A.R.S. § 34-604 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 604
34-604 Procurement of multiple contracts for certain job-order-contracting construction services and certain professional services; definition
Status: in_force

34-604. Procurement of multiple contracts for certain job-order-contracting construction services and certain professional services; definition

A. Except for multiple contracts an agent procures pursuant to section 34-103, section 34-606 or this section, an agent shall not procure in a single procurement multiple contracts for construction services or professional services. In a procurement under this section, there is a single procurement process for all of the multiple contracts included in the procurement.  An agent may procure under this section:

1. Multiple contracts for similar job-order-contracting construction services to be awarded to separate persons or firms.

2. Multiple contracts for professional services to be awarded to separate persons or firms or to be awarded to a single person or firm as specified in the request for qualifications.

B. An agent shall provide notice of each procurement under this section and shall award contracts on the basis of demonstrated competence and qualifications for the type of professional services or construction services pursuant to the procedures prescribed in this section.

C. In a procurement pursuant to this section:

1. The following requirements apply:

(a) The agent and the selection committee shall not request or consider fees, price, man-hours or any other cost information at any point in the selection process under this subsection or under subsection D of this section, including the selection of persons or firms to be interviewed, the selection of persons or firms to be on a final list, in determining the order of preference of persons or firms on a final list or for any other purpose in the selection process.

(b) In determining the persons or firms to participate in any interviews and in determining the persons and firms to be on a final list and their order on a final list, the selection committee shall use and shall consider only the criteria and weighting of criteria specified by the agent for that purpose as provided in this subsection.  No other factors or criteria may be used in the evaluation, determinations and other actions.

(c) If the agent enters into the number of multiple contracts being procured for job-order-contracting construction services or professional services, a procurement under this section ends.  After that time the agent may not use the procurement or any existing final list in the procurement as the basis for entering into a replacement contract with any other person or firm that participated in the procurement.

(d) Notwithstanding any other provision of this section specifying the number of persons or firms to be interviewed, the number of persons or firms to be on a final list or any other numerical specification in this section:

(i) If a smaller number of persons or firms respond to the request for qualifications or if one or more persons or firms drop out of the procurement so that there is a smaller number of persons or firms participating in the procurement, the agent may elect to proceed with the procurement with the participating persons or firms if there are at least two participating responsive and responsible persons or firms.  Alternatively, the agent may elect to terminate the procurement.

(ii) As to a request for qualifications for professional services or job-order-contracting construction services to be negotiated pursuant to subsection E of this section only, if only one responsive and responsible person or firm responds to the request for qualifications or if one or more persons or firms drop out of the procurement so that only one responsive and responsible person or firm remains in the procurement, the agent may elect to proceed with the procurement with only one person or firm if the agent determines in writing that the fee negotiated pursuant to subsection E of this section is fair and reasonable and that either other prospective persons or firms had reasonable opportunity to respond or there is not adequate time for a resolicitation.

(iii) If a person or firm on a final list withdraws or is removed from the procurement and the selection committee determines that it is in the best interest of the agent, the selection committee may replace that person or firm on the final list with another person or firm that submitted qualifications in the procurement and that is selected by the selection committee as the next most qualified.

2. An agent shall issue a request for qualifications for each procurement and publish notice of the request for qualifications. 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 no more than ten days apart if it is a daily newspaper.  The publication shall include the fact that multiple contracts may or will be awarded, shall state the number of contracts that may or will be awarded and shall describe the professional services or job-order-contracting construction services to be performed under each contract. The request for qualifications shall:

(a) State the following information about the contracts that may or will be awarded:

(i) If the request for qualifications is for multiple contracts for similar job-order-contracting construction services to be awarded to separate persons or firms, that multiple contracts for similar job-order-contracting construction services may or will be awarded, the number of contracts that may or will be awarded, the services to be performed under each of the multiple contracts and that each of the multiple contracts will be awarded to a separate person or firm.

(ii) If the request for qualifications is for multiple contracts for professional services, that multiple contracts for professional services may or will be awarded, the number of contracts that may or will be awarded, the services to be performed under each of the multiple contracts and either that each of the multiple contracts will be awarded to a separate person or firm or that all of the multiple contracts will be awarded to the same person or firm.

(b) State as to final lists:

(i) In a procurement of multiple contracts for professional services to be awarded to a single person or firm, that there will be a single final list of at least three but no more than five persons or firms.

(ii) In a procurement for multiple contracts for similar job-order-contracting construction services to be awarded to separate persons or firms or in a procurement for multiple contracts for similar professional services to be awarded to separate persons or firms, that there will be a single final list and the number of persons or firms on the final list, which shall be the sum of the number of contracts that may or will be awarded and a number that is determined by the agent and that is not more than five.

(iii) In a procurement for multiple contracts for different professional services to be awarded to separate persons or firms, that there will be a separate final list for each type of professional services and that the number of persons or firms on each final list will be the number of contracts that may or will be awarded for each type of professional services and a number that is determined by the agent and that is not more than five.

(c) As prescribed below, state the selection criteria and relative weight of the selection criteria to be used by the selection committee, except that in a procurement for multiple contracts for job-order-contracting construction services to be awarded to separate persons or firms one of the criteria shall be the person's or firm's subcontractor selection plan or procedures to implement the agent's subcontractor selection plan. All selection criteria pursuant to this subsection shall be factors that demonstrate competence and qualifications for the type of professional services or job-order-contracting construction services included in the procurement.  If:

(i) Interviews will be held, the request for qualifications shall state the selection criteria and the relative weight of the selection criteria to be used in selecting the persons or firms to be interviewed and the request for qualifications may state the selection criteria and relative weight of the selection criteria to be used in selecting the persons or firms on each final list and in determining their order on each final list.  The final list selection criteria and relative weights may be different than the selection criteria and relative weights used to determine the persons or firms to be interviewed. The request for qualifications also shall state whether the agent will select the persons or firms on the final list and their order on the final list solely through the results of the interview process or through the combined results of both the interview process and the evaluation of statements of qualifications and performance data submitted in response to the agent's request for qualifications.

(ii) Interviews will not be held, the request for qualifications shall state the selection criteria and relative weight of the selection criteria to be used in selecting the persons or firms on each final list and in determining their order on each final list.

(d) If the agent will hold interviews as part of the selection process:

(i) In a procurement of multiple contracts for professional services to be awarded to the same person or firm, state that interviews will be held and that the interviews will be with at least three but not more than five persons or firms.

(ii) In a procurement of multiple contracts for similar job-order-contracting construction services to be awarded to separate persons or firms or in a procurement of multiple contracts for similar professional services to be awarded to separate persons or firms, state that interviews will be held and that the interviews will be with a specified number of persons or firms.  The specified number shall be stated in the request for qualifications, shall be determined by the agent, and shall be the sum of the number of contracts that may or will be awarded and a number that is determined by the agent and that is not more than five.

(iii) In a procurement of multiple contracts for different professional services to be awarded to separate persons or firms, state that interviews will be held and that the interviews will be with a specified number of persons or firms. The specified number shall be stated in the request for qualifications, shall be determined by the agent, shall be at least three times the number of contracts that may or will be awarded and shall not be more than five times the number of contracts that may or will be awarded.

(e) For procurements of multiple contracts for job-order-contracting construction services to be awarded to separate persons or firms, include either:

(i) A requirement that each person or firm submit a proposed subcontractor selection plan and a requirement that the proposed subcontractor selection plan must select subcontractors based on qualifications alone or on a combination of qualifications and price and shall not select subcontractors based on price alone.

(ii) A subcontractor selection plan adopted by the agent that applies to the person or firm that is selected to perform the job-order-contracting construction services and that requires subcontractors to be selected based on qualifications alone or on a combination of qualifications and price and not based on price alone and a requirement that each person or firm must submit a description of the procedures it proposes to use to implement the agent's subcontractor selection plan.

(f) Include a description of the publicly available location of the agent's protest policy and procedures or, if the agent does not have a protest policy and procedures, a statement that the protest policy and procedures referred to in subsection J of this section apply to any protests in connection with the procurement.

3. An agent shall initiate an appropriately qualified selection committee for each request for qualifications.  The agent shall ensure that the selection committee members are competent to serve on the selection committee.  Each selection committee must include one employee of the agent or an agent representative who is appointed by the agent.  The same selection committee shall function as to all of the multiple contracts included in the procurement.  If the agent is procuring multiple contracts for professional services, the agent shall determine the number and qualifications of the selection committee members. A selection committee for the procurement of multiple contracts for job-order-contracting construction services shall have not more than seven members, except that if the contract involves the agent and additional governmental or private participants, the number of members of the selection committee shall be increased by one for each additional participant, except that the maximum number of members of the selection committee is nine. The selection committee for multiple contracts for job-order-contracting construction services shall include at least one person who is a senior management employee of a licensed contractor and one person who is an architect or engineer registered pursuant to section 32-121. These members may be employees of the agent or outside consultants. Outside contractors, architects and engineers serving on a selection committee shall not receive compensation from the agent for performing this service, but the agent may elect to reimburse outside contractors, architects and engineers for travel, lodging and other expenses incurred in connection with service on a selection committee.  A person who is a member of a selection committee shall not be a contractor under a contract awarded under the procurement or provide any professional services, construction, construction services, materials or other services under the contract.  The selection committee and the agent shall do the following:

(a) If interviews are specified in the request for qualifications:

(i) The selection committee shall determine the persons or firms to be interviewed by evaluating the statements of qualifications and performance data that are submitted in response to the agent's request for qualifications based only on the selection criteria and relative weight of the selection criteria stated in the request for qualifications to be used to determine the persons or firms to be interviewed.

(ii) If the selection criteria and relative weight of the selection criteria to be used by the selection committee to select the persons or firms on a final list and to determine their order on a final list are not included in the request for qualifications, before the interviews are held the agent shall distribute to the persons or firms to be interviewed the selection criteria and relative weight of the selection criteria to be used to select the persons or firms on each final list and to determine their order on each final list.  These selection criteria and relative weight may be different than the selection criteria and relative weight used to determine the persons or firms to be interviewed.

(iii) The selection committee shall conduct interviews with the number of persons or firms to be interviewed as stated in the request for qualifications regarding the professional services or job-order-contracting construction services and the relative methods of approach for furnishing the required professional services or job-order-contracting construction services.

(b) Based only on the selection criteria and relative weight of the selection criteria specified as provided in this subsection for selection of the persons or firms on each final list and their order on each final list, the selection committee shall select the persons or firms for each final list and in the case of a final list or final lists for multiple contracts that will be negotiated under subsection E of this section, rank the persons or firms on each final list in order of preference. If the procurement is for multiple contracts for different professional services to be awarded to separate persons or firms, there is a separate final list for each type of professional services, and if a person or firm submitted qualifications for more than one type of professional services, the person or firm may be on more than one final list.

(c) If the contract will be negotiated under subsection E of this section, before or at the same time as the agent notifies the persons or firms on each final list that they are on that final list, the agent shall send actual notice to the following persons or firms that they are not on that final list:

(i) If interviews were held, the other persons and firms interviewed for that final list.

(ii) If interviews were not held, the other persons and firms that made submittals for that final list.

(d) If the contract will be awarded under subsection F of this section, before or at the same time as the agent notifies the persons or firms on the final list that they are on the final list, the agent shall send actual notice to each of the following persons or firms that they are not on the final list or that other persons or firms are on the final list:

(i) If interviews were held, the other persons or firms interviewed.

