Sec. 15.914. CONSTRUCTION CONTRACT REQUIREMENTS

A political subdivision or water supply corporation receiving financial assistance under this subchapter shall require in all contracts for the construction of a project that:

(1) each bidder furnish a bid guarantee equivalent to five percent of the bid price;

(2) each contractor awarded a construction contract furnish performance and payment bonds as follows:

(A) the performance bond must include guarantees that work done under the contract will be completed and performed according to approved plans and specifications and in accordance with sound construction principles and practices; and

(B) the performance and payment bonds must be in a penal sum of not less than 100 percent of the contract price and remain in effect for one year after the date of approval by the engineer of the subdivision or corporation;

(3) payment be made in partial payments as the work progresses;

(4) each partial payment not exceed 95 percent of the amount due at the time of the payment as shown by the engineer of the project, but, if the project is substantially complete, a partial release of the five percent retainage may be made by the subdivision or corporation with approval of the executive administrator;

(5) payment of the retainage remaining due on completion of the contract be made only after:

(A) approval by the engineer for the subdivision or corporation as required under the bond proceedings;

(B) approval by the subdivision or corporation by a resolution or other formal action; and

(C) certification by the executive administrator in accordance with the rules of the board that the work to be done under the contract has been completed and performed in a satisfactory manner and in accordance with sound engineering principles and practices;

(6) no valid approval be granted unless the work done under the contract has been completed and performed in a satisfactory manner according to approved plans and specifications; and

(7) labor from inside the disadvantaged rural community be used to the extent possible.

Added by Acts 2001, 77th Leg., ch. 1234, Sec. 22, eff. Sept. 1, 2001. Amended by: Acts 2005, 79th Leg., Ch. 1151 , Sec. 13, eff. June 18, 2005.