3896S.03C
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SENATE COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 758
AN ACT
To repeal sections 8.250, 8.260, 34.055, 34.057,
34.058, 34.100, 34.203, 34.206, 34.209, 34.212,
34.217, and 34.218, RSMo, and to enact in lieu thereof
thirteen new sections relating to bidding procedures
for certain public projects for facilities.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 8.250, 8.260, 34.055, 34.057, 34.058,
34.100, 34.203, 34.206, 34.209, 34.212, 34.217, and 34.218,
RSMo, are repealed and thirteen new sections enacted in lieu
thereof, to be known as sections 8.250, 8.260, 8.690, 8.960,
8.962, 8.964, 8.966, 8.968, 8.970, 8.972, 8.974, 34.055, and
34.100, to read as follows:
8.250. 1. "Project" for the purposes of this chapter
means the labor or material necessary for the construction,
renovation, or repair of improvements to real property so
that the work, when complete, shall be ready for service for
its intended purpose and shall require no other work to be a
completed system or component.
2. All contracts for projects, the cost of which
exceeds twenty-five thousand dollars, en tered into by any
city containing five hundred thousand inhabitants or more
shall be let to the lowest, responsive, responsible bidder
or bidders after notice and publication of an advertisement
for five days in a daily newspaper in the county where th e
work is located, or at least twice over a period of ten days
or more in a newspaper in the county where the work is
located, and in two daily newspapers in the state which do
not have less than fifty thousand daily circulation, and by
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such other means as are determined to be most likely to
reach potential bidders.
3. All contracts for projects, the cost of which
exceeds one hundred thousand dollars, entered into by an
officer or agency of this state shall be let to the lowest,
responsive, responsible bidder or bidders based on
preestablished criteria after [notice and] publication of an
[advertisement] invitation to bid for [five days in a daily
newspaper in the county where the work is located, or at
least twice over] a period of ten days or more in a
newspaper in the county where the work is located [and], in
one daily newspaper in the state which does not have less
than fifty thousand daily circulation , and [by such other
means as determined to be most likely to reach potential
bidders] on the website of the officer or agency or through
an electronic procurement system . For all contracts for
projects between twenty -five thousand dollars and one
hundred thousand dollars, a minimum of three contractors
shall be solicited with th e award being made to the lowest
responsive, responsible bidder based on preestablished
criteria.
4. The number of such public bids shall not be
restricted or curtailed, but shall be open to all persons
complying with the terms upon which the bid s are requested
or solicited unless debarred for cause. No contract shall
be awarded when the amount appropriated for same is not
sufficient to complete the work ready for service.
5. Dividing a project into component labor or material
allocations for the purpose of avoiding bidding or
advertising provisions required by this section is
specifically prohibited.
8.260. All appropriations made by the general assembly
amounting to one hundred thousand dollars or more for the
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construction, renovation, or repair of facilities shall be
expended in the following manner:
(1) The agency requesting payment shall provide the
commissioner of administration with satisfactory evidence
that a bona fide contract, procured in accordanc e with all
applicable procedures, exists for the work for which payment
is requested;
(2) All requests for payment shall be approved by the
architect or engineer registered to practice in the state of
Missouri who designed the project or who has been assigned
to oversee it;
(3) In order to guarantee completion of the contract,
the agency or officer shall retain a portion of the contract
value in accordance with the provisions of section [34.057]
8.960;
(4) A contractor may be paid for materials delivered
to the site or to a storage facility approved by the
director of the division of facilities management, design
and construction as having adequate safeguards against loss,
theft or conversion.
In no case shall the amount contracted for exceed the amount
appropriated by the general assembly for the purpose.
8.690. Any public owner, as defined in section 8.675,
shall have the authority to utilize the construction manager -
at-risk delivery method, as provided for in section 67.5050,
or the design-build delivery method, as provided for in
section 67.5060, except that such public owner shall:
(1) In addition to the authority granted under
paragraph (b) of subdivision (3) of subsection 1 of section
67.5060, to use the design-build method for noncivil
projects in excess of seven million dollars, also have the
authority to use such design -build delivery method for
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noncivil works projects valued at less than one million
dollars; and
(2) Not be subject to subsection 15 of section 67.5050
and subsection 22 of section 67.5060.
