CHAPTER 12. PUBLIC WORK PROJECTS
IC 36-1-12
Chapter 12. Public Work Projects
IC 36-1-12-1
Application of chapter; alternatives to chapter
Sec. 1. (a) Except as provided in this section, this chapter appliesto all public work performed or contracted for by:
(1) political subdivisions; and
(2) their agencies;
regardless of whether it is performed on property owned or leased bythe political subdivision or agency.
(b) This chapter does not apply to an officer or agent who, onbehalf of a municipal utility, maintains, extends, and installs servicesof the utility if the necessary work is done by the employees of theutility.
(c) This chapter does not apply to hospitals organized or operatedunder IC 16-22-1 through IC 16-22-5 or IC 16-23-1, unless the publicwork is financed in whole or in part with cumulative building fundrevenue.
(d) This chapter does not apply to tax exempt Indiana nonprofitcorporations leasing and operating a city market owned by a politicalsubdivision.
(e) As an alternative to this chapter, the governing body of apolitical subdivision or its agencies may do the following:
(1) Enter into a design-build contract as permitted underIC 5-30.
(2) Participate in a utility efficiency program or enter into aguaranteed savings contract as permitted under IC 36-1-12.5.
(f) This chapter does not apply to a person that has entered into anoperating agreement with a political subdivision or an agency of apolitical subdivision under IC 5-23.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.182-1985,SEC.16; P.L.214-1989, SEC.7; P.L.24-1993, SEC.5; P.L.2-1993,SEC.199; P.L.1-1994, SEC.173; P.L.82-1995, SEC.12; P.L.49-1997,SEC.73; P.L.168-2006, SEC.2; P.L.71-2009, SEC.4; P.L.99-2009,SEC.3; P.L.1-2010, SEC.145.
IC 36-1-12-1.2
Definitions
Sec. 1.2. The following definitions apply throughout this chapter:
(1) "Board" means the board or officer of a political subdivisionor an agency having the power to award contracts for publicwork.
(2) "Contractor" means a person who is a party to a public workcontract with the board.
(3) "Subcontractor" means a person who is a party to a contractwith the contractor and furnishes and performs labor on thepublic work project. The term includes material men whosupply contractors or subcontractors.
(4) "Escrowed income" means the value of all property held in
an escrow account over the escrowed principal in the account.
(5) "Escrowed principal" means the value of all cash andsecurities or other property placed in an escrow account.
(6) "Operating agreement" has the meaning set forth inIC 5-23-2-7.
(7) "Person" means any association, corporation, limitedliability company, fiduciary, individual, joint venture,partnership, sole proprietorship, or any other legal entity.
(8) "Property" means all:
(A) personal property, fixtures, furnishings, inventory, andequipment; and
(B) real property.
(9) "Public fund" means all funds that are:
(A) derived from the established revenue sources of apolitical subdivision or an agency of a political subdivision;and
(B) deposited in a general or special fund of a municipalcorporation, or another political subdivision or agency of apolitical subdivision.
The term does not include funds received by any personmanaging or operating a public facility under a duly authorizedoperating agreement under IC 5-23 or proceeds of bondspayable exclusively by a private entity.
(10) "Retainage" means the amount to be withheld from apayment to the contractor or subcontractor until the occurrenceof a specified event.
(11) "Specifications" means a description of the physicalcharacteristics, functional characteristics, extent, or nature ofany public work required by the board.
(12) "Substantial completion" refers to the date when theconstruction of a structure is sufficiently completed, inaccordance with the plans and specifications, as modified byany complete change orders agreed to by the parties, so that itcan be occupied for the use for which it was intended.
As added by P.L.329-1985, SEC.9. Amended by P.L.82-1995,SEC.13; P.L.73-1995, SEC.3; P.L.49-1997, SEC.74.
IC 36-1-12-1.4
Repealed
(Repealed by P.L.82-1995, SEC.20.)
IC 36-1-12-1.6
Repealed
(Repealed by P.L.82-1995, SEC.20.)
IC 36-1-12-2
"Public work" defined
Sec. 2. As used in this chapter, "public work" means theconstruction, reconstruction, alteration, or renovation of a publicbuilding, airport facility, or other structure that is paid for out of a
public fund or out of a special assessment. The term includes theconstruction, alteration, or repair of a highway, street, alley, bridge,sewer, drain, or other improvement that is paid for out of a publicfund or out of a special assessment. The term also includes anypublic work leased by a political subdivision under a lease containingan option to purchase.
As added by Acts 1981, P.L.57, SEC.38. Amended by Acts 1981,P.L.56, SEC.2; P.L.329-1985, SEC.12; P.L.337-1987, SEC.1.
