2016 -- H 8269

========

LC006085

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

____________

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- CONTRACTORS' BONDS

     

     Introduced By: Representative John J. DeSimone

     Date Introduced: May 27, 2016

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

1

     SECTION 1. Section 37-12-10 of the General Laws in Chapter 37-12 entitled

2

"Contractors' Bonds" is hereby amended to read as follows:

3

     37-12-10. Retainers relating to contracts for public works, sewer, or water main

4

construction. -- Retainers relating to contracts for public works. -- (a) Upon substantial

5

completion of the work required by a contract aggregating in amount less than five hundred

6

thousand dollars ($500,000) with any municipality, or any agency or political subdivision thereof,

7

for the construction, reconstruction, alteration, remodeling, repair, or improvement of sewers and

8

water mains, or any public works project defined in § 37-13-1, the awarding authority may deduct

9

from its payment a retention to secure satisfactory performance of the contractual work not

10

exceeding five percent (5%) of the contract price unless otherwise agreed to by the parties. Upon

11

substantial completion of the work required by a contract aggregating in an amount of five

12

hundred thousand dollars ($500,000) or greater with any municipality, or any agency or political

13

subdivision thereof, for the construction, reconstruction, alteration, remodeling, repair, or

14

improvement of sewers and water mains, or any public works project defined in § 37-13-1, the

15

awarding authority may deduct from its payment a retention to secure satisfactory performance of

16

the contractual work not exceeding five percent (5%) of the contract price. In the case of periodic

17

payments with respect to contracts less than the aggregate amount of five hundred thousand

18

dollars ($500,000), the awarding authority may deduct from its payment a retention to secure

19

satisfactory performance of the contractual work not exceeding five percent (5%) of the approved

 

1

amount of any periodic payment unless otherwise agreed to by the parties. In the case of periodic

2

payments with respect to contracts in the aggregate amount of five hundred thousand dollars

3

($500,000) or greater, the awarding authority may deduct from its payment a retention to secure

4

satisfactory performance of the contractual work not exceeding five percent (5%) of the approved

5

amount of any periodic payment.

6

      (b) The retainage shall be paid to any contractor or subcontractor within ninety (90) days

7

of the date the work is accepted by the awarding authority unless a dispute exists with respect to

8

the work. If payment is not made within ninety (90) days for any reason other than a dispute,

9

which, if resolved and it is not the fault of the contractor, interest shall be assessed at the rate of

10

ten percent (10%) per annum on all money which is to be paid to the contractor or subcontractor.

11

      (c) The retainage shall be paid to any contractor or subcontractor within ninety (90) days

12

of the date his or her work is completed and accepted by the awarding authority. If payment is not

13

made, interest shall be assessed at the rate of ten percent (10%) per annum.

14

      (d) There shall also be deducted and retained from the contract price an additional sum

15

sufficient to pay the estimated cost of municipal police traffic control on any public works

16

project. Municipalities shall directly pay the officers working traffic details and shall bill and be

17

reimbursed by the withholding authority for which the contract is being performed every thirty

18

(30) days until the project is complete.

19

      (e) Notwithstanding the foregoing, with respect to projects located within the town of

20

Warren, the withholding authority shall hold an amount from the contract price which shall be

21

reasonably sufficient to pay the estimated cost of municipal police traffic control. The

22

withholding authority shall pay to the town of Warren within seventy-two (72) hours of written

23

demand the actual costs of police traffic control associated with said project on an ongoing basis.

24

     The state of Rhode Island, or any municipality or any agency or political subdivision

25

thereof, for the construction, reconstruction, alteration, remodeling, repair, or improvement of any

26

public works and/or sewers, water mains, or any public works project defined in §37-13-1, shall

27

not withhold more than five percent (5%) as a retainer in relation to any construction contract.

28

     (b) No general contractor or construction manager who has been awarded a contract by

29

the state of Rhode Island, any municipality or any agency or political subdivision thereof, for the

30

construction, reconstruction, alteration, remodeling, repair, or improvement of sewers and water

31

mains, or any public works project defined in §37-13-1 shall withhold more than five percent

32

(5%) from any subcontractors who perform work on any public works project as noted above.

33

     (c) Upon substantial completion of any public works project as noted above, or the

34

issuance of a permanent certificate of occupancy, whichever occurs first, any and all retainage as

 

LC006085 - Page 2 of 4

1

noted above shall be paid to the contractor or construction manager within fifty-five (55) days,

2

except as to an amount sufficient to equal one hundred fifty percent (150%) times the value of

3

any punch list as determined by the owner with respect to each project. The general contractor or

4

the construction manager shall make final payment to each subcontractor within ten (10) days of

5

receiving payment from the owner, less the withheld retainage of one hundred fifty percent

6

(150%) of the value of the punch list not completed by the subcontractor. Upon satisfactory

7

completion of the punch list, any and all monies withheld shall be paid to the general contractor

8

or to the construction manager within fifty-five (55) days and the general contractor or

9

construction manager shall pay the subcontractor within ten (10) days of receiving payment from

10

the owner.

11

     (d) Section 37-12-10 shall not apply to highway or heavy construction projects that are

12

procured by either the Rhode Island Department of Transportation, a public corporation, a public

13

agency or any city or town in Rhode Island.

14

     (e) There shall also be deducted and retained from the contract price an additional sum

15

sufficient to pay the estimated cost of municipal police traffic control on any public works

16

project. Municipalities shall directly pay the officers working traffic details and shall bill and be

17

reimbursed by the withholding authority for which the contract is being performed every thirty

18

(30) days until the project is complete.

19

     (f) Notwithstanding the foregoing, with respect to projects located within the town of

20

Warren, the withholding authority shall hold an amount from the contract price which shall be

21

reasonably sufficient to pay the estimated cost of municipal police traffic control. The

22

withholding authority shall pay to the town of Warren within seventy-two (72) hours of written

23

demand the actual costs of police traffic control associated with said project on an ongoing basis.

24

     SECTION 2. This act shall take effect upon passage.

========

LC006085

========

 

LC006085 - Page 3 of 4

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- CONTRACTORS' BONDS

***

1

     This act would prohibit the state, general contractors, and construction managers from

2

withholding more than five percent (5%) as a retainer with respect to any sewer, water main, or

3

other public works construction contract.

4

     This act would take effect upon passage.

========

LC006085

========

 

LC006085 - Page 4 of 4