(ii) If interviews were not held, the other persons or firms that made submittals.

D. An agent shall award multiple contracts specified in the request for qualifications as provided in subsection E or F of this section.

E. The agent shall conduct negotiations with persons or firms on the final list or final lists.  The negotiations shall include consideration of compensation and other contract terms that the agent determines to be fair and reasonable to the agent.  In making this decision, the agent shall take into account the estimated value, the scope, the complexity and the nature of the professional services or job-order-contracting construction services to be rendered.  If in a procurement under this section the agent terminates negotiations with a person or firm on a final list and commences negotiations with another person or firm on that final list, the agent shall not in that procurement recommence negotiations or enter into a contract for the job-order-contracting construction services or professional services covered by that final list with any person or firm on that final list with whom the agent has terminated negotiations.  If the procurement is for:

1. Multiple contracts for professional services to be awarded to a single person or firm, there is one final list and the agent shall enter into negotiations with the highest qualified person or firm on the final list.  If the agent is not able to negotiate a satisfactory contract with the highest qualified person or firm on the final list, at compensation and on other contract terms the agent determines to be fair and reasonable, the agent shall then undertake negotiations with the next most qualified person or firm on the final list in sequence until an agreement is reached or a determination is made to reject all persons or firms on the final list.

2. Multiple contracts for similar job-order-contracting construction services to be awarded to separate persons or firms or for multiple contracts for similar professional services to be awarded to separate persons or firms, there is one final list and the agent shall enter into separate negotiations for contracts with the number of the highest qualified persons or firms on the final list equal to the number of contracts to be awarded.  If the agent is not able to negotiate a satisfactory contract with a person or firm with whom the agent has commenced negotiations, the agent shall formally terminate negotiations with that person or firm.  The agent shall then undertake negotiations for a contract with the next most qualified person or firm on the final list with whom the agent is not then negotiating and with whom the agent has not previously negotiated in sequence until an agreement is reached for some or all of the multiple contracts included in the request for qualifications or a determination is made to reject all persons or firms on the final list.

3. Multiple contracts for different professional services to be awarded to separate persons or firms, there is a separate final list for each type of professional services and the agent shall enter into separate negotiations for contracts with the number of the highest qualified persons or firms on the final list equal to the number of contracts to be awarded.  If the agent is not able to negotiate a satisfactory contract with a person or firm with whom the agent has commenced negotiations, the agent shall formally terminate negotiations with that person or firm.  The agent shall then undertake negotiations for a contract with the next most qualified person or firm on the final list with whom the agent is not then negotiating and with whom the agent has not previously negotiated in sequence until an agreement is reached for some or all of the multiple contracts included in the request for qualifications or a determination is made to reject all persons or firms on the final list.

F. As an alternative to subsection E of this section, an agent may award multiple contracts for similar job-order-contracting construction services to be awarded to separate persons or firms as follows:

1. The agent shall use the selection committee appointed for the request for qualifications pursuant to subsection C of this section.

2. The agent shall issue a request for proposals to the persons or firms on the final list developed pursuant to subsection C of this section.

3. The request for proposals shall include:

(a) The agent's project schedule and project final budget for design and construction or life cycle budget for a procurement that includes maintenance services or operations services.

(b) A statement that the multiple contracts will be awarded to a specified number of offerors whose proposals receive the highest number of points under a scoring method.  The specified number of offerors will be the number of contracts included in the procurement.

(c) A description of the scoring method, including a list of the factors in the scoring method and the number of points allocated to each factor.  The factors in the scoring method may include:

(i) Offeror qualifications.

(ii) Offeror financial capacity.

(iii) Compliance with the agent's project schedule.

(iv) The price or life cycle price for procurements that include maintenance services, operations services or finance services.

(v) An offeror quality management plan.

(vi) Other evaluation factors that demonstrate competence and qualifications for the job-order-contracting construction services in the request for proposals as determined by the agent, if any.

(d) A requirement that each offeror submit separately a technical proposal and a price proposal and that the offeror's entire proposal be responsive to the requirements in the request for proposals.

(e) A statement that in applying the scoring method the selection committee will separately evaluate the technical proposal and the price proposal and will evaluate and score the technical proposal before opening the price proposal.

(f) If the agent conducts discussions pursuant to paragraph 5 of this subsection, a statement that discussions will be held and a requirement that each offeror submit a preliminary technical proposal before the discussions are held.

4. If the agent determines to conduct discussions pursuant to paragraph 5 of this subsection, each offeror shall submit a preliminary technical proposal to the agent before those discussions are held.

5. If determined by the agent and included by the agent in the request for proposals, the selection committee shall conduct discussions with all offerors that submit preliminary technical proposals. Discussions shall be for the purpose of clarification to ensure full understanding of, and responsiveness to, the solicitation requirements. Offerors shall be accorded fair treatment with respect to any opportunity for discussion and for clarification by the owner.  Revision of preliminary technical proposals shall be permitted after submission of preliminary technical proposals and before award for the purpose of obtaining best and final proposals. In conducting any discussions, information derived from proposals submitted by competing offerors shall not be disclosed to other competing offerors.

6. After completion of any discussions pursuant to paragraph 5 of this subsection or if no discussions are held, each offeror shall submit separately the offeror's final technical proposal and its price proposal.

7. Before opening any price proposal, the selection committee shall open the final technical proposals, evaluate the final technical proposals and score the final technical proposals using the scoring method in the request for proposals.  No other factors or criteria may be used in the evaluation and scoring.

8. After completion of the evaluation and scoring of all final technical proposals, the selection committee shall open the price proposals, evaluate the price proposals, score the price proposals and complete the scoring of the entire proposals using the scoring method in the request for proposals.  No other factors or criteria may be used in the evaluation and scoring.

9. The agent shall award the multiple contracts to the responsive and responsible offerors whose proposals receive the highest scores under the method of scoring in the request for proposals.  No other factors or criteria may be used in the evaluation.  Before or at the same time as the agent notifies the winning offerors that they have won, the agent shall send actual notice to each other offeror either that the offeror has not won or that other offerors have won.

10. The contracts file shall contain the basis on which the award is made, including at a minimum the information and documents required under subsection G of this section.

G. If the procurement has multiple final lists under subsection C of this section or multiple requests for proposals under subsection F of this section, the agent shall retain the items in paragraphs 1 and 2 of this subsection, as applicable, for each final list and each request for proposals procurement process.  At a minimum, the agent shall retain the following for each procurement under this section:

1. As to each final list under each request for qualifications procurement process under subsection C of this section:

(a) If interviews were not held:

(i) The submittal of the person or firm listed first on the final list and all submittals of each person or firm with which the agent enters into a contract.

(ii) The final list.

(iii) A list of the selection criteria and relative weight of selection criteria used to select the persons or firms for the final list and to determine their order on the final list.

(iv) A list that contains the name of each person or firm that submitted qualifications and that shows the person's or firm's final overall rank or score.

(v) A document or documents that show the final score or rank on each selection criteria of each person or firm that submitted qualifications and that support the final overall rankings and scores of the persons or firms that submitted qualifications. At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for individual selection committee members or any other form as determined by the agent.

(b) If interviews were held:

(i) All submittals of the person or firm listed first on the final list and all submittals of each person or firm with which the agent enters into a contract.

(ii) The final list.

(iii) A list of the selection criteria and relative weight of selection criteria used to select the persons or firms for the final list and to determine their order on the final list.

(iv) A list that contains the name of each person or firm that was interviewed and that shows the person's or firm's final overall rank or score.

(v) A document or documents that show the final score or rank on each selection criteria of each person or firm that was interviewed and that support the final overall rankings and scores of the persons or firms that were interviewed.  At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for individual selection committee members or any other form as determined by the agent.

(vi) A list of the selection criteria and relative weight of the selection criteria used to select the persons or firms for the short list to be interviewed.

(vii) A list that contains the name of each person or firm that submitted qualifications and that shows the person's or firm's final overall rank or score in the selection of the persons or firms to be on the short list to be interviewed.

(viii) A document or documents that show the final score or rank on each selection criteria of each person or firm that submitted qualifications and that support the final overall rankings and scores of the persons or firms that submitted qualifications in the selection of the persons or firms to be on the short list to be interviewed.  At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for the individual selection committee members or any other form as determined by the agent.

2. For each request for proposals procurement process under subsection F of this section:

(a) The entire proposal submitted by the person or firm that received the highest score in the scoring method in the request for proposals and the entire proposal submitted by each person or firm with which the agent enters into a contract.

(b) The description of the scoring method, the list of factors in the scoring method and the number of points allocated to each factor, all as included in the request for proposals.

(c) A list that contains the name of each offeror that submitted a proposal and that shows the offeror's final overall score.

(d) A document or documents that show the final score on each factor in the scoring method in the request for proposals of each offeror that submitted a proposal and that support the final overall scores of the offerors that submitted proposals. At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for individual selection committee members or any other form as determined by the agent.

H. Information relating to each procurement under this section shall be made available to the public as follows:

1. Notwithstanding title 39, chapter 1, article 2, until contract award by an agent of all of the multiple contracts in the procurement or termination of the procurement by the agent, only the name of each person or firm on the final list developed pursuant to subsection C of this section may be made available to the public and all other information received by the agent in response to the request for qualifications under subsection C of this section or contained in proposals submitted under subsection F of this section shall be confidential in order to avoid disclosure of the contents that may be prejudicial to competing submitters and offerors during the selection process.

2. After the agent awards all of the multiple contracts in the procurement or terminates the procurement, the agent shall make available to the public pursuant to title 39, chapter 1, article 2 at a minimum all of the items that the agent is required to retain under subsection G of this section, except the proposals submitted in response to a request for proposals under subsection F of this section and the document or documents prescribed in subsection G, paragraph 1, subdivision (a), item (v) and subdivision (b), items (v) and (viii) and paragraph 2, subdivision (d) of this section.

3. The proposals submitted under subsection F of this section shall not be made available to the public until after the agent has entered into a contract for all of the multiple contracts in the procurement or the agent has terminated the procurement.  At a minimum the proposals submitted under subsection F of this section that the agent is required to retain under subsection G of this section shall be made available to the public after the agent has entered into a contract for all of the contracts in the procurement or the agent has terminated the procurement.

4. To the extent that the offeror designates and the agent concurs, trade secrets and other proprietary data contained in a proposal shall remain confidential.

5. The document or documents prescribed in subsection G, paragraph 1, subdivision (a), item (v) and subdivision (b), items (v) and (viii) and paragraph 2, subdivision (d) of this section are available to the extent provided in title 39, chapter 1, article 2.

I. An agent may cancel a request for qualifications or a request for proposals, reject in whole or in part any or all submittals or proposals, or determine not to enter into one or more of the multiple contracts as specified in the solicitation if the agent determines in its absolute and sole discretion that such action is in the best interest of the agent.  The agent shall make the reasons for cancellation, rejection or determination not to enter into contracts part of the contract file.

J. If the agent does not have a procurement protest policy and procedures that have been formally adopted and published by the agent, for protests relating to procurements under this section the agent shall follow the procurement protest policy and procedures of the department of administration. The agent shall process all protests relating to procurements under this section.