IC 36-1-12-2.2
Repealed
(Repealed by P.L.82-1995, SEC.20.)
IC 36-1-12-2.4
Repealed
(Repealed by P.L.82-1995, SEC.20.)
IC 36-1-12-2.6
Repealed
(Repealed by P.L.82-1995, SEC.20.)
IC 36-1-12-3
Public work projects
Sec. 3. (a) The board may purchase or lease materials in themanner provided in IC 5-22 and perform any public work, by meansof its own workforce, without awarding a contract whenever the costof that public work project is estimated to be less than one hundredthousand dollars ($100,000). Before a board may perform any workunder this section by means of its own workforce, the politicalsubdivision or agency must have a group of employees on its staffwho are capable of performing the construction, maintenance, andrepair applicable to that work. For purposes of this subsection, thecost of a public work project includes the actual cost of materials,labor, equipment, rental, a reasonable rate for use of trucks andheavy equipment owned, and all other expenses incidental to theperformance of the project.
(b) When the project involves the rental of equipment with anoperator furnished by the owner, or the installation or application ofmaterials by the supplier of the materials, the project is consideredto be a public work project and subject to this chapter. However, anannual contract may be awarded for equipment rental and materialsto be installed or applied during a calendar or fiscal year if theproposed project or projects are described in the bid specifications.
(c) A board of aviation commissioners or an airport authorityboard may purchase or lease materials in the manner provided inIC 5-22 and perform any public work by means of its own workforceand owned or leased equipment, in the construction, maintenance,and repair of any airport roadway, runway, taxiway, or aircraftparking apron whenever the cost of that public work project isestimated to be less than fifty thousand dollars ($50,000). (d) Municipal and county hospitals must comply with this chapterfor all contracts for public work that are financed in whole or in partwith cumulative building fund revenue, as provided in section 1(c)of this chapter. However, if the cost of the public work is estimatedto be less than fifty thousand dollars ($50,000), as reflected in theboard minutes, the hospital board may have the public work donewithout receiving bids, by purchasing the materials and performingthe work by means of its own workforce and owned or leasedequipment.
(e) If a public works project involves a structure, an improvement,or a facility under the control of a department (as defined inIC 4-3-19-2(2)), the department may not artificially divide the projectto bring any part of the project under this section.
As added by Acts 1981, P.L.57, SEC.38. Amended by Acts 1981,P.L.56, SEC.3; P.L.329-1985, SEC.16; P.L.337-1987, SEC.2;P.L.66-1987, SEC.29; P.L.12-1991, SEC.6; P.L.21-1995, SEC.146;P.L.82-1995, SEC.14; P.L.49-1997, SEC.75.
IC 36-1-12-3.5
Contracts for engineering, architectural, or accounting services;applicability of restrictions of general statutes
Sec. 3.5. When any public work is proposed to be performed andthe board determines by a two-thirds (2/3) vote that it is expedientand in the best public interest to employ professional engineering,architectural, or accounting services for the planning and financingof the public work and the preparation of plans and specifications,then the limitations and restrictions in the general statutes withrespect to invalidity of contracts without an appropriation therefor,payment of fees solely from the proceeds of bonds or assessmentswhen and if issued, and payment of fees solely from a special fundor funds to be provided in the future, do not apply to contracts forthose professional services to the extent that such limitations andrestrictions might otherwise prevent the payment of fees for servicesactually rendered in connection with those contracts or affect theobligation to pay those fees.
As added by Acts 1982, P.L.33, SEC.16.
IC 36-1-12-4
Procedure for projects in certain cities and towns
Sec. 4. (a) This section applies whenever the cost of a public workproject will be:
(1) at least seventy-five thousand dollars ($75,000) in:
(A) a consolidated city or second class city;
(B) a county containing a consolidated city or second classcity; or
(C) a regional water or sewage district established underIC 13-26; or
(2) at least fifty thousand dollars ($50,000) in a politicalsubdivision or an agency not described in subdivision (1).
(b) The board must comply with the following procedure: (1) The board shall prepare general plans and specificationsdescribing the kind of public work required, but shall avoidspecifications which might unduly limit competition. If theproject involves the resurfacing (as defined by IC 8-14-2-1) ofa road, street, or bridge, the specifications must show how theweight or volume of the materials will be accurately measuredand verified.
(2) The board shall file the plans and specifications in a placereasonably accessible to the public, which shall be specified inthe notice required by subdivision (3).
(3) Upon the filing of the plans and specifications, the boardshall publish notice in accordance with IC 5-3-1 calling forsealed proposals for the public work needed.
