Reprinted
February 18, 2011
SENATE BILL No. 441
_____
DIGEST OF SB 441
(Updated February 17, 2011 4:21 pm - DI 87)
Citations Affected: IC 4-13.6; IC 5-11; IC 5-16; IC 36-1.
Synopsis: Public works projects cost thresholds. Increases the cost of
projects that the department of natural resources may perform without
awarding a public works contract from $75,000 to $150,000. Increases
the cost of projects that some political subdivisions may perform
without awarding a public works contract from $100,000 to $150,000.
Requires that the public works division include as part of a public
works contract provisions for retaining parts of certain payments if the
estimated cost of the public works project is more than $1,000,000.
(Current law requires the provisions to be included if the estimated cost
of the public works project is more than $150,000.) Specifies notice
and public meeting requirements that must be satisfied before a public
work project with an estimated cost of more than $100,000 may be
performed by the workforce of a municipality, county, state agency, or
state educational institution. Adds requirements for examination
reports prepared by the state board of accounts concerning public work
projects performed by the workforce of a municipality, county, state
agency, or state educational institution. Provides that a state higher
educational institution can maintain or repair a building without
awarding a contract if the estimated cost of the project is less than
$200,000. Allows Purdue University, on agricultural or forestry land
used by it for educational or research purposes, award contracts without
advertising for bids if the cost of work is estimated to be less than
$200,000 (instead of $50,000). Allows a board of aviation
commissioners or an airport authority board to perform public work
using their own workforce if the project is estimated to cost less than
$150,000 (instead of less than $50,000).
Effective: July 1, 2011.
Hershman
, Mishler, Hume
January 12, 2011, read first time and referred to Committee on Local Government.
February 10, 2011, amended, reported favorably _ Do Pass.
February 17, 2011, read second time, amended, ordered engrossed.
Reprinted
February 18, 2011
First Regular Session 117th General Assembly (2011)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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SENATE BILL No. 441
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 4-13.6-5-2; (11)SB0441.2.1. -->
SECTION 1. IC 4-13.6-5-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) Except as
provided by this chapter and IC 16-33-4-10, if the estimated cost of a
public works project is at least
seventy-five thousand dollars ($75,000),
one hundred fifty thousand dollars ($150,000), the division shall
award a contract for the project based on competitive bids.
(b) If the estimated cost of a public works project is at least
seventy-five thousand dollars ($75,000), one hundred fifty thousand
dollars ($150,000), the division shall develop contract documents for
a public works contract and keep the contract documents on file in its
offices so that they may be inspected by contractors and members of
the public.
(c) The division shall advertise for bids under section 8 of this
chapter. The director shall award a contract under IC 4-13.6-6.
(d) A contractor shall submit under oath a financial statement as a
part of the bid. The director may waive filing of the financial statement.
(e) After bids are opened but before a contract is awarded, the
director may require a contractor to submit a statement of the
contractor's experience, a proposed plan of performing the work, and
a listing of the equipment that is available to the contractor for
performance of the work.
(f) The statements required by this section shall be submitted on
forms approved by the state board of accounts. The forms shall be
based, so far as applicable, on standard questionnaires and financial
statements for contractors used in investigating the qualifications of
contractors on public construction work.
(g) The division shall reject the bid of a contractor if:
(1) the estimated cost of the public works project is one hundred
fifty thousand dollars ($150,000) or more and the contractor is not
qualified under chapter 4 of this article;
(2) the estimated cost of the public works project is less than one
hundred fifty thousand dollars ($150,000) and the director makes
a written determination, based upon information provided under
subsections (d) and (e), that the contractor is not qualified to
perform the public works contract;
(3) the contractor has failed to perform a previous contract with
the state satisfactorily and has submitted the bid during a period
of suspension imposed by the director (the failure of the
contractor to perform a contract satisfactorily must be based upon
a written determination by the director);
(4) the contractor has not complied with a rule adopted under this
article and the rule specifies that failure to comply with it is a
ground for rejection of a bid; or
(5) the contractor has not complied with any requirement under
section 2.5 of this chapter.
