Source: https://www.zlien.com/bond-claims/louisiana-bond-claim-faqs/
Timestamp: 2019-05-22 06:32:57
Document Index: 777121572

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Mechanic Lien Law Resources for Louisiana - State Projects
Louisiana Resources Home
Louisiana Bond Claim (Little Miller Act) Overview
Louisiana Bond Claim (Little Miller Act) FAQs
Louisiana Bond Claim (Little Miller Act) Statutes
It’s easy to file and manage your Louisiana bond claims with zlien, the industry’s only all-in-one bond claim and security rights management platform. Get complete control over your bond claim rights on a state, county, or municipal project, by using intelligent technology. To learn more about Louisiana’s bond claim laws and requirements, read the frequently asked questions below.
The lien - "Sworn Statement of Claim" - must be filed within 45 days from the completion of the public works project. Must be enforced with a foreclosure action within 1 year of filing.
Those Who Lease Equipment must deliver a copy of the lease to the governing authority having the work done within 10 days from the first delivery of equipment to the project. Material suppliers to a subcontractor must send a notice of non-payment to the general contractor within 75 days from the last day of the month in which the material was delivered.
Who Is Protected under Louisiana Bond Claim Laws?
In Louisiana, suit may be brought on a payment bond by a furnisher of labor and/or materials to the contractor or subcontractor, including those renting or leasing equipment. Further, parties who transport or deliver materials and/or supplies, and architects, surveyors, engineers, and other design professionals are also covered.
When is the Deadline to File a Louisiana Bond Claim?
Claimants must file statement of claim or give written notice after the maturity of the claim, but within 45 days from either: recordation of notice of acceptance of work by governing authority or from notice of default by contractor or subcontractor.
Who Should Receive the Louisiana Bond Claim?
The claim must be given to the governing authority contracting for the improvement (public entity), and filed in the Recorder of Mortgages for the parish in which the work is done. Further, if the claimant does not have a direct contract with the general contractor, the claim must also be given to the general.
Also, in order to preserve a right to attorney’s fees, the claimant must make an amicable demand for payment on the principal and the surety after the claim has been filed.
When is the Deadline to Initiate Suit, or, How Long is My Louisiana Bond Claim Effective?
Suit must be initiated within one year from recordation of acceptance of work or notice of contractor’s default. It appears that at least 45 days must elapse after the completion or abandonment of the work prior to the claimant filing suit.
What Must the Louisiana Bond Claim Include?
The amount being claimed and the party to which the labor/ materials were supplied.
Louisiana does not have statutory lien waiver forms, and therefore, you can use any lien waiver forms. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers. See this article: Should You Sign That Lien Waiver?.
Louisiana state law is unclear or silent about whether contractors and suppliers can waive their lien rights before any work on the project begins. Accordingly, you want to proceed with caution on this subject. You can learn more about such “no lien clauses” at this article: Where Can You Waive Your Lien Rights Before Payment?
No, suppliers to suppliers likely cannot file a bond claim in Louisiana.
How Must the Louisiana Bond Claim Be Sent?
The claim must be filed with the public entity, and recorded in the office of the Recorder of Mortgages in the parish in which the labor and/or materials were furnished. The claim must also be sent to the general contractor by registered or certified mail, or by personal delivery.
Louisiana Public Project Preliminary Notice FAQs
Generally in Louisiana, preliminary notice is not required in order to make a bond claim. However, an exception exists for equipment lessors in all cases, and for material suppliers to subcontractors if the contract has been recorded. Other claimants may give notice, but are not required to.
When required, failure to send preliminary notice timely is fatal to the claim.
To Whom Must the Louisiana Preliminary Notice be Given?
When you perform work on a state construction project in Louisiana, and are not paid, you can file a “lien” against the project pursuant to Louisiana’s Little Miller Act. Since the claim is not against the state or county’s actual property, but instead against a posted bond, the claim is not really called a “lien” but is more frequently referred to as a “bond claim” or “little miller act claim.”
Louisiana ‘s Little Miller Act is a bit segregated, whereby normal “Public Contracts” are governed by La. R.S. 38:2181 – 2247, and “Roads, Bridges and Ferries” are governed by La. R.S. 48:250 – 256.12. Both titles are reproduced below.
Title 38: Public Contracts, Works and Improvements.
§38.2181. Venue of Suits.
§ 38:2189. Prescription
Any action against the contractor on the contract or on the bond, or against the contractor or the surety or both on the bond furnished by the contractor, all in connection with the construction, alteration, or repair of any public works let by the state or any of its agencies, boards or subdivisions shall prescribe 5 years from the substantial completion, as defined in R.S. 38:2241.1, or acceptance of such work, whichever occurs first, or of notice of default of the contractor unless otherwise limited in this Chapter.