(4) The notice must specify the place where the plans andspecifications are on file and the date fixed for receiving bids.
(5) The period of time between the date of the first publicationand the date of receiving bids shall be governed by the size ofthe contemplated project in the discretion of the board. Theperiod of time between the date of the first publication andreceiving bids may not be more than:
(A) six (6) weeks if the estimated cost of the public worksproject is less than twenty-five million dollars($25,000,000); and
(B) ten (10) weeks if the estimated cost of the public worksproject is at least twenty-five million dollars ($25,000,000).
(6) If the cost of a project is one hundred thousand dollars($100,000) or more, the board shall require the bidder to submita financial statement, a statement of experience, a proposedplan or plans for performing the public work, and the equipmentthat the bidder has available for the performance of the publicwork. The statement shall be submitted on forms prescribed bythe state board of accounts.
(7) The board may not require a bidder to submit a bid beforethe meeting at which bids are to be received. The meeting forreceiving bids must be open to the public. All bids receivedshall be opened publicly and read aloud at the time and placedesignated and not before.
(8) Except as provided in subsection (c), the board shall:
(A) award the contract for public work or improvements tothe lowest responsible and responsive bidder; or
(B) reject all bids submitted.
(9) If the board awards the contract to a bidder other than thelowest bidder, the board must state in the minutes ormemoranda, at the time the award is made, the factors used todetermine which bidder is the lowest responsible andresponsive bidder and to justify the award. The board shall keepa copy of the minutes or memoranda available for publicinspection.
(10) In determining whether a bidder is responsive, the boardmay consider the following factors: (A) Whether the bidder has submitted a bid or quote thatconforms in all material respects to the specifications.
(B) Whether the bidder has submitted a bid that compliesspecifically with the invitation to bid and the instructions tobidders.
(C) Whether the bidder has complied with all applicablestatutes, ordinances, resolutions, or rules pertaining to theaward of a public contract.
(11) In determining whether a bidder is a responsible bidder, theboard may consider the following factors:
(A) The ability and capacity of the bidder to perform thework.
(B) The integrity, character, and reputation of the bidder.
(C) The competence and experience of the bidder.
(12) The board shall require the bidder to submit an affidavit:
(A) that the bidder has not entered into a combination oragreement:
(i) relative to the price to be bid by a person;
(ii) to prevent a person from bidding; or
(iii) to induce a person to refrain from bidding; and
(B) that the bidder's bid is made without reference to anyother bid.
(c) Notwithstanding subsection (b)(8), a county may award sand,gravel, asphalt paving materials, or crushed stone contracts to morethan one (1) responsible and responsive bidder if the specificationsallow for bids to be based upon service to specific geographic areasand the contracts are awarded by geographic area. The geographicareas do not need to be described in the specifications.
As added by Acts 1981, P.L.57, SEC.38. Amended by Acts 1981,P.L.56, SEC.4; P.L.329-1985, SEC.17; P.L.213-1986, SEC.4;P.L.252-1993, SEC.3; P.L.82-1995, SEC.15; P.L.22-2001, SEC.1;P.L.169-2006, SEC.48; P.L.113-2010, SEC.108.
IC 36-1-12-4.5
Bond or certified check; filing by bidders
Sec. 4.5. (a) The political subdivision or agency:
(1) shall require a bond or a certified check to be filed with eachbid by a bidder in the amount determined and specified by theboard in the notice of the letting if the cost of the public workis estimated to be more than two hundred thousand dollars($200,000); and
(2) may require a bond or a certified check to be filed with eachbid by a bidder in the amount determined and specified by theboard in the notice of the letting if the cost of the public workis estimated to be not more than two hundred thousand dollars($200,000).
(b) The amount of the bond or certified check may not be set atmore than ten percent (10%) of the contract price. The bond orcertified check shall be made payable to the political subdivision oragency. (c) All checks of unsuccessful bidders shall be returned to themby the board upon selection of successful bidders. Checks ofsuccessful bidders shall be held until delivery of the performancebond, as provided in section 14(e) of this chapter.
As added by P.L.329-1985, SEC.18. Amended by P.L.133-2007,SEC.12.
IC 36-1-12-4.7
Procedure for accepting quotes
Sec. 4.7. (a) This section applies whenever a public work projectis estimated to cost:
(1) at least twenty-five thousand dollars ($25,000) and less thanone hundred thousand dollars ($100,000) in:
(A) a consolidated city, second class city, or third class citywith a population of fifteen thousand (15,000) or more;
(B) a county containing a consolidated city or second classcity; or
(C) a regional water or sewage district established underIC 13-26; or
(2) at least twenty-five thousand dollars ($25,000) and less thanfifty thousand dollars ($50,000) in a political subdivision oragency not described in subdivision (1).
