Public works bond
- • rules
(1) Except as provided in subsection (4), (7), (8) or (9) of this section, before starting work on a contract or subcontract for a public works project, a contractor or subcontractor shall file with the Construction Contractors Board a public works bond with a corporate surety authorized to do business in this state in the amount of $30,000. The bond must provide that the contractor or subcontractor will pay claims ordered by the Bureau of Labor and Industries to workers performing labor upon public works projects. The bond must be a continuing obligation, and the surety’s liability for the aggregate of claims that may be payable from the bond may not exceed the penal sum of the bond. The bond must remain in effect continuously until depleted by claims paid under this section, unless the surety sooner cancels the bond. The surety may cancel the bond by giving 30 days’ written notice to the contractor or subcontractor, to the board and to the Bureau of Labor and Industries. When the bond is canceled, the surety is relieved of further liability for work performed on contracts entered into after the cancellation. The cancellation does not limit the surety’s liability for work performed on contracts entered into before the cancellation.
(2) Before permitting a subcontractor to start work on a public works project, the contractor shall verify that the subcontractor has filed a public works bond as required under this section, has elected not to file a public works bond under subsection (7) or (8) of this section or is exempt under subsection (4) or (9) of this section.
(3) A contractor or subcontractor is not required under this section to file a separate public works bond for each public works project for which the contractor or subcontractor has a contract.
(4) A person that is not required under ORS 279C.800 (Definitions for ORS 279C.800 to 279C.870) to 279C.870 (Civil action to enforce payment of prevailing rates of wage) to pay prevailing rates of wage on a public works project is not required to file a public works bond under this section.
(5) A public works bond required by this section is in addition to any other bond the contractor or subcontractor is required to obtain.
(6) The board may, by rule, require a contractor or subcontractor to obtain a new public works bond if a surety pays a claim out of an existing public works bond. The new bond must be in the amount of $30,000. The board may allow a contractor or subcontractor to obtain, instead of a new bond, a certification that the surety remains liable for the full penal sum of the existing bond, notwithstanding payment by the surety on the claim.
(7)(a) A disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business certified under ORS 200.055 (Certification as disadvantaged business enterprise, minority-owned business, woman-owned business, business that service-disabled veteran owns or emerging small business) may, for up to four years after certification, elect not to file a public works bond as required under subsection (1) this section. If an enterprise or a business elects not to file a public works bond, the enterprise or business shall give the board written verification of the certification and written notice that the enterprise or business elects not to file the bond.
(b) An enterprise or a business that elects not to file a public works bond under this subsection shall notify the public agency for whose benefit the contract was awarded or, if the enterprise or business is a subcontractor, the contractor of the election before starting work on a public works project. When an enterprise or a business elects not to file a public works bond under this subsection, a claim for unpaid wages may be made against the payment bond of the enterprise or business or, if the enterprise or business is a subcontractor, the payment bond of the contractor.
(c) An election not to file a public works bond expires four years after the date the enterprise or business is certified. After an election has expired and before starting or continuing work on a contract or subcontract for a public works project, the enterprise or business shall file a public works bond with the board as required under subsection (1) of this section.
(8) A contractor or subcontractor may elect not to file a public works bond as required under subsection (1) of this section for any public works project for which the contract price does not exceed $100,000.
(9) In cases of emergency, or when the interest or property of the public agency for whose benefit the contract was awarded probably would suffer material injury by delay or other cause, the requirement for filing a public works bond may be excused, if a declaration of the emergency is made in accordance with rules adopted under ORS 279A.065 (Model rules generally).
(10) The board shall make available on a searchable public website information concerning public works bonds filed with the board, claims made on those bonds, elections made by certified business enterprises not to file those bonds and the expiration date of each election. The board may adopt rules necessary to perform the duties required of the board by this section.
(11) The Commissioner of the Bureau of Labor and Industries, with approval of the board, shall adopt rules that establish language for public works bonds. [2005 c.360 §2; 2007 c.415 §1; 2007 c.764 §38; 2015 c.565 §16]
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