PROVIDING LEGAL SOLUTIONS FOR LOCAL GOVERNMENTS

Public Works Contracts in Missouri

Contract Essentials - Section 432.070, RSMo

To be valid, municipal contracts must contain certain characteristics: Within powers authorized by law; Consideration wholly performed

subsequently; In writing; Dated; Signed by all parties; Authorization to sign also in

writing.

Bonds/Securities

Bid Bond Payment Bond Performance Bond Maintenance Bond

Bid Bonds A guarantee to assure the owner that the bidder will

honor its bid

These are usually in the amount of 5% to 10% of the bid amount

Contractor and its surety are released from liability on the bid bond once the contractor executes a valid contract with the owner

Payment Bonds No mechanics’ liens on public works projects

Payment bonds required of prime contractors

• Protects subcontractors and suppliers • Prevents cities from being unjustly enriched

Estimated to exceed $50,000 Absolute duty to require Indemnification of officers except for willful neglect

of duty

Performance Bonds No general requirement for these

under Missouri law; but might be required under local law

Protect against loss by reason of the contractor’s failure to perform the contract.

Typically, performance bonds give the surety the option of remedying the default; performing the contract; or soliciting bids to obtain performance.

Maintenance Bonds No general requirement for these under

Missouri law; but might be required under local law

These warrant the contractor’s work for a period of time after the project is completed.

Surety’s options: • repair the work, • contracting for repairs, or • pay the owner for the cost of repairs

Construction Safety Training

10 hour training course

All on-site employees must complete the program within 60 days of beginning work on the project, or have already completed the training

If an employee is found on a worksite without documentation of successful completion of the safety course, that employee must produce the required documentation within 20 days or will be subject to removal from the project

Construction Safety Training

City requirements: • Must specify the safety training

requirements in the resolution or ordinance approving the project AND in the call for bids

• Must ensure that the safety training requirement is included in the terms of the contract

• Must include notice of the penalties for noncompliance of the safety training requirement in the contract (can be hefty)

Immigration Law Employment Provisions

Cities must condition the award of any new contract or grant in excess of $5,000 on receipt of affidavit that affirms: • Entity’s enrollment and

participation in a federal work authorization program (E-Verify) AND

• That entity does not knowingly employ unauthorized aliens to perform the contract

Immigration Law

State regulations require that the bid or RFP response include the affidavit (thus, make it part of the submittal requirements)

State law provides a limited time exception for emergency situations

Immigration Law

“Contract or grant” does not include a municipal permit or license

Not applicable to

purchase of goods or products (no services provided)

Insurance

• Require certificate prior to Notice to Proceed being issued and have city named as additional insured

• Commercial General Liability; Auto; Workers’ Comp are standard coverages

• Notice of cancellation to city • Worth talking to your insurance agent to see if

other coverages are in order (example: Builder’s Risk coverage)

Indemnification

A city can’t indemnify and hold harmless another party as that is a waiver of sovereign immunity, which only the General Assembly can do. Op. Atty. Gen. No. 138, Webster, 12-18-1987; Fowler v. Bd. of Regents for Central Missouri State Univ., 637 S.W.2d 352 (Mo. App. 1982).

But…should require the other party to provide

Non-Appropriation Clause

If the contract is for more than one fiscal year, include a non-appropriation clause that states the agreement is “subject to availability of funds”

Ready to Approve …Now What?

Resolution/Ordinance awarding the contract

Delegate authority for change order approval up to certain amount?

Notice of Award / Notice to Proceed

Notice of Award

W-9 Insurance Certificates Business License Subcontractor list (if applicable) E-Verify Affidavit Proof of Lawful Presence Performance and Payment Bond

Notice to Proceed

City signs all contract Issue Sales Tax Exemption Certificate Starts the clock for contract time of

completion provisions

About Us Williams & Campo, P.C., is a law firm devoted to the representation of local government entities. The firm currently represents over 30 municipalities ranging from villages to some of the largest cities in Missouri. We provide our clients with a full range of legal services. Williams & Campo, P.C., currently serves as general counsel (e.g., as appointed city attorneys) for 10 local government entities. We also serve as special legal counsel to numerous other local governments for a wide variety of matters including litigation, land use and development, infrastructure financing, and the use of economic development incentives. All of the attorneys in our firm have devoted their legal careers to representation of local government entities. We are each active members of organizations that assist local government entities and are frequently called upon to speak to and help train elected officials and the staffs of these entities. We believe our experience and focus on local government law enables us to provide our clients with creative and tested advice on a wide range of legal matters. The attorneys of Williams & Campo, P.C. are committed to providing the highest level of service to all of our local government clients. Our goal is not only to meet our clients’ legal services needs but to consistently exceed their expectations. We are proud to describe what we do as “providing legal solutions for local governments.”