A.R.S. tit. 34 ch. 2 — Arizona Revised Statutes Title 34 Chapter 2 — Employment Of Contractors

34-201. Notice of intention to receive bids and enter contract; procedure; doing work without advertising for bids; county compliance A. Except as provided in subsections B through G and L of this section, every agent, on acceptance and approval of the working drawings and specifications, shall publish a notice to contractors of intention to receive bids and contract for the proposed work. This notice shall be published by advertising in a newspaper of general circulation in the county in which the agent is located for two consecutive publications if it is a weekly newspaper or for two publications that are at least six but not more than ten days apart if it is a daily newspaper. The notice shall state: 1. The nature of the work required, the type, purpose and location of the proposed building and where the plans, specifications and full information as to the proposed work may be obtained. 2. That contractors desiring to submit proposals may obtain copies of full or partial sets of plans and specifications for estimate on request or by appointment. The return of the plans and specifications shall be guaranteed by a deposit of a designated amount that shall be refunded on return of the plans and specifications in good order. 3. That every proposal shall be accompanied by a certified check, cashier's check or surety bond for ten percent of the amount of the bid included in the proposal as a guarantee that the contractor will enter into a contract to perform the proposal in accordance with the plans and specifications. Notwithstanding any other statute, the surety bond shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance and financial institutions pursuant to title 20, chapter 2, article 1. The surety bond shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied. The certified check, cashier's check or surety bond shall be returned to the contractors whose proposals are not accepted, and to the successful contractor on the execution of a satisfactory bond and contract as provided in this article. The conditions and provisions of the surety bid bond regarding the surety's obligations shall follow the following form: Now, therefore, if the obligee accepts the proposal of the principal and the principal enters into a contract with the obligee in accordance with the terms of the proposal and gives the bonds and certificates of insurance as specified in the standard specifications with good and sufficient surety for the faithful performance of the contract and for the prompt payment of labor and materials furnished in the prosecution of the contract, or in the event of the failure of the principal to enter into the contract and give the bonds and certificates of insurance, if the principal pays to the obligee the difference not to exceed the penalty of the bond between the amount specified in the proposal and such larger amount for which the obligee may in good faith contract with another party to perform the work covered by the proposal then this obligation is void. Otherwise it remains in full force and effect provided, however, that this bond is executed pursuant to the provisions of section 34-201, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions of the section to the extent as if it were copied at length herein. 4. That the right is reserved to reject any or all proposals or to withhold the award for any reason the agent determines. B. If the agent believes that any construction, building addition or alteration contemplated at a public institution can be advantageously done by the inmates of the public institution and regularly employed help, the agent may cause the work to be done without advertising for bids. C. Any building, structure, addition or alteration may be constructed either with or without the use of the agent's regularly employed personnel without advertising for bids, provided that the total cost of the work, excluding materials and equipment previously acquired by bid, does not exceed: 1. In fiscal year 1994-1995, $14,000. 2. In fiscal year 1995-1996 and each fiscal year thereafter, the amount provided in paragraph 1 of this subsection adjusted by the annual percentage change in the GDP price deflator as defined in section 41-563. D. Notwithstanding subsection C of this section, any street, road, bridge, water or sewer work, other than a water or sewer treatment plant or building, may be constructed either with or without the use of the agent's regularly employed personnel without advertising for bids, provided that the total cost of the work does not exceed: 1. In fiscal year 1994-1995, $150,000. 2. In fiscal year 1995-1996 and each fiscal year thereafter, the amount provided in paragraph 1 of this subsection adjusted by the annual percentage change in the GDP price deflator as defined in section 41-563. E. For the purposes of subsection D of this section, the total cost of water or sewer work does not include services provided by volunteers or donations made for the water or sewer project. F. Notwithstanding this section, an agent may: 1. Construct, reconstruct, install or repair a natural gas or electric utility and distribution system, owned or operated by such agent, with regularly employed personnel of the agent without advertising for bids, unless otherwise prohibited by charter or ordinance. 2. Construct recreational projects, including trails, playgrounds, ballparks and other similar facilities and excluding buildings, structures, building additions and alterations to buildings, structures and building additions, with volunteer workers or workers provided by a nonprofit organization without advertising for bids for labor and materials, provided that the total cost of the work does not exceed: (a) In fiscal year 2001-2002, $150,000. (b) In fiscal year 2002-2003 and each fiscal year thereafter, the amount provided in subdivision (a) adjusted by the annual percentage change in the GDP price deflator as defined in section 41-563. G. A contribution by an agent for the financing of public infrastructure made pursuant to a development agreement is exempt from this section if the contribution for any single development does not exceed: 1. In fiscal year 1994-1995, $100,000. 