[34.057.] 8.960. 1. Unless contrary to any federal
funding requirements or unless funds from a state grant are
not timely received by the contracting public muni cipality
but notwithstanding any other law to the contrary, all
public works contracts made and awarded by the appropriate
officer, board or agency of the state or of a political
subdivision of the state or of any district therein,
including any municipality, county and any board referred to
as the public owner, for construction, reconstruction or
alteration of any public works project, shall provide for
prompt payment by the public owner to the contractor, and
any professional engineer, architect, landscape architect,
or land surveyor, as well as prompt payment by the
contractor to the subcontractor and material supplier in
accordance with the following:
(1) A public owner shall make progress payments to the
contractor and any professiona l engineer, architect,
landscape architect, or land surveyor on at least a monthly
basis as the work progresses, or, on a lump sum basis
according to the terms of the lump sum contract. Except in
the case of lump sum contracts, payments shall be based upon
estimates prepared at least monthly of work performed and
material delivered, as determined by the project architect
or engineer. Retainage withheld on any construction
contract or subcontract for public works projects shall not
exceed five percent of the value of the contract or
subcontract. If the contractor is not required to obtain a
bond under section 107.170 because the cost of the public
works contract is not estimated to exceed fifty thousand
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dollars, the public owner may withhold r etainage on the
public works project in an amount not to exceed ten percent
of the value of the contract or subcontract. The public
owner shall pay the contractor the amount due, less a
retainage, within thirty days following the latter of the
following:
(a) The date of delivery of materials or construction
services purchased;
(b) The date, as designated by the public owner, upon
which the invoice is duly delivered to the person or place
designated by the public owner; or
(c) In those instances in which the contractor
approves the public owner's estimate, the date upon which
such notice of approval is duly delivered to the person or
place designated by the public owner;
(2) Payments shall be considered received within the
context of this section when they are duly posted with the
United States Postal Service or other agreed upon delivery
service or when they are hand -delivered to an authorized
person or place as agreed to by the contracting parties;
(3) If, in the discretion of the owner and the project
architect or engineer and the contractor, it is determined
that a subcontractor's performance has been completed and
the subcontractor can be released prior to substantial
completion of the public works contract without risk to the
public owner, the contractor shall request such adjustment
in retainage, if any, from the public owner as necessary to
enable the contractor to pay the subcontractor in full. The
public owner may reduce or eliminate retainage on a ny
contract payment if, in the public owner's opinion, the work
is proceeding satisfactorily. If retainage is released and
there are any remaining minor items to be completed, an
amount equal to one hundred fifty percent of the value of
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each item as determined by the public owner's duly
authorized representatives shall be withheld until such item
or items are completed;
(4) The public owner shall pay at least ninety -eight
percent of the retainage, less any offsets or deductions
authorized in the contract or otherwise authorized by law,
to the contractor. The contractor shall pay the
subcontractor or supplier after substantial completion of
the contract work and acceptance by the public owner's
authorized contract representative, or as ma y otherwise be
provided by the contract specifications for state highway,
road or bridge projects administered by the state highways
and transportation commission. Such payment shall be made
within thirty days after acceptance, and the invoice and all
other appropriate documentation and certifications in
complete and acceptable form are provided, as may be
required by the contract documents. If the public owner or
the owner's representative determines the work is not
substantially completed and a ccepted, then the owner or the
owner's representative shall provide a written explanation
of why the work is not considered substantially completed
and accepted within fourteen calendar days to the
contractor, who shall then provide such notice to the
subcontractor or suppliers responsible for such work. If
such written explanation is not given by the public body,
the public body shall pay at least ninety -eight percent of
the retainage within thirty calendar days. If at that time
there are any remaining minor items to be completed, an
