2016 -- S 2550 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- CONTRACTORS' BONDS

     

     Introduced By: Senator James E. Doyle

     Date Introduced: February 25, 2016

     Referred To: Senate Labor

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 37-12-10 of the General Laws in Chapter 37-12 entitled

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"Contractors' Bonds" is hereby amended to read as follows:

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     37-12-10. Retainers relating to contracts for public works, sewer, or water main

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construction. -- Retainers relating to contracts for public works. -- (a) Upon substantial

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completion of the work required by a contract aggregating in amount less than five hundred

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thousand dollars ($500,000) with any municipality, or any agency or political subdivision thereof,

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for the construction, reconstruction, alteration, remodeling, repair, or improvement of sewers and

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water mains, or any public works project defined in § 37-13-1, the awarding authority may deduct

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from its payment a retention to secure satisfactory performance of the contractual work not

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exceeding five percent (5%) of the contract price unless otherwise agreed to by the parties. Upon

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substantial completion of the work required by a contract aggregating in an amount of five

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hundred thousand dollars ($500,000) or greater with any municipality, or any agency or political

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subdivision thereof, for the construction, reconstruction, alteration, remodeling, repair, or

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improvement of sewers and water mains, or any public works project defined in § 37-13-1, the

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awarding authority may deduct from its payment a retention to secure satisfactory performance of

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the contractual work not exceeding five percent (5%) of the contract price. In the case of periodic

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payments with respect to contracts less than the aggregate amount of five hundred thousand

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dollars ($500,000), the awarding authority may deduct from its payment a retention to secure

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satisfactory performance of the contractual work not exceeding five percent (5%) of the approved

 

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amount of any periodic payment unless otherwise agreed to by the parties. In the case of periodic

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payments with respect to contracts in the aggregate amount of five hundred thousand dollars

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($500,000) or greater, the awarding authority may deduct from its payment a retention to secure

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satisfactory performance of the contractual work not exceeding five percent (5%) of the approved

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amount of any periodic payment.

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      (b) The retainage shall be paid to any contractor or subcontractor within ninety (90) days

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of the date the work is accepted by the awarding authority unless a dispute exists with respect to

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the work. If payment is not made within ninety (90) days for any reason other than a dispute,

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which, if resolved and it is not the fault of the contractor, interest shall be assessed at the rate of

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ten percent (10%) per annum on all money which is to be paid to the contractor or subcontractor.

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      (c) The retainage shall be paid to any contractor or subcontractor within ninety (90) days

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of the date his or her work is completed and accepted by the awarding authority. If payment is not

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made, interest shall be assessed at the rate of ten percent (10%) per annum.

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      (d) There shall also be deducted and retained from the contract price an additional sum

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sufficient to pay the estimated cost of municipal police traffic control on any public works

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project. Municipalities shall directly pay the officers working traffic details and shall bill and be

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reimbursed by the withholding authority for which the contract is being performed every thirty

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(30) days until the project is complete.

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      (e) Notwithstanding the foregoing, with respect to projects located within the town of

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Warren, the withholding authority shall hold an amount from the contract price which shall be

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reasonably sufficient to pay the estimated cost of municipal police traffic control. The

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withholding authority shall pay to the town of Warren within seventy-two (72) hours of written

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demand the actual costs of police traffic control associated with said project on an ongoing basis.

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     The state of Rhode Island, or any municipality or any agency or political subdivision

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thereof, for the construction, reconstruction, alteration, remodeling, repair, or improvement of any

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public works and/or sewers, water mains, or any public works project defined in §37-13-1, shall

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not withhold more than five percent (5%) as a retainer in relation to any construction contract.

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     (b) No general contractor or construction manager who has been awarded a contract by

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the state of Rhode Island, any municipality or any agency or political subdivision thereof, for the

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construction, reconstruction, alteration, remodeling, repair, or improvement of sewers and water

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mains, or any public works project defined in §37-13-1 shall withhold more than five percent

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(5%) from any subcontractors who perform work on any public works project as noted above.

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     (c) Upon substantial completion of any public works project as noted above, or the

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issuance of a permanent certificate of occupancy, whichever occurs first, any and all retainage as

 

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noted above shall be paid to the contractor or construction manager within fifty-five (55) days,

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except as to an amount sufficient to equal one hundred fifty percent (150%) times the value of

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any punch list as determined by the owner with respect to each project. The general contractor or

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the construction manager shall make final payment to each subcontractor within ten (10) days of

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receiving payment from the owner, less the withheld retainage of one hundred fifty percent

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(150%) of the value of the punch list not completed by the subcontractor. Upon satisfactory

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completion of the punch list, any and all monies withheld shall be paid to the general contractor

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or to the construction manager within fifty-five (55) days and the general contractor or

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construction manager shall pay the subcontractor within ten (10) days of receiving payment from

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the owner.

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     (d) Section 37-12-10 shall not apply to highway or heavy construction projects that are

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procured by either the Rhode Island Department of Transportation, a public corporation, a public

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agency or any city or town in Rhode Island.

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     (e) There shall also be deducted and retained from the contract price an additional sum

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sufficient to pay the estimated cost of municipal police traffic control on any public works

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project. Municipalities shall directly pay the officers working traffic details and shall bill and be

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reimbursed by the withholding authority for which the contract is being performed every thirty

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(30) days until the project is complete.

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     (f) Notwithstanding the foregoing, with respect to projects located within the town of

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Warren, the withholding authority shall hold an amount from the contract price which shall be

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reasonably sufficient to pay the estimated cost of municipal police traffic control. The

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withholding authority shall pay to the town of Warren within seventy-two (72) hours of written

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demand the actual costs of police traffic control associated with said project on an ongoing basis.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- CONTRACTORS' BONDS

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     This act would prohibit the state, general contractors, and construction managers from

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withholding more than five percent (5%) as a retainer with respect to any sewer, water main, or

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other public works construction contract.

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     This act would take effect upon passage.

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