2. In fiscal year 1995-1996 and each fiscal year thereafter, the amount provided in paragraph 1 of this subsection adjusted by the annual percentage change in the GDP price deflator as defined in section 41-563. H. In addition to other state or local requirements relating to the publication of bids, each agent shall provide at least one set of all plans and specifications to any construction news reporting service that files an annual request with the agent. For the purposes of this subsection, "construction news reporting service" means a service that researches, gathers and disseminates news and reports either in print or electronically, on at least a weekly basis for building projects, construction bids, the purchasing of materials, supplies or services and other construction bidding or planned activity to the allied construction industry. The allied construction industry includes both general and specialty contractors, builders, material and service suppliers, architects and engineers, owners, developers and government agencies. I. Any construction by a county under this section shall comply with the uniform accounting system prescribed for counties by the auditor general under section 41-1279.21. Any construction by a city or town under this section shall comply with generally accepted accounting principles. J. Any construction, building addition or alteration project that is financed by monies of this state or its political subdivisions shall not use endangered wood species unless an exemption is granted by the director of the department of administration. The director shall only grant an exemption if the use of endangered wood species is deemed necessary for historical restoration or to repair existing facilities and the use of any substitute material is not practical. Any lease-purchase agreement entered into by this state or its political subdivisions for construction shall specify that no endangered wood species may be used in the construction unless an exemption is granted by the director. For the purposes of this subsection, "endangered wood species" includes those listed in appendix I of the convention on international trade in endangered species of wild flora and fauna. K. All bonds given by a contractor and surety pursuant to this article, regardless of their actual form, will be deemed by law to be the form required and set forth in this article and no other. L. Any building, structure, addition or alteration may be constructed without complying with this article if the construction, including construction of buildings or structures on public or private property, is required as a condition of development of private property and is authorized by section 9-463.01 or 11-822. For the purposes of this subsection, building does not include police, fire, school, library or other public buildings. M. Notwithstanding section 34-221, any agent may enter into a guaranteed energy cost savings contract with a qualified provider for the purchase of energy cost savings measures without complying with this article and may procure a guaranteed energy cost savings contract through the competitive sealed proposal process prescribed in title 41, chapter 23 or any similar competitive proposal process adopted by the agent. 34-202. Bids by contractors; estimates when work not done by contract A. Proposals for construction of buildings or structures, or additions and alterations thereto, shall be accompanied by bids for all of the proposed work, signed by a responsible contractor and accompanied by a certified check, cashier's check, or surety bond. B. If the proposed work is not to be done by contract, the accepted completed plans and specifications shall be estimated by a person specially qualified for that purpose and appointed by the agent for that purpose. 34-203. Failure to comply; civil penalty A. An agent who knowingly violates the provisions of section 34-201 is liable for a civil penalty: 1. Except as provided in paragraph 2, not to exceed five thousand dollars for each violation. 2. On the effective date of this amendment to this section until July 1, 2009, not to exceed: (a) Ten thousand dollars for a first violation. (b) Twenty-five thousand dollars for a second violation. (c) Seventy-five thousand dollars for a third violation. B. All monies collected from the civil penalty shall be deposited in the state general fund. The attorney general shall bring an action to recover the penalty in the name of this state in the superior court in the county in which the violation occurred. The attorney general shall bring any appropriate civil action to enjoin a threatened or pending violation of this article. 34-221. Contract with successful bidder; payments to contractor and design professional; security; recovery of damages for delay; progress payments; changed or additional work; attorney fees; definitions A. The agent shall enter into a contract with the lowest responsible bidder whose proposal is satisfactory, except that in determining the lowest responsible bidder under this section, the board of supervisors may consider, for not more than five projects, the time of completion proposed by the bidder, the value over time of completed services and facilities and the value over time of interrupted services if the board determines that this procedure will serve the public interest by providing a substantial fiscal benefit or that the use of the traditional awarding of contracts is not practicable for meeting desired construction standards or delivery schedules and if the formula for considering the time of completion is specifically stated in the bidding information. B. In determining the lowest responsible bidder for a horizontal construction project using the design-bid-build project delivery method, an agent may consider the time of completion proposed by the bidder if the agent determines that this procedure will serve the public interest by providing a substantial fiscal benefit or that the use of the traditional awarding of contracts is not practicable for meeting desired construction standards or delivery schedules and if the formula for considering the time of completion is specifically stated in the bidding information. C. The terms of a contract entered into pursuant to subsection A of this section shall include the following items: 1. A surety company bond or bonds as required under this article. 