K. For the purposes of this section, "professional services" includes architect services, engineer services, landscape architect services, assayer services, geologist services and land surveying services and any combination of those services.
A.R.S. § 34-221 — Arizona Code / Title 34 / Chapter 2 / Article 2 / Section 221
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
Status: in_force

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.
A.R.S. § 34-241 — Arizona Code / Title 34 / Chapter 2 / Article 3 / Section 241
34-241 Eligibility of contractors on public works; preferred contractors; eligibility of subcontractor; definitions
Status: in_force

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.
A.R.S. § 34-456 — Arizona Code / Title 34 / Chapter 4 / Article 3 / Section 456
34-456 Use of energy savings; definitions
Status: in_force

34-456. Use of energy savings; definitions

A. Fifty per cent of the amount of after-contract cost savings realized by the department of administration for that year from contracts entered into pursuant to section 34-455 shall remain available without further appropriation to undertake additional energy conservation measures. Funds generated as a result of these contracts shall be known as "energy conservation funds". The department shall use the energy conservation funds to implement additional energy conservation measures in state facilities. The department shall keep a separate accounting of these after-contract cost savings and provide an annual report to the speaker of the house of representatives, the president of the senate and the governor detailing account balances, amounts spent on additional conservation measures, energy and dollar savings accrued as a result of expenditures from the fund and projected utilization of the funds. These funds shall not be subject to the provisions of section 35-190.

B. For the purposes of this section:

1. "After-contract cost savings" means the portion of energy dollar savings for that year that remains after all performance contract costs are paid for that year.

2. "Combined heat and power" has the same meaning prescribed in section 34-455.

3. "Energy conservation measures" means measures that are applied to a state building that improve energy efficiency and are life cycle cost effective and involve energy conservation, cogeneration, renewable energy sources, improvements in operations, combined heat and power and maintenance efficiencies or retrofit activities.
A.R.S. § 34-105 — Arizona Code / Title 34 / Chapter 1 / Article 1 / Section 105
34-105 Guaranteed energy cost savings contracts; definitions
Status: in_force

34-105. Guaranteed energy cost savings contracts; definitions

A. An agent may contract for the procurement of a guaranteed energy cost savings contract with a qualified provider.

B. An agent may enter into a guaranteed energy cost savings contract with a qualified provider if the agent determines that the amount the agent would spend on the energy cost savings measures recommended in the proposal would not exceed the amount to be saved in energy costs over the expected life, according to the manufacturer's equipment standards, of the energy cost savings measures implemented, the term of the financial agreement or twenty-five years, whichever is shortest, after the date that installation or implementation is complete, if the recommendations in the proposal are followed. An agent shall retain the cost savings achieved by a guaranteed energy cost savings contract, and these cost savings may be used to pay for the contract and project implementation.

C. An agent shall use objective criteria in selecting the qualified provider, including the cost of the contract, the energy savings, the net projected energy savings, the quality of the technical approach, the quality of the project management plan, the financial solvency of the qualified provider and the experience of the qualified provider with projects of similar size and scope. An agent shall state each criterion with its relevant order of importance in the request for proposal.

D. In selecting a contractor to perform any construction work related to performing the guaranteed energy cost savings contract, the qualified provider may develop and use a prequalification process for contractors. These prequalifications may require the contractor to demonstrate that the contractor is adequately bonded to perform the work and that the contractor has not failed to perform on a prior job.

E. The selected qualified provider shall perform a study in order to establish the exact scope of the guaranteed energy cost savings contract, the fixed cost savings guarantee amount and the methodology for determining actual savings. The agent shall review and approve this report before the actual installation of any equipment. The qualified provider shall transmit a copy of the approved study to the department of administration.

F. The guaranteed energy cost savings contract shall require that in determining whether the projected energy savings calculations have been met, the energy costs savings shall be computed by comparing the energy baseline before installation or implementation of the energy cost savings measures with the energy consumed after installation or implementation of the energy cost savings measures. The qualified provider and the agent may agree to make modifications to the energy baseline only for any of the following:

1. Changes in utility rates.

2. Changes in the number of days in the utility billing cycle.

3. Changes in the square footage of the facility.

4. Changes in the operational schedule of the facility.

5. Changes in facility temperature.

6. Significant changes in the weather.

7. Significant changes in the amount of equipment or lighting utilized in the facility.

8. Significant changes in the nature or intensity of energy use such as the change of classroom space to laboratory space.

G. The information to develop the energy baseline shall be derived from historical energy costs or actual energy measurements or shall be calculated from energy measurements at the facility where energy cost savings measures are to be installed or implemented. The baseline shall be established before the installation or implementation of energy cost savings measures.

H. When submitting a proposal for the installation of equipment, the qualified provider shall include information on the projected energy savings associated with each proposed energy cost savings measure.

I. An agent, or two or more agents, may enter into a financing agreement with a qualified provider or the financial institution, trustee or paying agent for the purchase and installation or implementation of energy cost savings measures. The guaranteed energy cost savings contract may provide for payments over a period of not more than the expected life, according to the manufacturer's equipment standards, of the energy cost savings measures implemented, the term of the financial agreement or twenty-five years, whichever is shortest. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, shall be made pursuant to the terms of the agreement. If an agent purchases the energy cost savings measure, the qualified provider shall guarantee that the energy cost savings meet or exceed the agent's total cost of purchase.

J. The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that the energy cost savings will meet or exceed the costs of the energy cost savings measures over the expected life, according to the manufacturer's equipment standards, of the energy cost savings measures implemented, the term of the financial agreement or twenty-five years, whichever is shortest, except as provided in subsection I of this section.  The qualified provider shall:

1. For the term of the contract, prepare a measurement and verification report on an annual basis in addition to an annual reconciliation of savings.

2. Reimburse the agent for any shortfall of guaranteed energy cost savings on an annual basis.

3. Use the international performance and measurement and verification protocol standards or the federal energy management program standards to validate the savings guarantee.

K. The agent may obtain any required financing as part of the original competitive sealed proposal process from the qualified provider or a third-party financing institution.

L. A qualified provider that is awarded the contract shall give a sufficient bond to the agent for its faithful performance of the equipment installment.

M. This section does not apply to the construction of new buildings.

N. An agent may use a simplified energy performance contract for projects less than $500,000. Simplified energy performance contracts are not required to include an energy savings guarantee and shall comply with all requirements in this section except for the requirements that are specifically related to the energy savings guarantee and the measurement and verification of the guaranteed savings.

O. An agent may elect to use a shorter capital repayment schedule than required pursuant to this section.

P. For the purposes of this section:

1. "Agent" has the same meaning prescribed in section 34-101 but also includes a community college district organized under title 15, chapter 12, the department of administration and the Arizona board of regents.

2. "Construction" means the process of building, altering, repairing, improving or demolishing any structure or building, or other public improvements of any kind to any real property. Construction does not include the routine operation, routine repair or routine maintenance of existing structures, buildings or real property.

3. "Energy baseline" means a calculation of the amount of energy used in an existing facility before the installation or implementation of the energy cost savings measures.

4. "Energy cost savings" means one or both of the following:

(a) An estimated reduction in net fuel costs, energy costs, water costs, stormwater fees, or other utility costs, or related net operating costs, including costs for anticipated equipment replacement and repair, from or as compared to an established baseline of those costs.

(b) An estimate revenue increase associated with additional facility use or the use of improved meters or other measuring devices due to improvements included in the guaranteed energy cost savings contract.

5. "Energy cost savings measure" means a training program or facility alteration designed to reduce energy consumption and may include one or more of the following, and any related meters or other measuring devices:

(a) Insulating the building structure or systems in the building.

(b) Storm windows or doors, caulking or weather stripping, multiglazed windows or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.

(c) Automated or computerized energy control systems.

(d) Heating, ventilating or air conditioning system modifications or replacements, including ground source heat pumps.

(e) Replacing or modifying lighting fixtures to increase the energy efficiency of the lighting system without increasing the overall illumination of a facility unless an increase in illumination is necessary to conform to the applicable state or local building code for the lighting system after the proposed modifications are made.

(f) Indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements.

(g) Energy recovery systems.

(h) Installing a new or retrofitting an existing day lighting system.

(i) Procurement of low-cost utility supplies of all types, including electricity, natural gas, propane and water.

(j) Devices that reduce water consumption and water costs or that reduce sewer charges.

(k) Rainwater harvesting systems.

(l) Combined heat and power systems.

(m) Renewable and alternative energy projects and renewable energy power service agreements.

(n) Self-generation systems.

(o) Any additional building systems and infrastructure that produce energy, or that provide utility cost savings not specifically mentioned in this paragraph, if the improvements meet the life cycle cost requirement and enhance building system performance or occupant comfort and safety.

(p) Geothermal.

6. "Life cycle cost" means the sum of the present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs and disposal costs and utility rebates over the life of the project, product or measure as provided by federal life cycle cost rules, regulations and criteria contained in the United States department of energy federal energy management program "guidance on life-cycle cost analysis" required by executive order 13423, January 2007.

7. "Qualified provider" means a person or a business that is experienced in designing, implementing or installing energy cost savings measures, that has a record of established projects or measures of similar size and scope, that has demonstrated technical, operational, financial and managerial capabilities to design and operate cost savings measures and projects and that has the financial ability to satisfy guarantees for energy cost savings.
A.R.S. § 34-609 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 609
34-609 Contracts for construction-manager-at-risk, design-build and job-order-contracting construction services; payments to contractor; security; recovery of damages by contractor for delay; progress payments; changed or additional work; attorney fees; definitions
Status: in_force

34-609. Contracts for construction-manager-at-risk, design-build and job-order-contracting construction services; payments to contractor; security; recovery of damages by contractor for delay; progress payments; changed or additional work; attorney fees; definitions

A. An agent shall enter into a contract with the selected person or firm for construction-manager-at-risk construction services, design-build construction services or job-order-contracting construction services.

B. The terms of a contract entered into pursuant to subsection A shall include the following items:

1. A surety company bond or bonds as required by this chapter.

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 the contract may include payment for material and equipment, but to ensure the proper performance of the 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 provided 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 providing 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 after 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, less 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, engineer or other person, as specified in the contract.

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 an agent longer than sixty days after final completion and acceptance requires a specific written finding by the agent of the reasons justifying the delay in payment. An agent may not retain any monies after sixty days that are in excess of the amount necessary to pay the expenses the agent reasonably expects to incur in order to pay or discharge the expenses determined by the agent 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 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 that are retained by the agent as a guarantee for complete performance of the contract.  If the agent accepts substitute security as described in this paragraph for the ten percent retention, the contractor is entitled to receive all interest or income earned by this 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 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.

6. If the agent has accepted substitute security as provided in paragraph 5 of this subsection, any subcontractor undertaking to perform any part of this 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 this security is in lieu of any retention under the subcontract.

7. Notwithstanding paragraphs 1 through 6 of this subsection, any other provision of this section and any other law, there is no retention for job-order-contracting construction services contracts and the agent may elect to have no retention for construction-manager-at-risk and design-build construction services contracts.

C. A contract for construction services may not materially alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payment required to be included in the contract under subsection B of this section.

D. The contract shall be signed by the agent and the contractor.

E. A contract for the procurement of construction services 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, that is unreasonable under the circumstances and that 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, provides for arbitration or other procedures for settlement or provides for liquidated damages.

F. The contractor shall pay to the contractor's subcontractors or material suppliers and each subcontractor shall pay to the subcontractor's subcontractor 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 or subcontractor on account of the work performed by the subcontractors, to the extent of each subcontractor's interest, except that a contract for construction services may not materially alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payment as provided under this section. The payments to subcontractors 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 those payments, constitutes grounds for disciplinary action by the registrar of contractors. The subcontractor or material supplier shall notify the registrar of contractors and the agent in writing of any payment less than the amount or percentage approved for the class or item of work as set forth in this section.

