[As Amended by House Committee of the
Whole]
As Amended by Senate Committee
Session of 1998
SENATE BILL No. 489
By Committee on Transportation and Tourism
1-22
12
AN ACT concerning construction contracts; providing
procedure for par-
13 tial payment[;
establishing minimum wages therefor.];
amending
14 K.S.A. 68-411
and 68-1120 and K.S.A. 1997 Supp. 68-521 and re-
15 pealing the
existing sections.
16
17 Be it enacted by the Legislature of the
State of Kansas:
18 New
Section 1. Notwithstanding any other statutory provision
of this
19 state, in any contract entered into by the
state of Kansas or any depart-
20 ment or agency of the state, or any county,
city, school district or any
21 other political subdivision of the state,
for the construction, reconstruc-
22 tion, renovation, remodeling or repair of
any building or structure or for
23 the construction, reconstruction, repair or
maintenance of any highway,
24 road, bridge, underpass, viaduct, sewer or
waterworks, or other improve-
25 ments to public property, the contracting
public entity may include a
26 provision for retaining moneys until such
time as the contract has been
27 satisfactorily completed, subject to the
following:
28 (a) Such
withholding from any partial or complete payment shall
not
29 exceed 5% of such payment, not to
exceed 5% of the entire contract
30 amount.
31 (b)
(a) With respect to any contract to which this
act applies of
32 $1,000,000 or more, at any time before the
public contracting entity re-
33 leases the contract funds it has retained,
the contractor may request pub-
34 lic entity may approve a request from
the contractor that the retained
35 funds be placed in an interest bearing
escrow account. It shall be the
36 responsibility of the contractor to
establish the escrow account in a state
37 or national bank, federally chartered
savings and loan association, or fed-
38 erally chartered savings bank with offices
located in Kansas. All fees or
39 charges for establishing and maintaining
the escrow account shall be paid
40 by the contractor. Prior to paying any
retained funds into the escrow
41 account the public contracting entity shall
enter into an appropriate es-
42 crow agreement with the bank, savings and
loan association or savings
43 bank and the contractor. The escrow
agreement shall provide that the
SB 489--Am. by HCW
2
1 retained funds shall be returned to
the contracting public entity in the
2 event the contracting public entity
notifies the bank, savings and loan
3 association or savings bank that the
contractor has defaulted on the con-
4 tract, that the retained funds shall
not be released to the contractor until
5 authorized by the contracting public
entity and that the interest on the
6 retained funds shall be paid to the
contractor as it accumulates.
7 (c)
(b) With respect to any contract to which this
act applies of
8 $1,000,000 or more, at any time after
the contracting public entity has
9 retained any contract funds the
contractor shall be allowed, upon request
10 by the contractor, to
may request and upon approval by the public
11 contracting entity of such request
the contractor may substitute se-
12 curities of the following types for the
retained contract funds:
13 (1) United States
treasury bonds, United States treasury notes,
14 United States treasury certificates of
indebtedness or United States treas-
15 ury bills;
16 (2) bonds or notes of
the state of Kansas or any political subdivision
17 of the state; or
18 (3) certificates of
deposit from any state or national bank, federally
19 chartered savings and loan association, or
federally chartered savings
20 bank, with offices located in Kansas.
21 The value of the securities
substituted must be at least equal to the
22 amount of the funds retained. The
substituted securities shall be issued
23 in such a manner as to allow the
contracting public entity to convert the
24 securities to cash in the event the
contracting public entity makes a claim
25 against the contractor as a result of the
contractor's default on the con-
26 tract. Upon substitution of appropriate
securities the contracting public
27 entity shall pay the retained funds to the
contractor within five working
28 days. When the contract is satisfactorily
completed the substituted se-
29 curities will be returned to the contractor
with any interest that has ac-
30 cumulated. In the event that the
contracting public entity makes a claim
31 against the retained securities the entity
shall retain only such substituted
32 securities of a sufficient value to cover
the amount of the claim and return
33 the remaining substituted securities to the
contractor plus any accumu-
34 lated interest. Substituted securities
retained to cover the amount of the
35 claim made by the contracting public entity
may be converted to cash by
36 the entity. All costs associated with
substituting securities as provided in
37 this subsection shall be paid by the
contractor. The contracting public
38 entity may require the contractor to
establish and maintain an escrow
39 account with an escrow agent approved by
the contracting public entity
40 for the purpose of effectuating the
substitution of securities provided for
41 in this subsection.