2. The owner by mutual agreement may make progress payments on contracts of less than ninety days and shall make monthly progress payments on all other contracts as provided for in this paragraph. Payment to the contractor on the basis of a duly certified and approved estimate of the work performed during the preceding calendar month under such contract may include payment for material and equipment, but to ensure the proper performance of such contract, the owner shall retain ten percent of the amount of each estimate until final completion and acceptance of all material, equipment and work covered by the contract. An estimate of the work submitted shall be deemed approved and certified for payment seven days after the date of submission unless before that time the owner or owner's agent prepares and issues a specific written finding setting forth those items in detail in the estimate of the work that are not approved for payment under the contract. The owner may withhold an amount from the progress payment sufficient to pay the expenses the owner reasonably expects to incur in correcting the deficiency set forth in the written finding. The progress payments shall be paid on or before fourteen days after the estimate of the work is certified and approved. The estimate of the work shall be deemed received by the owner on submission to any person designated by the owner for the submission, review or approval of the estimate of the work. 3. When the contract is fifty percent completed, one-half of the amount retained, including any securities substituted under paragraph 5 of this subsection, shall be paid to the contractor on the contractor's request if the contractor is making satisfactory progress on the contract and there is no specific cause or claim requiring a greater amount to be retained. After the contract is fifty percent completed, not more than five percent of the amount of any subsequent progress payments made under the contract may be retained if the contractor is making satisfactory progress on the project, except that if at any time the owner determines satisfactory progress is not being made, ten percent retention shall be reinstated for all progress payments made under the contract subsequent to the determination. 4. On completion and acceptance of each separate building, public work or other division of the contract on which the price is stated separately in the contract, except as qualified in paragraph 5 of this subsection, payment may be made in full, including retained percentages thereon, minus authorized deductions. In preparing estimates, the material and equipment delivered on the site to be incorporated in the job shall be taken into consideration in determining the estimated value by the architect or engineer. 5. Ten percent of all estimates shall be retained by the agent as a guarantee for complete performance of the contract, to be paid to the contractor within sixty days after completion or filing notice of completion of the contract. Retention of payments by a purchasing agency longer than sixty days after final completion and acceptance requires a specific written finding by the purchasing agency of the reasons justifying the delay in payment. A purchasing agency may not retain any monies after sixty days that are in excess of the amount necessary to pay the expenses the purchasing agency reasonably expects to incur in order to pay or discharge the expenses determined by the purchasing agency in the finding justifying the retention of monies. In lieu of the retention provided in this section, the agent, at the option of the contractor, shall accept as a substitute an assignment of money market accounts, demand deposit accounts, time certificates of deposit of banks licensed by this state, securities of or guaranteed by the United States of America, securities of this state, securities of counties, municipalities and school districts within this state or shares of savings and loan associations authorized to transact business in this state, in an amount equal to ten percent of all estimates, which shall be retained by the agent as a guarantee for complete performance of the contract. If the contractor opts for substitute security as described in this paragraph for the ten percent retention, the contractor is entitled to receive all interest or income earned by such security as it accrues, and all such security in lieu of retention shall be returned to the contractor by the agent within sixty days after final completion and acceptance of all material, equipment and work covered by the contract if the contractor has furnished the agent satisfactory receipts for all labor and material billed and waivers of liens from any and all persons holding claims against the work. The agent may not accept a money market account, a demand deposit account, a time certificate of deposit of a bank or shares of a savings and loan association in lieu of the retention specified unless accompanied by a signed and acknowledged waiver of the bank or savings and loan association of any right or power to setoff against either the agent or the contractor in relationship to the certificates or shares assigned. The amount deposited in a money market account or demand deposit account in lieu of the retention provided in this section shall not be released by the financial institution to the contractor except on written authorization of the agent. 6. If the agent has accepted substitute security as provided in paragraph 5 of this subsection, any subcontractor undertaking to perform any part of such public work is entitled to provide substitute security to the contractor on terms and conditions similar to those described in paragraph 5 of this subsection, and such security is in lieu of any retention under the subcontract. D. A contract for construction or design professional services may not materially alter the rights of any contractor, subcontractor, design professional or material supplier to receive prompt and timely payment required to be included in the contract under subsection C of this section. E. The contract shall be signed by the agent and the contractor. F. A contract for the procurement of construction shall include a provision that provides for negotiations between the agent and the contractor for the recovery of damages related to expenses incurred by the contractor for a delay for which the agent is responsible, which is unreasonable under the circumstances and which was not within the contemplation of the parties to the contract. This section does not void any provision in the contract that requires notice of delays or provides for arbitration or other procedure for settlement or provides for liquidated damages. G. The contractor shall pay to the contractor's subcontractors, design professionals or material suppliers and each subcontractor shall pay to the subcontractor's subcontractor, design professional or material supplier, within seven days after receipt of each progress payment, unless otherwise agreed in writing by the parties, the respective amounts allowed the contractor, subcontractor or design professional on account of the work performed by subordinate subcontractors or design professionals, to the extent of each such subcontractor's or design professional's interest therein, except that a