G. A subcontractor may notify the agent in writing requesting that the subcontractor be notified by the agent in writing within five days after payment of each progress payment that is made to the contractor. The subcontractor's request remains in effect for the duration of the subcontractor's work on the project.

H.  This chapter does not prevent the contractor or subcontractor, at the time of application and certification to the owner or contractor, from withholding the application and certification to the owner or contractor for payment to the subcontractor or material supplier for unsatisfactory job progress, defective construction work or materials not remedied, disputed work or materials, third-party claims filed or reasonable evidence that a claim will be filed, failure of a subcontractor to make timely payments for labor, equipment and materials, damage to the contractor or another subcontractor, reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract sum or a reasonable amount for retention that does not exceed the actual percentage retained by the owner.

I. 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 the unpaid balance as may be due.

J. If any periodic or final payment to a subcontractor 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 the subcontractor or material supplier interest, beginning on the eighth day, at the rate of one percent per month or fraction of a month on the unpaid balance as may be due.

K. Notwithstanding anything to the contrary in this section, this section applies only to amounts payable in a construction services contract for construction and does not apply to amounts payable in a construction services contract for design services, preconstruction services, finance services, maintenance services, operations services and other related services.

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. 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.

4. "Work" means the labor, materials, equipment and services to be provided by a contractor or subcontractor under a construction contract.
A.R.S. § 34-603 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 603
34-603 Procurement of professional services and construction-manager-at-risk, design-build and job-order-contracting construction services; definition
Status: in_force

34-603. Procurement of professional services and construction-manager-at-risk, design-build and job-order-contracting construction services; definition

A. Except for services that are under a single contract and that an agent procures pursuant to section 34-103 or 34-606, an agent shall procure a single contract for the following services pursuant to this section:

1. Architect services.

2. Construction-manager-at-risk construction services.

3. Design-build construction services.

4. Engineer services.

5. Job-order-contracting construction services.

6. Landscape architect services.

7. Assayer services.

8. Geologist services.

9. Land surveying services.

B. An agent shall provide notice of each procurement of professional services or construction services specified in this section and shall award the single contract on the basis of demonstrated competence and qualifications for the type of professional services or construction services pursuant to the procedures prescribed in this section.

C. In a procurement of a single contract for professional services or construction services pursuant to this section:

1. The following requirements apply:

(a) The agent and the selection committee shall not request or consider fees, price, man-hours or any other cost information at any point in the selection process under this subsection or under subsection D of this section, including the selection of persons or firms to be interviewed, the selection of persons or firms to be on the final list, in determining the order of preference of persons or firms on the final list or for any other purpose in the selection process.

(b) In determining the persons or firms to participate in any interviews and in determining the persons and firms to be on the final list and their order on the final list, the selection committee shall use and shall consider only the criteria and weighting of criteria specified by the agent for that purpose as provided in this subsection.  No other factors or criteria may be used in the evaluation, determinations and other actions.

(c) An agent is limited to one contract in each procurement under this section.  Alternatively:

(i) For construction-manager-at-risk construction services, an agent may elect separate contracts for preconstruction services during the design phase, for construction during the construction phase and for any other construction services.

(ii) For design-build construction services, an agent may elect separate contracts for preconstruction services and design services during the design phase, for construction and design services during the construction phase and for any other construction services.

(iii) For professional services, an agent may enter into multiple contracts for different phases of a single project.

(d) All construction-manager-at-risk construction services or design-build construction services included in a procurement under this section shall be limited to construction services to be performed at a single location, a common location or, if the construction services are all for a similar purpose, multiple locations. For construction-manager-at-risk construction services and design-build construction services to be performed at multiple locations:

(i) At the time the request for qualifications is issued, the agent must intend to commence all construction at each location within thirty months after execution of the first contract for preconstruction services or other construction services at any of the locations.

(ii) The request for qualifications must include the information described in paragraph 2, subdivision (g) of this subsection.

(e) If the agent enters into the first contract for preconstruction services, construction services or professional services as the result of the procurement, the procurement under this section ends. After execution of that first contract the agent may not use the procurement or the existing final list in the procurement as the basis for entering into a contract with any other person or firm that participated in the procurement.

(f) Notwithstanding any other provision of this section specifying the number of persons or firms to be interviewed, the number of persons or firms to be on a final list or any other numerical specification in this section:

(i) If a smaller number of persons or firms respond to the request for qualifications or if one or more persons or firms drop out of the procurement so that there is a smaller number of persons or firms participating in the procurement, the agent may elect to proceed with the procurement with the participating persons or firms if there are at least two participating responsive and responsible persons or firms.  Alternatively, the agent may elect to terminate the procurement.

(ii) As to a request for qualifications for professional services or construction services to be negotiated pursuant to subsection E of this section only, if only one responsive and responsible person or firm responds to the request for qualifications or, if one or more persons or firms drop out of the procurement so that only one responsive and responsible person or firm remains in the procurement, the agent may elect to proceed with the procurement with only one person or firm if the agent determines in writing that the fee negotiated pursuant to subsection E of this section is fair and reasonable and that either other prospective persons or firms had reasonable opportunity to respond or there is not adequate time for a resolicitation.

(iii) If a person or firm on the final list withdraws or is removed from the procurement and the selection committee determines that it is in the best interest of the agent, the selection committee may replace that person or firm on the final list with another person or firm that submitted qualifications in the procurement and that is selected by the selection committee as the next most qualified.

2. An agent shall issue a request for qualifications for each procurement and publish notice of the request for qualifications. 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 no more than ten days apart if it is a daily newspaper. The request for qualifications shall:

(a) State that one contract may or will be awarded, describe the services to be performed under the contract and state that one person or firm may or will be awarded the contract.

(b) In a procurement of a contract to be negotiated under subsection E of this section, state that there will be a single final list of at least three and not more than five persons or firms. In a procurement in which the contract will be awarded under subsection F of this section, the request for qualifications shall state that there will be a single final list and that the number of persons or firms on the final list will be three.

(c) As prescribed below, state the selection criteria and relative weight of the selection criteria to be used by the selection committee, except that for construction services one of the criteria shall be the person's or firm's subcontractor selection plan or procedures to implement the agent's subcontractor selection plan. All selection criteria under this subsection shall be factors that demonstrate competence and qualifications for the type of professional services or construction services included in the procurement.  If:

(i) Interviews will be held, the request for qualifications shall state the selection criteria and relative weight of the selection criteria to be used in selecting the persons or firms to be interviewed and the request for qualifications may state the selection criteria and relative weight of the selection criteria to be used in selecting the persons or firms on the final list and in determining their order on the final list.  The final list selection criteria and relative weights may be different than the selection criteria and relative weights used to determine the persons or firms to be interviewed.  The request for qualifications shall also state whether the agent will select the persons or firms on the final list and their order on the final list solely through the results of the interview process or through the combined results of both the interview process and the evaluation of statements of qualifications and performance data submitted in response to the agent's request for qualifications.

(ii) Interviews will not be held, the request for qualifications shall state the selection criteria and relative weight of the selection criteria to be used in selecting the persons or firms on the final list and in determining their order on the final list.

(d) If the agent will hold interviews as part of the selection process, state that interviews will be held and that the interviews will be with at least three but not more than five persons or firms.

(e) For procurements of construction services, include either:

(i) A requirement that each person or firm submit a proposed subcontractor selection plan and a requirement that the proposed subcontractor selection plan must select subcontractors based on qualifications alone or on a combination of qualifications and price and shall not select subcontractors based on price alone.

(ii) A subcontractor selection plan adopted by the agent that applies to the person or firm that is selected to perform the construction services and that requires subcontractors to be selected based on qualifications alone or on a combination of qualifications and price and not based on price alone and a requirement that each person or firm must submit a description of the procedures it proposes to use to implement the agent's subcontractor selection plan.

(f) Include a description of the publicly available location of the agent's protest policy and procedures or, if the agent does not have a protest policy and procedures, a statement that the protest policy and procedures referred to in subsection J of this section apply to any protests in connection with the procurement.

(g) In a procurement of construction-manager-at-risk construction services or design-build construction services to be performed at multiple locations, include:

(i) A brief description of the construction services to be performed at each location.

(ii) The estimated budget for the construction services to be performed at each location.

(iii) A schedule for the construction services to be performed at each location that shows the agent's intent to commence all construction at each location within thirty months after execution of the first contract for preconstruction services or other construction services at any of the locations.

3. An agent shall initiate an appropriately qualified selection committee for each request for qualifications. The agent shall ensure that the selection committee members are competent to serve on the selection committee.  Each selection committee must include one employee of the agent or an agent representative who is appointed by the agent.  If the agent is procuring professional services, the agent shall determine the number and qualifications of the selection committee members. A selection committee for the procurement of construction services shall not have more than seven members, except that, if the contract involves the agent and additional governmental or private participants, the number of members of the selection committee shall be increased by one for each additional participant, except that the maximum number of members of the selection committee is nine. The selection committee for construction services shall include at least one person who is a senior management employee of a licensed contractor and one person who is an architect or an engineer who is registered pursuant to section 32-121. These members may be employees of the agent or outside consultants. Outside contractors, architects and engineers serving on a selection committee shall not receive compensation from the agent for performing this service, but the agent may elect to reimburse outside contractors, architects and engineers for travel, lodging and other expenses incurred in connection with service on a selection committee. A person who is a member of a selection committee shall not be a contractor under a contract awarded under the procurement or provide any professional services, construction, construction services, materials or other services under the contract.  The selection committee and the agent shall do the following:

(a) If interviews are specified in the request for qualifications:

(i) The selection committee shall determine the persons or firms to be interviewed by evaluating the statements of qualifications and performance data that are submitted in response to the agent's request for qualifications based only on the selection criteria and relative weight of the selection criteria stated in the request for qualifications to be used to determine the persons or firms to be interviewed.

(ii) If the selection criteria and relative weight of the selection criteria to be used by the selection committee to select the persons or firms on the final list and to determine their order on the final list are not included in the request for qualifications, before the interviews are held the agent shall distribute to the persons or firms to be interviewed the selection criteria and relative weight of the selection criteria to be used to select the persons or firms on the final list and to determine their order on the final list. These selection criteria and relative weight may be different than the selection criteria and relative weight used to determine the persons or firms to be interviewed.

(iii) The selection committee shall conduct interviews with the number of persons or firms to be interviewed as stated in the request for qualifications regarding the professional services or construction services and the relative methods of approach for furnishing the required professional services or construction services.

(b) Based only on the selection criteria and relative weight of the selection criteria specified as provided in this subsection for selection of the persons or firms on the final list and their order on the final list, the selection committee shall select the persons or firms for the final list and, in the case of a final list for a contract that will be negotiated under subsection E of this section, rank the persons or firms on the final list in order of preference.

(c) If the contract will be negotiated under subsection E of this section, before or at the same time as the agent notifies the highest ranking person or firm on the final list that it is the highest ranking person or firm, the agent shall send actual notice to each of the following that it is not the highest person or firm on the final list or that another person or firm is the highest ranking person or firm on the final list:

(i) If interviews were held, the other persons and firms interviewed.

(ii) If interviews were not held, the other persons and firms that made submittals.

