N.Y. Canal Law § 32
The performance of every contract for the improvement, maintenance or repair of the canal system shall be under the supervision and control of the corporation, and it shall be its duty to see that every such contract is performed in accordance with the provisions of the contract and with the plans and specifications forming a part thereof. If the corporation shall determine that the work upon any contract for the improvement, maintenance or repair of the canal system is not being performed according to the contract or for the best interest of the state, including the corporation, the execution of the work by the contractor may be temporarily suspended by the corporation, who may then proceed with the work under its own direction in such manner as will accord with the contract specifications and be for the best interest of the state including the corporation,; or it may terminate the contractor's employment under the contract while it is in progress, and thereupon, proceed with the work, in affirmance of the contract, by contract negotiated or publicly let, by the use of its 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; or it may cancel the contract and readvertise and relet the work as provided in section thirty of this article. Any excess in the cost of completing the contract beyond the price for which it was originally awarded shall be charged to and paid by the contractor failing to perform the work or by such contractor's surety. Where the estimate for the completion of a cancelled contract is in excess of the balance of the amount originally set aside by the state including the corporation, to provide for the improvement, maintenance or repair of the canal system, or a part thereof, together with any amount otherwise provided, the corporation is authorized to set aside from any funds available for the improvement, maintenance or repair of the canal system, or a part thereof, an additional sum equal to such excess and to pay such excess in the first instance, pending recovery of excess cost from the defaulting contractor and surety, as provided in this section. Every contract for the improvement, maintenance or repair of the canal system, or a part thereof, shall reserve to the corporation the right to suspend or cancel the contract as above provided, and to complete the work thereunder by contract negotiated or publicly let or by the use of its own forces, or affirm the contract and thereupon to complete the work thereunder according to any of the methods above provided as the corporation may determine.
N.Y. Canal Law § 32