental has failed to meet the state's affirmative action guidelines. In 1988, the Department of Environmental Conservation withheld a $1.8 million payment on a $12.3 million contract for remedial work at Love Canal.