GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	1 

SENATE BILL 51

Short Title:  Highway Contract Bonding Req'ments.	(Public)

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Sponsors: Senator Shaw of Cumberland.

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Referred to:  Commerce.

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February 8, 1999

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LAW GOVERNING HIGHWAY SMALL PROJECT BIDDING AND TO PROVIDE AN ALTERNATIVE PROCEDURE FOR RESOLVING STATE CONTRACT DISPUTES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 136-28.10(a) reads as rewritten:
"(a)	Notwithstanding the provisions of G.S. 136-28.4(b), for Highway Fund or Highway Trust Fund projects of five hundred thousand dollars ($500,000) or less, the Board of Transportation may, after soliciting at least three informal bids in writing from Small Business Enterprises, award contracts to the lowest responsible bidder.  The Department of Transportation may identify projects likely to attract increased participation by Small Business Enterprises, and restrict the solicitation and award to those bidders.  The Board of Transportation may delegate full authority to award contracts, adopt necessary rules, and administer the provisions of this section to the Secretary of Transportation."
Section 2.  G.S. 143-135.3 reads as rewritten:
"§ 143-135.3.  Adjustment and resolution of State contract claim.
(a)	Definitions. – The following definitions apply in this section:
(1)	"The State or any board, bureau, commission, institution, or other  agency of the State, as distinguished from a board or governing body of a subdivision of the State. 
(2)	"
	"Construction contract. – A contract for any of the following:
a.	The construction or repair of buildings or appurtenances to those buildings, including utilities, plumbing, heating, electrical, air conditioning, elevator, excavation, grading, paving, roofing, masonry work, tile work, and painting.
b.	The construction or repair of airport runways, taxiways and parking aprons, sewer and water mains, power lines, docks, wharves, dams, drainage canals, telephone lines, streets, site preparation, parking areas, and other capital improvements.
c.	Architectural, engineering, or other professional services in connection with a contract described in this subdivision.
(3)	Contract. – A contract for goods, services, construction,or repair administered by the Department of Administration.
(4)	Contractor. – A person who submits a bid on or enters into a contract with a board.
(b)	Uncompleted Construction Contract. – A contractor who has not completed a contract with a board and who has not received the amount the contractor claims is due under the contract may submit a verified written claim to the Director of the Office of State Construction of the Department of Administration for the amount the contractor claims is due. The Director may deny, allow, or compromise the claim, in whole or in part. The Director's decision is not a final decision of the Department of Administration under subsection (d) of this section and a claim under this subsection is not a contested case under Chapter 150B of the General Statutes.
(c)	Completed Construction Contract. – A contractor who has completed a contract with a board and who has not received the amount the contractor claims is due under the contract may submit a verified written claim to the Director of the Office of State Construction of the Department of Administration for the amount the contractor claims is due. The claim shall be submitted within 60 days after the contractor receives a final statement of the board's disposition of the contractor's claim and shall state the factual basis for the claim.
The Director shall investigate a submitted claim within 90 days of receiving the claim, or within any longer time period upon which the Director and the contractor agree. The contractor may appear before the Director, either in person or through counsel, to present facts and arguments in support of his claim. The Director may allow, deny, or compromise the claim, in whole or in part. The Director shall give the contractor a written statement of the Director's decision on the contractor's claim.
A contractor who is dissatisfied with the Director's decision on a claim submitted under this subsection may commence a contested case on the claim under Chapter 150B of the General Statutes. The contested case shall be commenced within 60 days of receiving the Director's written statement of the decision.
	(d)	Alternate Procedure. – Notwithstanding the provisions of subsection (c) of this section and of Chapter 150B of the General Statutes, in the case of any contract dispute between a board and a contractor, if the contractor and the Department of Administration cannot agree to a resolution through informal procedures, the contractor may, in lieu of filing a petition for a contested case under Article 3 of Chapter 150B of the General Statutes, within six months after a final decision by the Department of Administration, institute a civil action to determine the contractor's rights, duties, or privileges under the contract by filing a verified complaint and the issuance of a summons in the Superior Court of Wake County or in the superior court of any county where the work under the contract was performed. The procedure shall be the same as in all civil actions except that all issues shall be tried by the judge, without a jury.
(e)	Incorporation in Contracts. – The provisions of this section are part of every contract made by a board and a contractor. A provision in a contract that conflicts with this section is invalid."
Section 3.  Section 2 of this act becomes effective January 1, 2000, and applies to contract disputes arising on or after that date.  The remainder of this act is effective when it becomes law.