(h) The division shall keep a record of all bids. The state board of
accounts shall approve the form of this record, and the record must
include at least the following information:
(1) The name of each contractor.
(2) The amount bid by each contractor.
(3) The name of the contractor making the lowest bid.
(4) The name of the contractor to whom the contract was
awarded.
(5) The reason the contract was awarded to a contractor other than
the lowest bidder, if applicable.
(6) Purchase order numbers.
SOURCE: IC 4-13.6-5-3; (11)SB0441.2.2. -->
SECTION 2. IC 4-13.6-5-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3. (a) If the estimated
cost of a public works project is less than
seventy-five thousand dollars
($75,000), one hundred fifty thousand dollars ($150,000), the
division may award a public works contract either under section 2 of
this chapter or under this section, at the discretion of the director.
(b) If the director awards a contract under this section, the division
shall invite quotations from at least three (3) contractors known to the
division to deal in the work required to be done. However, if fewer than
three (3) contractors are known to the division to be qualified to
perform the work, the division shall invite quotations from as many
contractors as are known to be qualified to perform the work. Failure
to receive three (3) quotations shall not prevent an award from being
made.
(c) The division may authorize the governmental body for which the
public work is to be performed to invite quotations, but award of a
contract based upon those quotations is the responsibility of the
division.
(d) Quotations given by a contractor under this section must be in
writing and sealed in an envelope, shall be considered firm, and may
be the basis upon which the division awards a public works contract.
(e) The division shall award a contract to the lowest responsible and
responsive contractor and in accordance with any requirement imposed
under section 2.5 of this chapter.
SOURCE: IC 4-13.6-5-4; (11)SB0441.2.3. -->
SECTION 3. IC 4-13.6-5-4, AS AMENDED BY P.L.34-2005,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2011]: Sec. 4. (a) If the estimated cost of a public works
project is less than seventy-five thousand dollars ($75,000), one
hundred fifty thousand dollars ($150,000), the division may perform
the public work without awarding a public works contract under
section 2 of this chapter. In performing the public work, the division
may authorize use of equipment owned, rented, or leased by the state,
may authorize purchase of materials in the manner provided by law,
and may authorize performance of the public work using employees of
the state.
(b) The workforce of a state agency may perform a public work
described in subsection (a) only if:
(1) the workforce, through demonstrated skills, training, or
expertise, is capable of performing the public work; and
(2) for a public work project under subsection (a) whose cost
is estimated to be more than one hundred thousand dollars
($100,000), the agency shall:
(A) publish a notice under IC 5-3-1 that:
(i) describes the public work that the agency intends to
perform with its own workforce; and
(ii) sets forth the projected cost of each component of the
public work as described in subsection (a); and
(B) determine at a public meeting that it is in the public
interest to perform the public work with the agency's own
workforce.
A public work project performed by an agency's own workforce
must be inspected and accepted as complete in the same manner as
a public work project performed under a contract awarded after
receiving bids.
(c) If a public works project involves a structure, an
improvement, or a facility under the control of an agency, the
agency may not artificially divide the project to bring any part of
the project under this section.
(b) (c) If a public works project involves a structure, improvement,
or facility under the control of the department of natural resources, the
department of natural resources may purchase materials for the project
in the manner provided by law and without a contract being awarded,
and may use its employees to perform the labor and supervision, if:
(1) the department of natural resources uses equipment owned or
leased by it; and
(2) the division of engineering of the department of natural
resources estimates the cost of the public works project will be
less than seventy-five one hundred fifty thousand dollars
($75,000). ($150,000).
