A political subdivision or water supply corporation receiving financial assistance
under this subchapter shall require in all contracts for the construction of a project
(1) each bidder furnish a bid guarantee equivalent to five percent of the bid price;
(2) each contractor awarded a construction contract furnish performance and payment
bonds as follows:
(A) the performance bond must include guarantees that work done under the contract
will be completed and performed according to approved plans and specifications and
in accordance with sound construction principles and practices; and
(B) the performance and payment bonds must be in a penal sum of not less than 100
percent of the contract price and remain in effect for one year after the date of
approval by the engineer of the subdivision or corporation;
(3) payment be made in partial payments as the work progresses;
(4) each partial payment not exceed 95 percent of the amount due at the time of the
payment as shown by the engineer of the project, but, if the project is substantially
complete, a partial release of the five percent retainage may be made by the subdivision
or corporation with approval of the executive administrator;
(5) payment of the retainage remaining due on completion of the contract be made only
(A) approval by the engineer for the subdivision or corporation as required under
the bond proceedings;
(B) approval by the subdivision or corporation by a resolution or other formal action;
(C) certification by the executive administrator in accordance with the rules of the
board that the work to be done under the contract has been completed and performed
in a satisfactory manner and in accordance with sound engineering principles and practices;
(6) no valid approval be granted unless the work done under the contract has been
completed and performed in a satisfactory manner according to approved plans and specifications;
(7) labor from inside the disadvantaged rural community be used to the extent possible.
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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