contract for construction may not materially alter the rights of any contractor, subcontractor, design professional or material supplier to receive prompt and timely payment as provided under this section. Such payments to subcontractors, design professionals or material suppliers shall be based on payments received pursuant to this section. Any diversion by the contractor or subcontractor of payments received for work performed on a contract, or failure to reasonably account for the application or use of such payments, constitutes grounds for disciplinary action by the registrar of contractors. The subcontractor or material supplier shall notify the registrar of contractors and the purchasing agency in writing of any payment that is less than the amount or percentage approved for the class or item of work as set forth in this section. H. A subcontractor or design professional may notify the purchasing agency in writing requesting that the subcontractor or design professional be notified by the purchasing agency in writing within five days after payment of each progress payment that is made to the contractor. The subcontractor's or design professional's request remains in effect for the duration of the subcontractor's or design professional's work on the project. I. This chapter does not prevent the contractor or subcontractor, at the time of application and certification to the owner or contractor, from withholding such application and certification to the owner or contractor for payment to the subcontractor, design professional or material supplier for unsatisfactory job progress, defective design professional services or construction work or materials not remedied, disputed design professional services, work or materials, third-party claims filed or reasonable evidence that a claim will be filed, failure of a subcontractor or design professional to make timely payments for design professional services, labor, equipment and materials, damage to the contractor or another subcontractor or design professional, reasonable evidence that the subcontract or design professional service contract cannot be completed for the unpaid balance of the subcontract or design professional service contract sum or a reasonable amount for retention that does not exceed the actual percentage retained by the owner. J. If any payment to a contractor is delayed after the date due, interest shall be paid at the rate of one percent per month or fraction of a month on such unpaid balance as may be due. K. If any periodic or final payment to a subcontractor or design professional is delayed by more than seven days after receipt of the periodic or final payment by the contractor or subcontractor, the contractor or subcontractor shall pay a subordinate subcontractor, design professional or material supplier interest, beginning on the eighth day, at the rate of one percent per month or a fraction of a month on such unpaid balance as may be due. L. If the owner directs the contractor in writing to perform changed or additional work in accordance with the construction contract and the contractor submits to the owner a reasonable cost estimate of the changed or additional work as may be required under the construction contract, pending a final determination of the total amount to be paid for the changed or additional work, the contractor may request payment for changed or additional work that the contractor completed during the preceding calendar month in monthly pay estimates based on the costs the contractor incurred to perform that work. The person designated in the construction contract to certify and approve the monthly payment estimate shall make an interim determination for purposes of approval for payment of those costs and certify for payment the amount that person determines to be reasonably justified. Either party may disagree with the interim determination and may assert a claim in accordance with the terms of the construction contract. M. If the owner directs the contractor in writing to perform changed or additional work in accordance with the construction contract and the contractor submits to the owner a reasonable cost estimate of the changed or additional work as may be required under the construction contract and if the contractor directs the subcontractor to perform the changed or additional work in accordance with the terms of the agreement between the contractor and subcontractor and the subcontractor submits to the contractor a reasonable cost estimate of the changed or additional work as may be required under the construction contract, pending a final determination of the total amount to be paid for the changed or additional work, the subcontractor may request payment from the contractor for the changed or additional work that the subcontractor completed during the preceding calendar month in monthly pay estimates based on the costs the subcontractor incurred to perform that work. Either party may disagree with the interim determination and may assert a claim in accordance with the terms of the agreement between the contractor and subcontractor. N. In any action or arbitration brought pursuant to this section, the successful party shall be awarded reasonable attorney fees and costs. O. For the purposes of this section: 1. Contractor does not include an agricultural improvement district formed pursuant to title 48, chapter 17, an electric cooperative formed pursuant to title 10, chapter 19, article 2 or 4 or a domestic water improvement district or a domestic wastewater improvement district formed pursuant to title 48, chapter 6, article 4. 2. "Costs" means the aggregate cost of all labor, materials, equipment and services. 3. "Design professional service contract" means a written agreement relating to the planning, design, construction administration, study, evaluation, consulting, inspection, surveying, mapping, material sampling, testing or other professional, scientific or technical services furnished in connection with any actual or proposed study, planning, survey, environmental remediation, construction, improvement, alteration, repair, maintenance, relocation, moving, demolition or excavation of a structure, street or roadway, appurtenance, facility, development or other improvement to land. 4. "Design professional services" means architect services, engineer services, land surveying services, geologist services or landscape architect services or any combination of those services performed by or under the supervision of a design professional or an employee or subconsultant of the design professional. 