CONTRACTS; CONSTRUCTION INDUSTRIES; BONDS;

BONDS;

You asked for proof that the state received surety bonds on construction contracts awarded by the (1) Department of Public Works (DPW) (a) during the past fiscal year and valued at over $ 500,000 and (b) for the completion of the non-bid projects listed in CGS § 4b-91 and (2) Department of Transportation (DOT) during the past four years for the completion of buildings, not roads or bridges, and valued at over $ 8 million.

SUMMARY

The law requires contractors to furnish proof of performance and payment bonds as a condition of being awarded most state construction contracts valued at over $ 500,000. As a matter of practice, the DPW and DOT commissioners keep a copy of the bonds, which must be in the amount of the contract, with the contract. We have attached a copy of these bonds for your review.

The law does not specifically require the recipient of contracts the DPW commissioner awards on a total cost basis to furnish proof of these bonds even though these contacts can exceed $ 500,000. The commissioner awards these contracts to construction managers who employ various subcontractors to do the actual work.

DPW CONSTRUCTION CONTRACTS

With a few exceptions, the DPW commissioner is the authority charged with awarding state construction contracts that will cost the state over $ 500,000. The law covers reconstruction, alteration, remodeling, repairs, and demolition of any state building. The Legislative Management Committee is responsible for construction, alterations, or repairs to buildings under its supervision; public colleges and universities for such construction of buildings under their supervision or control up to $ 2 million (except there is no cap on UCONN 2000); and DOT for the construction of highways, bridges, and mass transit, marine, or aviation transportation facilities.

As a general rule, the public works commissioner must publicly advertise construction contracts estimated to cost more than $ 500,000 and award them to the lowest, responsible qualified bidder on the basis of competitive bids. Contractors awarded these contracts are required by law to furnish two bonds: one for performance and the other to insure that laborers and material suppliers are paid (CGS § 4b-91(a)).

The DPW commissioner awarded seven construction contracts valued at over $ 500,000 in FY 2002-03. Table 1 shows each of these contracts, the contract recipients, the name of the surety, and the bond amount.

Table 1: Bonds Filed on DPW Projects in FY 2002-03

Source: DPW

The commissioner also has the authority to expedite the process when awarding contracts for certain specified projects. These contracts are not awarded based on competitive bids. Instead the commissioner may negotiate a contract with any one of three general contractors taken from a short list of responsible and qualified contractors. Contractors awarded these contracts are subject to the same bonding requirements as those awarded a contract that is competitively bid (CGS § 4b-91(b)).

The General Assembly has placed eight projects on the fast-track in the past nine years: Hartford Community Court, Connecticut Juvenile Training School, Capital Community College in downtown Hartford, Homer Babbidge Library, Fort Trumbull State Park, MacDougall Correctional Facility, Juvenile Detention Center in Hartford and Bridgeport, and Connecticut State University Student Residential Facility. Of the eight, seven are listed in CGS § 4b-91. The eighth, Fort Trumbull State Park, is designated in SA 99-2. Table 2 shows each project, the contractor selected to complete it, and the surety company and amount.

As is shown in Table 2, the DPW commissioner awarded three of these projects on a total cost basis to a construction manager under CGS § 4b-24. This method of awarding contracts allows the commissioner to select a single contractor most qualified to perform all phases of the project rather than the lowest responsible qualified bidder for each project component. The particular statute authorizing total cost basis contracting does not require the contract recipient to file surety bonds with the commissioner. And the department cannot verify that individual subcontractors on the projects obtained bonds, according to Steven Kitowitz, DPW legislative liaison. However another statute (CGS § 49-41) requires anyone awarded a construction contract valued at more than $ 50,000 to furnish a payment bond.

TABLE 2: Fast-Track Projects 1994 to Present

Source: DPW

*DPW could not locate proof of these bonds

**Bond rounded to the nearest dollar

DOT BUILDING CONSTRUCTION CONTRACTS

As stated earlier, the DOT commissioner is responsible for awarding contracts for the construction of real assets required for the development and operation of a safe and efficient system of highway, mass transit, marine, and aviation transportation (CGS § 13b-4 (12)). While highway and bridge construction contracts represent the vast majority of those the commissioner awards, he also awards contracts for the construction of buildings. During the immediate past four years, the commissioner has awarded contracts for seven buildings with contract values over $ 8 million. Table 3 shows five of these contracts, the selected contractor, and the surety company and amount. DOT did not provide us with information on the remaining two, the Bradley Airport Terminal and Parking garage, in time for this report. We will forward it once we receive it.

TABLE 3: DOT Building Contracts Over $ 8 Million 1998-2003

Source: DOT

*Rounded to the nearest dollar

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