(b) The board must proceed under the following provisions:
(1) The board shall invite quotes from at least three (3) personsknown to deal in the class of work proposed to be done bymailing them a notice stating that plans and specifications areon file in a specified office. The notice must be mailed not lessthan seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote beforethe meeting at which quotes are to be received. The meeting forreceiving quotes must be open to the public. All quotes receivedshall be opened publicly and read aloud at the time and placedesignated and not before.
(3) The board shall award the contract for the public work to thelowest responsible and responsive quoter.
(4) The board may reject all quotes submitted.
As added by P.L.82-1995, SEC.16. Amended by P.L.22-2001, SEC.2;P.L.1-2002, SEC.154; P.L.169-2006, SEC.49; P.L.195-2007, SEC.7.
IC 36-1-12-4.9
Alternate procedures for projects costing less than $150,000
Sec. 4.9. (a) This section applies to a public work for the routineoperation, routine repair, or routine maintenance of existingstructures, buildings, or real property if the cost of the public workis estimated to be less than one hundred fifty thousand dollars($150,000).
(b) The board may award a contract for public work described insubsection (a) in the manner provided in IC 5-22.
As added by P.L.176-2009, SEC.24.
IC 36-1-12-5
Alternate procedures for projects costing less than $50,000
Sec. 5. (a) This section applies whenever a public work project isestimated to cost less than fifty thousand dollars ($50,000). Exceptas provided in subsection (g) for local boards of aviationcommissioners and local airport authorities, if a contract is to beawarded, the board may proceed under section 4 of this chapter orunder subsection (b) or (c).
(b) The board must proceed under the following provisions:
(1) The board shall invite quotes from at least three (3) personsknown to deal in the class of work proposed to be done bymailing them a notice stating that plans and specifications areon file in a specified office. The notice must be mailed not lessthan seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote beforethe meeting at which quotes are to be received. The meeting forreceiving quotes must be open to the public. All quotes receivedshall be opened publicly and read aloud at the time and placedesignated and not before.
(3) The board shall award the contract for the public work to thelowest responsible and responsive quoter.
(4) The board may reject all quotes submitted.
(5) If the board rejects all quotes under subdivision (4) of thissection, the board may negotiate and enter into agreements forthe work in the open market without inviting or receivingquotes if the board establishes in writing the reasons forrejecting the quotes.
(c) The board may not proceed under subsection (b) for theresurfacing (as defined in IC 8-14-2-1) of a road, street, or bridge,unless:
(1) the weight or volume of the materials in the project iscapable of accurate measurement and verification; and
(2) the specifications define the geographic points at which theproject begins and ends.
(d) For the purposes of this section, if contiguous sections of aroad, street, or bridge are to be resurfaced in a calendar year, all ofthe work shall be considered to comprise a single public workproject.
(e) The board may purchase or lease supplies in the mannerprovided in IC 5-22 and perform the public work by means of its ownworkforce without awarding a public work contract.
(f) Before the board may perform any work under this section bymeans of its own workforce, the political subdivision or agency musthave a group of employees on its staff who are capable of performingthe construction, maintenance, and repair applicable to that work.
(g) This subsection applies to local boards of aviationcommissioners operating under IC 8-22-2 and local airportauthorities operating under IC 8-22-3. If the contract is to be awardedby a board to which this subsection applies, or to a designee of theboard under subsection (h), the board or its designee may proceed
under section 4 of this chapter or under the following provisions. Theboard or its designee may invite quotes from at least three (3)persons known to deal in the class of work proposed to be done bymailing the persons a copy of the plans and specifications for thework not less than seven (7) days before the time fixed for receivingquotes. If the board or its designee receives a satisfactory quote, theboard or its designee shall award the contract to the lowestresponsible and responsive quoter for the class of work required. Theboard or its designee may reject all quotes submitted and, if no validquotes are received for the class of work, contract for the workwithout further invitations for quotes.
(h) The board may delegate its authority to award a contract fora public works project that is estimated to cost less than fiftythousand dollars ($50,000) to the airport personnel in charge ofairport public works projects.
(i) Quotes for public works projects costing less than twenty-fivethousand dollars ($25,000) may be obtained by soliciting at leastthree (3) quotes by telephone or facsimile transmission. The seven(7) day waiting period required by subsection (b)(1) does not applyto quotes solicited under this subsection.