§ 38:2189.1. Prescription; claims by contractors; surety
Any action by the contractor on the contract or on the bond, or by the contractor or the surety or both on the bond furnished by the contractor, against the state, or any of its agencies, boards or subdivisions, all in connection with the construction, alteration, or repair of any public works let by the state or any of its agencies, boards, or subdivisions, shall prescribe five years from the completion, the substantial completion, as defined in R.S. 38:2241.1, or acceptance of such work, whichever occurs first, or of notice of default of the contractor or other termination of the contract, unless otherwise limited in this Chapter. Any action which would be extinguished by the provisions of this Section may be brought within one year of the effective day of this Section.
PART II: LETTING CONTRACTS
§ 38:2211. Definitions
(7) (a) “Louisiana resident contractor” for the purposes of this Part, includes any person, partnership, association, corporation, or other legal entity and is defined as one that either:
(b) For the purposes of Item (7)(a)(ii) of this Paragraph, ownership percentages shall be determined on the basis of:
§ 38:2216. Written contract and bond
(2) Repealed by Acts 2001, No. 138, §1, eff. July 1, 2001.
(2) (a) For purposes of this Subsection, “responsible bidder” shall mean a contractor or subcontractor who has an established business and who has demonstrated the capability to provide goods and services in accordance with the terms of the contract, plan, and specifications without excessive delays, extensions, cost overruns, or changes for which the contractor or subcontractor was held to be responsible, and who does not have a documented record of past projects resulting in arbitration or litigation in which such contractor or subcontractor was found to be at fault.
E. In the event the responsible bidder, though meeting the requirements of Subsection D of this Section, is unable to secure the performance bond required under Paragraph C(1) of this Section, the responsible bidder shall pay a fee equal to the cost of a Small Business Administration guaranteed bond, as provided for under the provisions of Paragraph C(1) of this Section. All such fees shall be paid into the state treasury by the commissioner of administration and shall be credited to the Bond Security and Redemption Fund.
(2) From the contractor to any architect, landscape architect, engineer, or land surveyor engaged by the public body for such damages caused by the negligence of such architect, landscape architect, engineer, or land surveyor is contrary to the public policy of the state, and any and all such provisions in any and all contracts are null and void.
(a) Meets the definition and requirements of a “responsible bidder” as set forth in Paragraph C(2) of this Section.
(2) Notwithstanding the provisions of Paragraph (1) of this Subsection, in any parish or municipality with a population in excess of four hundred twenty-five thousand, the parish or municipality may require a contractor to pay for the additional costs incurred by a parish or municipality with respect to inspections of the contracted project provided the additional costs for inspections are above the budgeted amount for the contracted project, and further provided that the specifications or bidding documents include the average hourly rate to be charged for inspection and specify a reasonable budget for such inspections.
§ 38:2217. Independent arbitration; judicial review; evidence
In all public building, construction or other contracts which do not provide the right to independent arbitration with both parties having equal authority in selection of the arbitrator or arbitrators, the right of each party to such contract to judicial review of and redress for any action, determination or interpretation made under or with respect to such contract shall not be denied. In any such judicial action, no prior nonjudicial decision, determination or interpretation shall have any binding or conclusive or presumptive effect, nor shall there be any limitation upon the evidence which may be introduced in such action except the limitations arising out of the application of the rules of evidence applicable in courts of this state. The provisions of this Section may not be waived.
§ 38:2218. Evidence of good faith; countersigning
A. The public entity advertising for bids for work shall require the bidders to attach a certified check, cashier’s check, or bid bond for not more than five percent of the contract price of work to be done, as an evidence of good faith of the bidder. The public entity advertising for bids for work may require the bidders to attach a certified check, cashier’s check, or bid bond for not more than five percent of the estimated price of supplies or materials, as evidence of good faith of the bidder.
B. Repealed by Acts 2001, No. 138, §1, eff. July 1, 2001.
C. If bid bond is used, it shall be written by a surety or insurance company currently on the U.S. Department of the Treasury Financial Management Service list of approved bonding companies which is published annually in the Federal Register, or by a Louisiana domiciled insurance company with at least an A- rating in the latest printing of the A.M. Best’s Key Rating Guide to write individual bonds up to ten percent of policyholders’ surplus as shown in the A.M. Best’s Key Rating Guide or by an insurance company in good standing licensed to write bid bonds which is either domiciled in Louisiana or owned by Louisiana residents.
§ 38:2219. Procurement of surety bonds and insurance
A. (1) (a) Any surety bond written for a public works project shall be written by a surety or insurance company currently on the U.S. Department of the Treasury Financial Management Service list of approved bonding companies which is published annually in the Federal Register, or by a Louisiana domiciled insurance company with at least an A- rating in the latest printing of the A.M. Best’s Key Rating Guide to write individual bonds up to ten percent of policyholders’ surplus as shown in the A.M. Best’s Key Rating Guide, or by an insurance company that is either domiciled in Louisiana or owned by Louisiana residents and is licensed to write surety bonds.