(c) (d) If a public works project involves a structure, improvement,
or facility under the control of the department of correction, the
department of correction may purchase materials for the project in the
manner provided by law and use inmates in the custody of the
department of correction to perform the labor and use its own
employees for supervisory purposes, without awarding a contract, if:
(1) the department of correction uses equipment owned or leased
by it; and
(2) the estimated cost of the public works project using employee
or inmate labor is less than the greater of:
(A) fifty thousand dollars ($50,000); or
(B) the project cost limitation set by IC 4-13-2-11.1.
All public works projects covered by this subsection must comply with
the remaining provisions of this article, and all plans and specifications
for the public works project must be approved by a licensed architect
or engineer.
SOURCE: IC 4-13.6-7-2; (11)SB0441.2.4. -->
SECTION 4. IC 4-13.6-7-2, AS AMENDED BY P.L.160-2006,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2011]: Sec. 2. (a) If the estimated cost of a public works
project is one hundred fifty thousand dollars ($150,000) one million
dollars ($1,000,000) or more, the division shall include as part of the
public works contract provisions for the retainage of portions of
payments by the division to the contractor, by the contractor to
subcontractors, and for the payment of subcontractors and suppliers by
the contractor. The contract must provide that the division may
withhold from the contractor sufficient funds from the contract price to
pay subcontractors and suppliers as provided in section 4 of this
chapter.
(b) A public works contract and contracts between contractors and
subcontractors, if portions of the public works contract are
subcontracted, may include a provision that at the time any retainage
is withheld, the division or the contractor, as the case may be, may
place the retainage in an escrow account, as mutually agreed, with:
(1) a bank;
(2) a savings and loan institution;
(3) the state of Indiana; or
(4) an instrumentality of the state of Indiana;
as escrow agent. The parties to the contract shall select the escrow
agent by mutual agreement. The parties to the agreement shall enter
into a written agreement with the escrow agent.
(c) The escrow agreement must provide the following:
(1) The escrow agent shall promptly invest all escrowed principal
in the obligations that the escrow agent selects, in its discretion.
(2) The escrow agent shall hold the escrowed principal and
income until it receives notice from both of the other parties to the
escrow agreement specifying the percentage of the escrowed
principal to be released from the escrow and the persons to whom
this percentage is to be released. When it receives this notice, the
escrow agent shall promptly pay the designated percentage of
escrowed principal and the same percentage of the accumulated
escrowed income to the persons designated in the notice.
(3) The escrow agent shall be compensated for its services as the
parties may agree. The compensation shall be a commercially
reasonable fee commensurate with fees being charged at the time
the escrow fund is established for the handling of escrow accounts
of like size and duration. The fee must be paid from the escrowed
income of the escrow account.
(d) The escrow agreement may include other terms and conditions
that are not inconsistent with subsection (c). Additional provisions may
include provisions authorizing the escrow agent to commingle the
escrowed funds held under other escrow agreements and provisions
limiting the liability of the escrow agent.
SOURCE: IC 5-11-1-26; (11)SB0441.2.5. -->
SECTION 5. IC 5-11-1-26 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 26. (a) If a state office,
municipality, or other entity has authority to contract for the
construction, reconstruction, alteration, repair, improvement, or
maintenance of a public work, the state board of accounts shall include
in each examination report concerning the state office, municipality, or
entity:
(1) an opinion concerning whether the state office, municipality,
or entity has complied with IC 5-16-8; and
(2) a brief description of each instance in which the state office,
municipality, or entity has exercised its authority under
IC 5-16-8-2(b) or IC 5-16-8-4.
(b) If a municipality or a county performs a public work by
means of its own workforce under IC 36-1-12-3, the state board of
accounts shall include the following in each examination report
concerning the municipality or county:
(1) An opinion concerning whether the municipality or county
has complied with IC 36-1-12-3 for each public work
performed by the entity's own workforce.
(2) A brief description of each public work that the
municipality or county has performed with its own workforce
under IC 36-1-12-3, including a calculation of the actual cost
of each public work pursuant to IC 36-1-12-3.