As added by Acts 1981, P.L.57, SEC.38. Amended by Acts 1981,P.L.56, SEC.5; P.L.329-1985, SEC.19; P.L.85-1991, SEC.4;P.L.21-1995, SEC.147; P.L.82-1995, SEC.17; P.L.49-1997, SEC.76;P.L.195-2007, SEC.8.
IC 36-1-12-6
Contracts; notice to proceed; failure to award and execute contractand to issue notice; election by bidder to reject contract
Sec. 6. (a) Except as provided in subsections (b) and (c), the boardshall award the contract and shall provide the successful bidder withwritten notice to proceed within sixty (60) days after the date onwhich bids are opened.
(b) If general obligation bonds are to be sold to finance theconstruction that is the subject of the bid, the board shall allow thebidder ninety (90) days.
(c) If revenue bonds are to be issued, when approved by the utilityregulatory commission, or if special taxing district, special benefit,or revenue bonds are to be issued and sold to finance theconstruction, the board shall allow the bidder one hundred fifty (150)days.
(d) A failure to award and execute the contract and to issue noticewithin the time required by this section entitles the successful bidderto:
(1) reject the contract and withdraw his bid without prejudice;or
(2) extend the time to award the contract and provide notice toproceed at an agreed later date.
If the successful bidder elects to reject the contract and withdraw hisbid, notice of that election must be given to the board in writingwithin fifteen (15) days of the sixty (60) day expiration date or any
other extension date.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.23-1988,SEC.116.
IC 36-1-12-7
Public buildings; approval of plans and specifications by licensedarchitect or engineer
Sec. 7. Public work performed or contracted for on a publicbuilding, the cost of which is more than one hundred thousanddollars ($100,000) may be undertaken by the board only inaccordance with plans and specifications approved by an architect orengineer licensed under IC 25-4 or IC 25-31.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.3-1989,SEC.225; P.L.312-1995, SEC.1.
IC 36-1-12-8
Road, street, or bridge work; open price provisions; priceadjustments of materials; limitations
Sec. 8. The board may award a public work contract for road,street, or bridge work subject to the open price provisions ofIC 26-1-2-305. The contract may provide that prices for constructionmaterials are subject to price of materials adjustment. When priceadjustments are part of the contract, the method of price adjustmentsshall be specified in the contract. However, this section does notauthorize the expenditure of money above the total amount of moneyappropriated by the political subdivision or agency for road, street,or bridge contracts.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.329-1985,SEC.20.
IC 36-1-12-9
Emergencies; contracts by invitation
Sec. 9. (a) The board, upon a declaration of emergency, maycontract for a public work project without advertising for bids if bidsor quotes are invited from at least two (2) persons known to deal inthe public work required to be done.
(b) The minutes of the board must show the declaration ofemergency and the names of the persons invited to bid or providequotes.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.329-1985,SEC.21.
IC 36-1-12-10
Plans and specifications; approval by various agencies
Sec. 10. All plans and specifications for public buildings must beapproved by the state department of health, the division of fire andbuilding safety, and other state agencies designated by statute.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.8-1984,SEC.123; P.L.2-1992, SEC.886; P.L.1-2006, SEC.553.
IC 36-1-12-11
Completion of project; procedure
Sec. 11. (a) The board must, within sixty (60) days after thecompletion of the public work project, file in the division of fire andbuilding safety a complete set of final record drawings for the publicwork project. However, this requirement does not apply to a publicwork project constructed at a cost less than one hundred thousanddollars ($100,000). In addition, the filing of the drawings is requiredonly if the project involves a public building.
(b) The division of fire and building safety shall provide adepository for all final record drawings filed, and retain them forinspection and loan under regulated conditions. The fire preventionand building safety commission may designate the librarian ofIndiana as the custodian of the final record drawings. The librarianshall preserve the final record drawings in the state archives as publicdocuments.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.8-1984,SEC.124; P.L.329-1985, SEC.22; P.L.1-2006, SEC.554.
IC 36-1-12-12
Final payment; requirements; claims by subcontractors, laborers,or suppliers; disputes
Sec. 12. (a) When a public work project is to be performed, theboard shall withhold final payment to the contractor until thecontractor has paid the subcontractors, material suppliers, laborers,or those furnishing services. However, if there is not a sufficient sumowed to the contractor to pay those bills, the sum owed to thecontractor shall be prorated in payment of the bills among the partiesentitled.
(b) To receive payment the subcontractor or subcontractors,material suppliers, laborers, or those furnishing services shall filetheir claims with the board within sixty (60) days after the last laborperformed, last material furnished, or last service rendered by them,as provided in section 13 of this chapter.