(d) If the contract will be awarded under subsection F of this section, before or at the same time as the agent notifies the persons or firms on the final list that they are on the final list, the agent shall send actual notice to each of the following persons or firms that they are not on the final list or that other persons or firms are on the final list:

(i) If interviews were held, the other persons or firms interviewed.

(ii) If interviews were not held, the other persons or firms that made submittals.

D. An agent shall award the single contract under the procurement as provided in subsection E or F of this section.

E. The agent shall conduct negotiations with persons or firms on the final list as follows:

1. The procurement is for a single contract for construction services or professional services, and there is one final list.

2. The negotiations shall include consideration of compensation and other contract terms that the agent determines to be fair and reasonable to the agent. In making this decision, the agent shall take into account the estimated value, the scope, the complexity and the nature of the professional services or construction services to be rendered.

3. The agent shall enter into negotiations with the highest qualified person or firm on the final list.

4. If the agent is not able to negotiate a satisfactory contract with the highest qualified person or firm on the final list, at compensation and on other contract terms the agent determines to be fair and reasonable, the agent shall formally terminate negotiations with that person or firm.  The agent shall then undertake negotiations with the next most qualified person or firm on the final list in sequence until an agreement is reached or a determination is made to reject all persons or firms on the final list.

5. If in a procurement under this section the agent terminates negotiations with a person or firm on the final list and commences negotiations with another person or firm on the final list, the agent shall not in that procurement recommence negotiations or enter into a contract for the construction services or professional services covered by the final list with any person or firm on the final list with whom the agent has terminated negotiations.

F. As an alternative to subsection E of this section, an agent may award a single contract for design-build construction services or job-order-contracting construction services as follows:

1. The agent shall use the selection committee appointed for the request for qualifications pursuant to subsection C of this section.

2. The agent shall issue a request for proposals to the persons or firms on the final list developed pursuant to subsection C of this section.

3. The request for proposals shall include:

(a) The agent's project schedule and project final budget for design and construction or life cycle budget for a procurement that includes maintenance services or operations services.

(b) A statement that the contract will be awarded to the offeror whose proposal receives the highest number of points under a scoring method.

(c) A description of the scoring method, including a list of the factors in the scoring method and the number of points allocated to each factor.  The factors in the scoring method may include:

(i) For design-build construction services only, demonstrated compliance with the design requirements.

(ii) Offeror qualifications.

(iii) Offeror financial capacity.

(iv) Compliance with the agent's project schedule.

(v) For design-build construction services only, if the request for proposals specifies that the agent will spend its project budget and not more than its project budget and is seeking the best proposal for the project budget, compliance of the offeror's price or life cycle price for procurements that include maintenance services, operations services or finance services with the agent's budget as prescribed in the request for proposals.

(vi) For design-build construction services if the request for proposals does not contain the specifications prescribed in item (v) of this subdivision and for job-order-contracting construction services, the price or life cycle price for procurements that include maintenance services, operations services or finance services.

(vii) An offeror quality management plan.

(viii) Other evaluation factors that demonstrate competence and qualifications for the type of construction services in the request for proposals as determined by the agent, if any.

(d) For design-build construction services only, the design requirements.

(e) A requirement that each offeror submit separately a technical proposal and a price proposal and that the offeror's entire proposal be responsive to the requirements in the request for proposals. For design-build construction services, the price in the price proposal shall be a fixed price or a guaranteed maximum price.

(f) A statement that in applying the scoring method the selection committee will separately evaluate the technical proposal and the price proposal and will evaluate and score the technical proposal before opening the price proposal.

(g) If the agent conducts discussions pursuant to paragraph 5 of this subsection, a statement that discussions will be held and a requirement that each offeror submit a preliminary technical proposal before the discussions are held.

4. If the agent determines to conduct discussions pursuant to paragraph 5 of this subsection, each offeror shall submit a preliminary technical proposal to the agent before those discussions are held.

5. If determined by the agent and included by the agent in the request for proposals, the selection committee shall conduct discussions with all offerors that submit preliminary technical proposals. Discussions shall be for the purpose of clarification to ensure full understanding of, and responsiveness to, the solicitation requirements. Offerors shall be accorded fair treatment with respect to any opportunity for discussion and for clarification by the owner. Revision of preliminary technical proposals shall be permitted after submission of preliminary technical proposals and before award for the purpose of obtaining best and final proposals. In conducting any discussions, information derived from proposals submitted by competing offerors shall not be disclosed to other competing offerors.

6. After completion of any discussions pursuant to paragraph 5 of this subsection or if no discussions are held, each offeror shall submit separately the offeror's final technical proposal and its price proposal.

7. Before opening any price proposal, the selection committee shall open the final technical proposals, evaluate the final technical proposals and score the final technical proposals using the scoring method in the request for proposals. No other factors or criteria may be used in the evaluation and scoring.

8. After completion of the evaluation and scoring of all final technical proposals, the selection committee shall open the price proposals, evaluate the price proposals, score the price proposals and complete the scoring of the entire proposals using the scoring method in the request for proposals. No other factors or criteria may be used in the evaluation and scoring.

9. The agent shall award the contract or contracts to the responsive and responsible offeror whose proposal receives the highest score under the method of scoring in the request for proposals.  No other factors or criteria may be used in the evaluation. Before or at the same time as the agent notifies the winning offeror that it has won, the agent shall send actual notice to each other offeror either that the offeror has not won or that another offeror has won.

10. The contract or contracts file shall contain the basis on which the award is made, including at a minimum the information and documents required under subsection G of this section.

11. For design-build construction services only, the agent shall award a stipulated fee equal to a percentage, as prescribed in the request for proposals, of the agent's project final budget for design and construction, as prescribed in the request for proposals, but at least four-tenths of one percent of the project final budget for design and construction to each final list offeror who provides a responsive, but unsuccessful, proposal. If the agent does not award a contract, all responsive final list offerors shall receive the stipulated fee based on the owner's project final budget for design and construction as included in the request for proposals. The agent shall pay the stipulated fee to each offeror within ninety days after the award of the initial contract or the decision not to award a contract. In consideration for paying the stipulated fee, the agent may use any ideas or information contained in the proposals in connection with any contract awarded for the project, or in connection with a subsequent procurement, without any obligation to pay any additional compensation to the offerors.  Notwithstanding the other provisions of this paragraph, an offeror may elect to waive the stipulated fee. If an offeror elects to waive the stipulated fee, the agent may not use ideas and information contained in the offeror's proposal, except that this restriction does not prevent the agent from using any idea or information if the idea or information is also included in a proposal of an offeror that accepts the stipulated fee.

G. At a minimum, the agent shall retain the following for each procurement under this section:

1. For each request for qualifications procurement process under subsection C or subsection K, paragraph 2 of this section:

(a) If interviews were not held:

(i) The submittal of the person or firm listed first on the final list and, if different, the submittal of the person or firm with which the agent enters into a contract.

(ii) The final list.

(iii) A list of the selection criteria and relative weight of selection criteria used to select the persons or firms for the final list and to determine their order on the final list.

(iv) A list that contains the name of each person or firm that submitted qualifications and that shows the person's or firm's final overall rank or score.

(v) A document or documents that show the final score or rank on each selection criterion of each person or firm that submitted qualifications and that support the final overall rankings and scores of the persons or firms that submitted qualifications. At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for individual selection committee members or any other form as determined by the agent.

(b) If interviews were held:

(i) All submittals of the person or firm listed first on the final list and, if different, all submittals of the person or firm with which the agent enters into a contract.

(ii) The final list.

(iii) A list of the selection criteria and relative weight of selection criteria used to select the persons or firms for the final list and to determine their order on the final list.

(iv) A list that contains the name of each person or firm that was interviewed and that shows the person's or firm's final overall rank or score.

(v) A document or documents that show the final score or rank on each selection criterion of each person or firm that was interviewed and that support the final overall rankings and scores of the persons or firms that were interviewed.  At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for individual selection committee members or any other form as determined by the agent.

(vi) A list of the selection criteria and relative weight of the selection criteria used to select the persons or firms for the short list to be interviewed.

(vii) A list that contains the name of each person or firm that submitted qualifications and that shows the person's or firm's final overall rank or score in the selection of the persons or firms to be on the short list to be interviewed.

(viii) A document or documents that show the final score or rank on each selection criterion of each person or firm that submitted qualifications and that support the final overall rankings and scores of the persons or firms that submitted qualifications in the selection of the persons or firms to be on the short list to be interviewed. At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for the individual selection committee members or any other form as determined by the agent.

2. For each request for proposals procurement process under subsection F or subsection K, paragraph 3 of this section:

(a) The entire proposal submitted by the person or firm that received the highest score in the scoring method in the request for proposals and, if different, the entire proposal submitted by the person or firm with which the agent enters into a contract.

(b) The description of the scoring method, the list of factors in the scoring method and the number of points allocated to each factor, all as included in the request for proposals.

(c) A list that contains the name of each offeror that submitted a proposal and that shows the offeror's final overall score.

(d) A document or documents that show the final score on each factor in the scoring method in the request for proposals of each offeror that submitted a proposal and that support the final overall scores of the offerors that submitted proposals. At the election of the agent, this documentation may be in the form of a consolidated scoring sheet for the entire selection committee, in the form of individual scoring sheets for individual selection committee members or in any other form as determined by the agent.

H. Information relating to each procurement under this section shall be made available to the public as follows:

1. Notwithstanding title 39, chapter 1, article 2, until the agent awards a contract or terminates the procurement, only the name of each person or firm on the final list developed pursuant to subsection C or subsection K, paragraph 2 of this section may be made available to the public. All other information received by the agent in response to the request for qualifications pursuant to subsection C or subsection K, paragraph 2 of this section or contained in proposals submitted pursuant to subsection F or subsection K, paragraph 3 of this section shall be confidential in order to avoid disclosure of the contents that may be prejudicial to competing submitters and offerors during the selection process.

2. After the agent awards the contract or terminates the procurement, the agent shall make available to the public pursuant to title 39, chapter 1, article 2 at a minimum all of the items that the agent is required to retain under subsection G of this section, except the proposals submitted in response to a request for proposals under subsection F or subsection K, paragraph 3 of this section and the document or documents prescribed in subsection G, paragraph 1, subdivision (a), item (v) and subdivision (b), items (v) and (viii) and paragraph 2, subdivision (d) of this section.

3. The proposals submitted under subsection F or subsection K, paragraph 3 of this section shall not be made available to the public until after the agent has entered into a contract or terminated the procurement.  At a minimum the proposals submitted under subsection F or subsection K, paragraph 3 of this section that the agent is required to retain under subsection G of this section shall be made available to the public after the agent has entered into a contract or terminated the procurement.

4. To the extent that the offeror designates and the agent concurs, trade secrets and other proprietary data contained in a proposal remain confidential.

5. The document or documents prescribed in subsection G, paragraph 1, subdivision (a), item (v) and subdivision (b), items (v) and (viii) and paragraph 2, subdivision (d) of this section are available to the extent provided in title 39, chapter 1, article 2.

I. An agent may cancel a request for qualifications or a request for proposals, reject in whole or in part any or all submittals or proposals, or determine not to enter into a contract as specified in the solicitation if the agent determines in the agent's absolute and sole discretion that the action is in the best interest of the agent. The agent shall make the reasons for cancellation, rejection or determination not to enter into a contract part of the contract file.

