CHAPTER 179

An Act to amend and reenact §§ 11-20 and 11-28, as amended, of the Code
of Virginia, relating to the letting of public contracts and conditions
thereupon.

[H 383]

Approved March 2, 1962

Be it enacted by the General Assembly of Virginia:

1. That §§ 11-20 and 11-23, as amended, of the Code of Virginia, be
amended and reenacted as follows:

§ 11-20. The contract shall be let to the lowest responsible bidder for
the particular work covered in the bid when the contract is to be let for a
lump sum, or to the responsible bidder naming the lowest per centum of
fee if the contract is to be let on a cost-plus basis; and the contractor who
is the successful bidder shall thereupon enter into a bond with surety
thereon payable to the Commonwealth of Virginia, in the sum of at least
the estimated cost of the work, which bond shall be approved by the At-
torney General, and conditioned upon the faithful performance of the work
in strict conformity with the plans, specifications and conditions for the
same, and the payment to all persons who have, and fulfill, contracts which
are directly with the contractor for performing labor or furnishing ma-
terials in the prosecution of the work provided for in said contract, a certi-
fied copy of which bond shall be delivered to and kept on file in the office
of the Comptroller.

No contractor, as the lowest responsible bidder, shall subcontract any
work required by the contract except under the following conditions: each
subcontractor shall furnish, and the contractor shall require as a part of
the agreement between the subcontractor and the contractor, a payment
bond with surety thereon in the amount of fifty per cent of the work sublet
to the subcontractor which shall be conditioned upon the payment to all
persons who have, and fulfill, contracts which are directly with the sub-
contractor for performing labor and furnishing materials in the prose-
cution of the work provided for in the subcontract. Every such bond shall
be construed, regardless of its language, as incorporating, within its pro-
visions, the obligation to pay those persons who furnish labor or materials
as aforesaid; provided, however, that subcontracts between the contractor
and a manufacturer or a fabricator shall be exempt from the provision re-
quiring a payment bond and provided further that subcontracts for less
than two thousand five hundred dollars each are also exempt hereunder.
Provision for said payment bonds shall be made a part of each agreement

between the owner and contractor. In the event a contractor fails to require
from a subcontractor the bond provided for herein, any person who has
and fulfills contracts directly with such subcontractor for performing
labor and furnishing materials in the prosecution of the work provided for
in the subcontract shall have a direct right of action against the obligors
and sureties on the bond required herein of the contractor. |

Persons who have, and fulfill, contracts which are directly with the
contractor for performing labor and furnishing materials in the prosecu-
tion of construction work defined in § 11-17 shall have a direct right of
action against the obligors and sureties on the bond required herein of the
contractor. Persons who have, and fulfill, contracts which are directly with
subcontractors for performing labor and furnishing materials in the prose-
cution of construction work defined in § 11-17 shall have a direct right of
action against the obligors and sureties on the bond required herein of the
subcontractors; provided, however, any and all rights, claims, actions at
law or equity of persons performing labor or furnishing materials as
aforesaid which arise under the bond provided for in the first paragraph
hereof shall be subject to all rights, claims, actions at law or equity of the
Commonwealth of Virginia under such bond.

No action on any bond required herein shall be brought unless within
one year after substantial completion of the contract; provided, however,
every action brought under this section shall be brought in a Virginia
court of competent jurisdiction in and for the county or other political
subdivision of the Commonwealth in which the project, or any part
thereof is situated, or in the United States District Court for the district
in which the project, or any part thereof is situated and not elsewhere.

All bonds required herein shall be executed by a surety company
authorized to transact business in the Commonwealth of Virginia as surety.

§ 11-23. No contract, in excess of twenty-five hundred dollars, to
which any county, city, town, school board, or any agency thereof, is a
party, for the construction, improvement, or repair of any dwelling, school,
auditorium or other building, highway, bridge, street, sidewalk, sewer,
reservoir, dam, dock, wharf, draining, dredging, excavation, or other
construction work, shall be entered into unless and until the person
contracting to construct, improve or repair the work shall have entered
into a bond with surety approved as hereinafter provided, for at least
the sum estimated to be the cost of the work, payable to such county,
city, town, school board, or agency thereof * conditioned upon the faithful
performance of the contract in strict conformity to the plans, specifications
and conditions of said contract, and conditioned further upon the payment
to all persons who have, and fulfill, contracts directly with the contractor
for performing labor and furnishing materials in the prosecution of
such work as is required by the contract. Every such bond shall be
approved by the attorney for such county, city or town, as the case
may be, and every such bond shall be construed, regardless of its
language, as incorporating, within its provisions, the obligations to faith-
fully perform the contract and to pay all persons who have, and fulfill,
contracts directly with the contractor for performing labor and furnishing
materials in the prosecution of the work provided for in the contract.

No contractor, as the lowest responsible bidder, shall subcontract
any work required by the contract except under the following conditions:
each subcontractor shall furnish, and the contractor shall require as a
part of the agreement between the subcontractor and the contractor, a
payment bond with surety thereon in the amount of fifty per cent of the
work sublet to the subcontractor which shall be conditioned upon the
payment to all persons who have, and fulfill, contracts which are directly
with the subcontractor for performing labor and furnishing materials in
the prosecution of the work provided for in the subcontract. Every such
bond shall be construed, regardless of its language, as incorporating,
within its provisions, the obligation to pay those persons who furnish
labor or materials as aforesaid; provided, however, that subcontracts
between the contractor and a manufacturer or a fabricator shall be
exempt from the provision requiring a payment bond and provided
further that subcontracts for less than two thousand five hundred dollars
each are also exempt hereunder. Provision for said payment bonds shal
be made a part of each agreement between the owner and the contractor.
In the event a contractor fails to require from a subcontractor the bond
provided for herein, any person who has and fulfills contracts directly
with such subcontractor for performing labor and furnishing materials
in the prosecution of the work provided for in the subcontract shall have
a direct right of action against the obligors and sureties on the bond
required herein of the contractor.

Persons who have, and fulfill, contracts which are directly with the
contractor for performing labor and furnishing materials in the prosecu-
tion of construction work defined herein shall have a direct right of action
against the obligors and sureties on the bond required herein of the
contractor. Persons who have, and fulfill, contracts which are directly
with subcontractors for performing labor and furnishing materials in
the prosecution of construction work defined herein shall have a direct
right of action against the obligors and sureties on the bond required
herein of the subcontractors. Provided, however, any and all rights, claims,
actions at law or equity of persons performing labor or furnishing
materials as aforesaid which arise under the bond provided for in the
first paragraph hereof shall be subject to all rights, claims, actions at law
or equity of the Commonwealth of Virginia under such bond.

No action on any bond required herein shall be brought unless within
one year after substantial completion of the contract; provided, however,
every action brought under this section shall be brought in a Virginia
court of competent jurisdiction in and for the county or other political
subdivision of the Commonwealth in which the project, or any part
thereof, is situated, or in the United States District Court for the district
in which the project, or any part thereof, is situated and not elsewhere.

All bonds required herein shall be executed by a surety company
authorized to transact business in the Commonwealth of Virginia as surety.