5. "Subconsultant" means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that has a direct contract with a design professional or another subconsultant to perform a portion of the work under a design professional service contract. 6. Subcontractor does not include an agricultural improvement district formed pursuant to title 48, chapter 17, an electric cooperative formed pursuant to title 10, chapter 19, article 2 or 4 or a domestic water improvement district or a domestic wastewater improvement district formed pursuant to title 48, chapter 6, article 4. 7. "Work" means the labor, materials, equipment and services to be provided by a contractor or subcontractor under a construction contract. 34-222. Surety bond required; suit on bond; limitations A. Except where specifically exempted by statute, before any contract is executed with any person for the construction, alteration, or repair of any public building, a public work or improvement of any county, city or town, or officer, board or commission thereof, and irrigation, power, electrical, drainage, flood protection and flood control districts, tax levying public improvement districts, and county or city improvement districts, the person shall furnish to the agent entering into such contract the following bonds that shall become binding on the award of the contract to such person, who, for purposes of this article, means "contractor": 1. A performance bond in an amount equal to the full contract amount conditioned on the faithful performance of the contract in accordance with plans, specifications and conditions thereof. Such bond shall be solely for the protection of the public body awarding the contract. 2. A payment bond in an amount equal to the full contract amount solely for the protection of claimants supplying labor or materials to the contractor or his subcontractors in the prosecution of the work provided for in such contract. B. Each such bond shall include a provision allowing the prevailing party in a suit on such bond to recover as a part of the judgment such reasonable attorneys' fees as may be fixed by a judge of the court. C. Notwithstanding any other statute, each such bond shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance and financial institutions pursuant to title 20, chapter 2, article 1. The bonds shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied. The bonds shall be payable to the public body concerned. D. Such bonds shall be filed in the office of the department, board, commission, institution, agency or other contracting body awarding the contract. E. It shall be illegal for the invitation for bids or any person acting or purporting to act on behalf of the contracting body to require that such bonds be furnished by a particular surety company or through a particular agent or broker. F. The conditions and provisions in the payment bond regarding the surety's obligations shall follow the following form: Now, therefore, the condition of this obligation is such, that if the principal promptly pays all monies due to all persons supplying labor or materials to the principal or the principal's subcontractors in the prosecution of the work provided for in the contract, this obligation is void. Otherwise it remains in full force and effect. Provided, however, that this bond is executed pursuant to the provisions of title 34, chapter 2, article 2, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions, conditions and limitations of title 34, chapter 2, article 2, Arizona Revised Statutes, to the same extent as if they were copied at length in this agreement. The prevailing party in a suit on this bond shall recover as a part of the judgment reasonable attorney fees that may be fixed by a judge of the court. G. The conditions and provisions in the performance bond regarding the surety's obligations shall follow the following form: Now, therefore, the condition of this obligation is such, that if the principal faithfully performs and fulfills all of the undertakings, covenants, terms, conditions and agreements of the contract during the original term of the contract and any extension of the contract, with or without notice to the surety, and during the life of any guaranty required under the contract, and also performs and fulfills all of the undertakings, covenants, terms, conditions and agreements of all duly authorized modifications of the contract that may hereafter be made, notice of which modifications to the surety being hereby waived, the above obligation is void. Otherwise it remains in full force and effect. Provided, however, that this bond is executed pursuant to the provisions of title 34, chapter 2, article 2, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions of title 34, chapter 2, article 2, Arizona Revised Statutes, to the extent as if it were copied at length in this agreement. The prevailing party in a suit on this bond shall recover as part of the judgment reasonable attorney fees that may be fixed by a judge of the court. H. If the prime contract or specifications require any persons supplying labor or materials in the prosecution of the work to furnish payment or performance bonds, these bonds shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance and financial institutions pursuant to title 20, chapter 2, article 1. Notwithstanding the provisions of any other statute, the bonds shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied. I. All bonds given by a contractor and surety pursuant to the provisions of this article, regardless of their actual form, will be deemed by law to be the form required and set forth in this article and no other. 34-223. Payment bond provisions A. Every claimant who has furnished labor or material in the prosecution of the work provided for in a contract for which a payment bond is furnished under section 34-222, and who has not been paid in full for the labor or material for the work before the expiration of a period of ninety days after the day on which the last of the labor was done or performed by the claimant or material was furnished or supplied by the claimant for which the claim is made, shall have the right to sue on the payment bond for the amount, or the balance of the amount, unpaid at the time of institution of the suit and to prosecute the action to final judgment for the sum or sums justly due the claimant, and have execution thereon, provided however that any claimant who has a direct contractual relationship with a subcontractor of the contractor furnishing the payment bond but not a contractual relationship express or implied with the contractor has a right of action on the payment bond on giving the contractor the following notices: 1. A written preliminary twenty-day notice, as