IC 36-1-12-1 Application of chapter; alternatives to chapter
Sec. 1. (a) Except as provided in this section, this chapter applies
to 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 by
the political subdivision or agency.
(b) This chapter does not apply to an officer or agent who, on
behalf of a municipal utility, maintains, extends, and installs services
of the utility if the necessary work is done by the employees of the
utility.
(c) This chapter does not apply to hospitals organized or operated
under IC 16-22-1 through IC 16-22-5 or IC 16-23-1, unless the public
work is financed in whole or in part with cumulative building fund
revenue.
(d) This chapter does not apply to tax exempt Indiana nonprofit
corporations leasing and operating a city market owned by a political
subdivision.
(e) As an alternative to this chapter, the governing body of a
political subdivision or its agencies may do the following:
(1) Enter into a design-build contract as permitted under
IC 5-30.
(2) Participate in a utility efficiency program or enter into a
guaranteed savings contract as permitted under IC 36-1-12.5.
(f) This chapter does not apply to a person that has entered into an
operating agreement with a political subdivision or an agency of a
political 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 subdivision
or an agency having the power to award contracts for public
work.
(2) "Contractor" means a person who is a party to a public work
contract with the board.
(3) "Subcontractor" means a person who is a party to a contract
with the contractor and furnishes and performs labor on the
public work project. The term includes material men who
supply 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 and
securities or other property placed in an escrow account.
(6) "Operating agreement" has the meaning set forth in
IC 5-23-2-7.
(7) "Person" means any association, corporation, limited
liability company, fiduciary, individual, joint venture,
partnership, sole proprietorship, or any other legal entity.
(8) "Property" means all:
(A) personal property, fixtures, furnishings, inventory, and
equipment; and
(B) real property.
(9) "Public fund" means all funds that are:
(A) derived from the established revenue sources of a
political subdivision or an agency of a political subdivision;
and
(B) deposited in a general or special fund of a municipal
corporation, or another political subdivision or agency of a
political subdivision.
The term does not include funds received by any person
managing or operating a public facility under a duly authorized
operating agreement under IC 5-23 or proceeds of bonds
payable exclusively by a private entity.
(10) "Retainage" means the amount to be withheld from a
payment to the contractor or subcontractor until the occurrence
of a specified event.
(11) "Specifications" means a description of the physical
characteristics, functional characteristics, extent, or nature of
any public work required by the board.
(12) "Substantial completion" refers to the date when the
construction of a structure is sufficiently completed, in
accordance with the plans and specifications, as modified by
any complete change orders agreed to by the parties, so that it
can 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 the
construction, reconstruction, alteration, or renovation of a public
building, airport facility, or other structure that is paid for out of a
public fund or out of a special assessment. The term includes the
construction, alteration, or repair of a highway, street, alley, bridge,
sewer, drain, or other improvement that is paid for out of a public
fund or out of a special assessment. The term also includes any
public work leased by a political subdivision under a lease containing
an 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 the
manner provided in IC 5-22 and perform any public work, by means
of its own workforce, without awarding a contract whenever the cost
of that public work project is estimated to be less than one hundred
thousand dollars ($100,000). Before a board may perform any work
under this section by means of its own workforce, the political
subdivision or agency must have a group of employees on its staff
who are capable of performing the construction, maintenance, and
repair applicable to that work. For purposes of this subsection, the
cost of a public work project includes the actual cost of materials,
labor, equipment, rental, a reasonable rate for use of trucks and
heavy equipment owned, and all other expenses incidental to the
performance of the project.
(b) When the project involves the rental of equipment with an
operator furnished by the owner, or the installation or application of
materials by the supplier of the materials, the project is considered
to be a public work project and subject to this chapter. However, an
annual contract may be awarded for equipment rental and materials
to be installed or applied during a calendar or fiscal year if the
proposed project or projects are described in the bid specifications.
(c) A board of aviation commissioners or an airport authority
board may purchase or lease materials in the manner provided in
IC 5-22 and perform any public work by means of its own workforce
and owned or leased equipment, in the construction, maintenance,
and repair of any airport roadway, runway, taxiway, or aircraft
parking apron whenever the cost of that public work project is
estimated to be less than fifty thousand dollars ($50,000).
(d) Municipal and county hospitals must comply with this chapter
for all contracts for public work that are financed in whole or in part
with cumulative building fund revenue, as provided in section 1(c)
of this chapter. However, if the cost of the public work is estimated
to be less than fifty thousand dollars ($50,000), as reflected in the
board minutes, the hospital board may have the public work done
without receiving bids, by purchasing the materials and performing
the work by means of its own workforce and owned or leased
equipment.
(e) If a public works project involves a structure, an improvement,
or a facility under the control of a department (as defined in
IC 4-3-19-2(2)), the department may not artificially divide the project
to 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 and
the board determines by a two-thirds (2/3) vote that it is expedient
and in the best public interest to employ professional engineering,
architectural, or accounting services for the planning and financing
of the public work and the preparation of plans and specifications,
then the limitations and restrictions in the general statutes with
respect to invalidity of contracts without an appropriation therefor,
payment of fees solely from the proceeds of bonds or assessments
when and if issued, and payment of fees solely from a special fund
or funds to be provided in the future, do not apply to contracts for
those professional services to the extent that such limitations and
restrictions might otherwise prevent the payment of fees for services
actually rendered in connection with those contracts or affect the
obligation 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 work
project 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 class
city; or
(C) a regional water or sewage district established under
IC 13-26; or
(2) at least fifty thousand dollars ($50,000) in a political
subdivision 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 specifications
describing the kind of public work required, but shall avoid
specifications which might unduly limit competition. If the
project involves the resurfacing (as defined by IC 8-14-2-1) of
a road, street, or bridge, the specifications must show how the
weight or volume of the materials will be accurately measured
and verified.
(2) The board shall file the plans and specifications in a place
reasonably accessible to the public, which shall be specified in
the notice required by subdivision (3).
(3) Upon the filing of the plans and specifications, the board
shall publish notice in accordance with IC 5-3-1 calling for
sealed proposals for the public work needed.
(4) The notice must specify the place where the plans and
specifications are on file and the date fixed for receiving bids.
(5) The period of time between the date of the first publication
and the date of receiving bids shall be governed by the size of
the contemplated project in the discretion of the board. The
period of time between the date of the first publication and
receiving bids may not be more than:
(A) six (6) weeks if the estimated cost of the public works
project is less than twenty-five million dollars
($25,000,000); and
(B) ten (10) weeks if the estimated cost of the public works
project 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 submit
a financial statement, a statement of experience, a proposed
plan or plans for performing the public work, and the equipment
that the bidder has available for the performance of the public
work. The statement shall be submitted on forms prescribed by
the state board of accounts.
(7) The board may not require a bidder to submit a bid before
the meeting at which bids are to be received. The meeting for
receiving bids must be open to the public. All bids received
shall be opened publicly and read aloud at the time and place
designated and not before.
(8) Except as provided in subsection (c), the board shall:
(A) award the contract for public work or improvements to
the lowest responsible and responsive bidder; or
(B) reject all bids submitted.
(9) If the board awards the contract to a bidder other than the
lowest bidder, the board must state in the minutes or
memoranda, at the time the award is made, the factors used to
determine which bidder is the lowest responsible and
responsive bidder and to justify the award. The board shall keep
a copy of the minutes or memoranda available for public
inspection.
(10) In determining whether a bidder is responsive, the board
may consider the following factors:
(A) Whether the bidder has submitted a bid or quote that
conforms in all material respects to the specifications.
(B) Whether the bidder has submitted a bid that complies
specifically with the invitation to bid and the instructions to
bidders.
(C) Whether the bidder has complied with all applicable
statutes, ordinances, resolutions, or rules pertaining to the
award of a public contract.
(11) In determining whether a bidder is a responsible bidder, the
board may consider the following factors:
(A) The ability and capacity of the bidder to perform the
work.
(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 or
agreement:
(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 any
other bid.
(c) Notwithstanding subsection (b)(8), a county may award sand,
gravel, asphalt paving materials, or crushed stone contracts to more
than one (1) responsible and responsive bidder if the specifications
allow for bids to be based upon service to specific geographic areas
and the contracts are awarded by geographic area. The geographic
areas 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 each
bid by a bidder in the amount determined and specified by the
board in the notice of the letting if the cost of the public work
is 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 each
bid by a bidder in the amount determined and specified by the
board in the notice of the letting if the cost of the public work
is 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 at
more than ten percent (10%) of the contract price. The bond or
certified check shall be made payable to the political subdivision or
agency.
(c) All checks of unsuccessful bidders shall be returned to them
by the board upon selection of successful bidders. Checks of
successful bidders shall be held until delivery of the performance
bond, 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 project
is estimated to cost:
(1) at least twenty-five thousand dollars ($25,000) and less than
one hundred thousand dollars ($100,000) in:
(A) a consolidated city, second class city, or third class city
with a population of fifteen thousand (15,000) or more;
(B) a county containing a consolidated city or second class
city; or
(C) a regional water or sewage district established under
IC 13-26; or
(2) at least twenty-five thousand dollars ($25,000) and less than
fifty thousand dollars ($50,000) in a political subdivision or
agency 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) persons
known to deal in the class of work proposed to be done by
mailing them a notice stating that plans and specifications are
on file in a specified office. The notice must be mailed not less
than seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote before
the meeting at which quotes are to be received. The meeting for
receiving quotes must be open to the public. All quotes received
shall be opened publicly and read aloud at the time and place
designated and not before.