J. If the agent does not have a procurement protest policy and procedures that have been formally adopted and published by the agent, for protests relating to procurements under this section the agent shall follow the procurement protest policy and procedures of the department of administration. The agent shall process all protests relating to procurements under this section.

K. Notwithstanding any other law, in a procurement of a single contract for construction-manager-at-risk construction services for horizontal construction under this section when the federal aviation administration or the federal transit administration is a source of monies for the project and price competition is required by the funding federal agency or applicable federal law, rules or regulations, an agent that is a city with a population in excess of one million persons or an agent that is a separate legal entity formed under section 11-952 by a city with a population in excess of one million persons and that is designated as a subgrantee by a city with a population in excess of one million persons may do a two-step competition in accordance with the following:

1. Except as provided in paragraphs 2 and 3 of this subsection, all provisions of law applicable to construction-manager-at-risk construction services apply to construction-manager-at-risk construction services for horizontal construction procured under this subsection, including the provisions applicable to horizontal construction. The requirements in section 34-605, subsection B apply only if the contractor provides preconstruction services. Bid security is not required under section 34-608 for construction-manager-at-risk construction services for horizontal construction procured under this subsection, but an agent may elect to require bid security in which event the bid security process and requirements shall be as set forth in section 34-608.

2. In the first step of the two-step competition for procurement of construction-manager-at-risk construction services for horizontal construction, the agent shall follow the request for qualifications process and the requirements in subsection C of this section. For purposes of applying the requirements in subsection C, paragraph 1, subdivision (f), item (ii), paragraph 2, subdivision (b) and paragraph 3, subdivisions (b), (c) and (d) of this section only, a procurement under this subsection shall be deemed to be procurement of a contract to be awarded under subsection F of this section and not of a contract to be negotiated under subsection E of this section.

3. In the second step of the two-step competition:

(a) The agent shall use the selection committee appointed for the request for qualifications pursuant to subsection C of this section.

(b) The agent shall issue a request for proposals to the offerors on the final list developed pursuant to subsection C of this section.

(c) The request for proposals shall include:

(i) A statement that one contract may or will be awarded and that one offeror may or will be awarded the contract.

(ii) A description of the construction-manager-at-risk construction services for horizontal construction to be performed under the contract.

(iii) A requirement that each offeror submit separately a qualitative and technical proposal and a price proposal and that the offeror's entire proposal be responsive to the requirements in the request for proposals.

(iv) The required contents of the qualitative and technical proposals and the price proposals.

(v) Information to be used by offerors to prepare the qualitative and technical proposals and the price proposals.

(vi) A statement that in applying the scoring method the selection committee will evaluate and score the qualitative and technical proposals before opening the price proposals.

(vii) A statement that the agent will use the scoring method described in the request for proposals to determine the winning offeror and that the winning offeror will be the offeror whose proposal receives the highest number of points under the scoring method.

(viii) A description of the scoring method.  The scoring method shall be a best-value method in which the agent establishes criteria to score the qualitative and technical proposal and separate criteria to score the price proposal and the number of points assigned to each criteria. The number of points assigned to price criteria shall not exceed ten percent of the total number of points in the scoring method.

(ix) If the agent elects to conduct discussions pursuant to subdivision (e) of this paragraph, a statement that discussions will be held and a requirement that each offeror submit a preliminary qualitative and technical proposal before the discussions are held.

(d) If the agent determines to conduct discussions pursuant to subdivision (e) of this paragraph, each offeror shall submit a preliminary qualitative and technical proposal to the agent before those discussions are held.

(e) If determined by the agent and included by the agent in the request for proposals, the selection committee shall conduct discussions with all offerors solely about their preliminary qualitative and technical proposals. Discussions shall be for the purpose of clarification to ensure full understanding of, and responsiveness to, the solicitation requirements, other than price.  Offerors shall be accorded fair treatment with respect to any opportunity for discussion and for clarification by the selection committee. Revision of preliminary qualitative and technical proposals shall be permitted after submission of preliminary qualitative and technical proposals and before scoring of proposals for the purpose of obtaining best and final proposals. In conducting any discussions, information derived from the preliminary qualitative and technical proposals submitted by competing offerors shall not be disclosed to other competing offerors.  Price shall not be part of the discussions.

(f) After completion of any discussions pursuant to subdivision (e) of this paragraph or if no discussions are held, each offeror shall submit separately the offeror's final qualitative and technical proposal and its price proposal.

(g) In evaluating and scoring the offerors' proposals the selection committee shall use the scoring method specified in the request for proposals.

(h) Before opening any price proposal, the selection committee shall open the final qualitative and technical proposals, evaluate the final qualitative and technical proposals and score the final qualitative and technical proposals using the qualitative and technical criteria and assigned points in the scoring method in the request for proposals. No other factors or criteria may be used in the evaluation and scoring.

(i) After completion of the evaluation and scoring of all final qualitative and technical proposals, the selection committee shall open the price proposals and score the price proposals using the price criteria and assigned points in the scoring method in the request for proposals.  No other factors or criteria may be used in the evaluation and scoring.

(j) After evaluating and scoring the price proposals, the selection committee shall add the qualitative and technical proposal score and the price proposal score of each offeror together for a total score. The responsive and responsible offeror with the highest total score is the winning offeror.

(k) The agent shall promptly notify the winning offeror that it is the winner. Before or at the same time as the agent notifies the winning offeror that it is the winner, the agent shall send actual notice to each other offeror either that the offeror is not the winner or that another offeror is the winner.

(l) The contract or contracts file shall contain the basis on which the award is made, including at a minimum the information and documents required under subsection G of this section.

4. Notwithstanding this subsection, an agent shall not procure any construction-manager-at-risk construction services for horizontal construction pursuant to this subsection after December 31, 2030. For the purposes of this paragraph, an agent procures construction-manager-at-risk construction services for horizontal construction pursuant to this subsection when the contract for the construction-manager-at-risk construction services for horizontal construction is executed by the agent and the contractor. If a contract is executed for construction-manager-at-risk construction services for horizontal construction procured pursuant to this subsection on or before December 31, 2030, construction services under the contract may be rendered in whole or in part after December 31, 2030.

L. For the purposes of this section, "professional services" includes architect services, engineer services, landscape architect services, assayer services, geologist services and land surveying services and any combination of those services.
A.R.S. § 34-245 — Arizona Code / Title 34 / Chapter 2 / Article 3 / Section 245
34-245 Provisions inapplicable to irrigation districts
Status: in_force

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.
A.R.S. § 34-201 — Arizona Code / Title 34 / Chapter 2 / Article 1 / Section 201
34-201 Notice of intention to receive bids and enter contract; procedure; doing work without advertising for bids; county compliance
Status: reserved

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.
A.R.S. § 34-607 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 607
34-607 Multiterm contracts for job-order-contracting construction services
Status: in_force

34-607. Multiterm contracts for job-order-contracting construction services

A. A contract for construction services using the job-order-contracting method may be entered into for a period of up to five years, as deemed to be in the best interest of the agent, if the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and monies are available for the first fiscal period at the time of contracting.  Payment and performance obligations for succeeding fiscal periods are subject to the availability and appropriation of monies.

B. Before the use of a multiterm contract, the agent shall determine in writing that:

1. Estimated requirements cover the period of the contract and are reasonable and continuing.

2. Such a contract will serve the best interests of the agent by encouraging effective competition or otherwise promoting economies in the agent's procurement.

C. If monies are not appropriated or otherwise made available to support the continuation of performance in a subsequent fiscal period, the contract shall be cancelled and the contractor may only be reimbursed for the reasonable value of any nonrecurring costs that are incurred but not amortized in the price of the construction services delivered under the contract or that are otherwise not recoverable.  The cost of cancellation may be paid from any appropriations available for these purposes.
A.R.S. § 34-605 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 605
34-605 Requirements applicable to construction services and professional services and to contracts for construction services and professional services; definition
Status: in_force

34-605. Requirements applicable to construction services and professional services and to contracts for construction services and professional services; definition

A. The requirements prescribed in this section apply to each contract entered into as the result of a procurement under section 34-603, 34-604 or 34-606 and to the professional services and construction services included in each procurement under section 34-603, 34-604 or 34-606.

B. If a procurement under section 34-603 is for construction-manager-at-risk construction services or design-build construction services to be contracted pursuant to section 34-603, subsection E or if a procurement under section 34-606 is for construction-manager-at-risk construction services or design-build construction services, the agent shall enter into a written contract with the contractor for preconstruction services under which the agent shall pay the contractor a fee for preconstruction services in an amount agreed by the agent and the contractor, and the agent shall not request or obtain a fixed price or a guaranteed maximum price for the construction from the contractor or enter into a construction contract with the contractor until after the agent has entered into the written contract for preconstruction services and a preconstruction services fee.

C. If a contract for construction services is entered into as the result of a procurement under section 34-603, 34-604 or 34-606, construction shall not commence until the agent and contractor agree in writing on either a fixed price that the agent will pay for the construction to be commenced or a guaranteed maximum price for the construction to be commenced.  The construction to be commenced may be the entire project or may be one or more phased parts of the project.

D. A contract for professional services entered into as the result of a procurement under section 34-603, 34-604 or 34-606 shall have a term not exceeding five years after the date of contract award by the agent of the first contract under the procurement, except that the contract may continue in effect after the five-year term for professional services on projects on which the rendering of professional services commences within the five-year term.

E. Notwithstanding any other law:

1. The contractor for design-build or job-order-contracting construction services is not required to be registered to perform design services pursuant to title 32, chapter 1 if the person or firm actually performing the design services on behalf of the contractor is appropriately registered.

2. The contractor for construction-manager-at-risk, design-build or job-order-contracting construction services shall be licensed to perform construction pursuant to title 32, chapter 10.

F. For job-order-contracting construction services only:

1. The maximum dollar amount of an individual job order shall be $1,000,000 or such higher or lower amount prescribed by the agent in an action noticed pursuant to title 38, chapter 3, article 3.1 or a rule adopted by the agent as the maximum amount of an individual job order. Requirements shall not be artificially divided or fragmented in order to constitute a job order that satisfies this requirement.

2. If the contractor subcontracts or intends to subcontract part or all of the work under a job order and if the job-order-contracting construction services contract includes descriptions of standard individual tasks, standard unit prices for standard individual tasks and pricing of job orders based on the number of units of standard individual tasks in the job order:

(a) The contractor has a duty to deliver promptly to each subcontractor invited to bid a coefficient to the contractor to do all or part of the work under one or more job orders:

(i) A copy of the descriptions of all standard individual tasks on which the subcontractor is invited to bid.

(ii) A copy of the standard unit prices for the individual tasks on which the subcontractor is invited to bid.

(b) If not previously delivered to the subcontractor, the contractor has a duty to deliver promptly the following to each subcontractor invited to or that has agreed to do any of the work included in any job order:

(i) A copy of the description of each standard individual task that is included in the job order and that the subcontractor is invited to perform.

(ii) The number of units of each standard individual task that is included in the job order and that the subcontractor is invited to perform.

(iii) The standard unit price for each standard individual task that is included in the job order and that the subcontractor is invited to perform.

G. The following apply to horizontal construction:

1. Notwithstanding this chapter, an agent shall not procure any horizontal construction using the construction-manager-at-risk, design-build or job-order-contracting method of project delivery after December 31, 2030.  For purposes of this paragraph, an agent procures horizontal construction when the contract for the construction services is executed by the agent and the contractor for the construction-manager-at-risk, design-build or job-order-contracting construction services. If a contract is executed for construction services on or before December 31, 2030, construction services under the contract may be rendered in whole or in part after December 31, 2030.