(b) For any public works project, no surety or insurance company shall write a bond which is in excess of the amount indicated as approved by the U.S. Department of the Treasury Financial Management Service list or by a Louisiana domiciled insurance company with an A- rating by A.M. Best up to a limit of ten percent of policyholders’ surplus as shown by A.M. Best; companies authorized by this Paragraph who are not on the treasury list shall not write a bond when the penalty exceeds fifteen percent of its capital and surplus, such capital and surplus being the amount by which the company’s assets exceed its liabilities as reflected by the most recent financial statements filed by the company with the Department of Insurance.
§ 38:2241. Written contract and bond
§ 38:2241.1. Acceptance of governing authority
A. When any the public entity enters into a written contract for the construction, alteration, or repair of any public works, in accordance with the provisions of R.S. 38:2241, the official representative of the public entity shall have recorded in the office of the recorder of mortgages, in the parish where the work has been done, an acceptance of such work or of any specified area of such work, not later than thirty calendar days after the date of completion or substantial completion of such work.
B. “Substantial completion” is defined for the purpose of this Chapter, as the finishing of construction, in accordance with the contract documents as modified by any change orders agreed to by the parties, to the extent that the public entity can use or occupy the public works or use or occupy the specified area of the public works for the use for which it was intended. The recordation of an acceptance in accordance with the provisions of this Section upon substantial completion shall be effective as an acceptance for all purposes under this Chapter.
C. Any public entity that does not file for recordation an acceptance of public work, shall require the contractor to have recorded in the office of the recorder of mortgages, in the parish where the work has been done, an acceptance of such work or of any specified area of such work, not later than forty-five calendar days after the date of completion or substantial completion of the work. This acceptance shall not be executed except upon the recommendation of the design professional hired by the public entity whose recommendation may be made not later than thirty calendar days after the date of completion or substantial completion of such public work.
§ 38:2242. Claimant defined; filing of sworn statements of amounts due; payment by contracting authority
§ 38:2242.1. Authorization to cancel the inscription of claims and privileges; cancellation; lis pendens
A. If a statement of claim or privilege is improperly filed or if the claim or privilege preserved by the filing of a statement of claim or privilege is extinguished, the public entity, contractor, or subcontractor, or other interested person may require the person who has filed a statement of claim or privilege to give a written authorization directing the recorder of mortgages to cancel the statement of claim or privilege from his records. The authorization shall be given within ten days after a written request for authorization has been received by the person filing the statement of claim or privilege from a person entitled to demand it.
B. One who, without reasonable cause, fails to deliver written authorization to cancel a statement of claim or privilege as required by Subsection A of this Section shall be liable for damages suffered by the public entity, contractor, subcontractor, or other interested person requesting the authorization as a consequence of the failure and for reasonable attorney’s fees incurred in causing the statement to be cancelled.
C. A person who has properly requested written authorization for cancellation shall have an action against the person required to deliver the authorization to obtain a judgment declaring the claim or privilege extinguished and directing the recorder of mortgages to cancel the statement of claim or privilege if the person required to give the authorization fails or refuses to do so within the time required by Subsection A of this Section. The plaintiff may also seek recovery of damages and attorney’s fees to which he may be entitled under this Section.
D. The action authorized by this Section may be by summary proceeding and may be brought in the parish where the statement of claim or privilege is recorded.
E. The recorder of mortgages shall cancel a statement of claim or privilege from his records by making an appropriate notation in the margin of the recorded statement upon the filing with him, by any person, of:
(2) A certified copy of an executory judgment declaring the claim or privilege extinguished and directing the cancellation.
F. The effect of filing for recordation of a statement of claim or privilege and the privilege preserved by it shall cease as to third persons unless a notice of lis pendens identifying the suit is filed within one year after the date of filing the claim or privilege. In addition to the requirements of Article 3752 of the Code of Civil Procedure, the notice of lis pendens shall contain a reference to the notice of contract, if one is filed, or a reference to the recorded statement of claim or privilege if a notice of contract is not filed.
§ 38:2242.2. Filing of bond or other security; cancellation of statement of claim or privilege
A. If a statement of claim or privilege is filed, any interested party may deposit with the recorder of mortgages either a bond of a lawful surety company authorized to do business in the state or cash, certified funds, or a federally insured certificate of deposit to guarantee payment of the obligation secured by the privilege or that portion as may be lawfully due together with interest, costs, and attorney’s fees to which the claimant may be entitled up to a total amount of one hundred twenty-five percent of the principal amount of the claim as asserted in the statement of claim or privilege. A surety shall not have the benefit of division or discussion.
B. If the recorder of mortgages finds the amount of the cash, certified funds, or certificate of deposit or the terms and amount of a bond deposited with him to be in conformity with this Section, he shall note his approval on the bond and make note of either the bond or of the cash, certified funds, or certificate of deposit in the margin of the statement of claim or privilege as it is recorded in the mortgage records and cancel the statement of claim or privilege from his records by making an appropriate notation in the margin of the recorded statement. The bond shall not be recorded but shall be retained by the recorder of mortgages as a part of his records.
