§ 39-1-1 — Performance Bonds for Public Works; Payment Bonds; Civil Actions; Notice of Completion of Project; Final Settlement

Alabama § 39-1-1

• Jurisdiction: Alabama
• Title 39: Public Works
• Ch. 1: General Provisions

Text

(a) Any person entering into a contract with an awarding authority in this state for the prosecution of any public works, before commencing the work, shall execute a performance bond, with penalty equal to 100 percent of the amount of the contract price. In addition, another bond, payable to the awarding authority letting the contract, shall be executed in an amount not less than 50 percent of the contract price, with the obligation that the contractor or contractors shall promptly make payments to all persons supplying labor, materials, or supplies for or in the prosecution of the work provided in the contract and for the payment of reasonable attorney fees incurred by successful claimants or plaintiffs in civil actions on the bond.
(b) Any person that has furnished labor, materials, or supplies for or in the prosecution of a public work and payment has not been made may institute a civil action upon the payment bond and have their rights and claims adjudicated in a civil action and judgment entered thereon. Notwithstanding the foregoing, a civil action shall not be instituted on the bond until 45 days after written notice to the surety of the amount claimed to be due and the nature of the claim. The civil action shall be commenced not later than one year from the date of final settlement of the contract. The giving of notice by registered or certified mail, postage prepaid, addressed to the surety at any of its places of business or offices shall be deemed sufficient under this section. In the event the surety or contractor fails to pay the claim in full within 45 days from the mailing of the notice, then the person or persons may recover from the contractor and surety, in addition to the amount of the claim, a reasonable
attorney
fee based on the result, together with interest on the claim from the date of the notice.
(c) Every person having a right of action on the last described bond as provided in this section
, upon written application to the authority under the direction of whom the work has been prosecuted, indicating that labor, material, foodstuffs, or supplies for the work have been supplied and that payment has not been made,
shall
be promptly furnished a certified copy of the additional bond and contract. The claimant may bring a civil action in the claimant’s name on the bond against the contractor and the surety, or either of them, in the county in which the work is to be or has been performed or in any other county where venue is otherwise allowed by law.
(d) In the event a civil action is instituted on the payment bond, at any time more than 15 days before the trial begins, any party may serve upon the adverse party an offer to accept judgment in favor of the offeror or to allow judgment to be entered in favor of the offeree for the money or as otherwise specified in the offer. If within 10 days after the service of the offer, the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service and the clerk of the court shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence of the offer shall not be admissible. If the judgment finally obtained by the offeree is less favorable than the offer, the offeree shall pay the reasonable
attorney
fees and costs incurred by the offeror after the making of the offer. An offer that is made but not accepted does not preclude a subsequent offer. When the liability of one party to another party has been determined by verdict, order, or judgment, but the amount or extent of the liability remains to be determined by further proceedings, any party may make an offer of judgment, which shall have the same effect as an offer made before trial if the offer is made no less than 10 days prior to the commencement of hearings to determine the amount or extent of liability.
(e) This section shall not require the taking of a bond to secure contracts in an amount less than
one hundred thousand dollars ($100,000)
.
(f)
(1)
The contractor
, immediately after the completion of the contract,
shall
give notice of the completion by
publishing the notice for a minimum of three weeks using one or more of the following methods:
a. In a newspaper of general circulation in the county or counties in which the work, or some portion thereof, has been done.
b. On a website that is maintained by a newspaper of general circulation in the county or counties in which the work, or some portion thereof, has been done.
c. On a website used by the awarding authority for publishing notices.
(2) If no newspaper is published in the county in which the work was done, and if the awarding authority does not utilize a website for the purpose of publishing notices, the notice may be given by posting at the courthouse for 30 days, and proof of the posting of the notice shall be given by the awarding authority and the contractor.
(3)
A final settlement shall not be made upon the contract until the expiration of 30 days after the completion of the notice. Proof of publication of the notice shall be made by the contractor to the authority by whom the contract was made by affidavit of the publisher
or website owner
and a printed copy of the notice published.
(4) For contracts for road resurfacing materials that are awarded on an annual basis, where the bid specifications include options such as a unit price for materials, a unit price for the delivery of materials, or a unit price for materials to be laid in place by the bidder, notice of completion pursuant to this subsection may be given on an annual basis upon completion of the project as a whole, rather than at the completion of each proceed order.
(g) Subsection (f) shall not apply to contractors performing contracts of less than
one hundred thousand dollars ($100,000)
in amount.

Legislative History

(Acts 1927, No. 39, p. 37; Acts 1935, No. 39, p. 70; Code 1940, T. 50, §16; Acts 1983, No. 83-737, p. 1203; Acts 1989, No. 89-650, p. 1284, §1; Acts 1994, No. 94-207, p. 270, §1; Acts 1997, No. 97-225, p. 348, §1; Act 2023-497, §1.)