2. For each horizontal construction project under a design-build or construction-manager-at-risk construction services contract, the licensed contractor performing the contract shall perform, with the contractor's own organization, construction work that amounts to not less than forty-five percent of the total contract price for the construction, except that for light rail the self-performance percentage shall be not less than thirty percent.

3. A project is horizontal construction if more than one-half of the total contract price for the construction is for horizontal construction. Project elements shall not be artificially added in order to make a project not horizontal construction and shall not be artificially deleted in order to make a project horizontal construction.

4. The total contract price for the construction does not include the cost of preconstruction services, design services or any other related services or the cost to procure any right-of-way or other cost of condemnation.

H. Notwithstanding any contrary provision of this section or this title, an agent shall not:

1. Enter into a contract as contractor to provide construction-manager-at-risk construction services, design-build construction services or job-order-contracting construction services.

2. Contract with itself, with another agent, with this state or with any other governmental unit of this state or the federal government for the agent to provide construction-manager-at-risk construction services, design-build construction services or job-order-contracting construction services.

I. The prohibitions prescribed in subsection H of this section do not prohibit an agent from providing construction for itself as provided by law.

J. The agent shall include in each contract for construction services the full street or physical address of each separate location at which the construction will be performed and a requirement that the contractor and each subcontractor at any level include in each of its subcontracts the same address information. The contractor and each subcontractor at any level shall include in each subcontract the full street or physical address of each separate location at which construction work will be performed.

K. The following apply to all construction services procured under this chapter:

1. The contractor performing the construction services is permitted to self-perform part of the construction work if and to the extent agreed in writing by the agent and the contractor.  The agent may use methods other than competitive bidding to assure itself that the price the agent pays to the contractor for self-performed work is fair and reasonable.  Allowable methods to evaluate fairness and reasonableness of the price of self-performed work include evaluating the contractor's proposed scope of work and price for self-performed work by an estimator who is hired and paid by the agent, who is independent of the contractor and who may be an employee of the agent.  Although the agent may elect to so require, this chapter, this title or any other law shall not be construed or interpreted to require the agent to require a contractor desiring to self-perform part of the construction work to competitively bid that part of the construction work against other contractors in a bid competition.

2. The following requirements apply to the construction work to be performed by subcontractors and do not apply to construction work that the agent and the contractor agree in writing will be self-performed by the contractor:

(a) The person or firm selected to perform the construction services shall select subcontractors based on qualifications alone or on a combination of qualifications and price and shall not select subcontractors based on price alone. A qualifications and price selection may be a single-step selection based on a combination of qualifications and price or a two-step selection. In a two-step selection, the first step shall be based on qualifications alone and the second step may be based on a combination of qualifications and price or on price alone.

(b) The agent shall include in each contract:

(i) If the agent included its subcontractor selection plan in the request for qualifications, the agent's subcontractor selection plan and the procedures to implement the agent's subcontractor selection plan proposed by the selected person or firm in submitting its qualifications with those modifications to the procedures as the agent and the selected person or firm agree.

(ii) If the agent did not include its subcontractor selection plan in the request for qualifications, the subcontractor selection plan proposed by the selected person or firm in submitting its qualifications with those modifications as the agent and the selected person or firm agree.

(c) In making the selection of subcontractors, the person or firm selected to perform the construction services shall use the subcontractor selection plan and any procedures included in its contract.

L. If the agent does not have a procurement protest policy and procedures that have been formally adopted and published by the agent, for protests relating to procurements under this chapter the agent shall follow the procurement protest policy and procedures of the department of administration. The agent shall process all protests relating to procurements under this section. If the agent does have a procurement protest policy and procedures that have been formally adopted and published by the agent, the agent may choose to make information relating to each procurement available earlier than required under section 34-603, subsection H and section 34-604, subsection H if the agent determines the release of the information is necessary to adequately follow and manage its procurement protest policy and procedures.

M. For the purposes of this section, "professional services" includes architect services, engineer services, landscape architect services, assayer services, geologist services and land surveying services and any combination of those services.
A.R.S. § 34-612 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 612
34-612 Accounting standards; statutory applicability
Status: in_force

34-612. Accounting standards; statutory applicability

A. Any construction by a county pursuant to this chapter shall comply with the uniform accounting system prescribed for counties by the auditor general pursuant to section 41-1279.21.  Any construction by a city or a town pursuant to this chapter shall comply with generally accepted accounting principles.

B. Any building, structure, addition or alteration may be constructed without complying with this chapter 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.

C. Section 34-104, section 34-201, subsections A through I, K and L and sections 34-202, 34-203, 34-221, 34-222, 34-223 and 34-224 do not apply to procurement by an agent of construction-manager-at-risk construction services, design-build construction services and job-order-contracting construction services.

D. Section 34-201, subsections J and M and sections 34-225 and 34-226 apply to procurement by an agent of construction-manager-at-risk construction services, design-build construction services and job-order-contracting construction services.
A.R.S. § 34-252 — Arizona Code / Title 34 / Chapter 2 / Article 4 / Section 252
34-252 Contract, combination or conspiracy to restrain trade or commerce; violation; classification
Status: in_force

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.
A.R.S. § 34-602 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 602
34-602 Project delivery methods for design and construction services
Status: in_force

34-602. Project delivery methods for design and construction services

A. An agent may procure design services, construction and construction services, as applicable, under any of the following project delivery methods:

1. Design-bid-build.

2. Construction-manager-at-risk.

3. Design-build.

4. Job-order-contracting.

B. Except as provided in section 41-2501, subsection C and section 41-2535, subsection D, for the design-bid-build project delivery method, the agent shall procure:

1. Design services as provided in this chapter and chapter 1, article 1 of this title.

2. Construction by competitive sealed bidding pursuant to chapter 2, articles 1, 2 and 3 of this title and pursuant to rules adopted by the agent pursuant to section 41-2501, subsection C.

C. An agent shall procure construction services under the construction-manager-at-risk, design-build and job-order-contracting project delivery methods pursuant to this chapter.

D. An agent shall procure design services relating to construction-manager-at-risk construction services projects pursuant to section 34-103, 34-603, 34-604 or 34-606, as applicable.

E. For job-order-contracting construction services projects, if the agent does not include design services in the job-order-contracting construction services contract, the agent shall procure any design services relating to the job-order-contracting construction services projects under the contract pursuant to section 34-103, 34-603, 34-604 or 34-606, as applicable.
A.R.S. § 34-251 — Arizona Code / Title 34 / Chapter 2 / Article 4 / Section 251
34-251 Definitions
Status: in_force

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.
A.R.S. § 34-451 — Arizona Code / Title 34 / Chapter 4 / Article 3 / Section 451
34-451 Energy conservation standards for public buildings
Status: in_force

34-451. Energy conservation standards for public buildings

A. The governor's energy office in consultation with persons responsible for building systems shall adopt and publish energy conservation standards for construction of all new capital projects as defined in section 41-790, including buildings designed and constructed by school districts, community college districts and universities.  These standards shall be consistent with the recommended energy conservation standards of the American society of heating, refrigerating and air conditioning engineers and the international energy conservation code.

B. The standards shall be adopted to achieve energy conservation and shall allow for design flexibility.

C. The following state agencies shall reduce energy use in public buildings that they administer by ten per cent per square foot of floor area on or before July 1, 2008 and by fifteen per cent per square foot of floor area on or before July 1, 2011, using July 1, 2001 through June 30, 2002 as the baseline year:

1. The department of administration for its building systems.

2. The Arizona board of regents for its building systems.

3. The department of transportation for its building systems.

D. The governor's energy office shall provide technical assistance to the state agencies prescribed in subsection C of this section. On or before July 1 of each year, the energy office shall measure compliance with subsection C of this section, compile the results of that monitoring and report to the speaker of the house of representatives and the president of the senate as to the progress of attaining the goals prescribed in subsection C of this section.  The energy office shall include in its report an explanation of the reasons for any failure to achieve energy reductions in specific building systems as prescribed in subsection C of this section.

E. All state agencies shall procure energy efficient products that are certified by the United States department of energy or the United States environmental protection agency as energy star or that are certified under the federal energy management program in all categories that are available unless the products are shown not to be cost-effective on a life cycle cost basis.
A.R.S. § 34-258 — Arizona Code / Title 34 / Chapter 2 / Article 4 / Section 258
34-258 Enforcement jurisdiction
Status: in_force

34-258. Enforcement jurisdiction

The attorney general or a county attorney has jurisdiction to enforce the provisions of this article.
A.R.S. § 34-301 — Arizona Code / Title 34 / Chapter 3 / Article 1 / Section 301
34-301 Employment of aliens on public works prohibited
Status: in_force

34-301. Employment of aliens on public works prohibited

A. A person not a citizen or ward of the United States shall not be employed upon or in connection with any state, county or municipal works or employment.

B. This section shall not be construed to prevent the working of prisoners by the state or a county or municipality thereof on street, road, or other public work, nor shall the provisions of this section apply to the employment of any teacher, instructor or professor authorized to teach in the United States under the teacher exchange program as provided by federal statutes or the employment of university or college faculty members.
A.R.S. § 34-103 — Arizona Code / Title 34 / Chapter 1 / Article 1 / Section 103
34-103 Employment of technical registrants for work on public buildings and structures; direct selection; final list selection; public competition
Status: in_force

34-103. Employment of technical registrants for work on public buildings and structures; direct selection; final list selection; public competition

A. An agent shall procure professional services from a technical registrant in the manner prescribed in chapter 6 of this title if the contract is for an amount of more than five hundred thousand dollars.

B. An agent may procure professional services from a technical registrant in the manner prescribed in chapter 6 of this title or as prescribed in subsection D of this section if the contract is for an amount of five hundred thousand dollars or less.

C. If authority is given by law to an agent to construct a building or structure, or additions to or alterations of existing buildings, the agent shall employ an architect or engineer, or both, as warranted by the type of construction, if the agent deems the work to be of a nature that requires such employment.

D. An agent may employ a technical registrant by direct selection, by public competition pursuant to subsection G of this section or pursuant to subsections E and F of this section if the contract is for an amount of five hundred thousand dollars or less.

E. The agent may elect to employ a technical registrant or technical registrants by encouraging persons or firms engaged in the lawful practice of the profession to submit annually a statement of qualifications and experience. If the agent elects to employ a technical registrant or technical registrants by this method, the agent shall initiate an appropriately qualified selection committee for each procurement, which may include one contract or multiple contracts, in accordance with rules adopted by the agent. The amount of each contract in a single procurement under this subsection and subsection F of this section shall not exceed the dollar amount limits in subsections B and D of this section. The selection committee shall evaluate current statements of qualifications and experience on file with the agent together with those that may be submitted by other persons or firms regarding the procurement. If possible and practicable, the selection committee shall conduct interviews regarding the procurement and the relative methods of furnishing the required services and, if possible, shall select, in order of preference and based on criteria established and published by the selection committee, one or more final lists of the persons or firms deemed to be the most qualified to provide the services required. The selection committee shall base the selection of each final list and the order of preference on each final list on demonstrated competence and qualifications only. The agent and the selection committee shall not request or consider fees, price, man-hours or any other cost information at any point in the selection process under this subsection, including the selection of the persons or firms to be interviewed, the selection of the persons and firms to be on a final list, in determining the order of preference of persons and firms on a final list or for any other purpose in the selection process. If the procurement is for:

1. A single contract or if the procurement is for multiple contracts to be awarded to a single person or firm, there shall be one final list of at least three but no more than five persons or firms.