provided for in section 33-992.01, subsection C, paragraphs 1, 2, 3 and 4 and subsections E, F and H. 2. A written ninety-day notice given within ninety days after the date on which the claimant performed the last of the labor or furnished or supplied the last of the material for which the claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. The ninety-day notice shall be given by any means that provides written, third-party verification of delivery to the contractor at any place the contractor maintains an office or conducts business, or at the contractor's residence. B. Every suit instituted under this section shall be brought in the name of the claimant but no such suit shall be commenced after the expiration of one year after the date on which the last of the labor was performed or materials were supplied by the person bringing this suit. C. On written application, the contracting body and the agent in charge of its office shall furnish to any person that states the person has supplied labor or materials for the work, and payment for the labor or materials for the work has not been made, or is being sued on the bond, or is the surety on the bond, a certified copy of the bond and the contract for which the bond was given. The copy is prima facie evidence of the contents, execution and delivery of the original. Applicants shall pay for the certified copies and the reasonable fees that the contracting body or the agent in charge of its office fixes to cover the actual cost of preparation of the certified copies. 34-224. Effect of article on prior contracts This article shall not apply to any contract awarded pursuant to any invitation for bids issued on or before the effective date of this article or to any person or bonds in respect to any such contract, but rights, duties and obligations of parties arising under, or incidental to, bonds executed prior to such effective date shall continue to be governed by the prior statutes applicable to such bonds. 34-225. Governmental mall; private and public development; construction contracts; limitations A political subdivision of this state may not authorize, pursuant to its planning and zoning or other powers, the private or public development of structures or sites or award a construction contract for new buildings or improvements within the governmental mall composed of the area described in section 41-1362 without a request for permission from, and written approval by, the director of the department of administration. 34-226. State preemption; indemnity agreements in construction and design professional services contracts void; definitions A. The regulation and use of indemnity agreements in construction and design professional services contracts are of statewide concern. The regulation of indemnity agreements in construction and design professional services contracts pursuant to this section and their use are not subject to further regulation by a county, city, town or other political subdivision of this state. B. If a contractor, subcontractor or design professional provides work, services, studies, planning, surveys or other preparatory work in connection with a public building or improvement, the contracting agent may require that the construction contract or subcontract or design professional services contract or subcontract require the contractor, subcontractor or design professional to indemnify and hold harmless the agent, and its officers and employees, from liabilities, damages, losses and costs, including reasonable attorney fees and court costs, but only to the extent caused by the negligence, recklessness or intentional wrongful conduct of such contractor, subcontractor or design professional or other persons employed or used by such contractor, subcontractor or design professional in the performance of the contract or subcontract. A subcontract or design professional services subcontract entered into in connection with a public building or improvement may also require any subcontractor or design professional to indemnify and hold harmless the agent and that contractor, subcontractor, or design professional who executed the subcontract, and their respective owners, officers and employees, from liabilities, damages, losses and costs, including reasonable attorney fees and court costs, but only to the extent caused by negligence, recklessness or intentional wrongful conduct of the indemnifying subcontractor or design professional, or other persons employed or used by the indemnifying subcontractor or design professional in connection with the subcontract. Nothing in this section shall prohibit the requirement of insurance coverage that complies with this section, including the designation of any person as an additional insured on a general liability insurance policy or as a designated insured on an automobile liability policy provided in connection with a construction contract or subcontract or design professional services contract or subcontract. C. Except as provided in subsection B of this section, a construction contract or subcontract or design professional services contract or subcontract entered into in connection with a public building or improvement shall not require that the contractor, subcontractor or design professional defend, indemnify, insure or hold harmless the contracting agent or its employees, officers, directors, agents, contractors or subcontractors from any liability, damage, loss, claim, action or proceeding, and any contract provision that is not permitted by subsection B of this section is against the public policy of this state and is void. D. Notwithstanding subsection C of this section, a contractor who is responsible for the performance of a construction contract or subcontract may fully indemnify a person, firm, corporation, state or other agency for whose account the construction contract or subcontract is not being performed and that, as an accommodation, enters into an agreement with the contractor that permits the contractor to enter on or adjacent to its property to perform the construction contract or subcontract for others. E. If any provision or condition contained in this section conflicts with any provision of a contract between the state or a political subdivision of the state and the federal government, such provision of this section in conflict shall not apply to any construction contract or subcontract, or design professional services contract or subcontract to the extent such conflict exists, but all provisions of this section with which there is no such conflict shall apply. F. For the purposes of this section: 1. "Construction contract or subcontract" means a written or oral agreement relating to the construction, alteration, repair, maintenance, relocation, moving, demolition or excavation of a structure, street or roadway, appurtenance, facility, development or other improvement to land. 2. "Design professional services" means architect services, engineer services, land surveying services, geologist services or landscape architect services or any combination of those services performed by or under the supervision of a design professional or the bona fide employees of the design professional. 