Chapter 229
2024 -- S 2902 AS AMENDED
Enacted 06/24/2024

A N   A C T

Introduced By: Senators Cano, Mack, DiPalma, Pearson, DiMario, Zurier, McKenney, and Lawson

Date Introduced: March 22, 2024

It is enacted by the General Assembly as follows:
     SECTION 1. Sections 37-12-1 and 37-12-10 of the General Laws in Chapter 37-12 entitled
"Contractors’ Bonds" are hereby amended to read as follows:
     37-12-1. Contractors required to give bond — Terms and conditions.
     Every person (which word for the purposes of this chapter shall include a copartnership, a
number of persons engaged in a joint enterprise, or a corporation), before being awarded a contract
by the department of transportation or by the department of administration, as the case may be, and
every person awarded such a contract as a general contractor or construction or project manager or
prime contractor for the construction, improvement, completion, or repair of any public road or
portion thereof or of any bridge in which the contract price shall be in excess of one hundred and
fifty thousand dollars ($150,000), or for a contract for the construction, improvement, completion,
or repair of any public building, or portion thereof, shall be required to furnish to the respective
department a bond of that person to the state, with good and sufficient surety or sureties (hereafter
in this chapter referred to as surety), acceptable to the respective department, in a sum not less than
fifty percent (50%) and not more than one hundred percent (100%) of the contract price,
conditioned that the contractor, principal in the bond, the person’s executors, administrators, or
successors, shall in all things, well and truly keep and perform the covenants, conditions, and
agreements in the contract, and in any alterations thereof made as therein provided, on the person’s
part to be kept and performed, at the time and in the manner therein specified, and in all respects
according to their true intent and meaning, and shall indemnify and save harmless the state, the
respective department, and all of its officers, agents, and employees, as therein stipulated, and shall
also promptly pay for all such labor performed or furnished, together with penalties assessed
pursuant to § 37-13-14.1(b), and for all such materials and equipment furnished (which, as to
equipment, shall mean payment of the reasonable rental value, as determined by the respective
department, of its use during the period of its use), as shall be used in the carrying on of the work
covered by the contract, or shall see that they are promptly paid for, whether or not the labor is
directly performed for or furnished to the contractor or is even directly performed upon the work
covered by the contract, and whether or not the materials are furnished to the contractor or become
component parts of the work, and whether or not the equipment is furnished to the contractor or
even directly used upon the work. The bond shall contain the provisions that it is subject to all such
rights and powers of the respective department and such other provisions as are set forth in the
contract and the plans, specifications, and proposal incorporated by reference in the contract, and
that no extension of the time of performance of the contract or delay in the completion of the work
thereunder or any alterations thereof, made as therein provided, shall invalidate the bond or release
the liability of the surety thereunder. Waiver of the bonding requirements of this section is expressly
prohibited. However, upon application and for good cause, the chief purchasing officer of the state
may waive the bonding requirement for a State state of Rhode Island office of diversity, equity,
and opportunity certified minority business enterprise (MBE) or women-owned business enterprise
(WBE) prime contractor or subcontractor on a public works project for up to two hundred fifty
thousand dollars ($250,000).
     37-12-10. Retainers relating to contracts for public works, sewer, or water main
     (a) Upon substantial completion of the work required by a contract aggregating in amount
less than five hundred thousand dollars ($500,000) for the construction, reconstruction, alteration,
remodeling, repair, or improvement of sewers and water mains, or any public works project defined
in § 37-13-1, the awarding authority may deduct from its payment a retention to secure satisfactory
performance of the contractual work not exceeding five percent (5%) of the contract price.
     (b) There shall also be deducted and retained from the contract price an additional sum
sufficient to pay the estimated cost of municipal police traffic control on any public works project.
Municipalities shall directly pay the officers working traffic details and shall bill and be reimbursed
by the withholding authority for which the contract is being performed every thirty (30) days until
the project is complete.
     (c) Notwithstanding the foregoing, with respect to projects located within the town of
Warren, the withholding authority shall hold an amount from the contract price that shall be
reasonably sufficient to pay the estimated cost of municipal police traffic control. The withholding
authority shall pay to the town of Warren within seventy-two (72) hours of written demand the
actual costs of police traffic control associated with said project on an ongoing basis.
     (d) The director of the department of administration shall establish, by rule and regulation
adopted in accordance with chapter 35 of title 42 ("administrative procedures"), methods for the
interim release of retainage of State state of Rhode Island office of minority business enterprises
     SECTION 2. Section 42-11.1-3 of the General Laws in Chapter 42-11.1 entitled "Prompt
Payment by Department of Administration" is hereby amended to read as follows:
     42-11.1-3. Time period for payment.
     (a) All bills shall be paid within thirty (30) working calendar days of receipt of a proper
invoice or other contractual dates for periodic payments, except when a contractor has failed to
submit a bill in accordance with contractually imposed time frames.
     (b) Each contractor shall make payment to subcontractors within ten (10) seven (7) days of
receipt of payment by the state; provided, however, that the contractor may setoff a payment due
to a subcontractor by an amount equal to the amount of an unpaid legally enforceable debt owed
by the subcontractor to the contractor or any amount which the contractor is entitled to withhold
under the terms of the contract entered into by the contractor and subcontractor, or any amount
owed by the subcontractor to the contractor by way of a statutory obligation, or enforceable lien,
of which the contractor or subcontractor had previous knowledge or notice, or has reason to believe
     (c) This section shall not apply to contractors or subcontractors performing work pursuant
to a contract awarded by the department of transportation unless the subcontractor provides a
payment and performance bond in an amount equal to the contract between the contractor and
     SECTION 3. This act shall take effect upon passage.