C. Any party who files a bond or other security to guarantee payment of an obligation secured by a privilege in accordance with the provisions of Subsection A of this Section shall give notice to the public entity, the claimant, and the contractor by certified mail.
§ 38:2243. Petitions by authorities against claimants, contractors, and surety; preferential payment of claimants
A. If at the expiration of the forty-five days any filed and recorded claims are unpaid, the public entity shall file a petition in the proper court of the parish where the work was done, citing all claimants and the contractor, subcontractor, and surety on the bond and asserting whatever claims it has against any of them, and shall require the claimants to assert their claims. If the governing authority fails to file the proceeding any claimant may do so.
B. All the claims shall be tried in concursus and the claims of the claimants shall be paid in preference to the claims of the public entity.
§ 38:2244. Liability on bond; summary trial of objections to solvency and sufficiency of bond
A. If no objections are made by any claimant to the solvency or sufficiency of the bond required of the contractor by this Part, the public entity shall, ten days after the service of judicial notice of the concursus proceeding on each claimant having recorded claims, obtain a certificate to that effect from the clerk of court. The certificate shall relieve the public entity of any personal liability and the recorder of mortgages shall cancel all of the recorded claims.
B. If any objections are made by the claimants they shall be tried summarily. Whenever it is found that the surety is not solvent or sufficient to cover the amount of the bond or that the public entity has failed to exact the bond or record the bond within the time allowed, the public entity shall be in default and shall be liable to the same extent as the surety would have been. The surety on the bond shall be limited to the defenses which the principal has on the bond.
§ 38:2245. Proceedings tried summarily
All proceedings brought under this Part shall be tried summarily and referred to a commissioner, as provided by law, who shall report his findings to the court at the earliest date possible.
§ 38:2246. Attorney's fees
A. After amicable demand for payment has been made on the principal and surety and thirty days have elapsed without payment being made, any claimant recovering the full amount of his timely and properly recorded or sworn claim, whether by concursus proceeding or separate suit, shall be allowed ten percent attorney’s fees which shall be taxed in the judgment on the amount recovered.
B. If the trial court finds that such an action was brought by any claimant without just cause or in bad faith, the trial judge shall award the principal or surety a reasonable amount as attorney’s fees for defending such action.
§ 38:2247. Construction of Part
Nothing in this Part shall be construed to deprive any claimant, as defined in this Part and who has complied with the notice and recordation requirements of R.S. 38:2242(B), of his right of action on the bond furnished pursuant to this Part, provided that said action must be brought against the surety or the contractor or both within one year from the registry of acceptance of the work or of notice of default of the contractor; except that before any claimant having a direct contractual relationship with a subcontractor but no contractual relationship with the contractor shall have a right of action against the contractor or the surety on the bond furnished by the contractor, he shall in addition to the notice and recordation required in R.S. 38:2242(B) give written notice to said contractor within forty-five days from the recordation of the notice of acceptance by the owner of the work or notice by the owner of default, 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 or service was done or performed. Such notice shall be served by mailing the same by registered or certified mail, postage prepaid, in an envelope addressed to the contractor at any place he maintains an office in the state of Louisiana.
§ 48:250. Application of this Part
A. All projects for the construction or maintenance of, or improvements to, highways or other public facilities under the control of or advertised and let by the Department of Transportation and Development shall, except as otherwise provided in this Part, be undertaken only under contract.
B. Every contract exceeding the contract limit, as defined herein, for construction, maintenance, or improvement of a department facility under the provisions of this Part shall be made in the name of the department and shall be signed by the secretary of the Department of Transportation and Development or his duly appointed designee and by the contracting party. The contract limit for this Part is hereby defined to equal five hundred thousand dollars. No such contract shall be entered into nor shall any such work be authorized which will create a liability on the part of the state in excess of the funds available or which will be available for the project.
C. Every contract for the construction of or improvements to highways shall include a warranty by the contractor as to the quality of materials and workmanship for a duration of three years. The Department of Transportation and Development shall implement the purposes of this Subsection and shall submit a report on its implementation of the warranty requirements to the Joint Legislative Committee on Transportation, Highways and Public Works no later than July 1, 1998.
D. There shall be established by the Department of Transportation and Development a cash management plan which shall to the greatest extent possible effectively and efficiently utilize the funds appropriated or otherwise made available to the department to assure the timely construction of projects. The department shall submit a report on its implementation of the cash management plan to the House and Senate Committees on Transportation, Highways and Public Works and to the Joint Legislative Committee on the Budget no later than July 1, 1998.
§ 48:251.2. Prescription
Any action against a contractor on a contract or on the bond furnished by the contractor, or against a contractor or the surety or both on the bond furnished by the contractor, all in connection with the construction or maintenance of any public works let by the department shall prescribe five years from recordation of the acceptance of such work, or of notice of default of the contractor, whichever occurs first.