(3) The board shall award the contract for the public work to the
lowest 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 routine
operation, routine repair, or routine maintenance of existing
structures, buildings, or real property if the cost of the public work
is estimated to be less than one hundred fifty thousand dollars
($150,000).
(b) The board may award a contract for public work described in
subsection (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 is
estimated to cost less than fifty thousand dollars ($50,000). Except
as provided in subsection (g) for local boards of aviation
commissioners and local airport authorities, if a contract is to be
awarded, the board may proceed under section 4 of this chapter or
under subsection (b) or (c).
(b) The board must proceed under the following provisions:
(1) The board shall invite quotes from at least three (3) persons
known to deal in the class of work proposed to be done by
mailing them a notice stating that plans and specifications are
on file in a specified office. The notice must be mailed not less
than seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote before
the meeting at which quotes are to be received. The meeting for
receiving quotes must be open to the public. All quotes received
shall be opened publicly and read aloud at the time and place
designated and not before.
(3) The board shall award the contract for the public work to the
lowest responsible and responsive quoter.
(4) The board may reject all quotes submitted.
(5) If the board rejects all quotes under subdivision (4) of this
section, the board may negotiate and enter into agreements for
the work in the open market without inviting or receiving
quotes if the board establishes in writing the reasons for
rejecting the quotes.
(c) The board may not proceed under subsection (b) for the
resurfacing (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 is
capable of accurate measurement and verification; and
(2) the specifications define the geographic points at which the
project begins and ends.
(d) For the purposes of this section, if contiguous sections of a
road, street, or bridge are to be resurfaced in a calendar year, all of
the work shall be considered to comprise a single public work
project.
(e) The board may purchase or lease supplies in the manner
provided in IC 5-22 and perform the public work by means of its own
workforce without awarding a public work contract.
(f) Before the board may perform any work under this section by
means of its own workforce, the political subdivision or agency must
have a group of employees on its staff who are capable of performing
the construction, maintenance, and repair applicable to that work.
(g) This subsection applies to local boards of aviation
commissioners operating under IC 8-22-2 and local airport
authorities operating under IC 8-22-3. If the contract is to be awarded
by a board to which this subsection applies, or to a designee of the
board under subsection (h), the board or its designee may proceed
under section 4 of this chapter or under the following provisions. The
board or its designee may invite quotes from at least three (3)
persons known to deal in the class of work proposed to be done by
mailing the persons a copy of the plans and specifications for the
work not less than seven (7) days before the time fixed for receiving
quotes. If the board or its designee receives a satisfactory quote, the
board or its designee shall award the contract to the lowest
responsible and responsive quoter for the class of work required. The
board or its designee may reject all quotes submitted and, if no valid
quotes are received for the class of work, contract for the work
without further invitations for quotes.
(h) The board may delegate its authority to award a contract for
a public works project that is estimated to cost less than fifty
thousand dollars ($50,000) to the airport personnel in charge of
airport public works projects.
(i) Quotes for public works projects costing less than twenty-five
thousand dollars ($25,000) may be obtained by soliciting at least
three (3) quotes by telephone or facsimile transmission. The seven
(7) day waiting period required by subsection (b)(1) does not apply
to 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 contract
and to issue notice; election by bidder to reject contract
Sec. 6. (a) Except as provided in subsections (b) and (c), the board
shall award the contract and shall provide the successful bidder with
written notice to proceed within sixty (60) days after the date on
which bids are opened.
(b) If general obligation bonds are to be sold to finance the
construction that is the subject of the bid, the board shall allow the
bidder ninety (90) days.
(c) If revenue bonds are to be issued, when approved by the utility
regulatory commission, or if special taxing district, special benefit,
or revenue bonds are to be issued and sold to finance the
construction, the board shall allow the bidder one hundred fifty (150)
days.
(d) A failure to award and execute the contract and to issue notice
within the time required by this section entitles the successful bidder
to:
(1) reject the contract and withdraw his bid without prejudice;
or
(2) extend the time to award the contract and provide notice to
proceed at an agreed later date.
If the successful bidder elects to reject the contract and withdraw his
bid, notice of that election must be given to the board in writing
within 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 licensed
architect or engineer
Sec. 7. Public work performed or contracted for on a public
building, the cost of which is more than one hundred thousand
dollars ($100,000) may be undertaken by the board only in
accordance with plans and specifications approved by an architect or
engineer 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; price
adjustments 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 of
IC 26-1-2-305. The contract may provide that prices for construction
materials are subject to price of materials adjustment. When price
adjustments are part of the contract, the method of price adjustments
shall be specified in the contract. However, this section does not
authorize the expenditure of money above the total amount of money
appropriated 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, may
contract for a public work project without advertising for bids if bids
or quotes are invited from at least two (2) persons known to deal in
the public work required to be done.
(b) The minutes of the board must show the declaration of
emergency and the names of the persons invited to bid or provide
quotes. 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 be
approved by the state department of health, the division of fire and
building 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 the
completion of the public work project, file in the division of fire and
building safety a complete set of final record drawings for the public
work project. However, this requirement does not apply to a public
work project constructed at a cost less than one hundred thousand
dollars ($100,000). In addition, the filing of the drawings is required
only if the project involves a public building.
(b) The division of fire and building safety shall provide a
depository for all final record drawings filed, and retain them for
inspection and loan under regulated conditions. The fire prevention
and building safety commission may designate the librarian of
Indiana as the custodian of the final record drawings. The librarian
shall preserve the final record drawings in the state archives as public
documents. 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, the
board shall withhold final payment to the contractor until the
contractor has paid the subcontractors, material suppliers, laborers,
or those furnishing services. However, if there is not a sufficient sum
owed to the contractor to pay those bills, the sum owed to the
contractor shall be prorated in payment of the bills among the parties
entitled.
(b) To receive payment the subcontractor or subcontractors,
material suppliers, laborers, or those furnishing services shall file
their claims with the board within sixty (60) days after the last labor
performed, 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 be
entitled to the money withheld, the board shall pay the claim from
the 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 entitled
to the money withheld, the board shall retain sufficient money to pay
the claims until the dispute is settled and the correct amount is
determined. However, the board may make a final and complete
settlement with the contractor after thirty (30) days after the date of
the completion and acceptance of the public work if the board is
furnished with satisfactory evidence indicating the payment in full of
all subcontractors, material suppliers, laborers, or those furnishing
services.
(e) A claim form must be signed by an individual from the
political subdivision or agency who is directly responsible for the
project and who can verify:
(1) the quantity of a purchased item; or
(2) the weight or volume of the material applied, in the case of
a 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, or
suppliers
Sec. 13. A contract for public work must contain a provision for
the payment of subcontractors, laborers, material suppliers, and those
performing services. The board shall withhold money from the
contract 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 appropriate
political subdivision or agency:
(1) shall require the contractor to execute a payment bond to the
appropriate political subdivision or agency, approved by and for
the benefit of the political subdivision or agency, in an amount
equal to the contract price if the cost of the public work is
estimated to be more than two hundred thousand dollars
($200,000); and
(2) may require the contractor to execute a payment bond to the
appropriate political subdivision or agency, approved by and for
the benefit of the political subdivision or agency, in an amount
equal to the contract price if the cost of the public work is
estimated 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 indebtedness
to a person for labor and service performed, material furnished, or
services rendered. The payment bond must state that it is for the
benefit of the subcontractors, laborers, material suppliers, and those
performing services.
(b) The payment bond shall be deposited with the board. The
payment bond must specify that:
(1) a modification, omission, or addition to the terms and
conditions 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 and
awarding of the public work contract;
does not discharge the surety. The surety of the payment bond may
not 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, material
furnished, or services provided shall, within sixty (60) days after the
completion of the labor or service, or within sixty (60) days after the
last item of material has been furnished, file with the board signed
duplicate statements of the amount due. The board shall forward to
the surety of the payment bond one (1) of the signed duplicate
statements. However, failure of the board to forward a signed
duplicate statement does not affect the rights of a person to whom
money is due. In addition, a failure to forward the statement does not
operate 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 the
board. 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 court
action must be brought within sixty (60) days after the date of the
final completion and acceptance of the public work.
(e) This subsection applies to contracts for a capital improvement
entered into by, for, or on behalf of the Indiana stadium and
convention building authority created by IC 5-1-17-6. The board
awarding the contract for the capital improvement project may waive
any payment bond requirement if the board, after public notice and
hearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the payment bond; or
(B) the cost or coverage of the payment bond is not in the
best interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other
sufficient 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 substantial
completion; actions against surety contracts less than $250,000
Sec. 14. (a) This section applies to public work contracts in excess
of two hundred thousand dollars ($200,000) for projects other than
highways, roads, streets, alleys, bridges, and appurtenant structures
situated on streets, alleys, and dedicated highway rights-of-way. A
board may require a contractor and subcontractor to include contract
provisions for retainage as set forth in this section for contracts that
are not more than two hundred thousand dollars ($200,000). This
section also applies to a lessor corporation qualifying under
IC 20-47-2 or IC 20-47-3 or any other lease-back arrangement
containing an option to purchase, notwithstanding the statutory
provisions governing those leases.
