North Carolina § 44A-26 - Bonds required.

§ 44A-26. Bonds required.

When the total amount of construction contracts awarded for any one project exceeds three hundred thousand dollars ($300,000), a performance and payment bond as set forth in (1) and (2) is required by the contracting body from any contractor or construction manager at risk with a contract more than fifty thousand dollars ($50,000); provided that, for State departments, State agencies, and The University of North Carolina and its constituent institutions, a performance and payment bond is required in accordance with this subsection if the total amount of construction contracts awarded for any one project exceeds five hundred thousand dollars ($500,000). In the discretion of the contracting body, a performance and payment bond may be required on any construction contract as follows: A performance bond in the amount of one hundred percent (100%) of the construction contract amount, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract. Such bond shall be solely for the protection of the contracting body that is constructing the project. A payment bond in the amount of one hundred percent (100%) of the construction contract amount, conditioned upon the prompt payment for all labor or materials for which a contractor or subcontractor is liable. The payment bond shall be solely for the protection of the persons furnishing materials or performing labor for which a contractor, subcontractor, or construction manager at risk is liable. The performance bond and the payment bond shall be executed by one or more surety companies legally authorized to do business in the State of North Carolina and shall become effective upon the awarding of the construction contract. History (1973, c. 1194, s. 1; 1983, c. 818; 1987 (Reg. Sess., 1988), c. 1108, s. 10; 1995, c. 367, s. 3; 2001-496, s. 7; 2010-148, s. 1.) Local Modification. - Guilford: 1987 (Reg. Sess., 1988), c. 1010, s. 1; city of Greensboro: 1987 (Reg. Sess., 1988), c. 1010, s. 1; city of Winston-Salem: 1987 (Reg. Sess., 1988), c. 949; town of Carrboro: 1995, c. 339, s. 5. Cross References. - As to waiver of bonding requirements for Small Business Enterprises bids, see G.S. 136-28.10. As to department reporting provisions on projects let without a performance or payment bond, see G.S. 143-129(i). Editor's Note. - Session Laws 2005-276, s. 28.10, as amended by Session Laws 2006-67, s. 1, provides: "(a) The Department of Transportation may implement up to two performance-based contracts for routine maintenance and operations, exclusive of resurfacing. Selection of firms to perform this work shall be made using a best-value procurement process. "Prior to any advertisement for a proposed project, the Department shall report to the Joint Legislative Transportation Oversight Committee on the contractor selection criteria to be used." "(b) For contracts authorized under this section, notwithstanding G.S. 44A-26(a)(1) and (a)(2), the Department of Transportation may require the bonds issued pursuant to Article 3 of Chapter 44A of the General Statutes for public construction to be provided on a periodic basis and in the amount to cover that specific period rather than for the entire project duration." Effect of Amendments. - Session Laws 2010-148, s. 1, effective October 1, 2010, and applicable to construction contracts awarded on or after that date, added the proviso at the end of the first sentence in the introductory paragraph of subsection (a).