CHAPTER 106

AN ACT CONCERNING PROCUREMENT OF MATERIEL AND AWARDING OF CONTRACTS FOR PUBLIC WORKS BY STATE AGENCIES.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Sections 151 to 158, inclusive, of Title 17, are hereby repealed and the two following new sections, to be designated Sections 151 and 152, are substituted therefor:

§ 151. Procedure For Procurement Of Materials, Equipment Or Supplies And Award Of Contracts For Performance Of Work

The Department shall not purchase any materials, equipment or supplies nor enter into any contract for the performance of any work except in accordance with Chapter 69 of Title 29 of this Code.

§ 152.Supervision By Director Of Operations

The execution and performance of all contracts awarded by the Department shall be under the charge of the Director of Operations, and his decision shall, in all matters concerning the performance of the work and the compliance of the terms of the contract, be final.

Section 2. Chapter 67 and Sections 6901 to Section 6912, inclusive, and Section 6916, of Chapter 69 of Title 29 of the Delaware Code, are hereby repealed and in lieu thereof the following new sections are to be added to Chapter 69 and the present title of Chapter 69, "Contracts For Public Improvements" is to be repealed and Chapter 69 is to be entitled as follows:

CHAPTER 69. PROCUREMENT OF MATERIEL

AND AWARD OF CONTRACTS FOR PUBLIC WORKS

BY STATE AGENCIES

§ 6901. Definitions

As used in this chapter-

"Agency" means any board, department, bureau, commission or officer of the State.

"Materiel" means materials, equipment, tools, supplies or any other personal property but does not include electric, gas, water, telephone or similar utilities.

"Public works contract" means any contract for the construction, alteration or repair of any public building, road, street, highway or other public improvement.

§ 6902. Limitation On Cost Of Automobiles For State Use

No agency shall purchase any passenger motor vehicle to be used for State purposes when the initial cost of such vehicle, including the fair value or values of any motor vehicle or motor vehicles traded in as a part of a particular transaction, exceeds $2200.

§ 6903. Procurement of Materiel and Work in Absence of Appropriation; Payment; Exception

(a) An item shall be set up in the Budget Appropriation Bill for State Departmental Supplies to be drawn upon by warrants signed by the Secretary of State with the written approval of the State Treasurer and Auditor of Accounts.

The offices of the Governor, Lieutenant Governor, Secretary of State, State Treasurer, Auditor of Accounts, State Banking Commissioner and Insurance Commissioner may obtain materiel, including but not limited to, printing and binding, from the Secretary of State to be paid for out of Departmental Supplies insofar as any funds appropriated to such offices for such purposes are inadequate.

Any other agency which receives no appropriation for office expenses may obtain such materiel, including but not limited to, printing and binding, from the Secretary of State to be paid for out of Departmental Supplies.

(b) All materiel and printing and binding procured in accordance with the provisions of subsection (a) of this section shall be purchased or contracted for pursuant to the provisions of Section 6904 of this chapter. The Secretary of State, by and with the consent of the State Treasurer and Auditor of Accounts, may enter into contracts on the part of the State with the person furnishing such materiel or doing such printing and binding for any agency not having an appropriation therefor and pay for such materiel or printing and binding performed.

§ 6904. Procurement of Materiel and Work; Competitive Bidding; Power to Act Without Bids

(a) All materiel required by any agency shall be purchased, and all work of a non-professional nature which is not to be performed by employees of the agency shall be performed, under a contract entered into pursuant to the provisions of this chapter and after competitive bidding as provided for in this section, except that an agency may purchase materiel or contract for work to be performed without competitive bidding in the following instances:

(1) If the probable cost of the purchase or contract does not exceed $1,000;

(2) Whenever an unusual emergency exists by reason of extraordinary conditions or contingencies that could not reasonably be foreseen and guarded against and which in the opinion of the chief administrative officers of the agency concerned requires immediate action for the protection of public health, welfare, safety or property, provided that within ten (10) days after such an emergency expenditure, an affidavit of the chief administrative officer of the agency authorizing such expediture shall be filed with the State Treasurer setting forth the conditions and circumstances requiring such emergency expenditure;

(3) Where, because of a patent or licensed franchise situation, the materiel or work is procureable within the State from only one source; this paragraph (3) shall not apply to the construction of public buildings.

(b) If the probable cost of the materiel or work is estimated to exceed $1,000 but not more than $2,500, the purchase or contract may be made in the open market but shall be based on at least three competitive bids.

(c) If the probable cost of the materiel or work is estimated to exceed $2,500, the purchase or contract shall be made only after public advertising and the receipt of sealed bids as provided for in this chapter.

(d) Any person, who, with intent to avoid compliance with this section, willfully fragmentizes or sub-divides any contract for the purchase of materiel or work, the probable cost of which will require the receipt of competitive bids under paragraphs (b) or (c) hereof, into two or more contracts for the purchase of the same materiel or work shall be guilty of a misdemeanor and shall be fined not less than $1,000 nor more than $5,000 for each offense.