§ 48:251.3. Prescription; claims by contractors; surety
Any action arising out of or related to a department contract or on the bond furnished by a contractor shall prescribe five years from recordation of the acceptance of such contract or of notice of default of the contractor or other termination of the contract, whichever occurs first. Any action which would be extinguished by the provisions of this Section may be brought within one year of July 14, 1997.
§ 48:251.5. Payments under contract
B. (1) If the department fails to make any final payments after recordation of formal final acceptance and within forty-five days following receipt of a clear lien certificate by the department, the retainage or other payments known by the department to be due and payable shall be released, but the contractor and the contractor’s surety shall remain liable for any overpayment by the department to the contractor, stipulated damages for delay in completion or work necessary to repair latent defects, or in performance of warranty work under the contract.
(2) If the department fails to make any final payment within one hundred days after its receipt of the clear lien certificate, the department shall be liable for legal interest on the balance due on the contract.
§ 48:251.8. Public contracts; certain provisions invalid
The legislature hereby declares null and void and unenforceable as against public policy any provision in a department contract which requires either of the following:
(1) That a suit or arbitration proceeding must be brought in a forum or jurisdiction outside of this state, instead of being pursued in accordance with the laws of this state governing such actions.
(2) That the agreement must be interpreted according to the laws of another jurisdiction.
SUBPART B. BIDDING OF DEPARTMENT PROJECTS
§ 48:253. Bid bonds accompanying bids
A. Every bid submitted for projects in excess of fifty thousand dollars shall be accompanied by a bid bond guaranteed by a surety company qualified to do business in this state. The bid bond submitted shall be for five percent of the official bid amount.
B. (1) The bid bond shall be forfeited to the department or other named obligee if the bidder fails to make the required bond, fails to execute the contract, or fails to comply with any provision necessary for execution of the contract.
(2) Should the forfeited bid bond in any manner be limited or not payable on demand, the bidder will be disqualified from bidding or approval as a subcontractor on any department advertised project for a period of one year following nonpayment.
C. The bid bonds of unsuccessful bidders shall not be returned by the department.
D. Bid bonds shall be written by a surety or insurance company currently on the U.S. Department of Treasury Financial Management Service list of approved bonding companies which is published annually in the Federal Register, or by a Louisiana-domiciled insurance company with at least an A- rating in the latest printing of the A. M. Best’s Key Rating Guide.
§ 48:255. Award of contract; time limitations and exceptions; bond of successful bidder; rejection of certain bidders
A. The department shall establish specific bidding requirements, in accordance with the provisions of this Part, provisions of the Federal Highway Administration, if applicable, and other provisions as necessary and will include these requirements in the project specifications and bid package issued to prospective bidders. Bids of prospective bidders shall conform to these requirements. Bids not submitted in accordance with this Subpart or such other specified requirements are irregular and must be rejected by the department.
B. (1) For all construction, maintenance, or improvement projects for department facilities or other public facility projects, advertised and let by the department, the department or the contracting agency may reject any and all bids for just cause but otherwise shall, with the concurrence of all funding sources, award the contract to the lowest responsible bidder within forty-five calendar days after receipt of bids or twenty calendar days after receipt by the department of concurrence in award from all project funding agencies, whichever occurs last, unless the department and the successful bidder mutually agree to extend the deadline. However, in cases where concurrence in award is required, the department shall award the contract no later than sixty calendar days after receipt of bids unless the department and the successful bidder mutually agree to extend the deadline.
(2) Should the successful low bidder not agree to extend the time period for award beyond the above described period the bid guaranty will be returned to the bidder and the department may, at its discretion, award to the next low bidder or may readvertise the project.
(3) If the department delays the award of the project in bad faith beyond the period specified herein for award such that the low bidder cannot perform at the prices bid and the project is awarded to a higher bidder, the unsuccessful low bidder shall receive the costs of preparation of his bid on the project from the department.
(4) If the contract is to be financed by bonds which are required to be sold after receipt of bids on the construction contract, or if the contract is to be financed in whole or in part by federal or other funds which will not be available at the time construction bids are received, or if the contract requires a poll of the legislature prior to the release of funds for the contract, the time limitation for the award of a contract herein stipulated in this Section may be modified and, if modified, shall be reflected in the specifications for the construction project and in the official advertisement for bids required in accordance with R.S. 48:252.
(5) For the purposes of this Section “just cause” means but is not limited to the following circumstances:
(a) The department’s unavailability of funds sufficient for the construction of the proposed public work or the unavailability of funding participation in the project by anticipated funding sources.
(b) The failure of any bidder to submit a bid within an established threshold of the preconstruction estimate for the project by the department’s engineers.
(c) A substantial change by the department prior to the award in the scope or design of the proposed public work.
(d) A determination by the department not to build the proposed public work within twelve months of the date for the public opening and presentation of bids.
(e) The disqualification or rejection by the department of all bidders.
(f) The discovery by the department prior to the award of the project of an error, defect, or ambiguity in the bidding documents that may have affected the integrity of the competitive bidding process or may lead to a potential advantage or disadvantage to one or more of the bidders.