amount equal to one hundred fifty percent of the value of
each item as determined by the public owner's representative
shall be withheld until such items are completed;
(5) All estimates or invoices for supp lies and
services purchased, approved and processed, or final
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payments, shall be paid promptly and shall be subject to
late payment charges provided in this section. Except as
provided in subsection 4 of this section, if the contractor
has not been paid within thirty days as set forth in
subdivision (1) of subsection 1 of this section, the
contracting agency shall pay the contractor, in addition to
the payment due him, interest at the rate of one and one -
half percent per month calculated from the expiration of the
thirty-day period until fully paid;
(6) When a contractor receives any payment, the
contractor shall pay each subcontractor and material
supplier in proportion to the work completed by each
subcontractor and material supplier hi s application less any
retention not to exceed five percent. If the contractor
receives less than the full payment due under the public
construction contract, the contractor shall be obligated to
disburse on a pro rata basis those funds received, with the
contractor, subcontractors and material suppliers each
receiving a prorated portion based on the amount of
payment. When, however, the public owner does not release
the full payment due under the contract because there are
specific areas of work or materials he is rejecting or
because he has otherwise determined such areas are not
suitable for payment then those specific subcontractors or
suppliers involved shall not be paid for that portion of the
work rejected or deemed not suitable for pay ment; provided
the public owner or the owner's representative gives a
written explanation to the contractor, subcontractor, or
supplier involved as to why the work or supplies were
rejected or deemed not suitable for payment, and all other
subcontractors and suppliers shall be paid in full;
(7) If the contractor, without reasonable cause, fails
to make any payment to his subcontractors and material
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suppliers within fifteen days after receipt of payment under
the public construction contract, t he contractor shall pay
to his subcontractors and material suppliers, in addition to
the payment due them, interest in the amount of one and one -
half percent per month, calculated from the expiration of
the fifteen-day period until fully paid. This subdivision
shall also apply to any payments made by subcontractors and
material suppliers to their subcontractors and material
suppliers and to all payments made to lower tier
subcontractors and material suppliers throughout the
contracting chain;
(8) The public owner shall make final payment of all
moneys owed to the contractor, including any retainage
withheld under subdivision (4) of this subsection, less any
offsets or deductions authorized in the contract or
otherwise authorized by law, w ithin thirty days of the due
date. Final payment shall be considered due upon the
earliest of the following events:
(a) Completion of the project and filing with the
owner of all required documentation and certifications, in
complete and accepta ble form, in accordance with the terms
and conditions of the contract;
(b) The project is certified by the architect or
engineer authorized to make such certification on behalf of
the owner as having been completed, including the filing of
all documentation and certifications required by the
contract, in complete and acceptable form; or
(c) The project is certified by the contracting
authority as having been completed, including the filing of
all documentation and certifications required by the
contract, in complete and acceptable form.
2. Nothing in this section shall prevent the
contractor or subcontractor, at the time of application or
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certification to the public owner or contractor, from
withholding such applications or certi fications to the owner
or contractor for payment to the subcontractor or material
supplier. Amounts intended to be withheld shall not be
included in such applications or certifications to the
public owner or contractor. Reasons for withholding such
applications or certifications shall include, but not be
limited to, the following: unsatisfactory job progress;
defective construction work or material not remedied;
disputed work; failure to comply with other material
provisions of the contract; thi rd-party claims filed or
reasonable evidence that a claim will be filed; failure of
the subcontractor to make timely payments for labor,
equipment and materials; damage to a contractor or another
subcontractor or material supplier; reasonable evidence that
the contract cannot be completed for the unpaid balance of
the subcontract sum or a reasonable amount for retention,
not to exceed the initial percentage retained by the owner.