(b) A board that enters into a contract for public work, and a
contractor who subcontracts parts of that contract, shall include in
their respective contracts provisions for the retainage of portions of
payments by the board to contractors, by contractors to
subcontractors, and for the payment of subcontractors. At the
discretion of the contractor, the retainage shall be held by the board
or shall be placed in an escrow account with a bank, savings and loan
institution, or the state as the escrow agent. The escrow agent shall
be selected by mutual agreement between board and contractor or
contractor and subcontractor under a written agreement among the
bank 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 of
retainage that it holds under this section.
(c) To determine the amount of retainage to be withheld, the
board shall:
(1) withhold no more than ten percent (10%) nor less than six
percent (6%) of the dollar value of all work satisfactorily
completed 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 three
percent (3%) of the dollar value of all work satisfactorily
completed until the public work is substantially completed.
If upon substantial completion of the public work minor items remain
uncompleted, an amount computed under subsection (f) shall be
withheld until those items are completed.
(d) The escrow agreement must contain the following provisions:
(1) The escrow agent shall invest all escrowed principal in
obligations selected by the escrow agent.
(2) The escrow agent shall hold the escrowed principal and
income until receipt of notice from the board and the contractor,
or the contractor and the subcontractor, specifying the part of
the escrowed principal to be released from the escrow and the
person to whom that portion is to be released. After receipt of
the notice, the escrow agent shall remit the designated part of
escrowed principal and the same proportion of then escrowed
income to the person specified in the notice.
(3) The escrow agent shall be compensated for the agent's
services. The parties may agree on a reasonable fee comparable
with fees being charged for the handling of escrow accounts of
similar size and duration. The fee shall be paid from the
escrowed income.
The escrow agreement may include other terms and conditions
consistent with this subsection, including provisions authorizing the
escrow agent to commingle the escrowed funds with funds held in
other escrow accounts and limiting the liability of the escrow agent.
(e) Except as provided by subsections (i) and (h), the contractor
shall furnish the board with a performance bond equal to the contract
price. If acceptable to the board, the performance bond may provide
for incremental bonding in the form of multiple or chronological
bonds that, when taken as a whole, equal the contract price. The
surety 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 and
conditions 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 and
awarding of the public work contract;
does not discharge the surety.
(f) The board or escrow agent shall pay the contractor within
sixty-one (61) days after the date of substantial completion, subject
to sections 11 and 12 of this chapter. Payment by the escrow agent
shall include all escrowed principal and escrowed income. If within
sixty-one (61) days after the date of substantial completion there
remain uncompleted minor items, an amount equal to two hundred
percent (200%) of the value of each item as determined by the
architect-engineer shall be withheld until the item is completed.
Required warranties begin not later than the date of substantial
completion.
(g) Actions against a surety on a performance bond must be
brought within one (1) year after the date of the board's final
settlement with the contractor.
(h) This subsection applies to public work contracts of less than
two hundred fifty thousand dollars ($250,000). The board may waive
the performance bond requirement of subsection (e) and accept from
a contractor an irrevocable letter of credit for an equivalent amount
from an Indiana financial institution approved by the department of
financial 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 convention
building authority created by IC 5-1-17-6. The board awarding the
contract for a capital improvement project may waive any
performance bond requirement if the board, after public notice and
hearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the performance bond; or
(B) the cost or coverage of the performance bond is not in
the best interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other
sufficient 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 conform
to the wage scale provisions of IC 5-16-7.
(b) A contract by the board for public work must conform with the
antidiscrimination provisions of IC 5-16-6. The board may consider
a violation of IC 5-16-6 a material breach of the contract, as provided
in 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 or
agency 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; final
payment; interest for late payment
Sec. 17. (a) A contract for road or street work must contain a
provision for the timely payment of claims made by the contractor.
(b) Each contract must provide for final payment within one
hundred twenty (120) days after final acceptance and completion of
the contract. Final payment may not be made on any amount that is
in dispute, but final payment may be made on that part of a contract
or those amounts that are not in dispute.
(c) For each day after one hundred twenty (120) days, the board
shall pay to the contractor interest for late payment of money due to
the contractor. However, interest may not be paid for those days that
the delay in payment is not directly attributable to the board. The
annual percentage rate of interest that the board shall pay on the
unpaid 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, or
repair of a public work project, it becomes necessary to change or
alter the original specifications, a change order may be issued to add,
delete, or change an item or items in the original contract. The
change order becomes an addendum to the contract and must be
approved and signed by the board and the contractor.
(b) If a licensed architect or engineer is assigned to the public
work project, the change order must be prepared by that person.
(c) A change order may not be issued before commencement of
the actual construction, reconstruction, or repairs except in the case
of an emergency. In that case, the board must make a declaration, and
the board's minutes must show the nature of the emergency.
(d) The total of all change orders issued that increase the scope of
the project may not exceed twenty percent (20%) of the amount of
the original contract. A change order issued as a result of
circumstances that could not have been reasonably foreseen does not
increase the scope of the project.
(e) All change orders must be directly related to the original
public work project.
(f) If additional units of materials included in the original contract
are needed, the cost of these units in the change order must be the
same 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 more
projects; prohibition; penalty
Sec. 19. (a) For purposes of this section, the cost of a public work
project includes the cost of materials, labor, equipment rental, and all
other expenses incidental to the performance of the project.
(b) The cost of a single public work project may not be divided
into two (2) or more projects for the purpose of avoiding the
requirement to solicit bids.
(c) A bidder or quoter or a person who is a party to a public work
contract who knowingly violates this section commits a Class A
infraction and may not be a party to or benefit from any contract
under this chapter for two (2) years from the date of the conviction.
(d) Any board member or officer of a political subdivision or
agency who knowingly violates this section commits a Class A
infraction. 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 that
may require creation of a trench of at least five (5) feet in depth.
(b) IOSHA regulations 29 C.F.R. 1926, Subpart P, for trench
safety systems shall be incorporated into the contract documents for
a public works project.
(c) The contract documents for a public works project shall
provide 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 safety
systems 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 works
contract under this chapter that involves the installation of plumbing
must submit evidence that the person is a licensed plumbing
contractor under IC 25-28.5-1.
(b) If a public works contract under this chapter is awarded to a
person who does not meet the requirements of subsection (a), the
contract is void. As added by P.L.20-1991, SEC.13.
IC 36-1-12-1 Application of chapter; alternatives to chapter
Sec. 1. (a) Except as provided in this section, this chapter applies
to 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 by
the political subdivision or agency.
(b) This chapter does not apply to an officer or agent who, on
behalf of a municipal utility, maintains, extends, and installs services
of the utility if the necessary work is done by the employees of the
utility.
(c) This chapter does not apply to hospitals organized or operated
under IC 16-22-1 through IC 16-22-5 or IC 16-23-1, unless the public
work is financed in whole or in part with cumulative building fund
revenue.
(d) This chapter does not apply to tax exempt Indiana nonprofit
corporations leasing and operating a city market owned by a political
subdivision.
(e) As an alternative to this chapter, the governing body of a
political subdivision or its agencies may do the following:
(1) Enter into a design-build contract as permitted under
IC 5-30.
(2) Participate in a utility efficiency program or enter into a
guaranteed savings contract as permitted under IC 36-1-12.5.
(f) This chapter does not apply to a person that has entered into an
operating agreement with a political subdivision or an agency of a
political 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 subdivision
or an agency having the power to award contracts for public
work.
(2) "Contractor" means a person who is a party to a public work
contract with the board.
(3) "Subcontractor" means a person who is a party to a contract
with the contractor and furnishes and performs labor on the
public work project. The term includes material men who
supply 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 and
securities or other property placed in an escrow account.
(6) "Operating agreement" has the meaning set forth in
IC 5-23-2-7.
(7) "Person" means any association, corporation, limited
liability company, fiduciary, individual, joint venture,
partnership, sole proprietorship, or any other legal entity.
(8) "Property" means all:
(A) personal property, fixtures, furnishings, inventory, and
equipment; and
(B) real property.
(9) "Public fund" means all funds that are:
(A) derived from the established revenue sources of a
political subdivision or an agency of a political subdivision;
and
(B) deposited in a general or special fund of a municipal
corporation, or another political subdivision or agency of a
political subdivision.
The term does not include funds received by any person
managing or operating a public facility under a duly authorized
operating agreement under IC 5-23 or proceeds of bonds
payable exclusively by a private entity.
(10) "Retainage" means the amount to be withheld from a
payment to the contractor or subcontractor until the occurrence
of a specified event.
(11) "Specifications" means a description of the physical
characteristics, functional characteristics, extent, or nature of
any public work required by the board.
(12) "Substantial completion" refers to the date when the
construction of a structure is sufficiently completed, in
accordance with the plans and specifications, as modified by
any complete change orders agreed to by the parties, so that it
can 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 the
construction, reconstruction, alteration, or renovation of a public
building, airport facility, or other structure that is paid for out of a
public fund or out of a special assessment. The term includes the
construction, alteration, or repair of a highway, street, alley, bridge,
sewer, drain, or other improvement that is paid for out of a public
fund or out of a special assessment. The term also includes any
public work leased by a political subdivision under a lease containing
an 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 the
manner provided in IC 5-22 and perform any public work, by means
of its own workforce, without awarding a contract whenever the cost
of that public work project is estimated to be less than one hundred
thousand dollars ($100,000). Before a board may perform any work
under this section by means of its own workforce, the political
subdivision or agency must have a group of employees on its staff
who are capable of performing the construction, maintenance, and
repair applicable to that work. For purposes of this subsection, the
cost of a public work project includes the actual cost of materials,
labor, equipment, rental, a reasonable rate for use of trucks and
heavy equipment owned, and all other expenses incidental to the
performance of the project.