42
Sec. 2. K.S.A. 68-411 is hereby amended to read
as follows: 68-411.
43 The secretary of transportation
shall make partial payment to a contractor
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3
1 performing any road or bridge
work under contract with it, as the work
2 may progress,
said such partial
payment not to be less than ninety
percent
3 (90%) of the contract price
of the material delivered and work done and
4 accepted
to be made in accordance with the provisions of section
1. The
5 secretary shall provide
by regulation rules and
regulations, to be made a
6 part of all specifications,
for the withholding of not more than ten
percent
7 (10%)
5% of the full contract price of
any such work until the work is
8 satisfactorily completed and
approved by the secretary and the provisions
9 of the contract and bond
therefor have been fully satisfied.
10
Sec. 3. K.S.A. 1997 Supp. 68-521 is hereby amended to
read as fol-
11 lows: 68-521. (a) The board of
county commissioners before awarding any
12 contract for the construction,
surfacing, repairing or maintaining of any
13 road as provided in K.S.A. 68-520,
and amendments thereto, when the
14 county engineer's estimated cost of
such improvement is more than
15 $10,000, shall have the estimate
and the approved plans and specifications
16 which have been adopted by order of
the board for such work filed in
17 the county clerk's office or in
some other county office designated by the
18 board at least 20 days prior to the
time of the letting.
19 The county clerk or
some other county officer designated by the board
20 shall give not less than 20 days'
notice of the letting by publication in at
21 least two consecutive weekly issues
of the official county paper, the first
22 publication of such notice to be
not less than 20 days prior to such letting.
23 The notice shall specify with
reasonable minuteness the character of the
24 improvement contemplated, where it
is located, the kind of material to
25 be used, the hour, date and place
of letting of such contract, when the
26 work is to be completed, and invite
sealed proposals for the same. Such
27 other notice may be given as the
board may deem proper. All bids shall
28 be made on the proposal blanks
furnished by the county, signed by the
29 bidder, sealed and delivered, or
sent by mail, by the bidder, or the agent
30 or attorney thereof, to the county
clerk or to some other county officer
31 designated by the board. The
letting of all contracts shall be conducted
32 in such manner as to give free,
open competition, and all bidders shall be
33 given an equal opportunity to bid
upon the plans and specifications on
34 file. Each bidder shall be required
to accompany the submitted bid with
35 a bid surety in an amount equal to
5% of the bid amount in the form
36 prescribed by the board as a
guarantee that, if the contract is awarded to
37 the bidder, the bidder will enter
into the contract with the board. If a
38 bidder fails to enter into the
contract when awarded to the bidder, the
39 bid surety shall become the
property of the county as its liquidated dam-
40 ages and shall be paid to the
county treasurer for credit to the general
41 fund of the county, and the board
may award the contract to the next
42 lowest responsible bidder. The bids
shall be opened publicly by the board
43 or a designee thereof at the place
and hour named in the advertising
SB 489--Am. by HCW
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1 notice, and all bids shall be
considered, and accepted or rejected.
2 In case the
work is let at such public letting or thereafter, the
contract
3 shall be awarded to the
lowest responsible bidder, or the board, if it deems
4 the proposals too high, may
reject all bids, and readvertise the work as
5 before. No such contract
shall be let at an amount exceeding the county
6 engineer's estimated cost of
the work. No such contract shall be consid-
7 ered as awarded unless the
contractor shall within 10 days after the letting
8 enter into contract and shall
give the bond required by K.S.A. 60-1111,
9 and amendments thereto, and a
performance bond to the county in a
10 penal sum equal to the amount of
the contract price, conditioned upon
11 the faithful performance of the
contract, payable to the county upon fail-
12 ure to comply with the terms of the
contract. The contractor shall file
13 with the county clerk the bonds,
which shall be approved by the chair-
14 person of the board and the county
attorney by their signatures indorsed
15 thereon.
