2018 -- S 2513

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LC004931

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS

     

     Introduced By: Senator Frank S. Lombardi

     Date Introduced: March 01, 2018

     Referred To: Senate Finance

     (Administration)

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 37-12-1 and 37-12-10 of the General Laws in Chapter 37-12

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entitled "Contractors' Bonds" are hereby amended to read as follows:

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     37-12-1. Contractors required to give bond -- Terms and conditions.

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     Every person (which word for the purposes of this chapter shall include a copartnership, a

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number of persons engaged in a joint enterprise, or a corporation), before being awarded a

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contract by the department of transportation or by the department of administration, as the case

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may be, and every person awarded such a contract as a general contractor or construction or

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project manager for the construction, improvement, completion, or repair of any public road or

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portion thereof or of any bridge in which the contract price shall be in excess of fifty thousand

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dollars ($50,000) one hundred thousand dollars ($100,000), or for a contract for the construction,

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improvement, completion, or repair of any public building, or portion thereof, shall be required to

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furnish to the respective department a bond of that person to the state, with good and sufficient

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surety or sureties (hereafter in this chapter referred to as surety), acceptable to the respective

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department, in a sum not less than fifty percent (50%) and not more than one hundred percent

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(100%) of the contract price, conditioned that the contractor, principal in the bond, the person's

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executors, administrators, or successors, shall in all things, well and truly keep and perform the

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covenants, conditions, and agreements in the contract, and in any alterations thereof made as

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therein provided, on the person's part to be kept and performed, at the time and in the manner

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therein specified, and in all respects according to their true intent and meaning, and shall

 

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indemnify and save harmless the state, the respective department, and all of its officers, agents,

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and employees, as therein stipulated, and shall also promptly pay for all such labor performed or

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furnished, together with penalties assessed pursuant to § 37-13-14.1(b), and for all such materials

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and equipment furnished, (which, as to equipment, shall mean payment of the reasonable rental

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value, as determined by the respective department, of its use during the period of its use), as shall

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be used in the carrying on of the work covered by the contract, or shall see that they are promptly

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paid for, whether or not the labor is directly performed for or furnished to the contractor or is

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even directly performed upon the work covered by the contract, and whether or not the materials

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are furnished to the contractor or become component parts of the work, and whether or not the

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equipment is furnished to the contractor or even directly used upon the work. The bond shall

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contain the provisions that it is subject to all such rights and powers of the respective department

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and such other provisions as are set forth in the contract and the plans, specifications, and

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proposal incorporated by reference in the contract, and that no extension of the time of

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performance of the contract or delay in the completion of the work thereunder or any alterations

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thereof, made as therein provided, shall invalidate the bond or release the liability of the surety

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thereunder. Waiver of the bonding requirements of this section is expressly prohibited. In the sole

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discretion of the chief purchasing officer, the state may waive the bonding requirement for public

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works projects with a contract price of up to two hundred fifty thousand dollars ($250,000).

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Waiver of the bonding requirement for public works projects with a contract price in excess of

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two hundred fifty thousand dollars ($250,000) is expressly prohibited.

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

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construction.

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     (a) Upon substantial completion of the work required by a contract aggregating in amount

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less than five hundred thousand dollars ($500,000) with any municipality, or any agency or

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political 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 unless otherwise

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agreed to by the parties. Upon substantial completion of the work required by a contract

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aggregating in an amount of five hundred thousand dollars ($500,000) or greater with any

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municipality, or any agency or political subdivision thereof, for the construction, reconstruction,

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alteration, remodeling, repair, or improvement of sewers and water mains, or any public works

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project defined in § 37-13-1, the awarding authority may deduct from its payment a retention to

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

 

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contract price. In the case of periodic payments with respect to contracts less than the aggregate

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amount of five hundred thousand dollars ($500,000), the awarding authority may deduct from its

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payment a retention to secure satisfactory performance of the contractual work not exceeding five

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percent (5%) of the approved amount of any periodic payment unless otherwise agreed to by the

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parties. In the case of periodic payments with respect to contracts in the aggregate amount of five

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hundred thousand dollars ($500,000) or greater, the awarding authority may deduct from its

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payment a retention to secure satisfactory performance of the contractual work not exceeding five

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percent (5%) of the approved 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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     (f) The director of the department of administration shall establish, by rule and regulation

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adopted in accordance with chapter 35 of title 42, methods for the interim release of retainage.

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     SECTION 2. Section 42-11.1-3 of the General Laws in Chapter 42-11.1 entitled "Prompt

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Payment by Department of Administration" is hereby amended to read as follows:

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     42-11.1-3. Time period for payment.

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     (a) All bills shall be paid within thirty (30) working calendar days of receipt of a proper

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invoice or other contractual dates for periodic payments, except when a contractor has failed to

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submit a bill in accordance with contractually imposed time frames.

 

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     (b) Each contractor shall make payment to subcontractors within ten (10) five (5)

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calendar days of receipt of payment by the state; provided, however, that the contractor may

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setoff a payment due to a subcontractor by an amount equal to the amount of an unpaid legally

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enforceable debt owed by the subcontractor to the contractor or any amount which the contractor

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is entitled to withhold under the terms of the contract entered into by the contractor and

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subcontractor, or any amount owed by the subcontractor to the contractor by way of a statutory

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obligation, or enforceable lien, of which the contractor or subcontractor had previous knowledge

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or notice, or has reason to believe exists.

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     (c) Each subcontractor shall make payments to its lower tier subcontractors within five

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(5) calendar days of receipt of payment by the prime contractor.

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     (c)(d) This section shall not apply to contractors or subcontractors performing work

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pursuant to a contract awarded by the department of transportation unless the subcontractor

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provides a payment and performance bond in an amount equal to the contract between the

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contractor and subcontractor.

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     (e) The director of the department of administration shall adopt regulations in accordance

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with the administrative procedures act, chapter 35 of title 42, which are consistent with this

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chapter, and chapter 2 of title 37 (state purchases act), governing the prompt payment by

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contractors to subcontractors.

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     SECTION 3. 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

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     This act would authorize regulations for the interim release of retainage, raise the

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threshold amount required for a contractor bond from fifty thousand dollars ($50,000) to one

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hundred thousand dollars ($100,000), allow a waiver of bond in the discretion of the purchasing

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officer, for projects with a value of up to two hundred fifty thousand dollars ($250,000), reduce

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the required time for payment of contractors to thirty (30) calendar day, reduce the required time

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for payment from contractors to subcontractors to five (5) calendar days, and authorize

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regulations for prompt payment to subcontractors.

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     This act would take effect upon passage.

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