§ 5-16-5-2 — Payment bonds; payment provisions in contracts; statements of amount due; suits on bond; application of statute to bonds and claims on state highway projects; waiver of bond requirements for certain state educational institution projects

Indiana § 5-16-5-2

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 16: PUBLIC WORKS
• Ch. 5: Withholding and Bond to Secure Payment of

Text

(a) A contract awarded for a public work must
provide for the payment of subcontractors, labor, suppliers of materials,
and those performing service in connection with the public work. The
contract must provide for the payment of subcontractors by withholding
by the public body funds sufficient from the contract price to pay the
subcontractors, labor, suppliers of materials, and those furnishing
service in relation to or in connection with the public work. The
contractor shall execute a bond to the state, approved by the public
body in an amount equal to the total contract price. However, a
contractor is not required to execute a bond under this section in the
case of a contract entered into by a state educational institution, if the
amount to be paid under the contract is less than five hundred thousand
dollars ($500,000) and the state educational institution agrees to waive
the requirement. The bond shall be conditioned for payment by the
contractor, the contractor's successors and assigns, and by the
subcontractors, their successors and assigns, of all indebtedness, which
may accrue to any person for any labor or service performed, materials
furnished, or service rendered in the public work. The bond by its terms
shall be conditioned to directly inure to the benefit of subcontractors,
laborers, suppliers of materials, and those performing service who have
furnished or supplied labor, material, or service for the public work.
(b) The bond required under subsection (a) shall be deposited with
the public body for the benefit of a person interested in and entitled to
the bond. The bond shall be conditioned that:
(1) a change, modification, omission, or addition in and to the
terms or conditions of the contract, plans, specifications,
drawings, or profile; or
(2) any irregularity or defect in the contract or in the proceedings
preliminary to the letting and awarding of the contract;
does not affect or operate to release or discharge the surety.
(c) The provisions of this chapter become a part of the terms of a
contract awarded under this chapter. A bond for a public work is
subject to this chapter.
(d) A person to whom money is due for having performed labor or
having furnished material or service for a public work under this
chapter must, not later than sixty (60) days after that person completed
the labor or service or after that person furnished the last item of
material:
(1) file with the public body duplicate verified statements of the
amount due to the person; and
(2) deliver a copy of the statement to the contractor.
The public body shall deliver to the surety on the bond one (1) of the
duplicate statements. The failure to deliver a duplicate statement by the
public body does not affect or invalidate the rights of the person to
whom money is due, nor does the failure to deliver a duplicate
statement operate as a defense for the surety.
(e) A suit may not be brought against a surety on a bond under this
section before thirty (30) days after both of the following have
occurred:
(1) The filing of the verified duplicate statement.
(2) A copy of the notice has been delivered to the contractor.
If the indebtedness is not paid in full after thirty (30) days, the person,
may bring an action in a court of competent jurisdiction upon the bond.
The action must be brought not later than sixty (60) days after the date
of the final completion and acceptance of the public work. An action
on the bond against a surety is barred if not brought within this time.
(f) IC 8-23-9, and not this chapter, applies to bonds and claims on
state highway road and bridge contracts.
Formerly: Acts 1911, c.173, s.2; Acts 1925, c.44, s.2; Acts
1931, c.168, s.2; Acts 1933, c.258, s.2. As amended by Acts 1980,
P.L.74, SEC.11; Acts 1981, P.L.57, SEC.11; P.L.18-1990, SEC.13;
P.L.8-1993, SEC.63; P.L.75-2012, SEC.8; P.L.135-2017,
SEC.1.