Guam § 5304 - Contract Performance and Payment Bonds.

§ 5304. Contract Performance and Payment Bonds.

(a) When Required; Amounts. When a construction contract is awarded in excess of Twenty-Five

Thousand Dollars ($25,000), the following bonds or security shall be delivered to Guam and shall become

binding on the parties upon the execution of the contract:

(1) a performance bond satisfactory to Guam, executed by a surety company authorized to do

business in Guam or otherwise secured in a manner satisfactory to Guam, in an amount equal to one

hundred percent (100%) of the price specified in the contract; and

(2) a payment bond satisfactory to Guam, executed by a surety company authorized to do business

in Guam or otherwise secured in a manner satisfactory to Guam, for the protection of all persons

supplying labor and material to the contractor or its subcontractors for the performance of the work

provided for in the contract. The bond shall be in an amount equal to one hundred percent (100%) of

the price specified in the contract.

(b) Reduction of Bond Amounts. The Policy Office may promulgate regulations that authorize the

Director of Public Works or head of a purchasing agency to reduce the amount of performance and payment

bonds to fifty percent (50%) of the contract price for each bond.

(c) Authority to Require Additional Bonds. Nothing in this Section shall be construed to limit the

authority of the Government of Guam to require a performance bond or other security for a construction

contract awarded hereunder in addition to those bonds specified in Subsection (a) of this Section.

(d) Suits on Payment Bonds; Right to Institute. Every person who has furnished labor or material to

the contractor or its subcontractors for the work provided in the contract, in respect of which a payment

bond is furnished under this Section, and who has not been paid in full therefor before the expiration of a

period of ninety (90) days after the day on which the last of the labor was done or performed by such person

or material was furnished or supplied by such person for which such claim is made, shall have the right to

sue on the payment bond for the amount, or the balance thereof, unpaid at the time of institution of such

suit and to prosecute said action for the sum or sums justly due such person; provided, however, that any

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person having a direct contractual relationship with a subcontractor of the contractor, but no contractual

relationship express or implied with the contractor furnishing said payment bond, shall have a right of action

upon the payment bond upon giving written notice to the contractor within ninety (90) days from the date

on which such person did or performed the last of the labor or furnished or supplied the last of the material

upon which such claim is made, stating with substantial accuracy the amount claimed and the name of the

party to whom the material was furnished or supplied or for whom the labor was done or performed. Such

notice shall be personally served or served by mailing the same by registered or certified mail, postage

prepaid, in an envelope addressed to the contractor at any place the contractor maintains an office or

conducts its business.

(e) Suits on Payment Bonds; Where and When Brought. Every suit instituted upon a payment bond

shall be brought in the Superior Court, but no such suit shall be commenced after the expiration of one (l)

year after the day on which the last of the labor was performed or material was sup plied by the person

bringing suit. The obligee named in the bond need not be joined as a part in any such suit.