(A) The Public Works Law applies to all public work performed or contracted for by the city; and its agencies; regardless of whether it is performed on property owned or leased by the city or agency.
(1) A contract for public work by the city or agency is void if not let in accordance with I.C. 36-1-12.
(2) Public work means the construction, reconstruction, alteration, or renovation of a public building, airport facility, or other structure that is paid for out of a public fund or out of a special assessment. The term includes the construction, alteration, or repair of a highway, street, alley, bridge, sewer, drain, or other improvement that is paid for out of a public fund or out of a special assessment. The term also includes any public work leased by the city under a lease containing an option to purchase.
(B) Alternate to Public Works Law. As an alternative to the Public Works Law, the city or its agencies may (1) enter into a design-build contract as permitted under I.C. 5-30, or (2) participate in a utility efficiency program or enter into a guaranteed energy savings contract as permitted by I.C. 36-12.5 or (3) public-private agreement under I.C. 5-23.
(1) Design-build contract means a contract between the city and a design-builder to furnish (1) architectural, engineering, and related design services as required for a public project; and (2) labor, materials, and other construction services for the same public project.
(2) Guaranteed savings contract refers to a contract in which a qualified provider enters into an agreement with the city to: (1) evaluate and recommend to the city conservation measures; and (2) provide for the implementation of at least one conservation measure.
(3) Public-private agreement the Public Works Law does not apply to a person who has entered into an operating agreement with the city or an agency of the city under I.C. 5-23.
(C) Dividing cost of public work project into two or more projects. The cost of a single public work project may NOT be divided into two or more projects for the purpose of avoiding the Public Works Law. The cost of a public work project includes the cost of materials, labor, equipment rental, and all other expenses incidental to the performance of the project.
(1) Penalty. A bidder or quoter or a person who is a party to a public work contract who knowingly violates this section commits a Class A infraction and may not be a party to or benefit from any contract under this subchapter for two years from the date of the conviction. Any city member or officer of the city or agency who knowingly violates this section commits a Class A infraction.
(D) $150,000 public work for which advertising and bidding is required.
(1) Whenever the cost of a public work project will be at least $150,000, the city must comply with the following procedures.
(2) Plans and specifications.
(a) The city shall prepare general plans and specifications describing the kind of public work required, but shall avoid specifications which might unduly limit competition.
1. If the project involves the resurfacing (as defined in I.C. 8-14-2-1) of a road, street or bridge, the specifications must show how the weight or volume of the materials will be accurately measured and verified.
(b) The city shall file the plans and specifications in a place reasonably accessible to the public, which shall be specified in the notice to bidders. All plans and specifications for public buildings must be approved by the State Department of Health, the Division of Fire and Building Safety, and other state agencies designated by statute.
(3) Notice to bidders.
(a) Upon filing of the plans and specifications, the city shall publish a notice to bidders in accordance with I.C. 5-3-1 calling for sealed proposals for the work needed two times, at least one week apart, with the second publication made at least seven days before the date the bids will be received.
(b) The notice to bidders shall call for sealed proposals for the public work.
(c) The period of time between the date of the first publication and the date of receiving bids may not be more than six weeks if the estimated cost of the public work is less than $25,000,000, ten weeks if the estimated cost of the public work is at least $25,000,000.
(d) The notice to bidders shall specify: (1) the place where the plans and specifications are on file and (2) the date fixed for receiving bids.
(4) Bid bonds (evidence of financial responsibility).
(a) If the cost of the public work is estimated to be more than ($200,000), the city (1) shall require a bid bond or a certified check to be filed with each bid by a bidder in the amount determined and specified in the notice to bidders.
(b) If the cost of the public work is estimated to be not more than ($200,000), the city may require a bid bond or a certified check to be filed with each bid by a bidder in the amount determined and specified by the city in the notice to bidders.
(c) The amount of the bid bond or certified check may not be more than 10% of the contract price. The bid bond or certified check shall be made payable to the city. All bid bonds and checks of unsuccessful bidders shall be returned by the city upon selection of successful bidders. Certified check and bid bond of successful bidder shall be held until delivery of the performance bond, payment bond and executed agreement by the successful bidder.
(5) Bidder's non-collusion affidavit. The city shall require the bidder to submit a non-collusion affidavit that the bidder has not entered into a combination or agreement.
(a) Relative to the price to be bid by a person;
(b) To prevent a person from bidding; or
(c) To induce a person to refrain from bidding and that his bid is made without reference to any other bid
(6) Public meeting.