§ 6905. Plans and Specifications; Description; Advertisement

(a) When an agency proposes to purchase any materiel or contract for any work to be done, and the probable cost of such purchase or contract exceeds $2,500, the agency shall prepare a suitable description of such materiel or plans and specifications for such work, and shall prescribe such other terms and conditions as it deems necessary.

() The agency shall then advertise for formal sealed bids for furnishing the materiel or performing the work. The advertisement for such bids shall be published at least once a week for two consecutive weeks in a newspaper published or circulated in each County of the State. The advertisement shall state the name of the procuring agency, shall indicate with reasonable accuracy the character, quantity and location of the work or the character and quantity of materiel, the time and place for the opening of bids, and where the plans and specifications or descriptions may be obtained.

§ 6906. Qualifying Bidders

(a) An agency may require any person proposing to bid on a contract to answer a questionnaire and file a financial statement containing a complete statement of that person's financial ability and experience in performing such work.

(b) If the agency is not satisfied with the sufficiency of the answers to the questionnaire or the financial statement, it may refuse to furnish the person submitting such unsatisfactory answers or financial statement the plans and specifications for the work and the bid of any such person may be disregarded.

(c) No action of any nature shall lie against any agency because of its refusal to furnish a person with plans and specifications.

§ 6907. Deposit Required To Accompany Bids; Return of Deposit

(a) All bids shall be accompanied by a deposit of either a good and sufficient bond to the State of Delaware for the benefit of the agency involved, with corporate surety authorized to do business in this State, the form of the bond and the surety to be approved by the agency, with a warrant of attorney to confess judgment thereon attached thereto, or a certified check of the bidder drawn upon some responsible banking institution to the order of the agency, for a sum equal to at least 10% of the bid. The bid bond need not be for a specific sum but may be stated to be for a sum equal to 10% of the bid to which it relates and not to exceed a certain stated sum, if said sum is equal to at least 10% of the bid.

(b) Upon the execution of a formal contract and bond, the bid bond or certified check deposit shall be returned to the successful bidder. The deposit of the unsuccessful bidders shall be returned to them immediately upon the awarding of the contract or the rejection of all bids, but in no event later than thirty (30) days after the opening of bids.

§ 6908. Opening Of Bids; Awards Of Contracts; Right To Reject Bids

The bids shall be publicly opened at the time and place specified in the advertisement, and the contract shall be awarded within thirty (30) days thereafter by the agency to the lowest responsible bidder unless, in the opinion of the agency, the interest of the State shall be better served by the awarding of the contract to some other bidder, which may then be done, provided the agency shall set down in its minutes the reason or reasons for granting the contract to the person other than the lowest responsible bidder. If two or more responsible bidders shall bid an equal amount, and such amount shall be the lowest bid, the agency may award the contract to any one of them. The agency may reject all bids.

§ 6909. Formal Contracts; Failure To Execute Contract And Bond; Deposit as Damages, New Awards

(c) Within twenty (20) days after the award of the contract, the successful bidder shall promptly execute a formal contract to be approved as to its form, terms and conditions by the agency and also the bond required by Section 6910 of this Chapter.

(d) In the event of any successful bidder refusing or neglecting to execute a formal contract and bond within twenty (20) days of the awarding of the contract, the bid bond or certified check deposited by the successful bidder shall be taken and become the absolute property of the State for the benefit of the agency as liquidated damages, and not as a forfeiture or as a penalty, and shall be deposited with the State Treasurer, and the agency may award the contract to the next lowest responsible bidder or re-advertise for new bids. The agency shall forthwith proceed to collect on the bid bond.

§ 6910. Performance and Payment Bonds

(a) Simultaneous with the execution of the formal contract, the successful bidder shall also execute a good and sufficient bond to the State of Delaware for the benefit of the agency, with corporate surety authorized to do business in this State, in a sum equal to 100 per cent of the contract price.

(b) the bond shall be conditioned upon the faithful compliance and performance by the successful bidder of each and every term and condition of the contract and the proposal and plans and specifications thereof, at the time and in the manner prescribed by the contract and the plans and specifications, including the payment in full, to every person furnishing materiel or performing labor in the performance of the contract, of all sums of money due him for such labor or materiel. The bond shall also contain the successful bidder's guarantee to indemnify and save harmless the State and the agency from all costs, damages and expenses growing out of or by reason of the successful bidder's failure to comply and perform the work and complete the contract in accordance with the contract.

(c) The bond shall have attached thereto a warrant of attorney authorizing the confession of judgment thereon for the benefit of the State. The agency may, when it considers that the interests of the State so require, cause judgment to be confessed upon the bond. All sums received through confession of judgment shall be paid to the State Treasurer for the credit of the agency.