(b) When the project involves the rental of equipment with an
operator furnished by the owner, or the installation or application of
materials by the supplier of the materials, the project is considered
to be a public work project and subject to this chapter. However, an
annual contract may be awarded for equipment rental and materials
to be installed or applied during a calendar or fiscal year if the
proposed project or projects are described in the bid specifications.
(c) A board of aviation commissioners or an airport authority
board may purchase or lease materials in the manner provided in
IC 5-22 and perform any public work by means of its own workforce
and owned or leased equipment, in the construction, maintenance,
and repair of any airport roadway, runway, taxiway, or aircraft
parking apron whenever the cost of that public work project is
estimated to be less than fifty thousand dollars ($50,000).
(d) Municipal and county hospitals must comply with this chapter
for all contracts for public work that are financed in whole or in part
with cumulative building fund revenue, as provided in section 1(c)
of this chapter. However, if the cost of the public work is estimated
to be less than fifty thousand dollars ($50,000), as reflected in the
board minutes, the hospital board may have the public work done
without receiving bids, by purchasing the materials and performing
the work by means of its own workforce and owned or leased
equipment.
(e) If a public works project involves a structure, an improvement,
or a facility under the control of a department (as defined in
IC 4-3-19-2(2)), the department may not artificially divide the project
to 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 and
the board determines by a two-thirds (2/3) vote that it is expedient
and in the best public interest to employ professional engineering,
architectural, or accounting services for the planning and financing
of the public work and the preparation of plans and specifications,
then the limitations and restrictions in the general statutes with
respect to invalidity of contracts without an appropriation therefor,
payment of fees solely from the proceeds of bonds or assessments
when and if issued, and payment of fees solely from a special fund
or funds to be provided in the future, do not apply to contracts for
those professional services to the extent that such limitations and
restrictions might otherwise prevent the payment of fees for services
actually rendered in connection with those contracts or affect the
obligation 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 work
project 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 class
city; or
(C) a regional water or sewage district established under
IC 13-26; or
(2) at least fifty thousand dollars ($50,000) in a political
subdivision 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 specifications
describing the kind of public work required, but shall avoid
specifications which might unduly limit competition. If the
project involves the resurfacing (as defined by IC 8-14-2-1) of
a road, street, or bridge, the specifications must show how the
weight or volume of the materials will be accurately measured
and verified.
(2) The board shall file the plans and specifications in a place
reasonably accessible to the public, which shall be specified in
the notice required by subdivision (3).
(3) Upon the filing of the plans and specifications, the board
shall publish notice in accordance with IC 5-3-1 calling for
sealed proposals for the public work needed.
(4) The notice must specify the place where the plans and
specifications are on file and the date fixed for receiving bids.
(5) The period of time between the date of the first publication
and the date of receiving bids shall be governed by the size of
the contemplated project in the discretion of the board. The
period of time between the date of the first publication and
receiving bids may not be more than:
(A) six (6) weeks if the estimated cost of the public works
project is less than twenty-five million dollars
($25,000,000); and
(B) ten (10) weeks if the estimated cost of the public works
project 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 submit
a financial statement, a statement of experience, a proposed
plan or plans for performing the public work, and the equipment
that the bidder has available for the performance of the public
work. The statement shall be submitted on forms prescribed by
the state board of accounts.
(7) The board may not require a bidder to submit a bid before
the meeting at which bids are to be received. The meeting for
receiving bids must be open to the public. All bids received
shall be opened publicly and read aloud at the time and place
designated and not before.
(8) Except as provided in subsection (c), the board shall:
(A) award the contract for public work or improvements to
the lowest responsible and responsive bidder; or
(B) reject all bids submitted.
(9) If the board awards the contract to a bidder other than the
lowest bidder, the board must state in the minutes or
memoranda, at the time the award is made, the factors used to
determine which bidder is the lowest responsible and
responsive bidder and to justify the award. The board shall keep
a copy of the minutes or memoranda available for public
inspection.
(10) In determining whether a bidder is responsive, the board
may consider the following factors:
(A) Whether the bidder has submitted a bid or quote that
conforms in all material respects to the specifications.
(B) Whether the bidder has submitted a bid that complies
specifically with the invitation to bid and the instructions to
bidders.
(C) Whether the bidder has complied with all applicable
statutes, ordinances, resolutions, or rules pertaining to the
award of a public contract.
(11) In determining whether a bidder is a responsible bidder, the
board may consider the following factors:
(A) The ability and capacity of the bidder to perform the
work.
(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 or
agreement:
(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 any
other bid.
(c) Notwithstanding subsection (b)(8), a county may award sand,
gravel, asphalt paving materials, or crushed stone contracts to more
than one (1) responsible and responsive bidder if the specifications
allow for bids to be based upon service to specific geographic areas
and the contracts are awarded by geographic area. The geographic
areas 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 each
bid by a bidder in the amount determined and specified by the
board in the notice of the letting if the cost of the public work
is 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 each
bid by a bidder in the amount determined and specified by the
board in the notice of the letting if the cost of the public work
is 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 at
more than ten percent (10%) of the contract price. The bond or
certified check shall be made payable to the political subdivision or
agency.
(c) All checks of unsuccessful bidders shall be returned to them
by the board upon selection of successful bidders. Checks of
successful bidders shall be held until delivery of the performance
bond, 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 project
is estimated to cost:
(1) at least twenty-five thousand dollars ($25,000) and less than
one hundred thousand dollars ($100,000) in:
(A) a consolidated city, second class city, or third class city
with a population of fifteen thousand (15,000) or more;
(B) a county containing a consolidated city or second class
city; or
(C) a regional water or sewage district established under
IC 13-26; or
(2) at least twenty-five thousand dollars ($25,000) and less than
fifty thousand dollars ($50,000) in a political subdivision or
agency 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) persons
known to deal in the class of work proposed to be done by
mailing them a notice stating that plans and specifications are
on file in a specified office. The notice must be mailed not less
than seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote before
the meeting at which quotes are to be received. The meeting for
receiving quotes must be open to the public. All quotes received
shall be opened publicly and read aloud at the time and place
designated and not before.
(3) The board shall award the contract for the public work to the
lowest 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 routine
operation, routine repair, or routine maintenance of existing
structures, buildings, or real property if the cost of the public work
is estimated to be less than one hundred fifty thousand dollars
($150,000).
(b) The board may award a contract for public work described in
subsection (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 is
estimated to cost less than fifty thousand dollars ($50,000). Except
as provided in subsection (g) for local boards of aviation
commissioners and local airport authorities, if a contract is to be
awarded, the board may proceed under section 4 of this chapter or
under subsection (b) or (c).
(b) The board must proceed under the following provisions:
(1) The board shall invite quotes from at least three (3) persons
known to deal in the class of work proposed to be done by
mailing them a notice stating that plans and specifications are
on file in a specified office. The notice must be mailed not less
than seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote before
the meeting at which quotes are to be received. The meeting for
receiving quotes must be open to the public. All quotes received
shall be opened publicly and read aloud at the time and place
designated and not before.
(3) The board shall award the contract for the public work to the
lowest responsible and responsive quoter.
(4) The board may reject all quotes submitted.
(5) If the board rejects all quotes under subdivision (4) of this
section, the board may negotiate and enter into agreements for
the work in the open market without inviting or receiving
quotes if the board establishes in writing the reasons for
rejecting the quotes.
(c) The board may not proceed under subsection (b) for the
resurfacing (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 is
capable of accurate measurement and verification; and
(2) the specifications define the geographic points at which the
project begins and ends.
(d) For the purposes of this section, if contiguous sections of a
road, street, or bridge are to be resurfaced in a calendar year, all of
the work shall be considered to comprise a single public work
project.
(e) The board may purchase or lease supplies in the manner
provided in IC 5-22 and perform the public work by means of its own
workforce without awarding a public work contract.
(f) Before the board may perform any work under this section by
means of its own workforce, the political subdivision or agency must
have a group of employees on its staff who are capable of performing
the construction, maintenance, and repair applicable to that work.
(g) This subsection applies to local boards of aviation
commissioners operating under IC 8-22-2 and local airport
authorities operating under IC 8-22-3. If the contract is to be awarded
by a board to which this subsection applies, or to a designee of the
board under subsection (h), the board or its designee may proceed
under section 4 of this chapter or under the following provisions. The
board or its designee may invite quotes from at least three (3)
persons known to deal in the class of work proposed to be done by
mailing the persons a copy of the plans and specifications for the
work not less than seven (7) days before the time fixed for receiving
quotes. If the board or its designee receives a satisfactory quote, the
board or its designee shall award the contract to the lowest
responsible and responsive quoter for the class of work required. The
board or its designee may reject all quotes submitted and, if no valid
quotes are received for the class of work, contract for the work
without further invitations for quotes.
(h) The board may delegate its authority to award a contract for
a public works project that is estimated to cost less than fifty
thousand dollars ($50,000) to the airport personnel in charge of
airport public works projects.