(a) The city may not require a bidder to submit a bid before the meeting at which bids are to be received.
(b) The meeting for receiving bids must be open to the public.
(c) All bids received shall be opened publicly and read aloud at the time and place designated. Bids shall be submitted on prescribed General Form 96 (Contractor's Bid for Public Work).
(7) Award of contract - only two options.
(a) Except as permitted by the allowed price preference (I.C. 36-1-12-22), the city shall award the contract for public work or improvements to the lowest responsible and responsive bidder or the city may reject all bids submitted.
(b) Notwithstanding I.C. 36-1-12-4(b)(8), a county may award sand, gravel, asphalt paving materials, or crushed stone contracts to more than one responsible and responsive bidder if specifications allow for bids to be based on service to specific geographical areas and the contracts are awarded by geographic area. The geographic areas do not need to be prescribed by the specifications.
(c) Award of bid other than lowest bidder. If the city awards the contract to a bidder other than the lowest bidder, the city must state in the minutes or memoranda, at the time the award is made, the factors used to determine which bidder is the lowest responsible and responsive bidder and to justify the award. The city shall keep a copy of the minutes or memorandum available for public inspection.
1. Responsive bidder. In determining whether a bidder is responsive, the city may consider whether the bidder has (1) submitted a bid or quote that conforms in all material respects to the specifications; (2) submitted a bid that complies specifically with the notice to bidders and the instructions to bidders; or (3) complied with all applicable statutes, ordinances, resolutions, or rules pertaining to the award of a public contract.
2. Responsible bidder. In determining whether a bidder is a responsible bidder, the city may consider the (1) ability and capacity of the bidder to perform the work; (2) integrity, character, and reputation of the bidder; or (3) competence and experience of the bidder.
3. Price preference. Notwith-standing the requirement that the award of a contract to the lowest responsive and responsible bidder or the lowest responsive and responsible quoter, a contract shall be awarded to the lowest responsive and responsible local Indiana business that claims the preference.
a. Notwithstanding, a contract shall be awarded to the lowest responsive and responsible bidder or quoter, regardless of the preference provided, if the lowest responsive and responsible bidder or quoter is a local Indiana business.
b. A bidder or quoter that wants to claim the preference must claim the preference in the same manner that a business claims the preference under I.C. 5-22-15-20.9(f).
(8) Timing of award. The city shall award the contract and shall provide the successful bidder with written notice to proceed within (1) 60 days after the date on which bids are opened; (2) if general obligation bonds are to be sold to finance the construction that is the subject of the bid, the city shall allow the bidder 90 days; or (3) if revenue bonds are to be issued and sold to finance the construction, the city shall allow the bidder 150 days.
(a) A failure to award and execute the contract and to issue notice to proceed within the time required entitles the successful bidder to:
1. Reject the contract and withdraw his bid without prejudice, or
2. Extend the time to award the contract and provide notice to proceed at an agreed later date.
(b) If the successful bidder elects to reject the contract and withdraw his bid, notice of that election must be given to the city in writing within 15 days of the 60 day expiration date or any other extension date.
(E) Contract provisions and limitations.
(1) Change orders. If, in the course of construction, reconstruction or repair of a public work project, it becomes necessary to change or alter the original specifications, a change order may be issued to add, delete, or change an item or items in the original contract. All change orders must be directly related to the original public work project.
(a) Addendum. The change order becomes an addendum to the contract and must be approved and signed by the city and the contractor.
(b) Architect/engineer. If a licensed architect or engineer is assigned to the public work the change order must be prepared by that person.
(c) Change order limitations.
1. A change order may not be issued before commencement of the actual construction, reconstruction, or repairs, except in the case of an emergency.
2. The total of all change orders issued that increase the scope of the project may not exceed 20% of the amount of the original contract; however, a change order issued as a result of circumstances that could not have been reasonably foreseen does not increase the scope of the project. All change orders must be directly related to the original public work project.
3. Cost of materials. If additional units of materials included in the original contract are needed, the cost of these units in the change order must be the same as those shown in the original contract.
(2) Installation of plumbing. A person who submits a bid for a public works contract that involves the installation of plumbing must submit evidence that the person is a licensed plumbing contractor under I.C. 25-28.5-1.
(F) Public work costing more than $100,000 - additional procedures. In addition to the foregoing items applying to public work projects, the following items apply to public work projects costing more than $100,000:
(1) Approval of plans and specifications. Public works performed or contracted for on a public work, the costs of which is more than $100,000 may be undertaken by the city only in accordance with plans and specifications approved by an architect or engineer licensed under I.C. 25-4 or I.C. 25-31.
