§ 143-128. Requirements for certain building contracts. - North Carolina Statutes

Article 8.

Public Contracts.

§ 143‑128.  Requirementsfor certain building contracts.

(a)        Preparation ofspecifications. – Every officer, board, department, commission or commissionscharged with responsibility of preparation of specifications or awarding orentering into contracts for the erection, construction, alteration or repair ofany buildings for the State, or for any county, municipality, or other publicbody, shall have prepared separate specifications for each of the followingsubdivisions or branches of work to be performed:

(1)        Heating,ventilating, air conditioning and accessories (separately or combined into oneconductive system), refrigeration for cold storage (where the cold storagecooling load is 15 tons or more of refrigeration), and all related work.

(2)        Plumbing and gasfittings and accessories, and all related work.

(3)        Electrical wiringand installations, and all related work.

(4)        General work notincluded in subdivisions (1), (2), and (3) of this subsection relating to theerection, construction, alteration, or repair of any building.

Specifications for contractsthat will be bid under the separate‑prime system or dual bidding systemshall be drawn as to permit separate and independent bidding upon each of thesubdivisions of work enumerated in this subsection. The above enumeration ofsubdivisions or branches of work shall not be construed to prevent any officer,board, department, commission or commissions from preparing additional separatespecifications for any other category of work.

(a1)      Constructionmethods. – The State, a county, municipality, or other public body shall awardcontracts to erect, construct, alter, or repair buildings pursuant to any ofthe following methods:

(1)        Separate‑primebidding.

(2)        Single‑primebidding.

(3)        Dual biddingpursuant to subsection (d1) of this section.

(4)        Constructionmanagement at risk contracts pursuant to G.S. 143‑128.1.

(5)        Alternativecontracting methods authorized pursuant to G.S. 143‑135.26(9).

(a2)      Annually, on orbefore April 1st, beginning April 1, 2003, The University of North Carolina andall other public entities shall report to the Secretary of the Department ofAdministration on the effectiveness and cost‑benefit of utilization ofeach of the construction methods authorized in G.S. 143‑128(a1) that areused by the public entity. The reports, which shall be initially filed in theyear in which the project is completed, shall be in the format and contain thedata prescribed by the Secretary of Administration and shall include at leastthe following:

(1)        The type ofconstruction method used on the project.

(2)        The total dollarvalue of building projects by specific project with costs.

(3)        The bid costs andrelevant post‑bid costs.

(4)        A detailed listingof all contractors and subcontractors used on the project indicating whetherthe contractor or subcontractor was an out‑of‑state contractor orsubcontractor.

(5)        If any contractor orsubcontractor was an out‑of‑state contractor or subcontractor, thereasons why the contractor or subcontractor was selected.

The Secretary of theDepartment of Administration shall report to the General Assembly on or beforeMay 1st each year on the information collected pursuant to this subsection.

(b)        Separate‑primecontracts. – When the State, county, municipality, or other public body usesthe separate‑prime contract system, it shall accept bids for eachsubdivision of work for which specifications are required to be prepared undersubsection (a) of this section and shall award the respective work specifiedseparately to responsible and reliable persons, firms or corporations regularlyengaged in their respective lines of work. When the estimated cost of work tobe performed in any single subdivision or branch for which separate bids arerequired by this subsection is less than twenty‑five thousand dollars($25,000), the same may be included in the contract for one of the othersubdivisions or branches of the work, irrespective of total project cost. Thecontracts shall be awarded to the lowest responsible, responsive bidders,taking into consideration quality, performance, the time specified in the bidsfor performance of the contract, and compliance with G.S. 143‑128.2. Bidsmay also be accepted from and awards made to separate contractors for othercategories of work.

Each separate contractor shallbe directly liable to the State of North Carolina, or to the county,municipality, or other public body and to the other separate contractors forthe full performance of all duties and obligations due respectively under theterms of the separate contracts and in accordance with the plans andspecifications, which shall specifically set forth the duties and obligationsof each separate contractor. For the purpose of this section, "separatecontractor" means any person, firm or corporation who shall enter into acontract with the State, or with any county, municipality, or other publicentity to erect, construct, alter or repair any building or buildings, or partsof any building or buildings.

(c)        Repealed by SessionLaws 2001‑496, s. 3, effective January 1, 2001.

(d)        Single‑primecontracts. – All bidders in a single‑prime project shall identify ontheir bid the contractors they have selected for the subdivisions or branchesof work for:

(1)        Heating,ventilating, and air conditioning;

(2)        Plumbing;

(3)        Electrical; and

(4)        General.