(c) If there is no dispute between the parties claiming to beentitled to the money withheld, the board shall pay the claim fromthe money due the contractor and deduct it from the contract price.The board shall take a receipt for payment made on a claim.
(d) If there is a dispute between the parties claiming to be entitledto the money withheld, the board shall retain sufficient money to paythe claims until the dispute is settled and the correct amount isdetermined. However, the board may make a final and completesettlement with the contractor after thirty (30) days after the date ofthe completion and acceptance of the public work if the board isfurnished with satisfactory evidence indicating the payment in full ofall subcontractors, material suppliers, laborers, or those furnishingservices.
(e) A claim form must be signed by an individual from thepolitical subdivision or agency who is directly responsible for theproject and who can verify: (1) the quantity of a purchased item; or
(2) the weight or volume of the material applied, in the case ofa road, street, or bridge project.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.329-1985,SEC.23.
IC 36-1-12-13
Contract provision for payment of subcontractors, laborers, orsuppliers
Sec. 13. A contract for public work must contain a provision forthe payment of subcontractors, laborers, material suppliers, and thoseperforming services. The board shall withhold money from thecontract price in a sufficient amount to pay the subcontractors,laborers, material suppliers, and those furnishing services.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.337-1987,SEC.3.
IC 36-1-12-13.1
Contractor's payment bond for public work projects in excess of$200,000
Sec. 13.1. (a) Except as provided in subsection (e), the appropriatepolitical subdivision or agency:
(1) shall require the contractor to execute a payment bond to theappropriate political subdivision or agency, approved by and forthe benefit of the political subdivision or agency, in an amountequal to the contract price if the cost of the public work isestimated to be more than two hundred thousand dollars($200,000); and
(2) may require the contractor to execute a payment bond to theappropriate political subdivision or agency, approved by and forthe benefit of the political subdivision or agency, in an amountequal to the contract price if the cost of the public work isestimated to be not more than two hundred thousand dollars($200,000).
The payment bond is binding on the contractor, the subcontractor,and their successors and assigns for the payment of all indebtednessto a person for labor and service performed, material furnished, orservices rendered. The payment bond must state that it is for thebenefit of the subcontractors, laborers, material suppliers, and thoseperforming services.
(b) The payment bond shall be deposited with the board. Thepayment bond must specify that:
(1) a modification, omission, or addition to the terms andconditions of the public work contract, plans, specifications,drawings, or profile;
(2) a defect in the public work contract; or
(3) a defect in the proceedings preliminary to the letting andawarding of the public work contract;
does not discharge the surety. The surety of the payment bond maynot be released until one (1) year after the board's final settlement
with the contractor.
(c) A person to whom money is due for labor performed, materialfurnished, or services provided shall, within sixty (60) days after thecompletion of the labor or service, or within sixty (60) days after thelast item of material has been furnished, file with the board signedduplicate statements of the amount due. The board shall forward tothe surety of the payment bond one (1) of the signed duplicatestatements. However, failure of the board to forward a signedduplicate statement does not affect the rights of a person to whommoney is due. In addition, a failure to forward the statement does notoperate as a defense for the surety.
(d) An action may not be brought against the surety until thirty(30) days after the filing of the signed duplicate statements with theboard. If the indebtedness is not paid in full at the end of that thirty(30) day period the person may bring an action in court. The courtaction must be brought within sixty (60) days after the date of thefinal completion and acceptance of the public work.
(e) This subsection applies to contracts for a capital improvemententered into by, for, or on behalf of the Indiana stadium andconvention building authority created by IC 5-1-17-6. The boardawarding the contract for the capital improvement project may waiveany payment bond requirement if the board, after public notice andhearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unableto provide the payment bond; or
(B) the cost or coverage of the payment bond is not in thebest interest of the project; and
(2) that an adequate alternative is provided through a letter ofcredit, additional retainage of at least ten percent (10%) of thecontract amount, a joint payable check system, or othersufficient protective mechanism.
As added by P.L.337-1987, SEC.4. Amended by P.L.82-1995,SEC.18; P.L.120-2006, SEC.4; P.L.133-2007, SEC.13.
