CHAPTER 86

An Act to amend and reenact §§ 11-20, as amended, and 11-23 of the Code
of Virginia, relating to the letting of public contracts and conditions
thereupon.

(H 193]
Approved February 22, 1958

Be it enacted by the General Assembly of Virginia:

1.. That §§ 11-20, as amended, and 11-23 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
or 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, con-
tracts which are directly with the contractor for performing labor or fur-
nishing materials in the prosecution of the work provided for in said con-
tract, a certified 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 in the amount of 50% of the work sublet to the subcontractor which
shall be conditioned upon the payment to all persons who have, and fulfil,
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 $2,500.00 each are also
exempt hereunder. Provision for said payment bonds shall be made a part
of each agreement between the owner and 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
prosecution 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 ma-
terials 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.

§ 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, and to the persons performing
labor and furnishing materials, conditioned upon the faithful performance
of the contract in strict conformity to the plans, specifications and con-
ditions 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 incorpor-
ating, within its provisions, the obligations to faithfully perform the con-
tract 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 pay-
ment bond in the amount of 50% 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
tts language, as incorporating, within its provisions, the obligation to pay
those persons who furnish labor or materials as aforesaid; provided, how-
ever, 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 $2,500.00 each are
also exempt hereunder. Provision for said payment bonds shall be made a
part of each agreement between the owner and 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 con-
tractor. Persons who have, and fulfill, contracts which are directly with
subcontractors for performing labor and furnishing materials in the pros-
ecution 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.