3. Should the contractor determine, after application
or certification has been made and after payment has been
received from the public owner, or after payment has been
received by a contractor based upon the public owner's
estimate of materials in place and work performed as
provided by contract, that all or a po rtion of the moneys
needs to be withheld from a specific subcontractor or
material supplier for any of the reasons enumerated in this
section, and such moneys are withheld from such
subcontractor or material supplier, then such undistributed
amounts shall be specifically identified in writing and
deducted from the next application or certification made to
the public owner or from the next estimate by the public
owner of payment due the contractor, until a resolution of
the matter has been achieved. Disputes shall be resolved in
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accordance with the terms of the contract documents. Upon
such resolution the amounts withheld by the contractor from
the subcontractor or material supplier shall be included in
the next application or certification mad e to the public
owner or the next estimate by the public owner and shall be
paid promptly in accordance with the provisions of this
section. This subsection shall also apply to applications
or certifications made by subcontractors or material
suppliers to the contractor and throughout the various tiers
of the contracting chain.
4. The contracts which provide for payments to the
contractor based upon the public owner's estimate of
materials in place and work performed rather than
applications or certifications submitted by the contractor,
the public owner shall pay the contractor within thirty days
following the date upon which the estimate is required by
contract to be completed by the public owner, the amount due
less a retainage not to exceed five percent. All such
estimates by the public owner shall be paid promptly and
shall be subject to late payment charges as provided in this
subsection. After the thirtieth day following the date upon
which the estimate is required by contract to be completed
by the public owner, the contracting agency shall pay the
contractor, in addition to the payment due him, interest at
a rate of one and one -half percent per month calculated from
the expiration of the thirty -day period until fully paid .
5. The public owner shall pay or cause to be paid to
any professional engineer, architect, landscape architect,
or land surveyor the amount due within thirty days following
the receipt of an invoice prepared and submitted in
accordance with the contract terms. In addition to the
payment due, the contracting agency shall pay interest at
the rate of one and one -half percent per month calculated
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from the expiration of the thirty -day period until fully
paid.
6. Nothing in this section sha ll prevent the owner
from withholding payment or final payment from the
contractor, or a subcontractor or material supplier.
Reasons for withholding payment or final payment shall
include, but not be limited to, the following: liquidated
damages; unsatisfactory job progress; defective construction
work or material not remedied; disputed work; failure to
comply with any material provision of the contract; third
party claims filed or reasonable evidence that a claim will
be filed; failure to make t imely payments for labor,
equipment or materials; damage to a contractor,
subcontractor or material supplier; reasonable evidence that
a subcontractor or material supplier cannot be fully
compensated under its contract with the contractor for the
unpaid balance of the contract sum; or citation by the
enforcing authority for acts of the contractor or
subcontractor which do not comply with any material
provision of the contract and which result in a violation of
any federal, state or local law, regul ation or ordinance
applicable to that project causing additional costs or
damages to the owner.
7. Nothing in this section shall be construed to
require direct payment by a public owner to a subcontractor
or supplier, except in the case of the de fault, as
determined by a court, of the contractor on the contract
with the public owner where no performance or payment bond
is required or where the surety fails to execute its duties,
as determined by a court.
8. Notwithstanding any other prov isions in this
section to the contrary, no late payment interest shall be
due and owing for payments which are withheld in good faith
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for reasonable cause pursuant to subsections 2, 5, and 6 of
this section. If it is determined by a court of competent
jurisdiction that a payment which was withheld pursuant to
subsections 2, 5, and 6 of this section was not withheld in
good faith for reasonable cause, the court may impose
interest at the rate of one and one -half percent per month
calculated from the date of the invoice and may, in its
discretion, award reasonable attorney fees to the prevailing
party. In any civil action or part of a civil action
brought pursuant to this section, if a court determines
after a hearing for such purpose that the c ause was
initiated, or a defense was asserted, or a motion was filed,
or any proceeding therein was done frivolously and in bad
faith, the court shall require the party who initiated such
cause, asserted such defense, filed such motion, or caused
such proceeding to be had to pay the other party named in
such action the amount of the costs attributable thereto and
reasonable expenses incurred by such party, including
reasonable attorney fees.