(6) If two or more responsive bids from responsible bidders are received for exactly the same price and no preference or other method exists to determine the lowest bidder, the chief engineer shall notify the tied bidders of a time and place where the lowest bidder on the project will be chosen by flipping a coin or by lots, as appropriate in the determination of the chief engineer. The department may readvertise the projects in its discretion.
(7) Repealed by Acts 2007, No. 386, §2, eff. July 1, 2007.
C. Bids containing patently obvious mechanical, clerical, or mathematical errors may be withdrawn by the contractor if clear and convincing sworn, written evidence of such errors is furnished to the department within seventy-two hours of the bid opening, excluding Saturdays, Sundays, or other legal holidays. If the department determines that the error is a patently obvious mechanical, clerical, or mathematical error, it shall accept the withdrawal request and return the bid security to the contractor. A contractor who withdraws a bid under the provisions of this Section shall not be allowed to resubmit a bid on the project. If the bid withdrawn is the lowest bid, the next lowest bid may be accepted. If all bids are rejected, any contractor who had withdrawn a bid prior to rejection of all bids shall not be eligible to bid on the project unless the re-advertisement and opening of bids is at least one hundred eighty days after the date the bid was withdrawn.
D. (1) When the bid is accepted for the construction, maintenance, or improvement to a department facility, or public works project, a written contract shall be entered into by the successful bidder and the department or contracting agency, and, on projects exceeding fifty thousand dollars, the party to whom the contract is awarded shall furnish good and solvent bond in an amount equal to the contract bid cost for the faithful performance of his duties.
(2) Any surety bond written for a department project shall be written by a surety or insurance company currently on the U.S. Department of Treasury Financial Management Service list of approved bonding companies which is published annually in the Federal Register, or by a Louisiana-domiciled insurance company with at least an A- rating in the latest printing of the A.M. Best’s Key Rating Guide.
(3) For any project advertised and let by the department, no surety or insurance company shall write a bond which is in excess of the amount indicated as approved for them by the United States Department of the Treasury Financial Management Service list of approved bonding companies as published annually in the Federal Register. For any project advertised and let by the department, a Louisiana-domiciled insurance company not on the U.S. Department of Treasury Financial Management Service list of approved bonding companies shall not write bonds exceeding ten percent of policyholder’s surplus as shown in the A.M. Best’s Key Rating Guide.
(4) In addition, any surety bond written for a project advertised and let by the department shall be written by a surety or insurance company that is licensed to do business in the state of Louisiana.
(5) The performance bond described by this Section shall inure solely to the benefit of the department and its successors or assigns, and no other person shall have any right of action based thereon.
E. The secretary shall reject any bid submitted by any firm, corporation, individual, or legal entity on any state funded project who, at the time or submission of bid, is prohibited from bidding or working on any federally funded project by the Federal Highway Administration.
F. (1) The contractor shall return the signed contracts along with good and solvent bond to the department or the contracting agency within fifteen calendar days following the transmittal of contracts for execution. After return of the surety bond and signed contracts from the contractor, the department or the contracting agency shall execute the contract documents within twenty calendar days.
(2) The department or contracting agency shall issue a work order to the successful contractor within sixty calendar days following execution of the contract. However, upon mutual written consent by all parties, the notice to proceed may be extended beyond the sixty days. Should the contractor not wish to extend the period from contract execution to work order beyond sixty days, the contractor may demand contract cancellation.
(3) Should the contract be canceled at the request of the contractor, the department may at its discretion award the contract to the next higher bidder if the next higher bidder so agrees, or the department, at its discretion, may readvertise and relet the contract. Should the contract be canceled at the request of the contractor, the contractor shall be compensated for the cost of procuring the bond or bonds required for the contract
(4) If the contractor demands cancellation, but the department does not cancel the contract, the contractor shall be entitled to an escalation of his bid prices for the period between the lapse of the sixty-day period and the actual work order to the extent that the contractor can prove such escalation during that period, but in no event shall such escalation exceed the rate of inflation reflected by the United States Bureau of Labor Statistics Wholesale Price Index for the relevant period.
§ 48:255.2. Liability of surety in case of default of contractor
Within thirty days after default by a contractor on a public works project, the department shall notify the surety company with whom the contractor acquired a performance bond. Such notification shall be in writing by certified mail or overnight delivery. Within thirty days of receipt of such notification, the surety company shall present to the department either a plan assuming performance on the contract and procuring, or tendering completion of the project, the bond penal sum, or provide the public entity in writing with a reasonable response for the contractor’s alleged default. If no plan is presented by the surety company and the public entity completes the project, the surety company shall then be responsible for payment to the public entity of the costs of completion of the project and stipulated damages assessed by the public entity up to the total amount of the bond purchased by the contractor. In addition, if the surety company has not timely completed the project and a court of competent jurisdiction has determined that the surety company has in bad faith refused to take over the project as provided in this Section, the surety company shall be responsible for the payment of any stipulated damages for any delay in the completion of the project as specified in the original contract and any reasonable attorney fees and court costs incurred by the public entity in collection of the payments required by this Section.
