PRINTER'S NO. 1991
No. 1663 Session of 1989
INTRODUCED BY MERRY, DOMBROWSKI, VROON, COLAIZZO, BOYES, LINTON,
WOGAN, TRELLO, E. Z. TAYLOR, FAIRCHILD, ROBINSON, GODSHALL,
BILLOW, GLADECK, GIGLIOTTI, ROBBINS, DORR, CLYMER, BISHOP AND
NAHILL, JUNE 7, 1989
REFERRED TO COMMITTEE ON STATE GOVERNMENT, JUNE 7, 1989
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," further providing for
13 performance bonds.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Section 3 of the act of December 20, 1967
17 (P.L.869, No.385), known as the Public Works Contractors' Bond
18 Law of 1967, is amended to read:
19 Section 3. (a)--Before any contract exceeding [five thousand
20 dollars ($5,000)] fifty thousand dollars ($50,000) for the
21 construction, reconstruction, alteration or repair of any public
22 building or other public work or public improvement, including
1 highway work, of any contracting body is awarded to any prime
2 contractor, such contractor shall furnish to the contracting
3 body the following bonds, which shall become binding upon the
4 awarding of said contract to such contractor:
5 (1) A performance bond at one hundred percent of the
6 contract amount, conditioned upon the faithful performance of
7 the contract in accordance with the plans, specifications and
8 conditions of the contract. Such bond shall be solely for the
9 protection of the contracting body which awarded the contract.
10 (2) A payment bond at one hundred percent of the contract
11 amount. Such bond shall be solely for the protection of
12 claimants supplying labor or materials to the prime contractor
13 to whom the contract was awarded, or to any of his
14 subcontractors, in the prosecution of the work provided for in
15 such contract, and shall be conditioned for the prompt payment
16 of all such material furnished or labor supplied or performed in
17 the prosecution of the work. "Labor or materials" shall include
18 public utility services and reasonable rentals of equipment, but
19 only for periods when the equipment rented is actually used at
20 the site.
21 (a.1) No performance or payment bond shall be required for
22 any contract not exceeding fifty thousand dollars ($50,000) for
23 the construction, reconstruction, alteration or repair of any
24 public building or other public work or public improvement,
25 including highway work. A contracting body may, however, provide
26 for the retaining of a portion of the amount due the contractor
27 to insure the payment of persons supplying labor or materials to
28 the prime contractor to whom the contract was awarded, or to any
29 of the prime contractor's subcontractors, in the completion of
30 the work provided for in the contract. The sum withheld by the
19890H1663B1991 - 2 -
1 contracting body from the contractor may not exceed 20% of the
2 amount due the contractor. The retained funds shall be paid when
3 the contractor submits an affidavit, along with other documents
4 as the contracting body deems necessary to establish that all
5 suppliers and workers have been paid. The contractor may submit
6 a payment bond in lieu of the contracting body's retaining any
7 portion of the amount due the contractor. The payment bond shall
8 be 100% of the contract amount. The payment bond shall be solely
9 for the protection of claimants supplying labor or materials to
10 the prime contractor to whom the contract was awarded, or to any
11 of the prime contractor's subcontractors, in the completion of
12 the work provided for in the contract. The payment bond shall be
13 conditioned for the prompt payment for all material furnished or
14 labor supplied or performed in the completion of the work. As
15 used in this subsection, "labor or materials" shall include
16 public utility services and reasonable rentals of equipment, but
17 only for periods when the equipment rented is actually used at
18 the site.
19 (b) Each of such bonds shall be executed by one or more
20 surety companies legally authorized to do business in the
21 Commonwealth of Pennsylvania. If the contracting body is the
22 Commonwealth of Pennsylvania or any officer, employe, board,
23 bureau, commission, department, agency or institution thereof,
24 such bond shall be payable to the Commonwealth of Pennsylvania.
25 If the contracting body is other than one of those enumerated in
26 this subsection, such bond shall be payable to such other
27 contracting body.
28 (c) Each of such bonds shall be filed in the office of the
29 contracting body which awarded the contract for which such bonds
30 were given.
19890H1663B1991 - 3 -
1 Section 2. This act shall apply to contracts executed on or
2 after the effective date of this act.
3 Section 3. This act shall take effect January 1, 1990, or
4 immediately, whichever is later.
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