151Performance Bond and Payment Bond

151.01 Description

This Section describes the requirements for providing a performance bond and a payment bond.

151.02 Materials

(Intentionally Blank)

151.03 Procedure

151.03.01 Performance Bond and Payment Bond

Using bond forms issued by the Department, provide a performance bond and a payment bond to the Department within 14 days of the date of Award or Conditional Award. Ensure that the penal sum of the bond is equal to at least the Total Contract Price less the bid price for PERFORMANCE BOND AND PAYMENT BOND . With the bond, provide a certification authorizing the attorney-in-fact to commit the Surety and a true and correct statement of the Surety’s financial condition. With the bond, submit the schedule of broker’s fees, the certified rate schedule, paid invoices and the report of execution for the bond to the RE. Obtain bonds from sureties listed in the US Treasury Department Circular 570 and authorized to do business in the State. Reinsurance is prohibited as per N.J.A.C 16:44-6.1(b)6. If the S urety becomes insolvent before Acceptance, provide a performance bond and a payment bond issued by another surety to the Department. The Department may adjust Contract Time, require extra work, or issue other changes authorized by the Contract without obtaining the consent of the surety of the bonds.

151.04 Measurement and Payment

The Department will measure and make payment for Items as follows: Item Pay Unit PERFORMANCE BOND AND PAYMENT BOND DOLLAR The Department will make payment for PERFORMANCE BOND AND PAYMENT BOND as follows: BIP = the lesser of BB and BI BFP = the lesser of [BIP +R(CF − CO)] and BF Where: BIP = Initial payment for the PERFORMANCE BOND AND PAYMENT BOND made by the Department at the start of Work. BB = Bid price of the PERFORMANCE BOND AND PAYMENT BOND. BI = Actual price of the PERFORMANCE BOND AND PAYMENT BOND at the start of Work. BF = Actual price of the PERFORMANCE BOND AND PAYMENT BOND at Completion of Work. BFP = Final payment for the PERFORMANCE BOND AND PAYMENT BOND made by the Department at the Completion of Work. R = (for Final Contract Price greater than the Original Contract Price) = Rate or rates from the certified schedule corresponding to the portion of the Contract Price greater than the Original Contract Price. R = (for Final Contract Price less than the Original Contract Price) = Rate from the certified schedule corresponding to the Final Contract Price. CF = Final Contract Price excluding adjustments for LAYOUT and PERFORMANCE AND PAYMENT BOND CO = Original Contract Price The Department will not make payment for PERFORMANCE BOND AND PAYMENT BOND until after receipt of the certified rate schedule. The Department will make adjustments to PERFORMANCE BOND AND PAYMENT BOND in the final monthly Estimate. The Department will not make adjustments of less than $100.00.