45A.190 Performance bond and payment bond -- Recommendations on whether
613 words·~3 min read·
/ky/45a-190A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
performance bond should be required -- Audit of contract performance --
Release from performance bond.
(1)As used in this section, "agency contract administrator" means the state agency
employee responsible for the administration of a contract.
(2)When a construction contract is awarded in an amount in excess of one hundred
thousand dollars ($100,000), the following bonds shall be furnished to the
Commonwealth, and shall be binding on the parties upon the award of the contract:
(a)A performance bond satisfactory to the Commonwealth executed by a surety
company authorized to do business in this Commonwealth, or otherwise
supplied, satisfactory to the Commonwealth, in an amount equal to one
hundred percent (100%) of the contract price as it may be increased; and
(b)A payment bond satisfactory to the Commonwealth executed by a surety
company authorized to do business in the Commonwealth, or otherwise
supplied, satisfactory to the Commonwealth, for the protection of all persons
supplying labor and material to the contractor or his 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 original contract price.
(3)When any contract in an amount in excess of one hundred thousand dollars
($100,000) for commodities, supplies, equipment, or services of any kind, or when
a contract for construction services costing one hundred thousand dollars
($100,000) or less is proposed for presentation to vendors or contractors, the agency
contract administrator shall evaluate whether a performance bond should be
required in the procurement document, and make his recommendation to the
purchasing agency. The agency contract administrator shall note the reason that a
performance bond is or is not recommended and his notation shall be a part of the
permanent record relating to the contract. If a performance bond is required, the
requirement shall be included in the invitation to bid, request for proposal, or other
procurement document. The agency contract administrator shall make audits of the
performance of contracts upon completion of one-third (1/3) of the contract and
upon completion of two-thirds (2/3) of the contract. For contracts taking longer than
one
(1)year to complete, audits of performance shall be conducted at least
annually. Before a vendor is released from a performance bond, the agency contract
administrator shall review the audits of performance, make a final performance
review, and promptly determine whether, in his or her opinion, the vendor has fully
complied with the terms of the contract. The opinion of the agency contract
administrator shall be made in writing or electronically, set forth the reasons for his
or her opinion regarding compliance or noncompliance, and be signed by the
agency contract administrator. This opinion may have an electronic signature. The
using agency head shall, after consideration of the performance audits, the final
performance review, and the opinion of the agency contract administrator regarding
compliance or noncompliance, determine whether to recommend to the purchasing
agency that the performance bond be released or whether a claim should be made
against the performance bond. This determination of the using agency head shall be
in writing, signed by the using agency head, and forwarded to the purchasing
agency. This determination may have an electronic signature and be transmitted
electronically. If the recommendation of the using agency is not followed by the
purchasing agency, the purchasing agency shall place a statement in the file
explaining why it is not followed.
(4)Nothing in this section shall be construed to limit the authority of the
Commonwealth to require a performance bond or other security in addition to those
bonds, or in circumstances other than specified in subsection
(2)or
(3)of this
section.