SENATE AMENDED
        PRIOR PRINTER'S NOS. 834, 2014, 2197          PRINTER'S NO. 3273

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 757 Session of 1991


        INTRODUCED BY STETLER, ANGSTADT, BILLOW, BUNT, CAPPABIANCA,
           COLAIZZO, COY, DEMPSEY, KOSINSKI, LINTON, McNALLY, MERRY,
           PESCI, PISTELLA, SERAFINI, STURLA, TRELLO, VAN HORNE AND
           WAMBACH, MARCH 13, 1991

        AS AMENDED ON SECOND CONSIDERATION, IN SENATE, MARCH 17, 1992

                                     AN ACT

     1  Amending the act of June 23, 1931 (P.L.932, No.317), entitled
     2     "An act relating to cities of the third class; and amending,
     3     revising, and consolidating the law relating thereto,"
     4     granting city council the authority to determine whether or
     5     not security should accompany bids submitted in response to
     6     advertisement; AND FURTHER PROVIDING FOR REGULATIONS           <--
     7     CONCERNING CONTRACTS AND FOR BONDS FOR PROTECTION OF LABOR
     8     AND MATERIALMEN.

     9     The General Assembly of the Commonwealth of Pennsylvania
    10  hereby enacts as follows:
    11     Section 1.  Section 1901(f) AND (G) of the act of June 23,     <--
    12  1931 (P.L.932, No.317), known as The Third Class City Code,
    13  reenacted and amended June 28, 1951 (P.L.662, No.164) and
    14  amended September 17, 1959 (P.L.906, No.359), is ARE amended to   <--
    15  read:
    16     Section 1901.  Power to Make Contracts; Regulations
    17  Concerning Contracts.--* * *
    18     (f)  [All bids advertised for shall be accompanied by cash,
    19  by a certified or cashier's good faith check in an amount


     1  required by council but at least ten per centum of the bid, or
     2  by a bond with corporate surety in such amount as council shall
     3  determine but not less than ten per centum of the amount bid.]
     4  Council may require that any bids so advertised be accompanied
     5  by cash, by a certified or cashier's good faith check or other
     6  irrevocable letter of credit in a reasonable amount, or by a
     7  bond with corporate surety in a reasonable amount. Whenever it
     8  is required that a bid be accompanied by cash, certified check,
     9  cashier's good faith check or other irrevocable letter of
    10  credit, no bid shall be considered unless so accompanied. In the
    11  event any bidder shall, upon award of the contract to him, fail
    12  to comply with the requirements hereinafter stated as to a bond
    13  guaranteeing the performance of the contract the good faith
    14  deposit by cash, certified check, or bond, shall be forfeited to
    15  the city as liquidated damages.
    16     * * *                                                          <--
    17     (G)  WHERE ADVERTISING IS REQUIRED HEREIN, THE SUCCESSFUL      <--
    18  BIDDER SHALL BE REQUIRED TO FURNISH A BOND OR IRREVOCABLE LETTER
    19  OF CREDIT IN AN AMOUNT SUFFICIENT TO COUNCIL WITH SUITABLE
    20  REASONABLE REQUIREMENTS GUARANTEEING THE PERFORMANCE OF THE
    21  CONTRACT[, WITH SURETY SUFFICIENT TO COUNCIL,] WITHIN TWENTY
    22  DAYS AFTER THE CONTRACT HAS BEEN AWARDED, UNLESS COUNCIL
    23  PRESCRIBES A SHORTER PERIOD OF NOT LESS THAN TEN DAYS, AND
    24  FAILURE TO FURNISH SUCH [BOND] SECURITY WITHIN SUCH TIME SHALL
    25  [AVOID] VOID THE AWARD. THE PROVISIONS OF THIS SUBSECTION
    26  REQUIRING SUCCESSFUL BIDDERS TO FURNISH [BOND] SECURITY SHALL
    27  NOT BE MANDATORY AS TO CONTRACTS FOR THE PURCHASE OF MOTOR
    28  VEHICLES OR OTHER PIECES OF EQUIPMENT BUT ONLY AS TO THOSE
    29  CONTRACTS WHICH INVOLVE FURNISHING OF LABOR AND MATERIALS.
    30  COUNCIL MAY IN ALL CASES OF CONTRACTS OR PURCHASES REQUIRE
    19910H0757B3273                  - 2 -

