63G-6-505 - Bonds necessary when contract is awarded -- Waiver -- Action -- Attorney fees.
63G-6-505. Bonds necessary when contract is awarded -- Waiver -- Action --Attorney fees.
(1) When a construction contract is awarded under this chapter, the contractor to whomthe contract is awarded shall deliver the following bonds or security to the state, which shallbecome binding on the parties upon the execution of the contract:
(a) a performance bond satisfactory to the state that is in an amount equal to 100% of theprice specified in the contract and is executed by a surety company authorized to do business inthis state or any other form satisfactory to the state; and
(b) a payment bond satisfactory to the state that is in an amount equal to 100% of theprice specified in the contract and is executed by a surety company authorized to do business inthis state or any other form satisfactory to the state, which is for the protection of each personsupplying labor, service, equipment, or material for the performance of the work provided for inthe contract.
(2) (a) When a construction contract is awarded under this chapter, the chief procurementofficer or the head of the purchasing agency responsible for carrying out a construction projectmay not require a contractor to whom a contract is awarded to obtain a bond of the types referredto in Subsection (1) from a specific insurance or surety company, producer, agent, or broker.
(b) A person who violates Subsection (2)(a) is guilty of an infraction.
(3) Rules may provide for waiver of the requirement of a bid, performance, or paymentbond for circumstances in which the state considers any or all of the bonds to be unnecessary toprotect the state.
(4) A person shall have a right of action on a payment bond under this section for anyunpaid amount due him if:
(a) the person has furnished labor, service, equipment, or material for the work providedfor in the contract for which the payment bond is furnished under this section; and
(b) the person has not been paid in full within 90 days after the last date on which theperson performed the labor or service or supplied the equipment or material for which the claimis made.
(5) An action upon a payment bond shall be brought in a court of competent jurisdictionin any county where the construction contract was to be performed and not elsewhere. Theaction is barred if not commenced within one year after the last day on which the claimantperformed the labor or service or supplied the equipment or material on which the claim is based. The obligee named in the bond need not be joined as a party to the action.
(6) In any suit upon a payment bond, the court shall award reasonable attorney fees to theprevailing party, which fees shall be taxed as costs in the action.
Renumbered and Amended by Chapter 382, 2008 General Session