§ 32-2-60 - Authority to contract; form and content of construction contracts; federal-aid highway contracts; bonds - Georgia Statutes

O.C.G.A. 32-2-60 (2010)
32-2-60. Authority to contract; form and content of construction contracts; federal-aid highway contracts; bonds

(a) The department shall have the authority to contract as set forth in this article and in Code Section 32-2-2. All department construction contracts shall be in writing. Any contract entered into by the department for the construction of a public road shall include, as a cost of the project, provisions for sowing vegetation, if appropriate, on all banks, fills, cuts, ditches, and other places where soil erosion is likely to result from the necessary incidents to road work along the right of way of the road project.

(b) Persons, firms, or corporations submitting bids on department construction contracts are required to examine the site of the proposed work and determine for themselves the anticipated subsurface and latent physical conditions at the site prior to submitting a bid on the project. The submission of a bid shall be prima-facie evidence that the bidder has made such examination and is satisfied as to the conditions to be encountered in performing the work. The department does not in any way guarantee the amount or nature of subsurface materials which may be encountered and which must be excavated, graded, or driven through in performing the work on the project. The contractor shall not plead deception or misunderstanding because of variations from quantities of work to be performed or materials to be furnished as shown on the plans or minor variations from the locations or character of the work. Payment will be made only for actual quantities of work performed in accordance with the plans and specifications. The department shall not provide compensation above the amount bid on such project solely due to the encountering of subsurface or latent physical conditions at the site which are different from those anticipated by the bidder.
(c)(1) Notwithstanding the provisions of subsection (b) of this Code section, the department reserves the right to make, at any time during the progress of work, such increases or decreases in quantities and such alterations in the details of construction as necessary or desirable to satisfactorily complete the work. Such increases or decreases shall not invalidate the contract nor release the surety and the contractor agrees to perform the work as altered.

(2) Whenever an alteration materially increases or decreases the scope of the work specified in the contract, a supplemental agreement acceptable to both parties shall be made. In the absence of a supplemental agreement acceptable to both parties, the department may direct that the work be done either by force account or at existing contract prices. Any force account agreement shall be in writing, specifying the terms of payment signed by the chief engineer, and agreed to in writing by the contractor.

(3) Changes made by the engineer will not be considered to waive any of the provisions of the contract, nor may the contractor make any claim for loss of anticipated profits because of the changes, or by reason of any variation between the approximate quantities and the quantities of work as done.

(d) The provisions of subsections (b) and (c) of this Code section shall be applicable only to federal-aid highway contracts.

(e) (1) When the estimated amount of any department construction contract exceeds $300 million, performance and payment bonds shall be required in the amount of at least the total amount payable by the terms of the contract unless the department, after public notice, makes a written determination supported by specific findings that single bonds in such amount are not reasonably available, and the board approves such determination in a public meeting. In such event, the estimated value of the construction portion of the contract, excluding right of way acquisition and engineering, shall be guaranteed by a combination of security including, but not limited to, the following:

(A) Payment, performance, surety, cosurety, or excess layer surety bonds;

(B) Letters of credit;

(C) Guarantees of the contractor or its parent companies;

(D) Obligations of the United States and of its agencies and instrumentalities; or

(E) Cash collateral;

provided, however, that the aggregate total guarantee of the project may not use a corporate guarantee of more than 35 percent. The combination of such guarantees shall be determined at the discretion of the department, subject to the approval of the board; provided, however, that such aggregate guarantees shall include not less than $300 million of performance and payment bonds and shall equal not less than 100 percent of the contractor's obligation under the construction portion of the contract.

(2) Payment guarantees approved pursuant to this subsection shall be deemed to satisfy the requirements of Code Section 13-10-61. Contractors requesting payment under construction contracts guaranteed pursuant to this subsection shall provide the following certification under oath with each such request: "All payments due to subcontractors and suppliers from previous payment received under the contract have been made, and timely payments will be made from the proceeds of the payment covered by this certification."