(3) An opinion concerning whether the municipality or county
has complied with IC 36-1-12-19 in calculating the actual
costs of a public work project performed under IC 36-1-12-3.
(c) If a state agency performs a public work by means of its own
workforce under IC 4-13.6-5-4, the state board of accounts shall
include the following in each examination report concerning the
agency:
(1) An opinion concerning whether the agency has complied
with IC 4-13.6-5-4 for each public work performed by the
agency's own workforce.
(2) A brief description of each public work that the agency has
performed with its own workforce under IC 4-13.6-5-4,
including a calculation of the actual cost of each public work
under IC 4-13.6-5-4.
(3) An opinion concerning whether the agency has complied
with IC 4-13.6-5-4(c) in calculating the actual costs of a public
work project performed under IC 4-13.6-5-4.
(d) If a state educational institution performs a public work by
means of its own workforce under IC 5-16-1-1.5, the state board of
accounts shall include the following in each examination report
concerning the state educational institution:
(1) An opinion concerning whether the state educational
institution has complied with IC 5-16-1-1.5 for each public
work performed by the state educational institution's own
workforce.
(2) A brief description of each public work that the state
educational institution has performed with its own workforce
under IC 5-16-1-1.5, including a calculation of the actual cost
of each public work under IC 5-16-1-1.5.
(3) An opinion concerning whether the state educational
institution has complied with IC 5-16-1-1.5 in calculating the
actual costs of a public work project performed under
IC 5-16-1-1.5.
(b) (e) The state board of accounts may exercise any of its powers
under this chapter concerning public accounts to carry out this section,
including the power to require a uniform system of accounting or the
use of forms prescribed by the state board of accounts.
SOURCE: IC 5-16-1-1.5; (11)SB0441.2.6. -->
SECTION 6. IC 5-16-1-1.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1.5.
(a) The governing
board of any state educational institution, acting on behalf of said
institution, may purchase materials in the manner provided by law and
perform any work by means of its own employees and owned or leased
equipment in the construction, rehabilitation, extension, maintenance,
or repair of any building, structure, improvement, or facility of said
institutions, without awarding a contract therefor, whenever the cost of
such work shall be estimated to be less than
fifty thousand dollars
($50,000). two hundred thousand dollars ($200,000).
(b) The workforce of a state educational institution may
perform a public work described in subsection (a) only if:
(1) the workforce, through demonstrated skills, training, or
expertise, is capable of performing the public work; and
(2) for a public work project under subsection (a) whose cost
is estimated to be more than one hundred thousand dollars
($100,000), the state educational institution shall:
(A) publish a notice under IC 5-3-1 that:
(i) describes the public work that the state educational
institution intends to perform with its own workforce;
and
(ii) sets forth the projected cost of each component of the
public work as described in subsection (a); and
(B) determine at a public meeting that it is in the public
interest to perform the public work with the state
educational institution's own workforce.
A public work project performed by a state educational
institution's own workforce must be inspected and accepted as
complete in the same manner as a public work project performed
under a contract awarded after receiving bids.
(c) If a public work project involves a structure, an
improvement, or a facility under the control of a state educational
institution, the state educational institution may not artificially
divide the project to bring any part of the project under this
section.
SOURCE: IC 5-16-1-1.7; (11)SB0441.2.7. -->
SECTION 7. IC 5-16-1-1.7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1.7. On agricultural or
forestry land owned or occupied by Purdue University and used by it
for educational or research purposes, the trustees of the university may,
upon a declaration of necessity recorded in its minutes, award contracts
without advertising for bids or otherwise satisfying the requirements of
this chapter, if the cost of work is estimated to be less than fifty two
hundred thousand dollars ($50,000). ($200,000). However, bids shall
be invited from at least three (3) or more persons, firms, limited
liability companies, or corporations known to deal in the work required
to be done. The minutes of the board shall show the names of those
invited to bid.