(a) Public building only requirements. All plans and specification for public buildings must be approved by the State Department of Health, the Division of Fire and Building Safety, and other state agencies designated by statute.
(b) Filing of final record documents. If the cost of the work is greater than $100,000, the city must, within 60 after completion of the public works project, file in the Division of Fire and Building Safety a complete set of final record drawings for the public work project. The filling of the drawings is required only if the project involves a public building.
(2) Financial statement, statement of experience, proposed plan and equipment list. If the cost of the public work is $100,000 or more, the city shall require the bidder to submit a financial statement, a statement of experience, a proposed plan or plans for performing the public work, and the equipment that the bidder has available for the performance of the public work. The statement shall be submitted on forms prescribed by the State Board of Accounts.
(G) Public work costing more than $200,000 - additional procedures.
(1) Payment bond.
(a) If the cost of the public work is estimated to be more than ($200,000), the city shall require the contractor to execute a payment bond to the city, approved by and for the benefit of the city, in an amount equal to the contract price.
(b) If the cost of the public work is estimated to be not more than ($200,000), the city may require the contractor to execute a payment bond to the city, approved by and for the benefit of the city, in an amount equal to the contract price.
(c) The payment bond is binding on the contractor, the subcontractor, and their successors and assigns for the payment of all indebtedness to a person for labor and service performed, material furnished, or services rendered. The payment bond must state that it is for the benefit of the subcontractors, material suppliers, laborers, and those performing services.
(d) The payment bond shall be deposited with the city and specify that (1) a modification, omission, or addition to the terms and conditions of the public work contract, plans, specifications, drawings, or profile; (2) a defect in the public work contract; or a defect in the proceeding preliminary to the letting and awarding of the public work contract; does not discharge the surety.
(e) The surety of the payment bond may not be released until one year after the city's final settlement with the contractor.
(2) Performance bonds.
(a) The contractor shall furnish the city with a performance bond equal to the contract price. If acceptable to the city, the bond may provide for incremental bonding in the form of multiple or chronological bonds that, when taken as a whole, equal the contract price.
(b) The surety on the performance bond may not be released until one year after the date of the city's final settlement with the contractor.
(c) The performance bond must specify that (1) a modification, omission, or addition to the terms and conditions of the public work contract, plans, specifications, drawings, or profile; (2) a defect in the public work contract; or a defect in the proceeding preliminary to the letting and awarding of the public work contract; does not discharge the surety.
(3) Retainage limitations. The section applies to public work contracts in excess of ($200,000) for projects other than highways, roads, streets, alleys, bridges, and appurtenant structures situated on streets, alleys, and dedicated highway rights-of-way.
(a) The city may require a contractor and subcontractor to include contract provisions for retainage for contracts that are not more than ($200,000).
(b) The city that enters into a contract for public work, and a contractor who subcontracts part of that contract, shall include in their respective contracts provisions for the retainage of portions of payments by the city to contractors, by contractors to subcontractors, and for the payment of subcontractors.
(c) The city shall not be required to pay interest on the amounts of retainage that it holds under this section.
(d) To determine the amount of retainage to be withheld, the city shall:
1. Withhold no more than 10% nor less than 6% of the dollar value of all work satisfactorily completed until the public work is 50% completed, and nothing further after that; or
2. Withhold no more than 5% or less than 3% of the dollar value of all work satisfactorily completed until the public work is substantially completed.
3. If upon substantial completion of the public work minor items remain uncompleted, an amount computed under I.C. 36-1-12-14(f) shall be withheld until those items are completed.
(4) Escrow agreement. At the request of the contractor, retainage shall be held by the city or shall be placed in an escrow account, with a bank, savings and loan institution, or the state as the escrow agent. The escrow agent shall be selected by mutual agreement between city and contractor or subcontractor under a written agreement among the bank or savings and loan institution and (1) the city and the contractor; or (2) the subcontractor and the contractor.
(a) Indiana Code 36-1-12-14(f) provides the city or escrow agent shall pay the contractor within 61 days after the date of substantial completion subject to I.C. 36-1-12-11 and I.C. 36-1-12-12.
(b) Payment by the escrow agent shall include all escrowed principal and escrowed income.
(c) The escrow agreement must require the escrow agent shall (1) invest all escrowed principal in obligations selected by the escrow agent; (2) hold the escrowed principal and income until receipt of notice from the city and the contractor, or the contractor and the subcontractor, specifying the part of the escrowed principal to be released from the escrow and the person to whom that portion is to be released.
