Chapter 3.14
PUBLIC CONSTRUCTION
Sections
3.14.010 Bond of contractors for public buildings or works
3.14.020 Qualification in lieu of bonding
3.14.030 Rights of persons furnishing labor and materials
For statutory provisions regarding the form of exemption from bonding required by AS 36.25.010, see AS 29.25.010(a)(10).
3.14.010 Bond of contractors for public buildings or works
Except as otherwise provided in KCC 3.14.020, before a construction contract exceeding $25,000 for the construction, alteration, or repair of a public building or public work of the city is awarded to a general or specialty contractor, the contractor shall furnish to the city the following bonds which will become binding upon the award of the contract to the contractor:
(a) A payment bond with a corporate surety qualified to do business in the state, for the protection of all persons who supply labor and materials in the prosecution of the work provided for in the contract. The payment bond shall be in amounts as follows:
(1) 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.
(2) When the total amount payable by the terms of the contract is more than $1,000,000, and not more than $5,000,000, the payment bond shall be in a sum of 40 percent of the total amount payable by the terms of the contract.
(3) When the total amount payable by the terms of the contract is more than $5,000,000, the payment bond shall be in a sum of $2,500,000.
(b) A performance bond in an amount equal to the required payment bond with a corporate surety qualified to do business in the state. [Ord. 1111 §1, 2000; Ord. 698, 1983; Ord. 650, 1982]
3.14.020 Qualification in lieu of bonding
(a) The bonds required by KCC 3.14.010 shall be waived for any project having a total value of less than $25,000, if the contractor qualifies as provided in this section prior to the time for award of the contract and deposits with the city by cash, postal money orders, certified checks, or cashier’s checks, a sum equal to five percent of the contract amount in lieu of a performance bond and a 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 Kodiak Island 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 city 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 $50,000, 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 $6,250, 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 less than five projects completed by the contractor or on which the contractor completed specified portions of the project under one or more contractors.
(4) The contractor submits not less than three references establishing his good credit standing in the community.
(c) Contracts awarded without bonds shall be signed and 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.
(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 city within 90 days after acceptance of the project, the deposit made in lieu of a labor and material payment bond 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 city manager determines to release the deposit after a shorter time upon the recommendation of the city engineer. The recommendation of the city engineer shall be based upon consideration of the nature and complexity of the project. [Ord. 1111 §2, 2000; Ord. 650, 1982]
3.14.030 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 KCC 3.14.010 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. 650, 1982]
3.14.040 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. 650, 1982]