505-06 Payment Bond Waivers
Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
BOLI statute requires that before starting work on a contract for a Public Works project, a contractor or subcontractor must file with the contracting agency a payment bond issued by a corporate surety authorized to do business in Oregon in the full amount of the contract.
ORS 279C.625 holds the State of Oregon and the Contract Officers authorizing the contract jointly liable for the labor and materials used in performance of any work under the contract and for claims due the Industrial Accident Fund, the Unemployment Compensation Trust Fund and the Department of Revenue, on any contract that neglects to require the person entering into the contract to execute the payment bond.
While OSU must require Payment Bonds for all purchase orders subject to BOLI PWR, OSU has determined that it may be in the best interest of the University to waive the requirement for Payment Bonds on purchases with a total value not to exceed $50,000. There may be instances where there is little risk involved and requiring the contractor to provide a payment bond may substantially impact the cost of the contract.
For Public Improvement projects or for on-site services portions of mixed contracts with total values of less than $50,000, the determination of whether or not to waive the Payment Bond will be based on the following:
- Contractor’s performance and payment history with OSU or other Institutions and Entities;
- The ratio of goods to on-site services;
- The value of the contract or the on-site services portion;
- Whether other contracted construction or installation services are being held at the same general time and within the same general area of the job site;
- The contractor’s experience specific to the type of services being contracted
- Whether or not the purchase is for furniture or carpet placed off of an OSU Contract or State of Oregon Price Agreement. Special consideration may be given for these purchases;
- Contractor’s financial standing;
- Other factors that may indicate possible risks
PaCS will be the final authority on whether to waive any Payment Bond in these instances with consultation and a decision by the Associate Director of Facilities Design and Construction or Construction Contracting Supervisor. The act of waiving the requirement of a Payment Bond does not influence or impact the other necessary requirements such as other types of bonds or insurance.