Current through Register Vol. 30, No. 38, September 20, 2024
A. The following bonds or security is
required and is binding on the parties to the contract if the value of a
construction or construction services award exceeds the amount established by
R7-2-1002(A):
1. A performance bond that is executed and
furnished as required under Arizona Revised Statutes Title 34, Chapter 2,
Article 2 or Chapter 6, as applicable, in an amount equal to one hundred
percent of the price specified in the contract conditioned on the faithful
performance of the contract in accordance with the plans, specifications and
conditions of the contract, except that:
a.
For job-order-contracting construction services, the performance bond shall
cover the full amount of construction under the job-order-contracting
construction services contract, shall not include any design services,
pre-construction services, finance services, maintenance services, operations
services or other related services included in the contract, may be a single
bond for the full term of the contract, a separate bond for each year of a
multiyear contract or a separate bond for each job order, as determined by the
school district, and, if a single bond for the full term of the contract or a
separate bond for each year of a multiyear contract, shall initially be based
on the school district's reasonable estimate of the amount of construction that
the school district believes is likely to actually be done during the full term
of the contract or during the particular year of a multiyear contract, as
applicable.
b. For
construction-manager-at-risk construction services and design-build
construction services, the amount of the performance bond shall be the price of
construction and shall not include the cost of any design services,
preconstruction services, finance services, maintenance services, operations
services and other related services included in the contract. This bond is
solely for the protection of the school district. The conditions and provisions
of the performance bond regarding the surety's obligations shall follow the
form required under A.R.S. §
34-222(G)
or A.R.S. §
34-610(G),
as applicable.
c. For guaranteed
energy cost savings contracts and guaranteed energy production contracts, the
amount of the performance bond shall be one hundred percent of the project
amount to the school district for its faithful performance of the equipment
installment.
2. A
payment bond that is executed and furnished as required by Arizona Revised
Statutes Title 34, Chapter 2, Article 2 or Chapter 6, as applicable, in an
amount equal to one hundred percent of the price specified in the contract for
the protection of all persons supplying labor or material to the contractor or
its subcontractors for the performance of the construction provided for in the
contract, except that:
a. For
job-order-contracting construction services, the payment bond shall cover the
full amount of construction under the job-order-contracting construction
services contract, shall not include any design services, preconstruction
services, finance services, maintenance services, operations services or other
related services included in the contract, may be a single bond for the full
term of the contract, a separate bond for each year of a multiyear contract or
a separate bond for each job order, as determined by the school district, and,
if a single bond for the full term of the contract or a separate bond for each
year of a multiyear contract, shall initially be based on the school district's
reasonable estimate of the amount of construction that the school district
believes is likely to actually be done during the full term of the contract or
during the particular year of a multiyear contract, as applicable.
b. For construction-manager-at-risk
construction services and design-build construction services, the amount of the
payment bond shall be the price of construction and shall not include the cost
of any design services, pre-construction services, finance services,
maintenance services, operations services or other related services included in
the contract. The conditions and provisions of the payment bond regarding the
surety's obligations shall follow the form required under A.R.S. §
34-222(F)
or A.R.S. §
34-610(F),
as applicable.
B. For design-bid-build construction, the
bonds prescribed in subsection (A) shall be provided on and at the same time as
execution of the construction contract. For construction-manager-at-risk,
design-build and job-order-contracting construction services, the bonds
prescribed in subsection (A) shall be provided only on and at the same time as
execution of a contract or contract modification that commits the contractor to
provide construction for a fixed price, guaranteed maximum price or other fixed
amount within a designated time frame.
C. If the prime contract or specifications
require any persons supplying labor or materials in the prosecution of the work
to furnish payment or performance bonds, these bonds shall be executed solely
by a surety company or companies holding a certificate of authority to transact
surety business in this state issued by the director of the Department of
Insurance pursuant to Arizona Revised Statutes Title 20, Chapter 2, Article 1.
Notwithstanding the provisions of any other statute, the bonds shall not be
executed by an individual surety or sureties, even if the requirements of
A.R.S. §
7-101
are satisfied.
D. If a contractor
fails to deliver the required performance bond or payment bond, the
contractor's bid shall be rejected, its bid security shall be enforced, and
award of the contract shall be made pursuant to Articles 10 and 11.
E. This Section shall not be construed to
limit the authority of the school district to require a performance bond or
other security in addition to those bonds or in circumstances other than
specified in subsection (A).
F. Any
person who furnishes labor or material to the contractor or its subcontractors
for the work provided in the contract, in respect of which a payment bond is
furnished under this Section, and who has not been paid in full within 90 days
from the date on which the last of the labor was performed or material was
supplied by the person for whom the claim is made has the right to sue on the
payment bond for any amount unpaid at the time the suit is instituted and to
prosecute the action for the amount due the person. However, any person who has
a contract with a subcontractor of the contractor, but no express or implied
contract with the contractor furnishing the payment bond, has a right of action
on the payment bond on giving the contractor, only, a written preliminary
20-day notice as provided for in A.R.S. §
33-992.01,
subsection (C)(1), (2), (3), and (4) and subsections (D), (E), and (H), and
upon giving written notice to the contractor within 90 days from the date on
which the last of the labor was performed or material was supplied by the
person for whom the claim is made. The person shall state in the notice the
amount claimed and the name of the party for whom the labor was performed or to
whom the material was supplied. The notice shall be personally served or sent
by registered mail, postage prepaid, in an envelope addressed to the contractor
at any place the contractor maintains an office or conducts business.