IC 36-1-12-14
Contracts in excess of $200,000; retaining portions of payments;escrow agreements; performance bonds; payment on substantialcompletion; actions against surety contracts less than $250,000
Sec. 14. (a) This section applies to public work contracts in excessof two hundred thousand dollars ($200,000) for projects other thanhighways, roads, streets, alleys, bridges, and appurtenant structuressituated on streets, alleys, and dedicated highway rights-of-way. Aboard may require a contractor and subcontractor to include contractprovisions for retainage as set forth in this section for contracts thatare not more than two hundred thousand dollars ($200,000). Thissection also applies to a lessor corporation qualifying underIC 20-47-2 or IC 20-47-3 or any other lease-back arrangementcontaining an option to purchase, notwithstanding the statutoryprovisions governing those leases. (b) A board that enters into a contract for public work, and acontractor who subcontracts parts of that contract, shall include intheir respective contracts provisions for the retainage of portions ofpayments by the board to contractors, by contractors tosubcontractors, and for the payment of subcontractors. At thediscretion of the contractor, the retainage shall be held by the boardor shall be placed in an escrow account with a bank, savings and loaninstitution, or the state as the escrow agent. The escrow agent shallbe selected by mutual agreement between board and contractor orcontractor and subcontractor under a written agreement among thebank or savings and loan institution and:
(1) the board and the contractor; or
(2) the subcontractor and the contractor.
The board shall not be required to pay interest on the amounts ofretainage that it holds under this section.
(c) To determine the amount of retainage to be withheld, theboard shall:
(1) withhold no more than ten percent (10%) nor less than sixpercent (6%) of the dollar value of all work satisfactorilycompleted until the public work is fifty percent (50%)completed, and nothing further after that; or
(2) withhold no more than five percent (5%) nor less than threepercent (3%) of the dollar value of all work satisfactorilycompleted until the public work is substantially completed.
If upon substantial completion of the public work minor items remainuncompleted, an amount computed under subsection (f) shall bewithheld until those items are completed.
(d) The escrow agreement must contain the following provisions:
(1) The escrow agent shall invest all escrowed principal inobligations selected by the escrow agent.
(2) The escrow agent shall hold the escrowed principal andincome until receipt of notice from the board and the contractor,or the contractor and the subcontractor, specifying the part ofthe escrowed principal to be released from the escrow and theperson to whom that portion is to be released. After receipt ofthe notice, the escrow agent shall remit the designated part ofescrowed principal and the same proportion of then escrowedincome to the person specified in the notice.
(3) The escrow agent shall be compensated for the agent'sservices. The parties may agree on a reasonable fee comparablewith fees being charged for the handling of escrow accounts ofsimilar size and duration. The fee shall be paid from theescrowed income.
The escrow agreement may include other terms and conditionsconsistent with this subsection, including provisions authorizing theescrow agent to commingle the escrowed funds with funds held inother escrow accounts and limiting the liability of the escrow agent.
(e) Except as provided by subsections (i) and (h), the contractorshall furnish the board with a performance bond equal to the contractprice. If acceptable to the board, the performance bond may provide
for incremental bonding in the form of multiple or chronologicalbonds that, when taken as a whole, equal the contract price. Thesurety on the performance bond may not be released until one (1)year after the date of the board's final settlement with the contractor.The performance bond must specify that:
(1) a modification, omission, or addition to the terms andconditions of the public work contract, plans, specifications,drawings, or profile;
(2) a defect in the public work contract; or
(3) a defect in the proceedings preliminary to the letting andawarding of the public work contract;
does not discharge the surety.
(f) The board or escrow agent shall pay the contractor withinsixty-one (61) days after the date of substantial completion, subjectto sections 11 and 12 of this chapter. Payment by the escrow agentshall include all escrowed principal and escrowed income. If withinsixty-one (61) days after the date of substantial completion thereremain uncompleted minor items, an amount equal to two hundredpercent (200%) of the value of each item as determined by thearchitect-engineer shall be withheld until the item is completed.Required warranties begin not later than the date of substantialcompletion.
(g) Actions against a surety on a performance bond must bebrought within one (1) year after the date of the board's finalsettlement with the contractor.
(h) This subsection applies to public work contracts of less thantwo hundred fifty thousand dollars ($250,000). The board may waivethe performance bond requirement of subsection (e) and accept froma contractor an irrevocable letter of credit for an equivalent amountfrom an Indiana financial institution approved by the department offinancial institutions instead of a performance bond. Subsections (e)through (g) apply to a letter of credit submitted under this subsection.
(i) This subsection applies to the Indiana stadium and conventionbuilding authority created by IC 5-1-17-6. The board awarding thecontract for a capital improvement project may waive anyperformance bond requirement if the board, after public notice andhearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unableto provide the performance bond; or
(B) the cost or coverage of the performance bond is not inthe best interest of the project; and
(2) that an adequate alternative is provided through a letter ofcredit, additional retainage of at least ten percent (10%) of thecontract amount, a joint payable check system, or othersufficient protective mechanism.