(d) Every person furnishing materials or performing labor under the contract for which the successful bidder is liable may maintain an action on the bond for his own use in the name of the State in any court of competent jurisdiction for the recovery of such sum or sums as may be due such person from the successful bidder, but if the bond so provides, no suit shall be commenced after the expiration of one (1) year following the date on which the successful bidder ceased work on the contract, otherwise suits may be commenced at any time within three (3) years following the date the last work was done on the contract.

(e) No person or surety, in any action brought under this section, or on the bond required by this section, shall assert as a defense to such action, the claim that the bond given pursuant to this section contained a limitation or restriction not provided for by this section.

§ 6911. Failure To Comply With Contract; New Award; Supervision

If any person entering into a contract under the authority of this chapter neglects or refuses to perform it or fails to comply with the terms thereof, the agency may terminate the contract and proceed to award a new contract in accordance with the provisions of this chapter, or may require the surety on the performance bond to complete the contract in accordance with the terms of the performance bond.

§ 6912. Contracts for Public Buildings; Listing Subcontractors; Bidder as Subcontractor; Substitution of Subcontractors; Penalties

Any contract, the probable cost of which exceeds $5,000, for the construction, alteration or repair of any public building of the State or any political subdivision thereof, shall, in addition to the other requirements of this chapter be subject to the following provisions.

(a) Such contract shall be awarded only to a bidder whose bid is accompanied by a statement containing the names and addresses of the subcontractors whose services the bidder intends to use in performing the work. No bidder for such a contract shall list himself in any accompanying statement as the subcontractor of any part of the public building unless the bidder, in addition to being licensed as a general contractor of the State, shall also be recognized in the trade as a subcontractor in and for any such part or parts of such work so listed in such accompanying statement.

(b) Neither the State nor any political subdivision thereof nor any of their respective agencies shall accept any bid for such a contract or award any such contract to any bidder, as the general contractor, if the bidder has listed himself as the subcontractor of any specialty work required to complete such public building, such as plumbing, electrical wiring, heating, roofing, insulating, weather stripping, masonry, bricklaying, plastering, or any other specialty work, unless it has been established to the satisfaction of the awarding agency that the bidder has customarily performed such specialty work by artisans regularly employed by the bidder in his organization, that the bidder is duly licensed by the State to engage in such specialty work, if the State requires such licenses, and that the bidder is recognized in the trade as a bona fide sub-contractor in such specialty work.

(c) After such a contract has been awarded, the successful bidder shall not substitute another subcontractor for any subcontractor whose name was set forth in the statement which accompanied his bid without the written consent of the agency awarding the contract. No agency shall consent to such substitution unless the agency is satisfied that the subcontractor in question whose name is listed in the successful bidder's accompanying statement (1) is unqualified to perform the work required, or (2) has failed to execute a timely reasonable subcontract, or (3) has defaulted in the performance of the part of the work covered by the sub-contract, or (4) is no longer engaged in such business.

(d) Such a contract shall contain a provision for withholding from, or requiring the payment by, the successful bidder of a penalty, the amount to be determined by the agency, for the failure to utilize any or all the subcontractors set forth in the successful bidder's accompanying statement in the performance of the work on the public building contemplated by the contract. Any sum so withheld from or paid by the contractor for any such failure may be remitted or refunded, in whole or in part, by the agency awarding the contract, but only in the event it is established to the satisfaction of the agency, that the subcontractor in question has defaulted or is no longer engaged in such business. No claim for the remission or refund of any penalty shall be granted under this section unless application therefor is filed within one year after the liability of the successful bidder accrues. If any such application for refund of any sum paid as a penalty is denied, or if no application for refund is filed within the period provided herein for filing an application, such sum shall revert to the State Treasury.

§ 6914. Preference For Delaware Labor; Stipulation In Contract

In the construction of all public works for the State or any political subdivision thereof, or by persons contracting with the State or any political subdivision thereof, preference in employment of laborers, workmen or mechanics, shall be given to bona fide legal citizens of the State, who have established citizenship by residence of at least 90 days in the State. Each public works contract for the construction of public works for the State or any political subdivision thereof shall contain a stipulation that any person, company or corporations who violates the provisions of this section shall pay a penalty to the State Treasurer equal to the amount of compensation paid to any person in violation of this section.

§ 6915. Conflict With Federal Statutes Or Regulations

If any provision of this chapter conflicts or is inconsistent with any statute, rule or regulation of the Federal government applicable to a project or activity the cost of which is to be paid or reimbursed in whole or in part, by the Federal government, and due to such conflict or inconsistency the availability of Federal funds may be jeopardized, such provision shall not apply to such project or activity.

§ 6916. Purchases From The Federal Government

The provisions of this chapter shall not apply to any purchase of materiel from the Federal government.

Approved July 16, 1963.