(i) Quotes for public works projects costing less than twenty-five
thousand dollars ($25,000) may be obtained by soliciting at least
three (3) quotes by telephone or facsimile transmission. The seven
(7) day waiting period required by subsection (b)(1) does not apply
to 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 contract
and to issue notice; election by bidder to reject contract
Sec. 6. (a) Except as provided in subsections (b) and (c), the board
shall award the contract and shall provide the successful bidder with
written notice to proceed within sixty (60) days after the date on
which bids are opened.
(b) If general obligation bonds are to be sold to finance the
construction that is the subject of the bid, the board shall allow the
bidder ninety (90) days.
(c) If revenue bonds are to be issued, when approved by the utility
regulatory commission, or if special taxing district, special benefit,
or revenue bonds are to be issued and sold to finance the
construction, the board shall allow the bidder one hundred fifty (150)
days.
(d) A failure to award and execute the contract and to issue notice
within the time required by this section entitles the successful bidder
to:
(1) reject the contract and withdraw his bid without prejudice;
or
(2) extend the time to award the contract and provide notice to
proceed at an agreed later date.
If the successful bidder elects to reject the contract and withdraw his
bid, notice of that election must be given to the board in writing
within 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 licensed
architect or engineer
Sec. 7. Public work performed or contracted for on a public
building, the cost of which is more than one hundred thousand
dollars ($100,000) may be undertaken by the board only in
accordance with plans and specifications approved by an architect or
engineer 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; price
adjustments 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 of
IC 26-1-2-305. The contract may provide that prices for construction
materials are subject to price of materials adjustment. When price
adjustments are part of the contract, the method of price adjustments
shall be specified in the contract. However, this section does not
authorize the expenditure of money above the total amount of money
appropriated 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, may
contract for a public work project without advertising for bids if bids
or quotes are invited from at least two (2) persons known to deal in
the public work required to be done.
(b) The minutes of the board must show the declaration of
emergency and the names of the persons invited to bid or provide
quotes. 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 be
approved by the state department of health, the division of fire and
building 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 the
completion of the public work project, file in the division of fire and
building safety a complete set of final record drawings for the public
work project. However, this requirement does not apply to a public
work project constructed at a cost less than one hundred thousand
dollars ($100,000). In addition, the filing of the drawings is required
only if the project involves a public building.
(b) The division of fire and building safety shall provide a
depository for all final record drawings filed, and retain them for
inspection and loan under regulated conditions. The fire prevention
and building safety commission may designate the librarian of
Indiana as the custodian of the final record drawings. The librarian
shall preserve the final record drawings in the state archives as public
documents. 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, the
board shall withhold final payment to the contractor until the
contractor has paid the subcontractors, material suppliers, laborers,
or those furnishing services. However, if there is not a sufficient sum
owed to the contractor to pay those bills, the sum owed to the
contractor shall be prorated in payment of the bills among the parties
entitled.
(b) To receive payment the subcontractor or subcontractors,
material suppliers, laborers, or those furnishing services shall file
their claims with the board within sixty (60) days after the last labor
performed, 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 be
entitled to the money withheld, the board shall pay the claim from
the 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 entitled
to the money withheld, the board shall retain sufficient money to pay
the claims until the dispute is settled and the correct amount is
determined. However, the board may make a final and complete
settlement with the contractor after thirty (30) days after the date of
the completion and acceptance of the public work if the board is
furnished with satisfactory evidence indicating the payment in full of
all subcontractors, material suppliers, laborers, or those furnishing
services.
(e) A claim form must be signed by an individual from the
political subdivision or agency who is directly responsible for the
project and who can verify:
(1) the quantity of a purchased item; or
(2) the weight or volume of the material applied, in the case of
a 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, or
suppliers
Sec. 13. A contract for public work must contain a provision for
the payment of subcontractors, laborers, material suppliers, and those
performing services. The board shall withhold money from the
contract 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 appropriate
political subdivision or agency:
(1) shall require the contractor to execute a payment bond to the
appropriate political subdivision or agency, approved by and for
the benefit of the political subdivision or agency, in an amount
equal to the contract price if the cost of the public work is
estimated to be more than two hundred thousand dollars
($200,000); and
(2) may require the contractor to execute a payment bond to the
appropriate political subdivision or agency, approved by and for
the benefit of the political subdivision or agency, in an amount
equal to the contract price if the cost of the public work is
estimated 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 indebtedness
to a person for labor and service performed, material furnished, or
services rendered. The payment bond must state that it is for the
benefit of the subcontractors, laborers, material suppliers, and those
performing services.
(b) The payment bond shall be deposited with the board. The
payment bond must specify that:
(1) a modification, omission, or addition to the terms and
conditions 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 and
awarding of the public work contract;
does not discharge the surety. The surety of the payment bond may
not 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, material
furnished, or services provided shall, within sixty (60) days after the
completion of the labor or service, or within sixty (60) days after the
last item of material has been furnished, file with the board signed
duplicate statements of the amount due. The board shall forward to
the surety of the payment bond one (1) of the signed duplicate
statements. However, failure of the board to forward a signed
duplicate statement does not affect the rights of a person to whom
money is due. In addition, a failure to forward the statement does not
operate 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 the
board. 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 court
action must be brought within sixty (60) days after the date of the
final completion and acceptance of the public work.
(e) This subsection applies to contracts for a capital improvement
entered into by, for, or on behalf of the Indiana stadium and
convention building authority created by IC 5-1-17-6. The board
awarding the contract for the capital improvement project may waive
any payment bond requirement if the board, after public notice and
hearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the payment bond; or
(B) the cost or coverage of the payment bond is not in the
best interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other
sufficient 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 substantial
completion; actions against surety contracts less than $250,000
Sec. 14. (a) This section applies to public work contracts in excess
of two hundred thousand dollars ($200,000) for projects other than
highways, roads, streets, alleys, bridges, and appurtenant structures
situated on streets, alleys, and dedicated highway rights-of-way. A
board may require a contractor and subcontractor to include contract
provisions for retainage as set forth in this section for contracts that
are not more than two hundred thousand dollars ($200,000). This
section also applies to a lessor corporation qualifying under
IC 20-47-2 or IC 20-47-3 or any other lease-back arrangement
containing an option to purchase, notwithstanding the statutory
provisions governing those leases.
(b) A board that enters into a contract for public work, and a
contractor who subcontracts parts of that contract, shall include in
their respective contracts provisions for the retainage of portions of
payments by the board to contractors, by contractors to
subcontractors, and for the payment of subcontractors. At the
discretion of the contractor, the retainage shall be held by the board
or shall be placed in an escrow account with a bank, savings and loan
institution, or the state as the escrow agent. The escrow agent shall
be selected by mutual agreement between board and contractor or
contractor and subcontractor under a written agreement among the
bank 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 of
retainage that it holds under this section.
(c) To determine the amount of retainage to be withheld, the
board shall:
(1) withhold no more than ten percent (10%) nor less than six
percent (6%) of the dollar value of all work satisfactorily
completed 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 three
percent (3%) of the dollar value of all work satisfactorily
completed until the public work is substantially completed.
If upon substantial completion of the public work minor items remain
uncompleted, an amount computed under subsection (f) shall be
withheld until those items are completed.
(d) The escrow agreement must contain the following provisions:
(1) The escrow agent shall invest all escrowed principal in
obligations selected by the escrow agent.
(2) The escrow agent shall hold the escrowed principal and
income until receipt of notice from the board and the contractor,
or the contractor and the subcontractor, specifying the part of
the escrowed principal to be released from the escrow and the
person to whom that portion is to be released. After receipt of
the notice, the escrow agent shall remit the designated part of
escrowed principal and the same proportion of then escrowed
income to the person specified in the notice.
(3) The escrow agent shall be compensated for the agent's
services. The parties may agree on a reasonable fee comparable
with fees being charged for the handling of escrow accounts of
similar size and duration. The fee shall be paid from the
escrowed income.
The escrow agreement may include other terms and conditions
consistent with this subsection, including provisions authorizing the
escrow agent to commingle the escrowed funds with funds held in
other escrow accounts and limiting the liability of the escrow agent.
(e) Except as provided by subsections (i) and (h), the contractor
shall furnish the board with a performance bond equal to the contract
price. If acceptable to the board, the performance bond may provide
for incremental bonding in the form of multiple or chronological
bonds that, when taken as a whole, equal the contract price. The
surety 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 and
conditions 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 and
awarding of the public work contract;
does not discharge the surety.
(f) The board or escrow agent shall pay the contractor within
sixty-one (61) days after the date of substantial completion, subject
to sections 11 and 12 of this chapter. Payment by the escrow agent
shall include all escrowed principal and escrowed income. If within
sixty-one (61) days after the date of substantial completion there
remain uncompleted minor items, an amount equal to two hundred
percent (200%) of the value of each item as determined by the
architect-engineer shall be withheld until the item is completed.
Required warranties begin not later than the date of substantial
completion.
(g) Actions against a surety on a performance bond must be
brought within one (1) year after the date of the board's final
settlement with the contractor.
(h) This subsection applies to public work contracts of less than
two hundred fifty thousand dollars ($250,000). The board may waive
the performance bond requirement of subsection (e) and accept from
a contractor an irrevocable letter of credit for an equivalent amount
from an Indiana financial institution approved by the department of
financial 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 convention
building authority created by IC 5-1-17-6. The board awarding the
contract for a capital improvement project may waive any
performance bond requirement if the board, after public notice and
hearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the performance bond; or
(B) the cost or coverage of the performance bond is not in
the best interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other
sufficient 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 conform
to the wage scale provisions of IC 5-16-7.