The contract shall be awardedto the lowest responsible, responsive bidder, taking into considerationquality, performance, the time specified in the bids for performance of thecontract, and compliance with G.S. 143‑128.2. A contractor whose bid isaccepted shall not substitute any person as subcontractor in the place of thesubcontractor listed in the original bid, except (i) if the listedsubcontractor's bid is later determined by the contractor to be nonresponsibleor nonresponsive or the listed subcontractor refuses to enter into a contractfor the complete performance of the bid work, or (ii) with the approval of theawarding authority for good cause shown by the contractor. The terms, conditions,and requirements of each contract between the contractor and a subcontractorperforming work under a subdivision or branch of work listed in this subsectionshall incorporate by reference the terms, conditions, and requirements of thecontract between the contractor and the State, county, municipality, or otherpublic body.

When contracts are awardedpursuant to this section, the public body shall make available tosubcontractors the dispute resolution process as provided for in subsection(f1) of this section.

(d1)      Dual bidding. – TheState, a county, municipality, or other public entity may accept bids to erect,construct, alter, or repair a building under both the single‑prime andseparate‑prime contracting systems and shall award the contract to thelowest responsible, responsive bidder under the single‑prime system or tothe lowest responsible, responsive bidder under the separate‑primesystem, taking into consideration quality, performance, compliance with G.S.143‑128.2, and time specified in the bids to perform the contract. Indetermining the system under which the contract will be awarded to the lowestresponsible, responsive bidder, the public entity may consider cost ofconstruction oversight, time for completion, and other factors it considersappropriate. The bids received as separate‑prime bids shall be received,but not opened, one hour prior to the deadline for the submission of single‑primebids. The amount of a bid submitted by a subcontractor to the generalcontractor under the single‑prime system shall not exceed the amount bid,if any, for the same work by that subcontractor to the public entity under theseparate‑prime system. The provisions of subsection (b) of this sectionshall apply to separate‑prime contracts awarded pursuant to this sectionand the provisions of subsection (d) of this section shall apply to single‑primecontracts awarded pursuant to this section.

(e)        Project expediter;scheduling; public body to resolve project disputes. – The State, county,municipality, or other public body may, if specified in the bid documents,provide for assignment of responsibility for expediting the work on a projectto a single responsible and reliable person, firm or corporation, which may bea prime contractor. In executing this responsibility, the designated projectexpediter may recommend to the State, county, municipality, or other publicbody whether payment to a contractor should be approved. The project expediter,if required by the contract documents, shall be responsible for preparing theproject schedule and shall allow all contractors and subcontractors performingany of the branches of work listed in subsection (d) of this section equalinput into the preparation of the initial schedule. Whenever separate contractsare awarded and separate contractors engaged for a project pursuant to thissection, the public body may provide in the contract documents for resolutionof project disputes through alternative dispute resolution processes asprovided for in subsection (f1) of this section.

(f)         Repealed bySession Laws 2001‑496, s. 3, effective January 1, 2001.

(f1)       Dispute resolution.– A public entity shall use the dispute resolution process adopted by the StateBuilding Commission pursuant to G.S. 143‑135.26(11), or shall adoptanother dispute resolution process, which shall include mediation, to be usedas an alterative to the dispute resolution process adopted by the StateBuilding Commission. This dispute resolution process will be available to allthe parties involved in the public entity's construction project including thepublic entity, the architect, the construction manager, the contractors, andthe first‑tier and lower‑tier subcontractors and shall be availablefor any issues arising out of the contract or construction process. The publicentity may set a reasonable threshold, not to exceed fifteen thousand dollars($15,000), concerning the amount in controversy that must be at issue before aparty may require other parties to participate in the dispute resolution process.The public entity may require that the costs of the process be divided betweenthe parties to the dispute with at least one‑third of the cost to be paidby the public entity, if the public entity is a party to the dispute. Thepublic entity may require in its contracts that a party participate inmediation concerning a dispute as a precondition to initiating litigationconcerning the dispute.

(g)        Exceptions. – Thissection shall not apply to:

(1)        The purchase anderection of prefabricated or relocatable buildings or portions thereof, exceptthat portion of the work which must be performed at the construction site.

(2)        The erection,construction, alteration, or repair of a building when the cost thereof isthree hundred thousand dollars ($300,000) or less.

(3)        The erection,construction, alteration, or repair of a building by The University of NorthCarolina or its constituent institutions when the cost thereof is five hundredthousand dollars ($500,000) or less.

Notwithstanding the otherprovisions of this subsection, subsection (f1) of this section shall apply toany erection, construction, alteration, or repair of a building by a publicentity. (1925,c. 141, s. 2; 1929, c. 339, s. 2; 1931, c. 46; 1943, c. 387; 1945, c. 851;1949, c. 1137, s. 1; 1963, c. 406, ss. 2‑7; 1967, c. 860; 1973, c. 1419;1977, c. 620; 1987 (Reg. Sess., 1988), c. 1108, ss. 4, 5; 1989, c. 480, s. 1;1995, c. 358, s. 4; c. 367, ss. 1, 4, 5; c. 509, s. 79; 1998‑137, s. 1;1998‑193, s. 1; 2001‑496, ss. 3, 13; 2002‑159, s. 42; 2007‑322,s. 3.)