2. Multiple contracts for different technical registrant services to be awarded to separate persons or firms, there shall be a separate final list for each type of technical registrant services and the number of persons or firms on each final list shall be the number of contracts for each type of technical registrant service plus another number that is determined by the agent and that is not more than five.

3. Multiple contracts for similar technical registrant services to be awarded to separate persons or firms, there shall be one final list and the number of persons or firms on the final list shall be the number of contracts plus another number that is determined by the agent and that is not more than five.

F. After each final list is selected pursuant to subsection E of this section, the agent shall enter into negotiations with the highest qualified person or firm on each final list or, in the case of a final list for multiple contracts to be awarded to separate persons or firms, the agent shall enter into negotiations with a number of the highest qualified persons or firms on a final list equal to the number of contracts that may or will be awarded. The negotiations shall include consideration of compensation and other contract terms that the agent determines to be fair and reasonable to the agent. In making this determination, the agent shall take into account the estimated value, the scope, the complexity and the nature of the professional services to be rendered. If the agent is not able to negotiate a satisfactory contract with a person or firm with which the agent is negotiating at a price and on other contract terms the agent determines to be fair and reasonable, the agent shall formally terminate negotiations with that person or firm.  The agent may enter into negotiations with the next most qualified person or firm on the final list in sequence until an agreement is reached or a determination is made to reject all persons or firms on the final list.  If the agent terminates negotiations with a person or firm on a final list and commences negotiations with another person or firm on a final list, the agent shall not in that procurement recommence negotiations or enter into the single contract or multiple contracts for the technical registrant services covered by that final list with any person or firm on that final list with whom the agent has terminated negotiations.

G. If competitive designs are solicited, the agent shall publish notice of the competition at least thirty days before the date set for closing the competition.  The notice shall include the following:

1. The project title and description.

2. The design and construction budget.

3. The competitive process and criteria to be used to select the winning offeror.

4. The amount of the stipend to be paid to the unsuccessful offerors.

5. The offerors' response date.

6. The person to contact to obtain additional information regarding the competition.

7. Any other requirements established by the agent as appropriate.
A.R.S. § 34-610 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 610
34-610 Construction-manager-at-risk, design-build and job-order-contracting construction services surety bond required; suit on bond; limitations
Status: in_force

34-610. Construction-manager-at-risk, design-build and job-order-contracting construction services surety bond required; suit on bond; limitations

A. Except if specifically exempted by statute, before an agent executes any contract with any person or firm for construction-manager-at-risk construction services, design-build construction services or job-order-contracting construction services, the person or firm shall furnish to the agent entering into the contract the following bonds, except that the bonds shall be furnished only on and at the same time as execution of a contract or an amendment to a contract that commits the contractor to provide construction for a fixed price, a guaranteed maximum price or any other fixed amount within a designated time frame:

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 of the contract, except that:

(a) For job-order-contracting construction services, the performance bond shall cover the full amount of construction under the job-order-contracting construction services contract, shall not include any design services, preconstruction services, finance services, maintenance services, operations services or other related services included in the contract, may be a single bond for the full term of the contract, a separate bond for each year of a multiyear contract or a separate bond for each job order, as determined by the agent, and, if a single bond for the full term of the contract or a separate bond for each year of a multiyear contract, shall initially be based on the agent's reasonable estimate of the amount of construction that the agent believes is likely to actually be done during the full term of the contract or during the particular year of a multiyear contract, as applicable.

(b) For construction-manager-at-risk construction services and design-build construction services, the amount of the performance bond shall be the price of construction and shall not include the cost of any design services, preconstruction services, finance services, maintenance services, operations services or any other related services included in the contract.  The performance 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 the contractor's subcontractors in the prosecution of the construction and not for the protection of persons providing any design services, preconstruction services, finance services, maintenance services, operations services or other related services provided for in the contract, except that:

(a) For job-order-contracting construction services, the payment bond shall cover the full amount of construction under the job-order-contracting construction services contract, shall not include any design services, preconstruction services, finance services, maintenance services, operations services or other related services included in the contract, may be a single bond for the full term of the contract, a separate bond for each year of a multiyear contract or a separate bond for each job order, as determined by the agent, and, if a single bond for the full term of the contract or a separate bond for each year of a multiyear contract, shall initially be based on the agent's reasonable estimate of the amount of construction that the agent believes is likely to actually be done during the full term of the contract or during the particular year of a multiyear contract, as applicable.

(b) For construction-manager-at-risk construction services and design-build construction services, the amount of the payment bond shall be the price of construction and shall not include the cost of any design services, preconstruction services, finance services, maintenance services, operations services or any other related services included in the contract.

B. Each bond shall include a provision allowing the prevailing party in a suit on the bond to recover as a part of the judgment any reasonable attorney fees as may be fixed by the court.

C. Notwithstanding any other statute, each 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. The bonds shall be filed in the office of the department, board, commission, institution, agency or other contracting body awarding the contract.

E. It is illegal for a request for qualifications or a request for proposals pursuant to section 34-603 or 34-604, or any person acting or purporting to act on behalf of the contracting body, to require that 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 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 construction 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 title 34, chapter 6, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions, conditions and limitations of title 34, chapter 6, 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 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 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 title 34, chapter 6, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with title 34, chapter 6, 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 the court. The performance under this bond is limited to the construction to be performed under the contract and does not include any design services, preconstruction services, finance services, maintenance services, operations services or any other related services included in the contract.

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 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 this section, regardless of their actual form, are deemed by law to be in the form required and set forth in this section.
A.R.S. § 34-255 — Arizona Code / Title 34 / Chapter 2 / Article 4 / Section 255
34-255 Convicted persons; contracting employment; prohibition
Status: in_force

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.
A.R.S. § 34-226 — Arizona Code / Title 34 / Chapter 2 / Article 2 / Section 226
34-226 State preemption; indemnity agreements in construction and design professional services contracts void; definitions
Status: in_force

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.
A.R.S. § 34-242 — Arizona Code / Title 34 / Chapter 2 / Article 3 / Section 242
34-242 Preference for locally manufactured materials in awarding contracts for furnishing materials
Status: in_force

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.
A.R.S. § 34-243 — Arizona Code / Title 34 / Chapter 2 / Article 3 / Section 243
34-243 Preference for materials supplied by resident dealers in awarding contracts for furnishing materials
Status: in_force

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.
A.R.S. § 34-608 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 608
34-608 Bid security for design-build and job-order-contracting construction services
Status: in_force

34-608. Bid security for design-build and job-order-contracting construction services

A. As a guarantee that the contractor will enter into a contract, bid security is required for all design-build construction services and all job-order-contracting construction services awarded by an agent by competitive sealed proposals pursuant to section 34-603, subsection F or 34-604, subsection F if the agent estimates that the budget for construction, excluding the cost of any finance services, maintenance services, operations services, design services, preconstruction services or other related services, will be more than the amount prescribed in section 41-2535, subsection D. Each proposal for design-build construction services or job-order-contracting construction services shall be accompanied by a certified check, cashier's check or surety bond.  The bid security amount for design-build construction services shall be an amount equal to ten percent of the agent's budget for construction, excluding any finance services, maintenance services, operations services, design services, preconstruction services or other related services, for the project as stated in the request for proposals. The bid security amount for job-order-contracting construction services shall be the amount determined by the agent and stated in the request for proposals and shall not be more than ten percent of the agent's reasonably estimated budget for construction that the agent believes is likely to actually be done during the first year of the job-order-contracting contract, excluding any finance services, maintenance services, operations services, design services, preconstruction services or other related services that are included in the contract.

B. The agent shall return the certified check, cashier's check or surety bond to the contractors whose proposals are not accepted and to the successful contractor on the execution of satisfactory payment and performance bonds, insurance and the contract as provided in this chapter.

C. 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 bond shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied.

D. The conditions and provisions of the surety 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 any larger amount for which the obligee may contract in good faith with another party to perform the work covered by the proposal, this obligation is void. Otherwise it remains in full force and effect. Provided, however, that this bond is executed pursuant to section 34-608, 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 in this agreement.

E. If the request for proposals requires security, noncompliance requires that the agent reject the proposal for noncompliance with the security requirement, unless the agent determines that the bid fails to comply in a nonsubstantial manner with the security requirements.

F. After the agent opens the proposals, the proposals are irrevocable for the period specified in the request for proposals, except as provided in section 34-603, subsection F or section 34-604, subsection F.  If a proposer is allowed to withdraw its proposal before award, no action may be had against the proposer or the bid security.

G. All bonds given by a contractor and surety pursuant to this section, regardless of their actual form, are deemed by law to be the form required and set forth in this section.
A.R.S. § 34-222 — Arizona Code / Title 34 / Chapter 2 / Article 2 / Section 222
34-222 Surety bond required; suit on bond; limitations
Status: in_force

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.
A.R.S. § 34-256 — Arizona Code / Title 34 / Chapter 2 / Article 4 / Section 256
34-256 Persons convicted; service prohibition
Status: in_force

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.
A.R.S. § 34-243.01 — Arizona Code / Title 34 / Chapter 2 / Article 3 / Section 243.01
34-243.01 Effect of transaction privilege and use taxes in awarding contracts for furnishing any kind of equipment or materials or construction
Status: in_force

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.
A.R.S. § 34-227 — Arizona Code / Title 34 / Chapter 2 / Article 2 / Section 227
34-227 Construction contracts; design professional services contracts; void provisions
Status: in_force

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.
A.R.S. § 34-611 — Arizona Code / Title 34 / Chapter 6 / Article 1 / Section 611
34-611 Payment bonds for construction-manager-at-risk, design-build and job-order-contracting construction services
Status: in_force

34-611. Payment bonds for construction-manager-at-risk, design-build and job-order-contracting construction services

A. Every claimant who has furnished labor or material in the prosecution of the construction provided for in a contract for construction-manager-at-risk construction services, design-build construction services and job-order-contracting construction services in respect of which a payment bond is furnished under section  34-610, and who has not been paid in full before the expiration 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, unpaid at the time of institution of the suit and to prosecute the action to final judgment for the sums justly due the claimant, and have execution thereon, provided, however, that any  claimant having a direct contractual relationship with a subcontractor of the contractor furnishing the payment bond but no contractual relationship express or implied with the contractor shall have a right of action on the payment bond on giving the contractor only 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 and H, and on giving written notice to the contractor within ninety days from 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 notice shall be served by registered or certified mail, postage prepaid, in an envelope addressed 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 suit may be commenced after the expiration of one year from the date on which the last of the labor was performed or materials were supplied by the person bringing this suit.

C. The contracting body and the agent in charge of its office shall furnish to anyone making written application therefor and who states that it has supplied labor or materials for work, and payment therefor has not been made, or that it is being sued on any bond, or that it is the surety on the bond, a certified copy of the bond and the contract for which it was given, which copy is prima facie evidence of the contents, execution and delivery of the original. Applicants shall pay for these certified copies such reasonable fees as the contracting body or the agent in charge of its office fixes to cover the actual cost of preparation of the copies.
A.R.S. § 34-244 — Arizona Code / Title 34 / Chapter 2 / Article 3 / Section 244
34-244 Provisions inapplicable to federal aid contracts when federal law conflicts
Status: in_force

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.