3. "Design professional services contract or subcontract" means a written or oral agreement relating to the planning, design, construction administration, study, evaluation, consulting, inspection, surveying, mapping, material sampling, testing or other professional, scientific or technical services furnished in connection with any actual or proposed study, planning, survey, environmental remediation, construction, improvement, alteration, repair, maintenance, relocation, moving, demolition or excavation of a structure, street or roadway, appurtenance, facility, development or other improvement to land. 4. "Other person employed or used" means a subcontractor to a contractor or design professional in any tier, or any other person or entity who performs work or design professional services, or provides labor, services, materials or equipment in connection with a construction contract or subcontract or design professional service contract or subcontract subject to this section. 34-227. Construction contracts; design professional services contracts; void provisions A provision, covenant, clause or understanding in, collateral to or affecting a construction contract or a design professional service contract, as defined in section 34-226, that makes the contract subject to the laws of another state or that requires any litigation, arbitration or other dispute resolution proceeding arising from the contract to be conducted in another state is against this state's public policy and is void and unenforceable. 34-241. Eligibility of contractors on public works; preferred contractors; eligibility of subcontractor; definitions A. In awarding the contract for work to be paid for from public funds, bids of contractors, who are licensed under title 32, chapter 1 or chapter 10, who have satisfactorily performed prior public contracts, and who have paid real or personal property taxes assessed under title 42 for at least two consecutive years in an amount of at least two hundred dollars per year immediately prior to submitting a bid on a plant and equipment such as may be used in the performance of the contract for which the bid is submitted, or on other real or personal property in the state equivalent in value to such plant or equipment, shall be deemed a better bid than the bid of a competing contractor who has not paid such taxes, whenever the bid of the competing contractor is less than five per cent lower, and the contractor making a bid, as provided by this section, which is deemed the better bid, shall be awarded the contract. The location of the home office of the contractor is not a factor in a determination of preference pursuant to this section. B. No contract awarded for public work shall be sublet to a subcontractor who has not paid taxes as required by this section. C. For purposes of this section: 1. "Satisfactorily performed prior public contracts" means that the contractor has completed a public works contract with any agent or with the United States or any of its instrumentalities. 2. "Two consecutive years immediately prior to submitting a bid" means the two tax years immediately preceding submitting the bid. One of the years may be the year in which the bid is submitted. If the second year is the year in which the bid is submitted, the tax payments must be for a complete tax year. Prorated tax payments do not qualify as payment for a complete tax year. Installment tax payments do not qualify as payment for a complete tax year until all installments are paid. 34-242. Preference for locally manufactured materials in awarding contracts for furnishing materials A. In awarding contracts for furnishing materials to construct a building or structure, or additions to or alterations of existing buildings or structures, either directly or through a contractor or subcontractor, to any political subdivision of this state, to be paid for from public funds, bidders who furnish materials produced or manufactured in this state shall be awarded the contract in preference to any competing bidder who furnishes materials not produced or manufactured in this state whenever the bid of the competing bidder, quality and suitability considered, is less than five per cent lower. B. Bidders may not claim a preference pursuant to both this section and section 34-243. Bidders claiming a preference pursuant to this section shall be awarded a preference to any competing bidder claiming a preference pursuant to section 34-243 whenever the bid of the competing bidder claiming a preference pursuant to section 34-243, quality and suitability considered, is less than five per cent lower, but in no case may any bidder receive more than five per cent total preference. 34-243. Preference for materials supplied by resident dealers in awarding contracts for furnishing materials In awarding contracts for furnishing materials to construct a building or structure, or additions to or alterations of existing buildings or structures, either directly or through a contractor, to any political subdivision of this state, to be paid for from public funds, the contract shall be awarded to bidders who furnish materials supplied by a dealer who is a resident of this state who has for not less than two successive years immediately prior to submitting the bid paid real or personal property taxes assessed under title 42 in preference to a competing bidder who furnishes materials not supplied by the resident dealer, whenever the bid of the competing bidder, quality and suitability considered, is less than five per cent lower than that of the resident dealer. 34-243.01. Effect of transaction privilege and use taxes in awarding contracts for furnishing any kind of equipment or materials or construction In awarding contracts for furnishing any kind of equipment or materials or construction to a political subdivision of this state, the amount of any applicable transaction privilege or use tax of a political subdivision of this state shall not be a factor in determining the lowest bidder whenever a competing bidder located outside this state is not subject to a transaction privilege or use tax of a political subdivision of this state. 