SUBPART C. CLAIMS BY SUBCONTRACTORS,
§ 48:256.3. Payment bond
A. (1) Whenever the department enters into a contract in excess of fifty thousand dollars for the construction, maintenance, alteration, or repair of any public works, the department shall require of the contractor a bond with good, solvent, and sufficient surety in a sum not less than fifty percent of the contract price for the payment by the contractor or subcontractor to claimants as defined in R.S. 48:256.5.
(2) The bond furnished shall be a statutory bond and no modification, omissions, additions in or to the terms of the contract, in the plans or specifications, or in the manner and mode of payment shall in any manner diminish, enlarge, or otherwise modify the obligations of the bond. The bond shall be executed by the contractor with surety or sureties approved by the department and shall be recorded with the contract in the office of the recorder of mortgages in the parish where the work is to be done not later than thirty days after the work has begun
(3) The recorded portion of the contract shall state that the undersecretary is the official of the department to whom claims against the contractor or surety or both shall be made and shall state with particularity the address for delivery of claims to the department pursuant to R.S. 48:256.5.
B. The payment provisions of all bonds furnished for department contracts described in this Subpart, regardless of form or content, shall be construed as and deemed statutory bond provisions. Any such bond which fails to contain any of the requirements set forth in this Subpart shall be deemed to incorporate all of the requirements set forth in this Section. Language in any such bond containing any obligations beyond the requirements set forth in this Part shall be deemed surplusage and read out of such bond. Sureties and contractors executing payment bonds for department contracts under this Subpart shall be immune from liability for or payment of any claims not required by this Subpart.
C. A bond issued pursuant to this Section shall not create, nor shall such bond be construed to create, any cause of action in favor of the department, or any third party, for personal injury or property damages sustained by any third party during the effective period of the bond. Nothing contained herein shall in any way limit the liability on the bond for the performance of the work pursuant to the contract in question; however, to the extent that the department contract in question should contain any provisions for a hold harmless or indemnity agreement, or both, by the contractor, in favor of the public entity, for personal injury or property damages sustained by third parties, the hold harmless or indemnity agreement, or both, shall not be deemed or construed to be secured by the bond, conditioned upon the concurrence of the contractor and the surety.
D. Any provisions of a bond issued pursuant to this Section which are contrary to Subsection C of this Section are hereby declared to be contrary to the public policy of the state of Louisiana and are null and void.
E. The provisions of this Section shall not be subject to waiver by contract.
§ 48:256.4. Acceptance by the department
Whenever the department enters into a contract for the construction, maintenance, alteration, or repair of any public works, in accordance with the provisions of this Subpart, the undersecretary or his duly appointed designee of the department shall have recorded in the office of the recorder of mortgages, in the parish where the work has been done, a final acceptance of said work or a partial acceptance of any specified area thereof upon completion of all of the work. The final acceptance shall be executed by the secretary or his duly appointed designee within thirty days of completion of all of the work on the project. The recordation of a final acceptance in accordance with the provisions of this Section shall be effective for all purposes under this Chapter.
§ 48:256.5. Claimant defined; filing of sworn statements of amounts due; payment by the department
C. (1) To be entitled to assert the claim given by Subsection B of this Section, the lessor of movables shall deliver a copy of the lease to the department and the contractor, not more than ten days after the movables are first placed at the site of the immovable for use in the work.
D. (1) The department shall withhold from progress payments and the final payment one hundred twenty-five percent of the amount claimed after receipt by the undersecretary of the department at the location specified in the recorded contract of a sworn statement of amount due from a claimant to the extent of payments due and owed the contractor after receipt of said claim.
§ 48:256.6. Authorization to cancel the inscription of claims and privileges; cancellation; lis pendens
A. (1) If a statement of claim or privilege is improperly filed or if the claim or privilege preserved by the filing of a statement of claim or privilege is extinguished, the public entity, contractor, or subcontractor, or other interested person may require the person who has filed a statement of claim or privilege to give a written authorization directing the recorder of mortgages to cancel the statement of claim or privilege from his records, or to file an original lien cancellation certificate with the recorder of mortgages and to submit a certified copy of the recorded lien cancellation certificate, showing the recordation data, with the undersecretary of the department.
(2) The authorization shall be given within ten days after a written request for authorization has been received by the person filing the statement of claim or privilege from a person entitled to demand it.
(3) One who, without reasonable cause, fails to deliver written authorization to cancel a statement of claim or privilege as required by Subsection A of this Section shall be liable for damages suffered by the department, contractor, subcontractor, or other interested person requesting the authorization as a consequence of the failure and for reasonable attorney fees incurred in causing the statement to be canceled.
(4) A person who has properly requested written authorization for cancellation shall have an action against the person required to deliver the authorization to obtain a judgment declaring the claim or privilege extinguished and directing the recorder of mortgages to cancel the statement of claim or privilege if the person required to give the authorization fails or refuses to do so within the time required by Subsection A of this Section. The plaintiff may also seek recovery of damages and attorney fees to which he may be entitled under this Section.
