Chapter 3.65
PUBLIC CONSTRUCTION

Sections:

3.65.010    Bond of contractors for public buildings or works.

3.65.020    Qualification in lieu of bonding.

3.65.030    Rights of persons furnishing labor and materials.

3.65.040    Definitions.

3.65.010 Bond of contractors for public buildings or works.

A. Except as otherwise provided in KIBC 3.65.020, before a construction contract exceeding $2,000 for the construction, alteration, or repair of a public building or public work of the borough is awarded to a general or specialty contractor, the contractor shall furnish to the borough the following bonds which will become binding upon the award of the contract to the contractor:

1. A payment bond with a corporate surety qualified to do business in the state, or at least two individuals who shall each qualify in a sum equal to the amount of the bond, for the prosecution of the work provided for in the contract. The payment bond shall be in amounts as follows:

a. When the total amount payable by the terms of the contract is not more than $1,000,000, the payment bond shall be in a sum of one-half the total amount payable by the terms of the contract;

b. When the total amount payable by the terms of the contract is more than $1,000,000, but not more than $6,250,000, the payment bond shall be in a sum of 40 percent of the total amount payable by the terms of the contract; or

c. When the total amount payable by the terms of the contract is more than $6,250,000, the payment bond shall be in a sum of $2,500,000.

2. A performance bond in an amount equal to the required payment bond with a corporate surety qualified to do business in the state or at least two individual sureties who shall each qualify for a sum equal to the amount of the bond.

B. When individual sureties are used to comply with the provisions of subsection A of this section, the net worth and the total value of the assets located in Alaska for each individual surety may not be less than the required amount of the bond. Each individual surety must execute an affidavit of individual surety on a form provided by the borough, demonstrating the sufficiency of the surety’s assets. Real property shall be valued at its assessed valuation, proof of which must accompany the affidavits, unless a current independent appraisal has been performed and a copy of the appraisal accompanies the affidavit. [Ord. 97-05 §6, 1997; Ord. 85-13-O §4, 1985; Ord. 84-42-O §2, 1984. Formerly §3.40.010].

3.65.020 Qualification in lieu of bonding.

A. The bonds required by KIBC 3.65.010 shall be waived for any project having a total value of less than $50,000 if the contractor qualifies as provided in this section prior to the time for award of the contract and deposits with the borough by cash, postal money order, certified check, or cashier’s check a sum equal to five percent of the contract amount in lieu of a performance bond and sum equal to five percent of the contract amount in lieu of a payment bond.

B. If the following four criteria apply, a contractor is qualified for a waiver of bond requirements:

1. The contractor has maintained a business office within the borough for a continuous period of not less than six calendar months prior to the application for qualification;

2. A statement is submitted to the borough, prepared and signed by a certified public accountant or the manager or other qualified officer of a federal or state chartered bank, savings and loan association, or credit union, demonstrating that the contractor has a current net worth of a stated amount not less than twice the total value of the contract or $100,000, whichever is less, and that the liquid assets of the contractor are a stated amount of not less than 25 percent of the total value of the contract or $12,500, whichever is less. The statement shall be dated not more than 60 days prior to application for qualification;

3. The contractor is recommended by the owners of not fewer than five projects completed by the contractor or on which the contractor completed specified portions of the project under one or more contractors; and

4. The contractor submits not fewer than three references establishing his good credit standing in the community.

C. Contracts awarded without bonds shall be signed guaranteed by the following persons, in their individual capacities, in addition to the authorized signature of the contractor:

1. Each general partner, if the contractor is a partnership; and

2. Each officer or general manager and each shareholder holding 10 percent or more of the common stock, if the contractor is a corporation.

D. Upon completion of the project, the contractor shall submit an affidavit of payment of all sums due or claimed to be due for labor or materials on the project. Final payment shall be made following receipt of this affidavit and, if no claims for labor or materials have been received by the borough within 90 days after acceptance of the project, the deposit made in lieu of a labor and material payment shall be released to the contractor.

E. The deposit made in lieu of a performance bond shall be retained for a period of one year unless the assembly determines to release the deposit after a shorter time upon the recommendation of the engineering/facilities department director. The recommendation of the engineering/ facilities department director shall be based upon consideration of the nature and complexity of the project. [Ord. 98-03 §2, 1998; Ord. 97-05 §6, 1997; Ord. 84-42-O §2, 1984. Formerly §3.40.020].

3.65.030 Rights of persons furnishing labor and materials.

A person who furnishes labor or materials in the prosecution of work provided for in a contract of which a payment bond is furnished under KIBC 3.65.010 and who is not paid in full before the expiration of 90 days after the last day on which the labor is performed or material is furnished shall have recourse under AS 36.25.020. [Ord. 97-05 §6, 1997; Ord. 84-42-O §2, 1984. Formerly §3.40.030].

3.65.040 Definitions.

As used in this chapter, the following definitions shall apply:

“Local office” means a principal place of business used for the conduct of general firm activities and shall not include a construction shack or other temporary quarters established and utilized mainly for the supervision or management of one or more ongoing projects.

“Materials” means all supplies, products, raw materials, and equipment utilized in the construction project. [Ord. 97-05 §6, 1997; Ord. 84-42-O §2, 1984. Formerly §3.40.040].