[34.058.] 8.962. 1. As used in this sect ion, the term
"public works contract" means a contract of the state,
county, city and other political subdivisions of the state,
except the Missouri transportation department, for the
construction, alteration, repair, or maintenance of any
building, structure, highway, bridge, viaduct, pipeline,
public works, or any other works dealing with construction,
which shall include, but need not be limited to, moving,
demolition, or excavation performed in conjunction with such
work.
2. Any clause in a public works contract that purports
to waive, release, or extinguish the rights of a contractor
to recover costs or damages, or obtain an equitable
adjustment, for delays in performing such contract, if such
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delay is caused in whole, or in part, by acts or omissions
within the control of the contracting public entity or
persons acting on behalf thereof, is against public policy
and is void and unenforceable.
3. Subsection 2 of this section is not intended to
render void any contract provisi on of a public works
contract that:
(1) Precludes a contractor from recovering that
portion of delay costs caused by the acts or omissions of
the contractor or its agents;
(2) Requires notice of any delay by the party
responsible for such d elay;
(3) Provides for reasonable liquidated damages; or
(4) Provides for arbitration or any other procedure
designed to settle contract disputes.
[34.203.] 8.964. The provisions of sections [34.203 to
34.216] 8.964 to 8.974 shall be known and may be cited as
the "Fairness in Public Construction Act".
[34.206.] 8.966. The purpose of sections [34.203 to
34.216*] 8.964 to 8.974 is to fulfill the state's
proprietary objectives in maintaining and promoting the
economical, nondiscriminatory, and efficient expenditures of
public funds in connection with publicly funded or assisted
construction projects. Nothing in sections [34.203 to
34.216*] 8.964 to 8.974 shall prohibit employers or other
parties covered by the National Labor Relations Act from
entering into agreements or engaging in any other activity
arguably protected by law, nor shall any aspect of sections
[34.203 to 34.216*] 8.964 to 8.974 be interpreted in such a
way as to interfere with the labo r relations of parties
covered by the National Labor Relations Act.
[34.209.] 8.968. 1. The state, any agency of the
state, any political subdivision of the state, or any
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instrumentality thereof, when engaged in procuring or
letting contracts for construction, repair, remodeling, or
demolition of a facility shall ensure that bid
specification, project agreements, and other controlling
documents entered into, required, or subject to approval by
the state, agency, political subdivisi on, or instrumentality
do not:
(1) Require or prohibit bidders, offerors,
contractors, or subcontractors to enter into or adhere to
agreements with one or more labor organizations on the same
or related projects; or
(2) Discriminate against , encourage, or give
preferential treatment to bidders, offerors, contractors, or
subcontractors for:
(a) Entering or refusing to enter agreements with one
or more labor organizations on the same or related
construction projects; or
(b) Remaining or refusing to remain signatory with one
or more labor organizations on the same or related
construction projects.
2. Nothing in this section shall be construed to
prohibit the state, any agency of the state, any political
subdivision of the state, or any instrumentality thereof
from requiring bidders, offerors, contractors, or
subcontractors, as a condition of receiving work or
submitting a bid, to test its workers and employees for the
presence of illegal drugs.
[34.212.] 8.970. 1. The state, any agency of the
state, any political subdivision of the state, or any
instrumentality thereof shall not issue or award grants, tax
abatements, or tax credits or enter into cooperative
agreements for construction projects or for the improvement,
maintenance, or renovation of real property or fixtures, a
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condition of which requires that bid specifications, project
agreements, or other controlling documents pertaining to the
grant, tax abatement, tax credit, or cooperative agreement
contain any of the elements specified in section [34.209]
8.968.
2. The state, any agency of the state, any political
subdivision, or any instrumentality thereof shall exercise
such authority as may be required to preclude a grant, tax
abatement, or tax credit recipient or party to a cooperative
agreement from imposing any of the elements specified in
section [34.209] 8.968 in connection with any grant or
cooperative agreement awarded or entered into. Nothing in
sections [34.203 to 34.217] 8.964 to 8.974 shall prohibit
contractors or subcontractors from voluntarily entering into
agreements described in section [34.209] 8.968.