(b) A contract by the board for public work must conform with the
antidiscrimination provisions of IC 5-16-6. The board may consider
a violation of IC 5-16-6 a material breach of the contract, as provided
in 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 or
agency 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; final
payment; interest for late payment
Sec. 17. (a) A contract for road or street work must contain a
provision for the timely payment of claims made by the contractor.
(b) Each contract must provide for final payment within one
hundred twenty (120) days after final acceptance and completion of
the contract. Final payment may not be made on any amount that is
in dispute, but final payment may be made on that part of a contract
or those amounts that are not in dispute.
(c) For each day after one hundred twenty (120) days, the board
shall pay to the contractor interest for late payment of money due to
the contractor. However, interest may not be paid for those days that
the delay in payment is not directly attributable to the board. The
annual percentage rate of interest that the board shall pay on the
unpaid 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, or
repair of a public work project, it becomes necessary to change or
alter the original specifications, a change order may be issued to add,
delete, or change an item or items in the original contract. The
change order becomes an addendum to the contract and must be
approved and signed by the board and the contractor.
(b) If a licensed architect or engineer is assigned to the public
work project, the change order must be prepared by that person.
(c) A change order may not be issued before commencement of
the actual construction, reconstruction, or repairs except in the case
of an emergency. In that case, the board must make a declaration, and
the board's minutes must show the nature of the emergency.
(d) The total of all change orders issued that increase the scope of
the project may not exceed twenty percent (20%) of the amount of
the original contract. A change order issued as a result of
circumstances that could not have been reasonably foreseen does not
increase the scope of the project.
(e) All change orders must be directly related to the original
public work project.
(f) If additional units of materials included in the original contract
are needed, the cost of these units in the change order must be the
same 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 more
projects; prohibition; penalty
Sec. 19. (a) For purposes of this section, the cost of a public work
project includes the cost of materials, labor, equipment rental, and all
other expenses incidental to the performance of the project.
(b) The cost of a single public work project may not be divided
into two (2) or more projects for the purpose of avoiding the
requirement to solicit bids.
(c) A bidder or quoter or a person who is a party to a public work
contract who knowingly violates this section commits a Class A
infraction and may not be a party to or benefit from any contract
under this chapter for two (2) years from the date of the conviction.
(d) Any board member or officer of a political subdivision or
agency who knowingly violates this section commits a Class A
infraction. 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 that
may require creation of a trench of at least five (5) feet in depth.
(b) IOSHA regulations 29 C.F.R. 1926, Subpart P, for trench
safety systems shall be incorporated into the contract documents for
a public works project.
(c) The contract documents for a public works project shall
provide 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 safety
systems 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 works
contract under this chapter that involves the installation of plumbing
must submit evidence that the person is a licensed plumbing
contractor under IC 25-28.5-1.
(b) If a public works contract under this chapter is awarded to a
person who does not meet the requirements of subsection (a), the
contract is void. As added by P.L.20-1991, SEC.13.
IC 36-1-12-1 Application of chapter; alternatives to chapter
Sec. 1. (a) Except as provided in this section, this chapter applies
to 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 by
the political subdivision or agency.
(b) This chapter does not apply to an officer or agent who, on
behalf of a municipal utility, maintains, extends, and installs services
of the utility if the necessary work is done by the employees of the
utility.
(c) This chapter does not apply to hospitals organized or operated
under IC 16-22-1 through IC 16-22-5 or IC 16-23-1, unless the public
work is financed in whole or in part with cumulative building fund
revenue.
(d) This chapter does not apply to tax exempt Indiana nonprofit
corporations leasing and operating a city market owned by a political
subdivision.
(e) As an alternative to this chapter, the governing body of a
political subdivision or its agencies may do the following:
(1) Enter into a design-build contract as permitted under
IC 5-30.
(2) Participate in a utility efficiency program or enter into a
guaranteed savings contract as permitted under IC 36-1-12.5.
(f) This chapter does not apply to a person that has entered into an
operating agreement with a political subdivision or an agency of a
political 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 subdivision
or an agency having the power to award contracts for public
work.
(2) "Contractor" means a person who is a party to a public work
contract with the board.
(3) "Subcontractor" means a person who is a party to a contract
with the contractor and furnishes and performs labor on the
public work project. The term includes material men who
supply 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 and
securities or other property placed in an escrow account.
(6) "Operating agreement" has the meaning set forth in
IC 5-23-2-7.
(7) "Person" means any association, corporation, limited
liability company, fiduciary, individual, joint venture,
partnership, sole proprietorship, or any other legal entity.
(8) "Property" means all:
(A) personal property, fixtures, furnishings, inventory, and
equipment; and
(B) real property.
(9) "Public fund" means all funds that are:
(A) derived from the established revenue sources of a
political subdivision or an agency of a political subdivision;
and
(B) deposited in a general or special fund of a municipal
corporation, or another political subdivision or agency of a
political subdivision.
The term does not include funds received by any person
managing or operating a public facility under a duly authorized
operating agreement under IC 5-23 or proceeds of bonds
payable exclusively by a private entity.
(10) "Retainage" means the amount to be withheld from a
payment to the contractor or subcontractor until the occurrence
of a specified event.
(11) "Specifications" means a description of the physical
characteristics, functional characteristics, extent, or nature of
any public work required by the board.
(12) "Substantial completion" refers to the date when the
construction of a structure is sufficiently completed, in
accordance with the plans and specifications, as modified by
any complete change orders agreed to by the parties, so that it
can 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 the
construction, reconstruction, alteration, or renovation of a public
building, airport facility, or other structure that is paid for out of a
public fund or out of a special assessment. The term includes the
construction, alteration, or repair of a highway, street, alley, bridge,
sewer, drain, or other improvement that is paid for out of a public
fund or out of a special assessment. The term also includes any
public work leased by a political subdivision under a lease containing
an 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 the
manner provided in IC 5-22 and perform any public work, by means
of its own workforce, without awarding a contract whenever the cost
of that public work project is estimated to be less than one hundred
thousand dollars ($100,000). Before a board may perform any work
under this section by means of its own workforce, the political
subdivision or agency must have a group of employees on its staff
who are capable of performing the construction, maintenance, and
repair applicable to that work. For purposes of this subsection, the
cost of a public work project includes the actual cost of materials,
labor, equipment, rental, a reasonable rate for use of trucks and
heavy equipment owned, and all other expenses incidental to the
performance of the project.
(b) When the project involves the rental of equipment with an
operator furnished by the owner, or the installation or application of
materials by the supplier of the materials, the project is considered
to be a public work project and subject to this chapter. However, an
annual contract may be awarded for equipment rental and materials
to be installed or applied during a calendar or fiscal year if the
proposed project or projects are described in the bid specifications.
(c) A board of aviation commissioners or an airport authority
board may purchase or lease materials in the manner provided in
IC 5-22 and perform any public work by means of its own workforce
and owned or leased equipment, in the construction, maintenance,
and repair of any airport roadway, runway, taxiway, or aircraft
parking apron whenever the cost of that public work project is
estimated to be less than fifty thousand dollars ($50,000).
(d) Municipal and county hospitals must comply with this chapter
for all contracts for public work that are financed in whole or in part
with cumulative building fund revenue, as provided in section 1(c)
of this chapter. However, if the cost of the public work is estimated
to be less than fifty thousand dollars ($50,000), as reflected in the
board minutes, the hospital board may have the public work done
without receiving bids, by purchasing the materials and performing
the work by means of its own workforce and owned or leased
equipment.
(e) If a public works project involves a structure, an improvement,
or a facility under the control of a department (as defined in
IC 4-3-19-2(2)), the department may not artificially divide the project
to 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 and
the board determines by a two-thirds (2/3) vote that it is expedient
and in the best public interest to employ professional engineering,
architectural, or accounting services for the planning and financing
of the public work and the preparation of plans and specifications,
then the limitations and restrictions in the general statutes with
respect to invalidity of contracts without an appropriation therefor,
payment of fees solely from the proceeds of bonds or assessments
when and if issued, and payment of fees solely from a special fund
or funds to be provided in the future, do not apply to contracts for
those professional services to the extent that such limitations and
restrictions might otherwise prevent the payment of fees for services
actually rendered in connection with those contracts or affect the
obligation 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 work
project 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 class
city; or
(C) a regional water or sewage district established under
IC 13-26; or
(2) at least fifty thousand dollars ($50,000) in a political
subdivision 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 specifications
describing the kind of public work required, but shall avoid
specifications which might unduly limit competition. If the
project involves the resurfacing (as defined by IC 8-14-2-1) of
a road, street, or bridge, the specifications must show how the
weight or volume of the materials will be accurately measured
and verified.
(2) The board shall file the plans and specifications in a place
reasonably accessible to the public, which shall be specified in
the notice required by subdivision (3).
(3) Upon the filing of the plans and specifications, the board
shall publish notice in accordance with IC 5-3-1 calling for
sealed proposals for the public work needed.
(4) The notice must specify the place where the plans and
specifications are on file and the date fixed for receiving bids.