As added by Acts 1981, P.L.57, SEC.38. Amended by P.L.70-1989,SEC.3; P.L.43-2003, SEC.1; P.L.120-2006, SEC.5; P.L.2-2006,SEC.189; P.L.1-2007, SEC.239; P.L.133-2007, SEC.14.
IC 36-1-12-15
Wage scale and antidiscrimination provisions
Sec. 15. (a) A contract by the board for public work must conformto the wage scale provisions of IC 5-16-7.
(b) A contract by the board for public work must conform with theantidiscrimination provisions of IC 5-16-6. The board may considera violation of IC 5-16-6 a material breach of the contract, as providedin IC 22-9-1-10.
As added by Acts 1981, P.L.57, SEC.38.
IC 36-1-12-16
Necessity of compliance with chapter
Sec. 16. A contract for public work by a political subdivision oragency is void if it is not let in accordance with this chapter.
As added by Acts 1981, P.L.57, SEC.38.
IC 36-1-12-17
Road or street work contracts; timely payment of claims; finalpayment; interest for late payment
Sec. 17. (a) A contract for road or street work must contain aprovision for the timely payment of claims made by the contractor.
(b) Each contract must provide for final payment within onehundred twenty (120) days after final acceptance and completion ofthe contract. Final payment may not be made on any amount that isin dispute, but final payment may be made on that part of a contractor those amounts that are not in dispute.
(c) For each day after one hundred twenty (120) days, the boardshall pay to the contractor interest for late payment of money due tothe contractor. However, interest may not be paid for those days thatthe delay in payment is not directly attributable to the board. Theannual percentage rate of interest that the board shall pay on theunpaid balance is twelve percent (12%).
As added by P.L.340-1983, SEC.1.
IC 36-1-12-18
Change or alteration of specifications; change orders
Sec. 18. (a) If, in the course of the construction, reconstruction, orrepair of a public work project, it becomes necessary to change oralter the original specifications, a change order may be issued to add,delete, or change an item or items in the original contract. Thechange order becomes an addendum to the contract and must beapproved and signed by the board and the contractor.
(b) If a licensed architect or engineer is assigned to the publicwork project, the change order must be prepared by that person.
(c) A change order may not be issued before commencement ofthe actual construction, reconstruction, or repairs except in the caseof an emergency. In that case, the board must make a declaration, andthe board's minutes must show the nature of the emergency.
(d) The total of all change orders issued that increase the scope ofthe project may not exceed twenty percent (20%) of the amount of
the original contract. A change order issued as a result ofcircumstances that could not have been reasonably foreseen does notincrease the scope of the project.
(e) All change orders must be directly related to the originalpublic work project.
(f) If additional units of materials included in the original contractare needed, the cost of these units in the change order must be thesame as those shown in the original contract.
As added by P.L.329-1985, SEC.24.
IC 36-1-12-19
Dividing cost of a single public work project into two or moreprojects; prohibition; penalty
Sec. 19. (a) For purposes of this section, the cost of a public workproject includes the cost of materials, labor, equipment rental, and allother expenses incidental to the performance of the project.
(b) The cost of a single public work project may not be dividedinto two (2) or more projects for the purpose of avoiding therequirement to solicit bids.
(c) A bidder or quoter or a person who is a party to a public workcontract who knowingly violates this section commits a Class Ainfraction and may not be a party to or benefit from any contractunder this chapter for two (2) years from the date of the conviction.
(d) Any board member or officer of a political subdivision oragency who knowingly violates this section commits a Class Ainfraction.
As added by P.L.216-1986, SEC.1.
IC 36-1-12-20
Trench safety systems; cost recovery
Sec. 20. (a) This section applies to a public works project thatmay require creation of a trench of at least five (5) feet in depth.
(b) IOSHA regulations 29 C.F.R. 1926, Subpart P, for trenchsafety systems shall be incorporated into the contract documents fora public works project.
(c) The contract documents for a public works project shallprovide that the cost for trench safety systems shall be paid for:
(1) as a separate pay item; or
(2) in the pay item of the principal work with which the safetysystems are associated.
As added by P.L.26-1989, SEC.21.
IC 36-1-12-21
Plumbing installations; proof of licensure
Sec. 21. (a) A person who submits a bid for a public workscontract under this chapter that involves the installation of plumbingmust submit evidence that the person is a licensed plumbingcontractor under IC 25-28.5-1.
(b) If a public works contract under this chapter is awarded to aperson who does not meet the requirements of subsection (a), the
contract is void.
As added by P.L.20-1991, SEC.13.