[34.217.] 8.972. Notwithstanding the provisions of
section 1.140, the provisions of sect ions 290.095 and
290.250 and sections [34.203 to 34.216*] 8.964 to 8.974
shall not be severable. In the event a court of competent
jurisdiction rules that any part of this act is
unenforceable, the entire act shall be rendered null and
void.
[34.218.] 8.974. 1. Any entity which violates the
provisions of sections [34.203 to 34.217] 8.964 to 8.974
shall be liable to the person affected for such equitable
relief as may be appropriate, including reasonable
attorney's fees.
2. Any entity which violates the provisions of
sections [34.203 to 34.217] 8.964 to 8.974 shall not be
eligible for any state funding or tax credits issued by the
state for two years.
3. The prosecuting attorney or circuit attorney with
jurisdiction over the location where a violation of sections
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[34.203 to 34.217] 8.964 to 8.974 occurs, or the attorney
general of this state, shall investigate complaints of
violation of such sections, and use all means at their
command to ensure the effective enf orcement of this section.
34.055. 1. Except as otherwise provided in section
[34.057] 8.960, all invoices for supplies and services
purchased by the state, duly approved and processed, shall
be subject to interest charges or late payme nt charges as
provided in this section.
2. After the forty-fifth day following the later of
the date of delivery of the supplies and services or the
date upon which the invoice is duly approved and processed,
interest retroactive to the thirtieth day shall be paid on
any unpaid balance, except balances for services provided by
a gas corporation, electrical corporation, water
corporation, or sewer corporation which has received
authorization from the public service commission to impose
late payment charges on delinquent utility bills, upon
application of the vendor thereof. The rate of such
interest shall be three percentage points above the average
predominant prime rate quoted by commercial banks to large
businesses, as determined by the Board of Governors of the
Federal Reserve System.
3. The state shall be liable for late payment charges
on any delinquent bill for services purchased by the state
from a gas corporation, electrical corporation, water
corporation, or sewer corpor ation which has received
authorization from the public service commission to impose
late payment charges on delinquent utility bills. The rate
of such late payment charges shall be as established for
each such corporation by order of the public servic e
commission, but bills rendered to the state shall not be
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considered delinquent until thirty days after rendition of
the bill by the corporation.
4. Any such interest charges or late payment charges
shall be paid from appropriations which were m ade for the
fiscal year in which the supplies or services were delivered
to the respective departments purchasing such supplies or
services. The commissioner of administration shall be
responsible for the timely implementation of this section
and all officers, departments, institutions and agencies of
state government shall fully cooperate with the commissioner
of administration in the implementation of this section. No
late payment penalty shall be assessed against, nor payable
by, the state unless pursuant to the provisions of this
section.
5. Notwithstanding any other provision of this
section, recipients of funds from the low -income energy
assistance program shall be exempt from interest charges
imposed by such section for the durati on of the recipient's
participation in the program.
34.100. The commissioner of administration may, when
in the commissioner's best judgment it is in the best
interests of the state, delegate the commissioner's
procurement authority pu rsuant to this chapter to an
individual department; provided, however, that each instance
of single feasible source purchasing authority in excess of
[five] ten thousand dollars under section 34.044 must be
specifically delegated by the commissioner. The delegation
may allow departments to negotiate in accordance with
section 34.042 the purchase of services for patients,
residents or clients with funds appropriated for this
purpose. In accepting this delegated authority the
department acknowledge s its ability to, and agrees to,
fulfill all of the requirements of this chapter in making
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purchases and entering into contracts and keeping records.
No claim for payment based upon any purchase under this
section shall be certified by the commissione r unless
accompanied by such documentation of compliance with the
provisions of this chapter as the commissioner may require.
Any department that fails to fulfill all such requirements
may have its delegated authority rescinded by the
commissioner of administration.