A. The following bonds or security is required and is binding on the parties to the contract if the value of a construction award exceeds the amount established by section 41-2535:

Terms Used In Arizona Laws 41-2574

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Business: means any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture or other private legal entity. See Arizona Laws 41-2503
  • Construction services: means either of the following for construction-manager-at-risk, design-build and job-order-contracting project delivery methods:

    (a) Construction, excluding services, through the construction-manager-at-risk or job-order-contracting project delivery methods. See Arizona Laws 41-2503

  • Construction-manager-at-risk: means a project delivery method in which:

    (a) There is a separate contract for design services and a separate contract for construction services, except that instead of a single contract for construction services, the purchasing agency may elect separate contracts for preconstruction services during the design phase, for construction during the construction phase and for any other construction services. See Arizona Laws 41-2503

  • Contract: means all types of state agreements, regardless of what they may be called, for the procurement of materials, services, construction, construction services or the disposal of materials. See Arizona Laws 41-2503
  • Contract: A legal written agreement that becomes binding when signed.
  • Contractor: means any person who has a contract with a state governmental unit. See Arizona Laws 41-2503
  • Cost: means the aggregate cost of all materials and services, including labor performed by force account. See Arizona Laws 41-2571
  • Department: means the department of administration. See Arizona Laws 41-2503
  • Design services: means architect services, engineer services or landscape architect services. See Arizona Laws 41-2503
  • Design-bid-build: means a project delivery method in which:

    (a) There is a sequential award of two separate contracts. See Arizona Laws 41-2503

  • Design-build: means a project delivery method in which:

    (a) There is a single contract for design services and construction services, except that instead of a single contract for design services and construction services, the purchasing agency may elect separate contracts for preconstruction services and design services during the design phase, for construction and design services during the construction phase and for any other construction services. See Arizona Laws 41-2503

  • Director: means the director of the department of administration. See Arizona Laws 41-2503
  • Finance services: means financing for a construction services project. See Arizona Laws 41-2503
  • Job-order-contracting: means a project delivery method in which:

    (a) The contract is a requirements contract for indefinite quantities of construction. See Arizona Laws 41-2503

  • Maintenance services: means routine maintenance, repair and replacement of existing facilities, structures, buildings or real property. See Arizona Laws 41-2503
  • Operations services: means routine operation of existing facilities, structures, buildings or real property. See Arizona Laws 41-2503
  • Preconstruction services: means services and other activities during the design phase. See Arizona Laws 41-2503
  • Purchasing agency: means any state governmental unit that is authorized by this chapter or rules adopted pursuant to this chapter, or by way of delegation from the director, to enter into contracts. See Arizona Laws 41-2503
  • Statute: A law passed by a legislature.

1. A performance bond that is executed and furnished as required under Title 34, Chapter 2, Article 2 or chapter 6, as applicable, in an amount equal to one hundred percent of the price specified in the contract conditioned on the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract, except that:

(a) For job-order-contracting construction services, the performance bond shall cover the full amount of construction under the job-order-contracting construction services contract, shall not include any design services, preconstruction services, finance services, maintenance services, operations services or other related services included in the contract, may be a single bond for the full term of the contract, a separate bond for each year of a multiyear contract or a separate bond for each job order, as determined by the purchasing agency, and, if a single bond for the full term of the contract or a separate bond for each year of a multiyear contract, shall initially be based on the purchasing agency’s reasonable estimate of the amount of construction that the purchasing agency believes is likely to actually be done during the full term of the contract or during the particular year of a multiyear contract, as applicable.

(b) For construction-manager-at-risk construction services and design-build construction services, the amount of the performance bond shall be the price of construction and shall not include the cost of any design services, preconstruction services, finance services, maintenance services, operations services and other related services included in the contract. This bond is solely for the protection of this state. The conditions and provisions of the performance bond regarding the surety’s obligations shall follow the form required under section 34-222, subsection G or section 34-610, subsection G, as applicable.

2. A payment bond that is executed and furnished as required by Title 34, Chapter 2, Article 2 or chapter 6, as applicable, in an amount equal to one hundred percent of the price specified in the contract for the protection of all persons supplying labor or material to the contractor or its subcontractors for the performance of the construction provided for in the contract, except that:

(a) For job-order-contracting construction services, the payment bond shall cover the full amount of construction under the job-order-contracting construction services contract, shall not include any design services, preconstruction services, finance services, maintenance services, operations services or other related services included in the contract, may be a single bond for the full term of the contract, a separate bond for each year of a multiyear contract or a separate bond for each job order, as determined by the purchasing agency, and, if a single bond for the full term of the contract or a separate bond for each year of a multiyear contract, shall initially be based on the purchasing agency’s reasonable estimate of the amount of construction that the purchasing agency believes is likely to actually be done during the full term of the contract or during the particular year of a multiyear contract, as applicable.

(b) For construction-manager-at-risk construction services and design-build construction services, the amount of the payment bond shall be the price of construction and shall not include the cost of any design services, preconstruction services, finance services, maintenance services, operations services or other related services included in the contract. The conditions and provisions of the payment bond regarding the surety’s obligations shall follow the form required under section 34-222, subsection F or section 34-610, subsection F, as applicable.

B. For design-bid-build construction, the bonds prescribed in subsection A of this section shall be provided on and at the same time as execution of the construction contract. For construction-manager-at-risk, design-build and job-order-contracting construction services, the bonds prescribed in subsection A of this section shall be provided only on and at the same time as execution of a contract or an amendment to a contract that commits the contractor to provide construction for a fixed price, guaranteed maximum price or other fixed amount within a designated time frame.

C. If the prime contract or specifications require any persons supplying labor or materials in the prosecution of the work to furnish payment or performance bonds, these bonds shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance and financial institutions pursuant to Title 20, Chapter 2, Article 1. Notwithstanding any other statute, the bonds shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied.

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