Bid Guarantee on Public Works
Please read below and see attached summary for information regarding the bid guarantee on public works:
Some contractors have encountered various municipalities and their subsidiaries such as water works boards and many other entities that are considered “Public Works” requiring a 5% not to exceed $50,000 bid security/penalty. The fact is that ALDOT is only entity allowed to utilize the $50,000 bid security/penalty. For all others it remains 5% not to exceed $10,000.
Please feel free to share with County managers, architects and engineers, and any relevant associations that may benefit.
Bid Guarantee on Public Works Jobs
In 2016, SB175 (Act #2016-260) was passed for the purpose of increasing the amount of the bid guarantee required to be filed by the bidder on Department of Transportation projects. This bill was specifically written to only apply to ALDOT projects.
In the 2016 bill the summary of the bill is clearly states the intent and §23-1-2 was amended correctly. However, the bill failed to address the necessary language in §39-2-4.
In 2017, SB72 by Sen. Allen was introduced to correct the necessary language in §39-2-4. This bill passed out of the legislature and was signed into law.
SB72, (Act #2017-279) reverts back to the original language in the Code of Alabama for all construction except ALDOT construction.
The bid guarantee for construction on public works jobs has been reverted back to five percent of the estimated cost but not more than $10,000, except for ALDOT where the bid guarantee is five percent but not more than $50,000.