34-244. Provisions inapplicable to federal aid contracts when federal law conflicts A. If any provision or condition of this article or section 34-301, 34-302 or 38-481 conflicts with any provision of federal law or any rule or regulation made under federal law pertaining to federal aid contracts, such provision or condition shall not apply on federal aid contracts to the extent that conflict exists, but all provisions or conditions of sections with which there is no conflict shall apply to federal aid contracts. B. Political subdivisions shall, when federal law, rules or regulations permit, enter into and perform any contract subject to the provisions or conditions of this article and sections 34-301, 34-302 and 38-481, and shall obligate from such funds the amount that the representatives of the federal government require to be deducted from the federal aid funds allotted to the contract by reason of the application of the provisions and conditions of such sections. 34-245. Provisions inapplicable to irrigation districts The provisions of this article and sections 34-301 and 34-302 shall not apply to irrigation districts. 34-246. Violations; classification An officer of the state or political subdivision thereof or a person acting under or for such officer, or a contractor or subcontractor of the state or political subdivision thereof, or any other person violating any provision of this article or sections 34-301, 34-302 or 38-481, is guilty of a class 2 misdemeanor. 34-251. Definitions In this article, unless the context otherwise requires: 1. "Governmental agency" includes this state, agencies, boards, commissions, departments, institutions and political subdivisions of this state, municipal corporations and all other public bodies which may enter into contracts for the construction or repair of highways, buildings or structures, or additions or alterations to highways, buildings or structures, or for the furnishing of equipment, labor or materials. 2. "Person" means any individual, partnership, corporation, association or other entity formed for the purpose of doing business as a contractor, subcontractor or supplier. 34-252. Contract, combination or conspiracy to restrain trade or commerce; violation; classification A. A person who enters into any contract, combination, conspiracy or other act in restraint of trade or commerce which is unlawful under title 44, chapter 10, article 1 is guilty of a class 4 felony if the contract, combination, conspiracy or other unlawful act in restraint of trade or commerce involves: 1. A contract between a governmental agency and a person for the purchase of equipment, labor or materials or for the construction or repair of highways, buildings or structures, or additions or alterations to highways, buildings or structures. 2. A subcontract with a contractor or proposed contractor for a governmental agency for the purchase of equipment, labor or materials or for the construction or repair of highways, buildings or structures, or additions or alterations to highways, buildings or structures. B. This section does not limit or modify section 44-1416. 34-253. Noncollusion affidavits A governmental agency may require noncollusion affidavits from all bidders. The governmental agency shall specify the requirement for noncollusion affidavits in the call for bids. Failure of any bidder to provide an affidavit to the governmental agency is grounds for disqualification of his bid. 34-254. Civil damages; limitation A. Any governmental agency entering into a contract which is or was the subject of a contract, combination, conspiracy or other act prohibited by title 44, chapter 10, article 1 has a right of action against the parties to the contract, combination, conspiracy or other act to recover damages as provided in this section. The governmental agency may proceed jointly or severally in a civil action against any one or more of the parties for recovery of the full amount of the damages. There is no right to contribution among parties not named as defendants by the governmental agency. B. At the election of the governmental agency, the agency may recover either the actual damages trebled or ten per cent of the contract price trebled and as determined by the court taxable costs, reasonable attorney's fees and expenses. C. The cause of action accrues at the time of discovery by the governmental agency of the unlawful contract, combination, conspiracy or other unlawful act. The agency shall bring the action within four years of the date of accrual of the cause of action. 34-255. Convicted persons; contracting employment; prohibition A. For a period of up to three years from the date of conviction for a violation of section 34-252 as determined by the court, the person convicted is not eligible to enter into a contract with any governmental agency, either directly as a contractor or supplier or indirectly as a subcontractor. B. If a person is convicted of violating section 34-252, the court may, for a period of up to three years from the date of conviction, prescribe that the person not be employed by a corporation as an officer, director, employee or agent if the corporaton engages in public work contracts with a governmental agency, either directly as a contractor or supplier or indirectly as a subcontractor. 34-256. Persons convicted; service prohibition A person is not eligible to serve as registrar of contractors or as a member of the contractors' recovery fund board who was convicted of a crime involving one of the following: 1. A contract, combination, conspiracy or other act in restraint of trade in the courts of this state in violation of section 34-252 or title 44, chapter 10, article 1, or similar charges in any federal court or a court in any other state. 2. Bribery in the courts of this state, or similar charges in any federal court or a court in any other state. 34-257. Suspension from bidding Any governmental agency may suspend for a period of up to three years from the date of conviction any person and any subsidiary or affiliate of any person from further bidding to the agency and from being a subcontractor to a contractor with the agency or a supplier to the agency if that person or any officer, director, employee or agent of that person is convicted of entering into any contract, combination, conspiracy or other unlawful act in restraint of trade or commerce in the courts in this state, or of similar charges in any federal court or a court in any other state. 34-258. Enforcement jurisdiction The attorney general or a county attorney has jurisdiction to enforce the provisions of this article.