2023 Indiana Code › Title 5. State and Local Administration › Article 16. Public Works › Chapter 5. Withholding and Bond to Secure Payment of Subcontractors, Labor, and Materialmen › 5-16-5-2. Payment Bonds; Payment Provisions in Contracts; Statements of Amount Due; Suits on Bond; Application of Statute to Bonds and Claims on State Highway Projects; Waiver of Bond Requirements for Certain State Educational Institution Projects

Sec. 2. (a) A contract awarded for a public work must provide for the payment of subcontractors, labor, suppliers of materials, and those performing service in connection with the public work. The contract must provide for the payment of subcontractors by withholding by the public body funds sufficient from the contract price to pay the subcontractors, labor, suppliers of materials, and those furnishing service in relation to or in connection with the public work. The contractor shall execute a bond to the state, approved by the public body in an amount equal to the total contract price. However, a contractor is not required to execute a bond under this section in the case of a contract entered into by a state educational institution, if the amount to be paid under the contract is less than five hundred thousand dollars ($500,000) and the state educational institution agrees to waive the requirement. The bond shall be conditioned for payment by the contractor, the contractor's successors and assigns, and by the subcontractors, their successors and assigns, of all indebtedness, which may accrue to any person for any labor or service performed, materials furnished, or service rendered in the public work. The bond by its terms shall be conditioned to directly inure to the benefit of subcontractors, laborers, suppliers of materials, and those performing service who have furnished or supplied labor, material, or service for the public work.
(b) The bond required under subsection (a) shall be deposited with the public body for the benefit of a person interested in and entitled to the bond. The bond shall be conditioned that:
(1) a change, modification, omission, or addition in and to the terms or conditions of the contract, plans, specifications, drawings, or profile; or
(2) any irregularity or defect in the contract or in the proceedings preliminary to the letting and awarding of the contract;
does not affect or operate to release or discharge the surety.
(c) The provisions of this chapter become a part of the terms of a contract awarded under this chapter. A bond for a public work is subject to this chapter.
(d) A person to whom money is due for having performed labor or having furnished material or service for a public work under this chapter must, not later than sixty (60) days after that person completed the labor or service or after that person furnished the last item of material:
(1) file with the public body duplicate verified statements of the amount due to the person; and
(2) deliver a copy of the statement to the contractor.
The public body shall deliver to the surety on the bond one (1) of the duplicate statements. The failure to deliver a duplicate statement by the public body does not affect or invalidate the rights of the person to whom money is due, nor does the failure to deliver a duplicate statement operate as a defense for the surety.
(e) A suit may not be brought against a surety on a bond under this section before thirty (30) days after both of the following have occurred:
(1) The filing of the verified duplicate statement.
(2) A copy of the notice has been delivered to the contractor.
If the indebtedness is not paid in full after thirty (30) days, the person, may bring an action in a court of competent jurisdiction upon the bond. The action must be brought not later than sixty (60) days after the date of the final completion and acceptance of the public work. An action on the bond against a surety is barred if not brought within this time.
(f) IC 8-23-9, and not this chapter, applies to bonds and claims on state highway road and bridge contracts.
Formerly: Acts 1911, c.173, s.2; Acts 1925, c.44, s.2; Acts 1931, c.168, s.2; Acts 1933, c.258, s.2. As amended by Acts 1980, P.L.74, SEC.11; Acts 1981, P.L.57, SEC.11; P.L.18-1990, SEC.13; P.L.8-1993, SEC.63; P.L.75-2012, SEC.8; P.L.135-2017, SEC.1.