SOURCE: IC 5-16-1-1.9; (11)SB0441.2.8. -->
SECTION 8. IC 5-16-1-1.9, AS AMENDED BY P.L.2-2007,
SECTION 103, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2011]: Sec. 1.9. Notwithstanding this article, a
state educational institution may award a contract for any construction
or repair work to any building, structure, or improvement of the
institution without advertising for bids and meeting other contract
awarding requirements of this article whenever the estimated cost of
the project is less than
fifty two hundred thousand dollars
($50,000).
($200,000). However, in awarding any contract under this section the
state educational institution must do the following:
(1) Invite bids from at least three (3) persons, firms, limited
liability companies, or corporations known to deal in the work
required to be done.
(2) Give notice of the project if the estimated cost of the project
is more than twenty-five thousand dollars ($25,000). If required,
notice must include a description of the work to be done and be
given in at least one (1) newspaper of general circulation printed
and published in the county in which the work is to be done.
(3) Award the contract to the lowest and best bidder.
SOURCE: IC 36-1-12-3; (11)SB0441.2.9. -->
SECTION 9. IC 36-1-12-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3. (a) The board may
purchase or lease materials in the manner provided in IC 5-22 and
perform any public work, by means of its own workforce, without
awarding a contract whenever the cost of that public work project is
estimated to be less than one hundred
fifty thousand dollars
($100,000). ($150,000). Before a board may perform any work under
this section by means of its own workforce, the political subdivision or
agency must have a group of employees on its staff who are capable of
performing the construction, maintenance, and repair applicable to that
work. For purposes of this subsection, the cost of a public work project
includes:
(1) the actual cost of materials, labor, equipment,
and rental;
(2) a reasonable rate for use of trucks and heavy equipment
owned; and
(3) all other expenses incidental to the performance of the project.
(b) This subsection applies only to a municipality or a county.
The workforce of a municipality or county may perform a public
work described in subsection (a) only if:
(1) the workforce, through demonstrated skills, training, or
expertise, is capable of performing the public work; and
(2) for a public work project under subsection (a) whose cost
is estimated to be more than one hundred thousand dollars
($100,000), the board shall:
(A) publish a notice pursuant to IC 5-3-1 that:
(i) describes the public work that the board intends to
perform with its own workforce; and
(ii) sets forth the projected cost of each component of the
public work as described in subsection (a); and
(B) determine at a public meeting that it is in the public
interest to perform the public work with the board's own
workforce.
A public work project performed by a board's own workforce must
be inspected and accepted as complete in the same manner as a
public work project performed pursuant to a contract awarded
after receiving bids.
(b) (c) When the project involves the rental of equipment with an
operator furnished by the owner, or the installation or application of
materials by the supplier of the materials, the project is considered to
be a public work project and subject to this chapter. However, an
annual contract may be awarded for equipment rental and materials to
be installed or applied during a calendar or fiscal year if the proposed
project or projects are described in the bid specifications.
(c) (d) A board of aviation commissioners or an airport authority
board may purchase or lease materials in the manner provided in
IC 5-22 and perform any public work by means of its own workforce
and owned or leased equipment, in the construction, maintenance, and
repair of any airport roadway, runway, taxiway, or aircraft parking
apron whenever the cost of that public work project is estimated to be
less than one hundred fifty thousand dollars ($50,000). ($150,000).
(d) (e) Municipal and county hospitals must comply with this
chapter for all contracts for public work that are financed in whole or
in part with cumulative building fund revenue, as provided in section
1(c) of this chapter. However, if the cost of the public work is
estimated to be less than fifty thousand dollars ($50,000), as reflected
in the board minutes, the hospital board may have the public work done
without receiving bids, by purchasing the materials and performing the
work by means of its own workforce and owned or leased equipment.
(e) (f) If a public works project involves a structure, an
improvement, or a facility under the control of a department (as defined
in IC 4-3-19-2(2)), the department may not artificially divide the
project to bring any part of the project under this section.