(5) The period of time between the date of the first publication
and the date of receiving bids shall be governed by the size of
the contemplated project in the discretion of the board. The
period of time between the date of the first publication and
receiving bids may not be more than:
(A) six (6) weeks if the estimated cost of the public works
project is less than twenty-five million dollars
($25,000,000); and
(B) ten (10) weeks if the estimated cost of the public works
project 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 submit
a financial statement, a statement of experience, a proposed
plan or plans for performing the public work, and the equipment
that the bidder has available for the performance of the public
work. The statement shall be submitted on forms prescribed by
the state board of accounts.
(7) The board may not require a bidder to submit a bid before
the meeting at which bids are to be received. The meeting for
receiving bids must be open to the public. All bids received
shall be opened publicly and read aloud at the time and place
designated and not before.
(8) Except as provided in subsection (c), the board shall:
(A) award the contract for public work or improvements to
the lowest responsible and responsive bidder; or
(B) reject all bids submitted.
(9) If the board awards the contract to a bidder other than the
lowest bidder, the board must state in the minutes or
memoranda, at the time the award is made, the factors used to
determine which bidder is the lowest responsible and
responsive bidder and to justify the award. The board shall keep
a copy of the minutes or memoranda available for public
inspection.
(10) In determining whether a bidder is responsive, the board
may consider the following factors:
(A) Whether the bidder has submitted a bid or quote that
conforms in all material respects to the specifications.
(B) Whether the bidder has submitted a bid that complies
specifically with the invitation to bid and the instructions to
bidders.
(C) Whether the bidder has complied with all applicable
statutes, ordinances, resolutions, or rules pertaining to the
award of a public contract.
(11) In determining whether a bidder is a responsible bidder, the
board may consider the following factors:
(A) The ability and capacity of the bidder to perform the
work.
(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 or
agreement:
(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 any
other bid.
(c) Notwithstanding subsection (b)(8), a county may award sand,
gravel, asphalt paving materials, or crushed stone contracts to more
than one (1) responsible and responsive bidder if the specifications
allow for bids to be based upon service to specific geographic areas
and the contracts are awarded by geographic area. The geographic
areas 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 each
bid by a bidder in the amount determined and specified by the
board in the notice of the letting if the cost of the public work
is 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 each
bid by a bidder in the amount determined and specified by the
board in the notice of the letting if the cost of the public work
is 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 at
more than ten percent (10%) of the contract price. The bond or
certified check shall be made payable to the political subdivision or
agency.
(c) All checks of unsuccessful bidders shall be returned to them
by the board upon selection of successful bidders. Checks of
successful bidders shall be held until delivery of the performance
bond, 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 project
is estimated to cost:
(1) at least twenty-five thousand dollars ($25,000) and less than
one hundred thousand dollars ($100,000) in:
(A) a consolidated city, second class city, or third class city
with a population of fifteen thousand (15,000) or more;
(B) a county containing a consolidated city or second class
city; or
(C) a regional water or sewage district established under
IC 13-26; or
(2) at least twenty-five thousand dollars ($25,000) and less than
fifty thousand dollars ($50,000) in a political subdivision or
agency 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) persons
known to deal in the class of work proposed to be done by
mailing them a notice stating that plans and specifications are
on file in a specified office. The notice must be mailed not less
than seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote before
the meeting at which quotes are to be received. The meeting for
receiving quotes must be open to the public. All quotes received
shall be opened publicly and read aloud at the time and place
designated and not before.
(3) The board shall award the contract for the public work to the
lowest 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 routine
operation, routine repair, or routine maintenance of existing
structures, buildings, or real property if the cost of the public work
is estimated to be less than one hundred fifty thousand dollars
($150,000).
(b) The board may award a contract for public work described in
subsection (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 is
estimated to cost less than fifty thousand dollars ($50,000). Except
as provided in subsection (g) for local boards of aviation
commissioners and local airport authorities, if a contract is to be
awarded, the board may proceed under section 4 of this chapter or
under subsection (b) or (c).
(b) The board must proceed under the following provisions:
(1) The board shall invite quotes from at least three (3) persons
known to deal in the class of work proposed to be done by
mailing them a notice stating that plans and specifications are
on file in a specified office. The notice must be mailed not less
than seven (7) days before the time fixed for receiving quotes.
(2) The board may not require a person to submit a quote before
the meeting at which quotes are to be received. The meeting for
receiving quotes must be open to the public. All quotes received
shall be opened publicly and read aloud at the time and place
designated and not before.
(3) The board shall award the contract for the public work to the
lowest responsible and responsive quoter.
(4) The board may reject all quotes submitted.
(5) If the board rejects all quotes under subdivision (4) of this
section, the board may negotiate and enter into agreements for
the work in the open market without inviting or receiving
quotes if the board establishes in writing the reasons for
rejecting the quotes.
(c) The board may not proceed under subsection (b) for the
resurfacing (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 is
capable of accurate measurement and verification; and
(2) the specifications define the geographic points at which the
project begins and ends.
(d) For the purposes of this section, if contiguous sections of a
road, street, or bridge are to be resurfaced in a calendar year, all of
the work shall be considered to comprise a single public work
project.
(e) The board may purchase or lease supplies in the manner
provided in IC 5-22 and perform the public work by means of its own
workforce without awarding a public work contract.
(f) Before the board may perform any work under this section by
means of its own workforce, the political subdivision or agency must
have a group of employees on its staff who are capable of performing
the construction, maintenance, and repair applicable to that work.
(g) This subsection applies to local boards of aviation
commissioners operating under IC 8-22-2 and local airport
authorities operating under IC 8-22-3. If the contract is to be awarded
by a board to which this subsection applies, or to a designee of the
board under subsection (h), the board or its designee may proceed
under section 4 of this chapter or under the following provisions. The
board or its designee may invite quotes from at least three (3)
persons known to deal in the class of work proposed to be done by
mailing the persons a copy of the plans and specifications for the
work not less than seven (7) days before the time fixed for receiving
quotes. If the board or its designee receives a satisfactory quote, the
board or its designee shall award the contract to the lowest
responsible and responsive quoter for the class of work required. The
board or its designee may reject all quotes submitted and, if no valid
quotes are received for the class of work, contract for the work
without further invitations for quotes.
(h) The board may delegate its authority to award a contract for
a public works project that is estimated to cost less than fifty
thousand dollars ($50,000) to the airport personnel in charge of
airport public works projects.
(i) Quotes for public works projects costing less than twenty-five
thousand dollars ($25,000) may be obtained by soliciting at least
three (3) quotes by telephone or facsimile transmission. The seven
(7) day waiting period required by subsection (b)(1) does not apply
to 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 contract
and to issue notice; election by bidder to reject contract
Sec. 6. (a) Except as provided in subsections (b) and (c), the board
shall award the contract and shall provide the successful bidder with
written notice to proceed within sixty (60) days after the date on
which bids are opened.
(b) If general obligation bonds are to be sold to finance the
construction that is the subject of the bid, the board shall allow the
bidder ninety (90) days.
(c) If revenue bonds are to be issued, when approved by the utility
regulatory commission, or if special taxing district, special benefit,
or revenue bonds are to be issued and sold to finance the
construction, the board shall allow the bidder one hundred fifty (150)
days.
(d) A failure to award and execute the contract and to issue notice
within the time required by this section entitles the successful bidder
to:
(1) reject the contract and withdraw his bid without prejudice;
or
(2) extend the time to award the contract and provide notice to
proceed at an agreed later date.
If the successful bidder elects to reject the contract and withdraw his
bid, notice of that election must be given to the board in writing
within 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 licensed
architect or engineer
Sec. 7. Public work performed or contracted for on a public
building, the cost of which is more than one hundred thousand
dollars ($100,000) may be undertaken by the board only in
accordance with plans and specifications approved by an architect or
engineer 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; price
adjustments 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 of
IC 26-1-2-305. The contract may provide that prices for construction
materials are subject to price of materials adjustment. When price
adjustments are part of the contract, the method of price adjustments
shall be specified in the contract. However, this section does not
authorize the expenditure of money above the total amount of money
appropriated 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, may
contract for a public work project without advertising for bids if bids
or quotes are invited from at least two (2) persons known to deal in
the public work required to be done.
(b) The minutes of the board must show the declaration of
emergency and the names of the persons invited to bid or provide
quotes. 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 be
approved by the state department of health, the division of fire and
building 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 the
completion of the public work project, file in the division of fire and
building safety a complete set of final record drawings for the public
work project. However, this requirement does not apply to a public
work project constructed at a cost less than one hundred thousand
dollars ($100,000). In addition, the filing of the drawings is required
only if the project involves a public building.
(b) The division of fire and building safety shall provide a
depository for all final record drawings filed, and retain them for
inspection and loan under regulated conditions. The fire prevention
and building safety commission may designate the librarian of
Indiana as the custodian of the final record drawings. The librarian
shall preserve the final record drawings in the state archives as public
documents. 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, the
board shall withhold final payment to the contractor until the
contractor has paid the subcontractors, material suppliers, laborers,
or those furnishing services. However, if there is not a sufficient sum
owed to the contractor to pay those bills, the sum owed to the
contractor shall be prorated in payment of the bills among the parties
entitled.
(b) To receive payment the subcontractor or subcontractors,
material suppliers, laborers, or those furnishing services shall file
their claims with the board within sixty (60) days after the last labor
performed, 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 be
entitled to the money withheld, the board shall pay the claim from
the 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 entitled
to the money withheld, the board shall retain sufficient money to pay
the claims until the dispute is settled and the correct amount is
determined. However, the board may make a final and complete
settlement with the contractor after thirty (30) days after the date of
the completion and acceptance of the public work if the board is
furnished with satisfactory evidence indicating the payment in full of
all subcontractors, material suppliers, laborers, or those furnishing
services.
