Chapter 4 - § 4.12 • BOND REQUIREMENTS

• Jurisdiction: Colorado

§ 4.12 • BOND REQUIREMENTS

§ 4.12.1-Bid Bonds

The Colorado Procurement Code requires bid security for all invitations for bids for state construction contracts when the procurement price is estimated to exceed $50,000.¹⁷¹ Bid security may consist of a bond provided by a surety company authorized to do business in Colorado, cash equivalent, cashier's or certified check, or another satisfactory form.¹⁷² Procurement authorities have discretion to require bid security for construction contracts under the $50,000 threshold.¹⁷³ Bid security must be in an amount equal to at least 5 percent of the bid amount.¹⁷⁴ If invitations for bids require bid security, non-compliance results in rejection of bids as non-responsive.¹⁷⁵ After bids are opened, bid bonds are irrevocable for the period of 30 days or as specified in the invitation for bids.¹⁷⁶

Additional coverage of this subject is found in § 12.6.1, "Bid Bonds," of this handbook.

§ 4.12.2-Performance and Payment Bonds or Other Acceptable Sureties

Separate performance and payment bonds or other acceptable sureties, generally, are required by Colorado's Public Works Act, also known as the "Little Miller Act," for state construction contracts exceeding $150,000.¹⁷⁷ The penal sum of the bond or other acceptable surety must be at least one-half of the total contract amount.¹⁷⁸ Procurement authorities have discretion to require performance and payment bonds or other acceptable sureties for construction contracts awarded for a value of $50,000 or less.¹⁷⁹ For state construction contracts exceeding $500 million, the penal sum of the bond or other acceptable surety must be at least one-half of the maximum amount payable under the terms of the contract in any calendar year in which the contract is performed.¹⁸⁰ Additional coverage of this subject is found in Chapter 12, "Construction Sureties."

Similar bonding requirements exist for state construction contracts pursuant to the Colorado Procurement Code. For construction contracts exceeding $150,000, contractors must obtain performance and payment bonds.¹⁸¹ The performance and payment bonds must be executed by a surety company authorized to do business in Colorado or otherwise secured in a manner satisfactory to the state and must be in an amount equal to 50 percent of the contract price.¹⁸² Procurement authorities have discretion to require performance and payment bonds for state construction contracts of $150,000 or less.¹⁸³ Suits on performance and payment bonds required...