B. The action authorized by this Section may be by summary proceeding and may be brought in the parish where the statement of claim or privilege is recorded.
C. The recorder of mortgages shall cancel a statement of claim or privilege from his records by making an appropriate notation in the margin of the recorded statement upon the filing with him, by any person, of one of the following:
(1) A written request for cancellation, to which is attached a written authorization for cancellation given by the person who filed it.
D. The effect of filing for recordation of a statement of claim or privilege and the privilege preserved by it shall cease as to third persons unless a notice of lis pendens identifying the suit is filed within one year after the date of filing the claim or privilege. In addition to the requirements of Article 3752 of the Code of Civil Procedure, the notice of lis pendens shall contain a reference to the notice of contract, if one is filed, or a reference to the recorded statement of claim or privilege if a notice of contract is not filed.
§ 48:256.7. Filing of bond or other security; cancellation of statement of claim or privilege
A. If a statement of claim or privilege is filed, any interested party may deposit with the recorder of mortgages either a bond of a lawful surety company authorized to do business in the state or cash, certified funds, or a federally insured certificate of deposit to guarantee payment of the obligation secured by the privilege or that portion as may be lawfully due together with interest, costs, and attorney fees to which the claimant may be entitled up to a total amount of one hundred twenty-five percent of the principal amount of the claim as asserted in the statement of claim or privilege. A surety shall not have the benefit of division or discussion.
C. Any party who files a bond or other security to guarantee payment of an obligation secured by a privilege in accordance with the provisions of Subsection A of this Section shall give notice to the department, the claimant, and the contractor by certified mail, and shall file a certified copy of the cancellation of the statement of claim or privilege by the recorder of mortgages, showing the recordation data, with the undersecretary of the department by certified mail.
§ 48:256.8. Petitions by authorities against claimants, contractors, and surety; preferential payment of claimants
A. If at the expiration of the forty-five days any filed and recorded claims are unpaid, the department shall file a petition in the proper court of the parish where the work was done, citing all claimants and the contractor, subcontractor, and surety on the bond and asserting whatever claims it has against any of them, and shall require the claimants to assert their claims. If the department fails to file the proceeding any claimant may do so.
B. All the claims shall be tried in a concursus proceeding and the claims of the claimants shall be paid in preference to the claims of the department.
C. All suits for judgment against the contractor or the surety or both on the bond shall be filed as prescribed in this Section.
§ 48:256.9. Liability on bond; summary trial of objections to solvency and sufficiency of bond
A. If no objections are made by any claimant to the solvency or sufficiency of the bond required of the contractor by this Part, the department shall, ten days after the service of judicial notice of the concursus proceeding on each claimant having recorded claims, obtain a certificate to that effect from the clerk of court. The certificate shall relieve the department of any personal liability and the recorder of mortgages shall cancel all of the recorded claims.
B. If any objections are made by the claimants they shall be tried summarily. Whenever it is found that the surety is not solvent or sufficient to cover the amount of the bond or that the department has failed to exact the bond or record the bond within the time allowed, the department shall be in default and shall be liable to the same extent as the surety would have been. The surety on the bond shall be limited to the defense which the principal has on the bond.
§ 48:256.10. Proceedings tried summarily
All proceedings brought under this Part shall be tried summarily, if a commissioner is available in the venue of the suit, the proceeding shall be referred to a commissioner, as provided by law, who shall report his findings to the court at the earliest date possible.
§ 48:256.11. Attorney fees
A. After amicable demand for payment has been made on the principal and surety and thirty days have elapsed without payment being made, any claimant recovering the full amount of his timely and properly recorded or sworn claim in a concursus proceeding pursuant to this Subpart shall be allowed reasonable attorney fees which shall be taxed in the judgment on the amount recovered.
B. If the trial court finds that such an action was brought by any claimant without just cause or in bad faith, the trial judge shall award the principal or surety a reasonable amount as attorney fees for defending such action.
§ 48:256.12. Construction of Part
Nothing in this Part shall be construed to deprive any claimant, as defined in this Part and who has complied with the notice and recordation requirements of R.S. 48:256.5(B), of his right of action on the bond furnished pursuant to this Part, provided that said action must be brought against the surety or the contractor or both within one year from the registry of acceptance of the work or of notice of default of the contractor; except that before any claimant having a direct contractual relationship with a subcontractor but no contractual relationship with the contractor shall have a right of action against the contractor or the surety on the bond furnished by the contractor, he shall in addition to the notice and recordation required in R.S. 48:256.5(B) give written notice to said contractor and surety within forty-five days from the recordation of the notice of final acceptance by the department of the work or notice by the department of default, 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 or service was done or performed. Such notice shall be served by mailing the same by registered or certified mail, postage prepaid, in envelopes addressed separately to the contractor and surety at any place each maintains an office in the state of Louisiana.