§ 2-1270. Contract performance and payment bonds for construction contracts.

(a)

Required, amounts. When a construction contract is awarded in excess of $20,000.00, the following bonds or security shall be delivered to the city and shall become binding on the parties upon the execution of the contract:

(1)

A performance bond satisfactory to the city, executed by a surety company authorized to do business in the state by the Georgia Insurance Commissioner or otherwise secured in a manner satisfactory to the city, in an amount equal to 100 percent of the price specified in the contract; and

(2)

A payment bond satisfactory to the city, executed by a surety company authorized to do business in the state by the Georgia Insurance Commissioner or otherwise secured in a manner satisfactory to the city, for the protection of all persons supplying labor and material to the contractor or subcontractors for the performance of the work provided for in the contract, in an amount equal to 100 percent of the price specified in the contract.

(b)

Reduction or waiver of bond. The chief procurement officer is authorized to reduce or waive performance and payment bonds for contracts for $20,000.00 or less, when a written determination is made that it is in the best interests of the city to do so. Nothing in this subsection prevents the requirement of such bonds on construction contracts for $20,000.00 or less when the chief procurement officer determines that the circumstances warrant.

(c)

Authority to require additional bonds. Nothing in this section shall be construed to limit the authority of the chief procurement officer to require other security in addition to those bonds or in circumstances other than those specified in subsections (a) and (b) of this section.

(d)

Right to institute suit on payment bond; jurisdiction and time limits for suits upon payment bonds. The right to institute suit and jurisdiction and time limits for suits upon payment bonds provided under this section will be governed by the provisions of Title 13, Chapter, 10, Article 1, P. 4 of the Georgia Code.

[(e)

Reserved. ]

(f)

Retention.

(1)

Maximum amount withheld. In any contract for construction which provides for progress payments in installments based upon an estimated percentage of completion with a percentage of the contract's proceeds to be retained by the city pending completion of the contract, the retained amount of each progress payment or installment shall be no more than ten percent.

(2)

Release of retained funds. Funds held by the city as retainage under the contract shall be released to the contractor as specified in the contract.

(Ord. No. 2009-78(09-O-1876), § 6, 12-15-09)