Presentation on theme: "1 1 These materials have been prepared by the CASBO San Diego- Imperial Section Purchasing Professional Council (or CASBO Associate Member). They have."— Presentation transcript:
1 1 These materials have been prepared by the CASBO San Diego- Imperial Section Purchasing Professional Council (or CASBO Associate Member). They have not been reviewed by State CASBO for approval, so therefore are not an official statement of CASBO
2 Long Beach, CA April 5, 2013 Presented by: Gretchen M. Shipley; Fagen, Friedman, & Fulfrost Guiselle Carreon, Director of Purchasing, Grossmont Union High School District
5 Basics Types Bid Payment Performance Purpose Essential elements
6 Surety Admitted Surety Insurer as defined in CCP § 995.120 A.M. Best rated A- or better A.M. Best Financial Size Category VII or better Reject bonds issued by a surety who does not meet or exceed these criteria.
7 So this just happened to your construction project… …what do you do?
8 Process of Enforcing Bonds Contract unable or unwilling to contract Contractors material breach Dealing with the contractor Bankruptcy Approval from surety Notice of termination to contractor
9 Bonds claims process Notice of tender to surety Likelihood of takeover Retention of completion contractor Takeover agreement
11 Different types Workers Compensation Employers Liability Commercial General Liability Includes coverage for bodily injury, death, property damage and motor vehicle liability Builders Risk
12 Determining limits: assessed risk / tiered Construction agreement should list minimum coverage amounts for each policy of insurance required Construction agreement should also list subcontractor insurance requirements
13 Owner Controlled Insurance Program (OCIP) Government Code section 4420.5 School districts exempt from $50,000,000 project cost threshold Implementation Required determination Considerations
15 Which of the following is not one of the factors that must be considered when implementing an OCIP program: A.Serious and willful workers compensation violations B.Number of workplace complaints to Cal/OSHA during the past 5 years C.Workers compensation experience modification factor D.Injury prevention programs
16 Definition Elements of a valid stop payment notice 20 day preliminary notice Contents Timely filed How much to withhold? For how long? Lawsuit
17 How much to withhold? 125% For how long? Unconditional release/withdrawal Release bond Failure to file a counteraffidavit Failure to timely commence an action Lawsuit to enforce dismissed Lawsuit
18 Lawsuit Timing Service on the public entity Tender a defense Stay away!
19 Effect Public Works Contract Period for Recording Notice of Completion Completion of a Public Work of Improvement Stop Payment Notice Fee New & Standardized Service Requirements