HOUSE BILL NO. 649
INTRODUCED BY M. MCCANN
BY REQUEST OF THE HOUSE JOINT APPROPRIATIONS SUBCOMMITTEE ON LONG-RANGE PLANNING
AN ACT GENERALLY REVISING THE LAWS RELATING TO STATE CONSTRUCTION CONTRACTS; CLARIFYING THE REQUIREMENT THAT CONTRACTS MUST BE AWARDED TO CONTRACTORS REGISTERED IN MONTANA; REVISING PECUNIARY INTEREST PROHIBITIONS FOR DEPARTMENT OF ADMINISTRATION EMPLOYEES; ELIMINATING THE REQUIREMENT TO FILE A COPY OF A SURETY BOND WITH THE CLERK AND RECORDER OF THE COUNTY IN WHICH THE WORK WILL BE PERFORMED; EXEMPTING CERTAIN CONSTRUCTION PROJECTS FROM CERTAIN STATE LAWS GOVERNING CONSTRUCTION CONTRACTS; AMENDING SECTIONS 18-2-103, 18-2-106, AND 18-2-201, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A TERMINATION DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 18-2-103, MCA, is amended to read:
"18-2-103. Supervision of construction of buildings. (1) For the construction of a building costing more than
$150,000, the department of administration shall:
(a) review and accept all plans, specifications, and cost estimates prepared by architects or consulting engineers;
(b) approve all bond issues or other financial arrangements and supervise and approve the expenditure of all money;
(c) solicit, accept, and reject bids and award all contracts to the lowest qualified bidder considering conformity with specifications and terms and reasonableness of the bid amount;
(d) review and approve all change orders; and
(e) accept the building when completed according to accepted plans and specifications.
(2) The department may delegate on a project-by-project basis any powers and duties under subsection (1) to other state agencies, including units of the Montana university system, upon terms and conditions specified by the department.
(3) Before a contract under subsection (1) is awarded, two formal bids must have been received, if reasonably available.
(4) The department need not require the provisions of Montana law relating to advertising, bidding, or supervision when
proposed construction costs are $75,000 or less. However, with respect to a project having a proposed cost of $75,000 or
less but more than $25,000, the agency awarding the contract shall procure at least three informal bids from contractors
licensed registered in Montana, if reasonably available.
(5) For the construction of buildings owned or to be owned by a school district, the department of administration shall,
upon request, provide inspection to ensure compliance with the plans and specifications for the construction of the
buildings. "Construction" includes construction, repair, alteration, equipping, and furnishing during construction, repair, or
alteration. These services must be provided at a cost to be contracted for between the department of administration and the
school district, with the receipts to be deposited in the department of administration's department's construction regulation
account in a state special revenue fund.
(6) It is the intent of the legislature that student housing and other facilities constructed under the authority of the regents of the university system are subject to the provisions of subsections (1) through (3).
(7) The department of military affairs may act as the contracting agency for buildings constructed under the authority of 18-2-102(2)(d). However, the department of administration may agree to act as the contracting agency on behalf of the department of military affairs. Montana law applies to any controversy involving a contract."
Section 2. Section 18-2-106, MCA, is amended to read:
"18-2-106. Pecuniary interest prohibited. (1) Neither the The director of administration nor any employee of the
department of administration shall and the state architect may not have a direct or indirect pecuniary interest in any
contract, transaction, or project involving the construction of a building.
(2) An employee of the department who is directly responsible for construction procurement may not have a direct pecuniary interest in a contract for the construction of a building unless the contract is awarded through a competitive procurement procedure."
Section 3. Section 18-2-201, MCA, is amended to read:
"18-2-201. Security requirements. (1) Except as otherwise provided in 85-1-219 and subsections (4) (3) through (6)
(5) of this section, whenever any board, council, commission, trustees, or body acting for the state or any county,
municipality, or any public body contracts with a person or corporation to do work for the state, county, or municipality or
other public body, city, town, or district, the board, council, commission, trustees, or body shall require the corporation,
person, or persons with whom the contract is made to make, execute, and deliver to the board, council, commission,
trustees, or body a good and sufficient bond with a licensed surety company as surety, conditioned that the corporation,
person, or persons shall:
(a) faithfully perform all of the provisions of the contract;
(b) pay all laborers, mechanics, subcontractors, and material suppliers; and
(c) pay all persons who supply the corporation, person or persons, or subcontractors with provisions, provender, material, or supplies for performing the work.
(2) A copy of the bond must be filed with the county clerk and recorder of the county in which the work is to be
performed or the improvement is to be made or, if the work is to be performed or the improvement is to be made in more
than one county, with the county clerk of either county, except in cases of cities and towns, in which case the bond must be
filed with the city or town clerk.
(3)(2) Notwithstanding the provisions of subsections subsection (1) and (2), the state or other governmental entity may,
in lieu of a surety bond, permit the deposit with the contracting governmental entity or agency of the following securities in
an amount at least equal to the contract sum to guarantee the faithful performance of the contract and the payment of all
laborers, suppliers, material suppliers, mechanics, and subcontractors:
(a) lawful money of the United States; or
(b) a cashier's check, certified check, bank money order, certificate of deposit, money market certificate, or bank draft, drawn or issued by:
(i) any federally or state-chartered bank or savings and loan association that is insured by or for which insurance is administered by the federal deposit insurance corporation; or
(ii) a credit union insured by the national credit union share insurance fund.
(4)(3) Notwithstanding the provisions of subsections subsection (1) and (2), any board, council, commission, trustee, or
body acting for any county, municipality, or any public body other than the state may, in lieu of a bond from a licensed
surety company, accept good and sufficient bond with two or more sureties acceptable to the governmental body.
(5)(4) Except as provided in subsection (6) (5), the state or other governmental entity may waive the requirements
contained in subsections (1) through (4) (3) for building or construction projects, as defined in 18-2-101, that cost less than
$25,000.
(6)(5) A school district may waive the requirements contained in subsections (1) through (4) (3) for building or
construction projects, as defined in 18-2-101, that cost less than $7,500."
Section 4. Exemption of certain projects -- conditions. (1) If the nondenominational chapel project at Montana tech of the university of Montana is authorized in House Bill No. 5, then the design of this project is not subject to the requirements of 18-2-112 or Title 18, chapter 8, part 2.
(2) (a) It is the intent of the legislature, with regard to the classroom-laboratory building authorized in section 4, Chapter 469, Laws of 1997, that the department of administration contract as provided in this subsection (2). The department shall contract for combinations of services, materials, and labor related to innovative building technologies, not otherwise expressly allowed under Title 18, if the innovative technologies:
(i) have the potential to produce energy or operational savings for the state over the life cycle of the building;
(ii) demonstrate the use of recycled material; or
(iii) demonstrate the use of indigenous material for which a new local, regional, or national market may be developed.
(b) The conditions in subsection (2)(a) must specifically apply to individual building systems or components and not to the general contract for construction or for any project service, including design. The terms, guaranties, and conditions related to the innovations must be negotiated by the department in the best interests of the state and must provide that there is no express or implied commitment of state appropriations for construction, operations, or maintenance.
Section 5. Effective date. [This act] is effective on passage and approval.
Section 6. Termination. [Section 4] terminates June 30, 2003.
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