(e) A claim form must be signed by an individual from the
political subdivision or agency who is directly responsible for the
project and who can verify:
(1) the quantity of a purchased item; or
(2) the weight or volume of the material applied, in the case of
a 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, or
suppliers
Sec. 13. A contract for public work must contain a provision for
the payment of subcontractors, laborers, material suppliers, and those
performing services. The board shall withhold money from the
contract 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 appropriate
political subdivision or agency:
(1) shall require the contractor to execute a payment bond to the
appropriate political subdivision or agency, approved by and for
the benefit of the political subdivision or agency, in an amount
equal to the contract price if the cost of the public work is
estimated to be more than two hundred thousand dollars
($200,000); and
(2) may require the contractor to execute a payment bond to the
appropriate political subdivision or agency, approved by and for
the benefit of the political subdivision or agency, in an amount
equal to the contract price if the cost of the public work is
estimated 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 indebtedness
to a person for labor and service performed, material furnished, or
services rendered. The payment bond must state that it is for the
benefit of the subcontractors, laborers, material suppliers, and those
performing services.
(b) The payment bond shall be deposited with the board. The
payment bond must specify that:
(1) a modification, omission, or addition to the terms and
conditions 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 and
awarding of the public work contract;
does not discharge the surety. The surety of the payment bond may
not 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, material
furnished, or services provided shall, within sixty (60) days after the
completion of the labor or service, or within sixty (60) days after the
last item of material has been furnished, file with the board signed
duplicate statements of the amount due. The board shall forward to
the surety of the payment bond one (1) of the signed duplicate
statements. However, failure of the board to forward a signed
duplicate statement does not affect the rights of a person to whom
money is due. In addition, a failure to forward the statement does not
operate 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 the
board. 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 court
action must be brought within sixty (60) days after the date of the
final completion and acceptance of the public work.
(e) This subsection applies to contracts for a capital improvement
entered into by, for, or on behalf of the Indiana stadium and
convention building authority created by IC 5-1-17-6. The board
awarding the contract for the capital improvement project may waive
any payment bond requirement if the board, after public notice and
hearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the payment bond; or
(B) the cost or coverage of the payment bond is not in the
best interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other
sufficient 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 substantial
completion; actions against surety contracts less than $250,000
Sec. 14. (a) This section applies to public work contracts in excess
of two hundred thousand dollars ($200,000) for projects other than
highways, roads, streets, alleys, bridges, and appurtenant structures
situated on streets, alleys, and dedicated highway rights-of-way. A
board may require a contractor and subcontractor to include contract
provisions for retainage as set forth in this section for contracts that
are not more than two hundred thousand dollars ($200,000). This
section also applies to a lessor corporation qualifying under
IC 20-47-2 or IC 20-47-3 or any other lease-back arrangement
containing an option to purchase, notwithstanding the statutory
provisions governing those leases.
(b) A board that enters into a contract for public work, and a
contractor who subcontracts parts of that contract, shall include in
their respective contracts provisions for the retainage of portions of
payments by the board to contractors, by contractors to
subcontractors, and for the payment of subcontractors. At the
discretion of the contractor, the retainage shall be held by the board
or shall be placed in an escrow account with a bank, savings and loan
institution, or the state as the escrow agent. The escrow agent shall
be selected by mutual agreement between board and contractor or
contractor and subcontractor under a written agreement among the
bank 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 of
retainage that it holds under this section.
(c) To determine the amount of retainage to be withheld, the
board shall:
(1) withhold no more than ten percent (10%) nor less than six
percent (6%) of the dollar value of all work satisfactorily
completed 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 three
percent (3%) of the dollar value of all work satisfactorily
completed until the public work is substantially completed.
If upon substantial completion of the public work minor items remain
uncompleted, an amount computed under subsection (f) shall be
withheld until those items are completed.
(d) The escrow agreement must contain the following provisions:
(1) The escrow agent shall invest all escrowed principal in
obligations selected by the escrow agent.
(2) The escrow agent shall hold the escrowed principal and
income until receipt of notice from the board and the contractor,
or the contractor and the subcontractor, specifying the part of
the escrowed principal to be released from the escrow and the
person to whom that portion is to be released. After receipt of
the notice, the escrow agent shall remit the designated part of
escrowed principal and the same proportion of then escrowed
income to the person specified in the notice.
(3) The escrow agent shall be compensated for the agent's
services. The parties may agree on a reasonable fee comparable
with fees being charged for the handling of escrow accounts of
similar size and duration. The fee shall be paid from the
escrowed income.
The escrow agreement may include other terms and conditions
consistent with this subsection, including provisions authorizing the
escrow agent to commingle the escrowed funds with funds held in
other escrow accounts and limiting the liability of the escrow agent.
(e) Except as provided by subsections (i) and (h), the contractor
shall furnish the board with a performance bond equal to the contract
price. If acceptable to the board, the performance bond may provide
for incremental bonding in the form of multiple or chronological
bonds that, when taken as a whole, equal the contract price. The
surety 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 and
conditions 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 and
awarding of the public work contract;
does not discharge the surety.
(f) The board or escrow agent shall pay the contractor within
sixty-one (61) days after the date of substantial completion, subject
to sections 11 and 12 of this chapter. Payment by the escrow agent
shall include all escrowed principal and escrowed income. If within
sixty-one (61) days after the date of substantial completion there
remain uncompleted minor items, an amount equal to two hundred
percent (200%) of the value of each item as determined by the
architect-engineer shall be withheld until the item is completed.
Required warranties begin not later than the date of substantial
completion.
(g) Actions against a surety on a performance bond must be
brought within one (1) year after the date of the board's final
settlement with the contractor.
(h) This subsection applies to public work contracts of less than
two hundred fifty thousand dollars ($250,000). The board may waive
the performance bond requirement of subsection (e) and accept from
a contractor an irrevocable letter of credit for an equivalent amount
from an Indiana financial institution approved by the department of
financial 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 convention
building authority created by IC 5-1-17-6. The board awarding the
contract for a capital improvement project may waive any
performance bond requirement if the board, after public notice and
hearing, determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the performance bond; or
(B) the cost or coverage of the performance bond is not in
the best interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other
sufficient 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 conform
to the wage scale provisions of IC 5-16-7.
(b) A contract by the board for public work must conform with the
antidiscrimination provisions of IC 5-16-6. The board may consider
a violation of IC 5-16-6 a material breach of the contract, as provided
in 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 or
agency 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; final
payment; interest for late payment
Sec. 17. (a) A contract for road or street work must contain a
provision for the timely payment of claims made by the contractor.
(b) Each contract must provide for final payment within one
hundred twenty (120) days after final acceptance and completion of
the contract. Final payment may not be made on any amount that is
in dispute, but final payment may be made on that part of a contract
or those amounts that are not in dispute.
(c) For each day after one hundred twenty (120) days, the board
shall pay to the contractor interest for late payment of money due to
the contractor. However, interest may not be paid for those days that
the delay in payment is not directly attributable to the board. The
annual percentage rate of interest that the board shall pay on the
unpaid 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, or
repair of a public work project, it becomes necessary to change or
alter the original specifications, a change order may be issued to add,
delete, or change an item or items in the original contract. The
change order becomes an addendum to the contract and must be
approved and signed by the board and the contractor.
(b) If a licensed architect or engineer is assigned to the public
work project, the change order must be prepared by that person.
(c) A change order may not be issued before commencement of
the actual construction, reconstruction, or repairs except in the case
of an emergency. In that case, the board must make a declaration, and
the board's minutes must show the nature of the emergency.
(d) The total of all change orders issued that increase the scope of
the project may not exceed twenty percent (20%) of the amount of
the original contract. A change order issued as a result of
circumstances that could not have been reasonably foreseen does not
increase the scope of the project.
(e) All change orders must be directly related to the original
public work project.
(f) If additional units of materials included in the original contract
are needed, the cost of these units in the change order must be the
same 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 more
projects; prohibition; penalty
Sec. 19. (a) For purposes of this section, the cost of a public work
project includes the cost of materials, labor, equipment rental, and all
other expenses incidental to the performance of the project.
(b) The cost of a single public work project may not be divided
into two (2) or more projects for the purpose of avoiding the
requirement to solicit bids.
(c) A bidder or quoter or a person who is a party to a public work
contract who knowingly violates this section commits a Class A
infraction and may not be a party to or benefit from any contract
under this chapter for two (2) years from the date of the conviction.
(d) Any board member or officer of a political subdivision or
agency who knowingly violates this section commits a Class A
infraction. 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 that
may require creation of a trench of at least five (5) feet in depth.
(b) IOSHA regulations 29 C.F.R. 1926, Subpart P, for trench
safety systems shall be incorporated into the contract documents for
a public works project.
(c) The contract documents for a public works project shall
provide 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 safety
systems 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 works
contract under this chapter that involves the installation of plumbing
must submit evidence that the person is a licensed plumbing
contractor under IC 25-28.5-1.
(b) If a public works contract under this chapter is awarded to a
person who does not meet the requirements of subsection (a), the
contract is void. As added by P.L.20-1991, SEC.13.