(d) After receipt of the notice, the escrow agent shall remit the designated part of escrowed principal and the same proportion of then escrowed income to the person specified in the notice be compensated for services, to be paid from the escrowed income.
(5) Final payment. The city or escrow agent shall pay the contractor within 61 days after the date of substantial completion subject to conditions contained herein.
(a) Payment by the escrow agent shall include all escrowed principal and escrowed income.
(b) If within 61 days after the date of substantial completion there remain uncompleted minor items, an amount equal to 200% of the value of each item as determined by the architect-engineer shall be withheld until the item is completed.
(c) Required warranties begin not later than the date of substantial completion.
(H) Procedures for accepting quotes - $50,000 - $150,000.
(1) Application. This section applies whenever a public work project will be at least $50,000 and less than $150,000.
(2) Procedure. The city must proceed under the following provisions:
(a) The city shall invite quotes from at least three persons known to deal in the class of work proposed to be done by mailing before the time fixed for receiving quotes.
(b) The city may not require a person to submit a quote before the meeting at which quotes are to be received. The meeting for receiving quotes must be open to the public. All quotes received shall be opened publicly and read aloud at the time and place designated and not before.
(c) Except as permitted by the allowed price preferences (I.C. 36-1-12-22), the city shall award the contract for the public work to the lowest responsible and responsive quoter.
(d) The city may reject all quotes submitted.
(3) Plans and specifications. All plans and specifications for public buildings must be approved by the State Department of Health, the Division of Fire and Building Safety, and other state agencies designated by statute.
(4) Inviting quotes. The city shall invite quotes from at least three persons known to deal in the class of work proposed to be done by mailing them a notice stating that plans and specifications are on file in a specified office. The notice must be mailed not less than seven days before the time fixed for receiving quotes.
(5) Award of contract. Except as permitted by the allowed price preferences (I.C. 36-1-12-22), the city shall award the contract for public work to the lowest responsible and responsive quoter.
(a) Public meeting. The city may not require a person to submit a quote before the meeting at which quotes are to be received. The meeting for receiving quotes must be open to the public. All quotes received shall be opened publicly and read aloud at the time and place designated and not before.
1. "Responsible bidder or quoter" means one who is capable of performing the contract requirements fully and who has the integrity and reliability that will assure good faith performance.
2. "Responsive bidder or quoter" means one who has submitted a bid or quote conforming in all material respects to the specifications.
3. Price preference. Notwith-standing the requirement that the award of a contract to the lowest responsive and responsible bidder or the lowest responsive and responsible quoter, a contract shall be awarded to the lowest responsive and responsible local Indiana business that claims the preference.
a. Notwithstanding, a contract shall be awarded to the lowest responsive and responsible bidder or quoter, regardless of the preference provided, if the lowest responsive and responsible bidder or quoter is a local Indiana business.
b. A bidder or quoter that wants to claim the preference under this section must claim the preference in the same manner that a business claims the preference under I.C. 5-22-15-20.9(f).
(b) Rejection of all quotes. The city may reject all quotes submitted.
(I) Public work costing less than $50,000 (I.C. 36-1-12-5).
(1) Application. This section applies whenever a public work is estimated to cost less than $50,000.
(2) Procedure. If the city wishes to award a contract for a public work costing less than $50,000, the procedures outlined for public works costing $50,000 or more contained in I.C. 36-1-12-4 may be used. If such procedures are not used, then the following procedures must be used:
(a) Plans and specifications. All plans and specifications for public buildings must be approved by the State Department of Health, the Division of Fire and Building Safety, and other state agencies designated by statute.
(b) Inviting quotes. The city shall invite quotes from at least three persons known to deal in the class of work proposed to be done by mailing them a notice stating that plans and specifications are on file in a specified office. The notice must be mailed not less than seven days before the time fixed for receiving quotes.
(c) Under $25,000. Quotes for public works projects costing less than ($25,000) may be obtained by soliciting at least three quotes by telephone or facsimile transmission. The seven day waiting period required by division (I)(2)(b) of this section does not apply to quotes solicited under this subsection.
(3) Award of contract. Except as permitted by the allowed price preferences (I.C. 36-1-12-22), the city shall award the contract for the public work to the lowest responsible and responsive quoter.
(4) Public meeting. The city may not require a person to submit a quote before the meeting at which quotes are to be received. The meeting for receiving quotes must be open to the public. All quotes received shall be opened publicly and read aloud at the time and place designated.
