NORTH CAROLINA GENERAL ASSEMBLY

1971 SESSION

 

 

CHAPTER 972

SENATE BILL 668

 

 

AN ACT RELATING TO HIGHWAY CONSTRUCTION CONTRACTS AND BONDS.

 

The General Assembly of North Carolina enacts:

 

Section 1.  Chapter 136 of the General Statutes is hereby amended by adding a new section to be numbered G.S. 136-28.1 and to read as follows:

"§ 136-28.1.  (a) All contracts over ten thousand dollars ($10,000) that the Commission may let for construction or repair necessary to carry out the provisions of this Chapter shall be let to a responsible bidder after public advertising under rules and regulations to be made and published by the State Highway Commission. The right to reject any and all bids shall be reserved to the Commission.

(b)        In those cases in which the amount of the work to be let to contract for highway construction or repair is ten thousand dollars ($10,000) or less, at least three informal bids shall be solicited. Upon a written determination of the State Highway Purchasing Officer that the soliciting of three bids is not feasible and is not in the public interest, the requirement may be waived.

(c)        The construction and repair of ferryboats and all other marine floating equipment and the construction and repair of all types of docks by the State Highway Commission shall be deemed highway construction or repair for the purpose of G.S. 136‑28.1 and G.S. 136-28.3 and Article 1 of Chapter 143, 'The Executive Budget Act'. In cases of a written determination by the State Highway Purchasing Officer that the requirement for compatibility does not make public advertising feasible for the repair of ferryboats, the public advertising as well as the soliciting of informal bids may be waived. The bond requirements of G.S. 136-28.3 shall not apply to ferry repair or construction.

(d)        The construction and repair of the highway rest area buildings and facilities, weight stations and the Commission's participation in the construction of welcome center buildings shall be deemed highway construction or repair for the purpose of G.S. 136-28.1 and G.S. 136-28.3 and Article 1 of Chapter 143 of the General Statutes, 'The Executive Budget Act'.

(e)        The Commission may enter into contracts for construction or repair without complying with the bidding requirements of this section upon a determination of the Chairman of the State Highway Commission or the State Highway Administrator that an emergency exists and that it is not feasible or not in the public interest for the State Highway Commission to comply with the bidding requirements.

(f)         Contracts for professional engineering services may be let without taking and considering bids or proposals. However, the Commission is encouraged to solicit proposals when it is in the public interest to do so.

(g)        The Commission may enter into contracts for research and development with educational institutions and nonprofit organizations without soliciting bids or proposals.

(h)        The Commission may enter into contracts for applied research and experimental work without soliciting bids or proposals; provided, however, that if the research or work is for the purpose of testing equipment, materials, or supplies, the provisions of Article 3 of Chapter 143 of the General Statutes shall apply. The Commission is encouraged to solicit proposals when contracts are entered into with private firms when it is in the public interest to do so."

Sec. 2.  Chapter 136 of the General Statutes is amended by adding a new G.S. 136‑28.2 to read as follows:

"§ 136-28.2.  The State Highway Commission is authorized to permit power companies and governmental agencies, including agencies of the Federal Government, when it is necessary to relocate a public highway by reason of the construction of a dam, to let contracts for the construction of the relocated highway. The construction shall be in accordance with the State Highway Commission standards and specifications. The Commission is further authorized to reimburse the power company or governmental agency for betterments arising out of the construction of the relocated highway, provided the bidding and the award is in accordance with the Commission's regulations and the Commission approves the award of the contract."

Sec. 3.  Chapter 136 of the General Statutes is hereby amended by adding a new G.S. 136-28.3 to read as follows:

"§ 136-28.3.  (a) The State Highway Commission shall require a performance bond and a payment bond of any contractor awarded a highway construction or repair contract which exceeds the sum of ten thousand dollars ($10,000). The performance bond and the payment bond shall be acceptable to the Commission and each shall be in the amount of the contract awarded, provided that the amount of the bonds may be rounded to the nearest five dollars ($5.00). Each of such bonds shall be executed by one or more surety companies legally authorized to do business in the State of North Carolina.

(b)        The performance bond shall be conditioned upon the faithful performance of the contract in accordance with the plans and specifications and conditions of the contract. Such bond shall be for the protection of the State Highway Commission.

(c)        The payment bond shall be conditioned upon the prompt payment of all such material furnished or labor performed in the prosecution of the work called for in contract. The payment bond shall be solely for the protection of persons or firms furnishing materials or performing labor in or about the construction of the highway project for which the contractor or subcontractor is liable. 'Labor or materials' shall include, but without limitation, water, gas, power, light, heat, oil, gasoline, telephone services, and rental of equipment or the reasonable value of the use of equipment directly applicable to the contract. The payment bond shall cover materials furnished or labor performed in the prosecution of the work called for in the contract regardless of whether or not it enters into and becomes a component part of the public improvement.

(d)        Subject to the provisions of subsection (e) hereof, any claimant who has performed labor or furnished material in the prosecution of the work provided for in any contract for which a payment bond has been given pursuant to the provisions of this section, and who has not been paid in full therefor before the expiration of 90 days after the date on which such claimant performed the last of such labor or furnished the last of such materials for which he claims payment, may bring an action on such payment bond in his own name, to recover any amount due him for such labor or material and may prosecute such action to final judgment and have execution on the judgment.

(e)        Any claimant who has a direct contractual relationship with any subcontractor of the prime contractor who gave such payment bond but has no contractual relationship, express or implied, with such prime contractor, may bring an action on the payment bond only if he has given written notice to such contractor within 90 days from the date on which the claimant performed the last of the labor or furnished the last of the materials for which he claims payment, stating with substantial accuracy the amount claimed and the name of the person or persons for whom the work was performed or to whom the material was furnished. The failure to file such a notice as required by this subsection shall be a complete bar against any recovery on the bond of the contractor and the surety thereon.

(f)         The notice required by subsection (e) may be served on the contractor by registered mail, postage prepaid in an envelope addressed to such contractor at any place where his office is regularly maintained for the transaction of business or served in any manner in which legal process may be served in the manner now or hereafter provided by law for the service of a summons.

(g)        Every action on a payment bond as provided for in this section shall be brought in the appropriate court where the contract or any part thereof for which the bond was given was to be performed. No surety shall be liable under the payment bond for more than the amount of the payment bond.

(h)        Any person entitled to bring an action shall have the right to require the Commission to furnish a certified copy of the payment bond. It shall be the duty of the Commission to give any such person a certified copy thereof upon proper notice and request. The Commission may require a reasonable payment for the cost of furnishing the certified copy.

(i)         No suit or action shall be commenced on a payment bond given pursuant to this section after the expiration of six months following the date on which the contractor receives the final estimate and payment therefor.

(j)         Every bond given by any contractor to the State Highway Commission for the construction or repair of highways as required by this section shall be conclusively presumed to have been given in accordance therewith, whether such bond be so drawn as to conform to the statute or not, and this statute shall be conclusively presumed to have been written into every such bond so given."

Sec. 4.  Section 3 of this act shall apply only to those contracts for which invitation for bids were issued after the effective date of this act.

Sec. 5.  This act shall become effective January 1, 1972.

Sec. 6.  G.S. 136-28 is hereby repealed, provided however, the repeal of G.S. 136-28 shall have no application to those contracts and bonds to which Section 3 of this act does not apply, and as to those contracts the law that was in effect prior to the passage of this act shall apply.

In the General Assembly read three times and ratified, this the 19th day of July, 1971.