16 (b) The
provisions of subsection (a) shall not apply to contracts
for
17 the expenditure of county moneys
for the reconstruction or repair of a
18 road if:
19 (1) The road has
been damaged or destroyed as a result of a disaster;
20 (2) the governor
has declared the county, or that part of the county
21 in which the road is located, a
disaster area;
22 (3) the board of
county commissioners finds that a hardship would
23 result if the road is not
immediately reconstructed or repaired;
24 (4) the board of
county commissioners has obtained an estimate of
25 the cost of the reconstruction or
repair of the road from the county en-
26 gineer. If there is no county
engineer, the board shall obtain such estimate
27 from the Kansas department of
transportation; and
28 (5) the contract
for the reconstruction or repair of the road is
awarded
29 within 60 days of the governor's
declaration required by paragraph (2).
30 (c) The county
attorney shall meet with and advise the board of
31 county commissioners in all matters
pertaining to letting and making of
32 all contracts under this act. The
board may make partial payments
in
33 accordance with the provisions
of section 1, on the written estimate of
its
34 county engineer, upon any contract
work as the same progresses, but not
35 more than
90% 95% of the
estimate of the materials furnished and work
36 done, or of the contract price,
shall be paid in advance of the full and
37 satisfactory completion of the
contract. Final payment shall not be made
38 on any such contract until the
county engineer has inspected the work
39 and certified in writing that it
has been properly done and completed in
40 accordance with the contract, plans
and specifications, and the county
41 engineer's certificate to that
effect has been filed in the office of the
42 county clerk or some other county
officer designated by the board.
43
Sec. 4. K.S.A. 68-1120 is hereby amended to read as
follows: 68-
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1 1120. The board of county
commissioners may make partial payments
in
2 accordance with the
provisions of section 1, upon written estimate
of their
3 engineer, on any contract for
bridge or culvert work under this act as the
4 same
progresses;,
but at no time shall more than ninety
percent (90%)
5 95%
of the estimate of the materials at such time furnished and
of the
6 work at such time done be
paid in advance of the full and satisfactory
7 completion of
said such work.
Final payment shall not be made on any
8 of such contracts where the
amount of the contract involved exceeds
three
9 hundred dollars
($300) $300 by any county
board until the county engi-
10 neer has inspected the structure
and certified in writing that the work
11 has been done properly and
completed according to contract, plans and
12 specifications, and labor and
materials paid for, and the county engineer's
13 certificate to that effect shall be
filed in the office of the county clerk.
14 The acceptance of any bridge or the
approval thereof shall not relieve the
15 contractor or sureties of such
contractor from any liability for any failure
16 to fully perform the contract or
under any provisions of such contractor's
17 bond.
18
Sec. 5. K.S.A. 68-411 and 68-1120 and K.S.A. 1997 Supp.
68-521 are
19 hereby repealed.
20 [Sec. 2. (a) Each
contract entered into pursuant to this act
21 shall be based on bid or contract
specifications prescribing and
22 requiring that employees of any
contractor or subcontractor shall
23 be paid not less than the hourly wages,
including fringe benefits,
24 paid to corresponding classes of
laborers and mechanics employed
25 on similar projects in the county where
the project is to be per-
26 formed. Such minimum wage shall be the
wage paid to the majority
27 of the laborers or mechanics, unless the
same wages are not paid
28 to a majority, in which case the minimum
wage shall be the average
29 wages paid, weighted by the total
employed in the classification.
30 In the alternative, the minimum wage
shall be that determined
31 under federal law which would be
required to be paid on federally
32 funded projects at the location of the
public works project.
33 [(b) Employees
employed by contractors or subcontractors in
34 the execution of any nonfederal aid,
public works project contract
35 with any state agency shall be paid not
less than the wages as de-
36 termined pursuant to subsection
(a).
37 [(c) All work done on
public works projects owned by or built
38 for any state agency shall be done by
Kansas resident employees
39 whenever possible.]
40 Sec. 6
2 [3]. This act
shall take effect and be in force from and after
41 its publication in the statute book.
42