(5) Rejection of all quotes. The city may reject all quotes submitted. If the city rejects all quotes, the city may negotiate and enter into agreements for the work in the open market without inviting or receiving quotes if the city establishes in writing the reasons for rejecting the quotes.
(6) Restrictions.
(a) The city may not proceed for the resurfacing (as defined in I.C. 8-14-2-1) of a road, street, or bridge, unless (1) the weight or volume of the materials in the project is capable of accurate measurement and verification ; and (2) the specifications define the geographic points at which the project begins and ends.
1. For the purposes of this section, if contiguous sections of a road, street, or bridge are to be resurfaced in a calendar year, all of the work shall be considered to comprise a single public work project.
(b) The city may purchase or lease supplies in the manner provided in I.C. 5-22 and perform the public work by means of its own workforce without awarding a public work contract.
1. Before the city may perform any work by means of its own workforce, the city or agency must have a group of employees on its staff who are capable of performing the construction, maintenance, and repair applicable to that work.
(J) Quotes for public works projects costing less than $25,000. May be obtained by soliciting at least three quotes by telephone or facsimile transmission. The seven day waiting period required by subsection does not apply to quotes solicited under this division.
(K) City's own work force less than $150,000.
(1) The city may perform any public work by means of its own work force, without awarding a contract whenever the cost of that public work project is estimated to be less than $150,000.
(a) Before the city may perform any work under this section by means of its own work force, the city must have a group of employees on its staff who are capable of performing the construction, maintenance, and repair applicable to that work.
(2) For purposes of this division, the cost of public work project includes the actual cost of materials, labor, equipment, and rental, a reasonable rate for use of trucks and heavy equipment owned, and all other expenses incidental to the performance of the project.
(3) The work force of the city may perform a public work only if:
(a) The work force, through demonstrated skills, is capable of performing the public work.
(b) Notice requirement. For public work whose cost is estimated to be more than $100,000, the city must publish notice under I.C. 5-3-1 that describes the public work and sets forth the projected cost of each component of the public work.
(c) And the city determines at a public meeting that it is in the public interest to perform the public work with its own workforce. A public work project performed by the city's own workforce must be inspected and accepted as complete in the same manner as a public work project performed under a contract awarded after receiving bids.
(d) When the project involves the rental of equipment with an operator furnished by the owner, or the installation or application of materials by the supplier of the materials, the project is considered to be a public work project. However, an annual contract may be awarded for equipment rental and materials to be installed or applied during a calendar or fiscal year if the proposed project or projects are described in the bid specifications.
(L) Emergency contracts. In case of an emergency, the city may contract for a public work project without advertising for bids if bids or quotes are invited from at least two persons known to deal in the public work required to be done. The minutes of the city must show the declaration of emergency and the names of the persons invited to bid or provide quotes.
(Ord. 2020-4A, passed 3-3-2020)
Statutory reference:
Definition of team, see I.C. 5-30-1-13
Definition of responsible bidder or quoter, see I.C. 36-1-2-15.5
Application of chapter; alternatives to public works state law, see I.C. 36-1-12-1
Definition of public work, see I.C. 36-1-12-2
Public work projects, see I.C. 36-1-12-3
Bidding procedures for projects costing more than certain amounts, see I.C. 36-1-12-4
Bond or certified check; filing by bidders, see I.C. 36-1-12-4.5
Procedures for inviting quotes; applicable dollar amounts, see I.C. 36-1-12-4.7, 36-1-12-5
Contracts; notice to proceed; failure to award and execute contract and to issue notice; election by bidder to reject contract, see I.C. 36-1-12-6
Public buildings; approval of plans and specifications by licensed architect or engineer, see I.C. 36-1-12-7
Emergencies; contracts by invitation, see I.C. 36-1-12-9
Plans and specifications; approval by various agencies, see I.C. 36-1-12-10
Completion of project; procedure, see I.C. 36-1-12-11
Contract provision for payment of subcontractors, laborers, or suppliers, see I.C. 36-1-12-13
Contracts in excess of $200,000; retaining portions of payments; escrow agreements; performance bonds; payment on substantial completion; actions against surety contracts less than $250,000, see I.C. 36-1-12-14
Necessity of compliance with chapter, see I.C. 36-1-12-16
Change or alteration of specifications; change orders, see I.C. 36-1-12-18
Dividing cost of a single public work project into two or more projects; prohibition; penalty, see I.C. 36-1-12-19
Plumbing installations; proof of licensure, see I.C. 36-1-12-21
Definition of guaranteed savings contract, see I.C. 36-1-12.5-2