     1  [BONDS] SECURITY FOR PERFORMANCE, DELIVERY, OR OTHER TERMS.
     2     * * *
     3     SECTION 2.  SECTION 1907 OF THE ACT, AMENDED OCTOBER 9, 1967
     4  (P.L.378, NO.170), IS AMENDED TO READ:
     5     SECTION 1907.  [BONDS] SECURITY FOR THE PROTECTION OF LABOR
     6  AND MATERIALMEN.--IT SHALL BE THE DUTY OF EVERY CITY TO REQUIRE
     7  ANY PERSON, COPARTNERSHIP, ASSOCIATION, OR CORPORATION, ENTERING
     8  INTO A CONTRACT WITH SUCH CITY FOR THE CONSTRUCTION, ERECTION,
     9  INSTALLATION, COMPLETION, ALTERATION, REPAIR OF, OR ADDITION TO,
    10  ANY PUBLIC WORK OR IMPROVEMENT OF ANY KIND WHATSOEVER, WHERE THE
    11  AMOUNT OF SUCH CONTRACT IS IN EXCESS OF ONE THOUSAND FIVE
    12  HUNDRED DOLLARS, BEFORE COMMENCING WORK UNDER SUCH CONTRACT, TO
    13  EXECUTE AND DELIVER TO SUCH CITY, IN ADDITION TO ANY OTHER
    14  [BOND] SECURITY WHICH MAY NOW OR HEREAFTER BE REQUIRED BY LAW TO
    15  BE GIVEN IN CONNECTION WITH SUCH CONTRACT, AN ADDITIONAL BOND OR
    16  IRREVOCABLE LETTER OF CREDIT FOR THE USE OF ANY AND EVERY
    17  PERSON, COPARTNERSHIP, ASSOCIATION, OR CORPORATION INTERESTED,
    18  IN A SUM NOT LESS THAN FIFTY PER CENTUM AND NOT MORE THAN ONE
    19  HUNDRED PER CENTUM OF THE CONTRACT PRICE, AS SUCH CITY MAY
    20  PRESCRIBE, [HAVING AS SURETY THEREON ONE OR MORE SURETY
    21  COMPANIES LEGALLY AUTHORIZED TO DO BUSINESS IN THIS
    22  COMMONWEALTH,] CONDITIONED FOR THE PROMPT PAYMENT OF ALL
    23  MATERIAL FURNISHED AND LABOR SUPPLIED OR PERFORMED IN THE
    24  PROSECUTION OF THE WORK, WHETHER OR NOT THE SAID MATERIAL OR
    25  LABOR ENTER INTO AND BECOME COMPONENT PARTS OF THE WORK OR
    26  IMPROVEMENT CONTEMPLATED. SUCH ADDITIONAL [BOND] SECURITY SHALL
    27  BE DEPOSITED WITH AND HELD BY THE CITY FOR THE USE OF ANY PARTY
    28  INTERESTED THEREIN. EVERY SUCH ADDITIONAL [BOND] SECURITY SHALL
    29  PROVIDE THAT EVERY PERSON, COPARTNERSHIP, ASSOCIATION, OR
    30  CORPORATION WHO, WHETHER AS SUBCONTRACTOR OR OTHERWISE, HAS
    19910H0757B3273                  - 3 -

     1  FURNISHED MATERIAL OR SUPPLIED OR PERFORMED LABOR IN THE
     2  PROSECUTION OF THE WORK AS ABOVE PROVIDED, AND WHO HAS NOT BEEN
     3  PAID THEREFOR, MAY SUE IN ASSUMPSIT ON SAID ADDITIONAL [BOND]
     4  SECURITY, IN THE NAME OF THE CITY, FOR HIS, THEIR, OR ITS USE
     5  AND PROSECUTE THE SAME TO FINAL JUDGMENT FOR SUCH SUM OR SUMS AS
     6  MAY BE JUSTLY DUE HIM, THEM, OR IT, AND HAVE EXECUTION THEREOF:
     7  PROVIDED, HOWEVER, THAT THE CITY SHALL NOT BE LIABLE FOR THE
     8  PAYMENT OF ANY COSTS OR EXPENSE OF ANY SUIT. THE SURETY OR
     9  SURETIES ON A BOND UNDER THIS SECTION MUST BE AUTHORIZED TO DO
    10  BUSINESS IN THIS COMMONWEALTH.
    11     Section 2 3.  This act shall take effect in 60 days.           <--













    B5L11JRW/19910H0757B3273         - 4 -