HOUSE AMENDED
PRIOR PRINTER'S NO. 797 PRINTER'S NO. 2608
No. 733 Session of 1989
INTRODUCED BY CORMAN, RHOADES, STOUT AND AFFLERBACH,
MARCH 21, 1989
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
NOVEMBER 14, 1990
AN ACT
1 Amending the act of December 20, 1967 (P.L.869, No.385),
2 entitled "An act establishing a uniform and mandatory system
3 governing the requirement of bonds to be furnished by
4 contractors in the prosecution of any public building, or
5 other public work or public improvement, including road work;
6 the rights and remedies of persons furnishing labor or
7 material in the prosecution of such public building, public
8 work or public improvement, including road work; procedure in
9 connection with suits on payment bonds; rights of persons
10 furnishing labor or materials to a copy of bond; prescribing
11 penalties; and repealing other prior acts or provisions
12 thereof inconsistent herewith," providing for financial
13 security to protect certain contracting bodies.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The act of December 20, 1967 (P.L.869, No.385),
17 known as the Public Works Contractors' Bond Law of 1967, is
18 amended by adding a section to read:
19 Section 3.1. (a)--Before any contract exceeding five
20 thousand dollars ($5,000) for the construction, reconstruction,
21 alteration or repair of any public building or other public work
22 or public improvement, including highway work, of any
1 contracting body is awarded to any prime contractor, such
2 contractor shall furnish to the contracting body the following
3 financial security, which shall become binding upon the awarding
4 of said contract to such contractor:
5 (1) Any financial security, acceptable to and approved by
6 the contracting body, including, but not limited to, Federal or
7 Commonwealth chartered lending institution irrevocable letters
8 of credit and restrictive or escrow accounts in such lending
9 institutions, equal to one hundred percent of the contract
10 amount, conditioned upon the faithful performance of the
11 contract in accordance with the plans, specifications and
12 conditions of the contract. Such financial security shall be
13 solely for the protection of the contracting body which awarded
14 the contract.
15 (2) Any financial security, acceptable to and approved by
16 the contracting body, including, but not limited to, Federal or
17 Commonwealth chartered lending institution irrevocable letters
18 of credit and restrictive or escrow accounts in such lending
19 institutions, equal to one hundred percent of the contract
20 amount. Such financial security shall be solely for the
21 protection of claimants supplying labor or materials to the
22 prime contractor to whom the contract was awarded, or to any of
23 his subcontractors, in the prosecution of the work provided for
24 in such contract, and shall be conditioned for the prompt
25 payment of all such material furnished or labor supplied or
26 performed in the prosecution of the work. "Labor or materials"
27 shall include public utility services and reasonable rentals of
28 equipment, but only for periods when the equipment rented is
29 actually used at the site.
30 (b) Any bond or other financial security under the
19890S0733B2608 - 2 -
1 provisions of this act shall be executed by one or more surety
2 companies or Federal or Commonwealth chartered lending
3 institutions, chosen by the party posting the financial security
4 and acceptable to the contracting body, legally authorized to do
5 business in the Commonwealth of Pennsylvania.
6 (c) A duplicate copy of each financial security, including
7 bonds, shall be filed in the office of the contracting body
8 which awarded the contract for which such bonds or financial
9 security were given.
10 (d) For purposes of this section, the phrase "contracting
11 body" shall mean any COUNTY, SCHOOL DISTRICT, INTERMEDIATE UNIT, <--
12 AREA VOCATIONAL-TECHNICAL SCHOOL, city, borough, incorporated
13 town, township home-rule municipality and any authority formed
14 under the act of May 2, 1945 (P.L.382, No.164), known as the
15 "Municipality Authorities Act of 1945."
16 (e) For the contracting body as defined in subsection (d),
17 the provisions of this section supersede the provisions of
18 section 3 of this act.
19 Section 2. This act shall take effect in 60 days.
B9L62JAM/19890S0733B2608 - 3 -