| Chapter 229 |
| 2024 -- S 2902 AS AMENDED Enacted 06/24/2024 |
| A N A C T |
| RELATING TO PUBLIC PROPERTY AND WORKS -- CONTRACTORS BONDS |
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 |
| construction. |
| (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 |
| (MBEs). |
| 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 |
| exists. |
| (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 |
| subcontractor. |
| SECTION 3. This act shall take effect upon passage. |
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