Chapter 5525: CONSTRUCTION CONTRACTS

5525.01 Advertisement for bids - awarding of contracts - ODOT letting fund.

Before entering into a contract, the director of transportation shall advertise for bids for two consecutive weeks in one newspaper of general circulation published in the county in which the improvement or part thereof is located, but if there is no such newspaper then in one newspaper having general circulation in an adjacent county. In the alternative, the director may advertise for bids as provided in section 7.16 of the Revised Code. The director may advertise for bids in such other publications as the director considers advisable. Such notices shall state that plans and specifications for the improvement are on file in the office of the director and the district deputy director of the district in which the improvement or part thereof is located and the time within which bids therefor will be received.

Each bidder shall be required to file with the bidder's bid a bid guaranty in the form of a certified check, a cashier's check, or an electronic funds transfer to the treasurer of state that is evidenced by a receipt or by a certification to the director of transportation in a form prescribed by the director that an electronic funds transfer has been made to the treasurer of state, for an amount equal to five per cent of the bidder's bid, but in no event more than fifty thousand dollars, or a bid bond for ten per cent of the bidder's bid, payable to the director, which check, transferred sum, or bond shall be forthwith returned to the bidder in case the contract is awarded to another bidder, or, in case of a successful bidder, when the bidder has entered into a contract and furnished the bonds required by section 5525.16 of the Revised Code. In the event the contract is awarded to a bidder, and the bidder fails or refuses to furnish the bonds as required by section 5525.16 of the Revised Code, the check, transferred sum, or bid bond filed with the bidder's bid shall be forfeited as liquidated damages. No bidder shall be required either to file a signed contract with the bidder's bid, to enter into a contract, or to furnish the contract performance bond and the payment bond required by that section until the bids have been opened and the bidder has been notified by the director that the bidder is awarded the contract.

The director shall permit a bidder to withdraw the bidder's bid from consideration, without forfeiture of the check, transferred sum, or bid bond filed with the bid, providing a written request together with a sworn statement of the grounds for such withdrawal is delivered within forty-eight hours after the time established for the receipt of bids, and if the price bid was substantially lower than the other bids, providing the bid was submitted in good faith, and the reason for the price bid being substantially lower was a clerical mistake evident on the face of the bid, as opposed to a judgment mistake, and was actually due to an unintentional and substantial arithmetic error or an unintentional omission of a substantial quantity of work, labor, or material made directly in the compilation of the bid. In the event the director decides the conditions for withdrawal have not been met, the director may award the contract to such bidder. If such bidder does not then enter into a contract and furnish the contract bond as required by law, the director may declare forfeited the check, transferred sum, or bid bond as liquidated damages and award the contract to the next higher bidder or reject the remaining bids and readvertise the project for bids. Such bidder , within thirty days, may appeal the decision of the director to the court of common pleas of Franklin county and the court may affirm or reverse the decision of the director and may order the director to refund the amount of the forfeiture. At the hearing before the common pleas court evidence may be introduced for and against the decision of the director. The decision of the common pleas court may be appealed as in other cases.

There is hereby created the ODOT letting fund, which shall be in the custody of the treasurer of state but shall not be part of the state treasury. All certified checks and cashiers' checks received with bidders' bids, and all sums transferred to the treasurer of state by electronic funds transfer in connection with bidders' bids, under this section shall be credited to the fund. All such bid guaranties shall be held in the fund until a determination is made as to the final disposition of the money. If the department determines that any such bid guaranty is no longer required to be held, the amount of the bid guaranty shall be returned to the appropriate bidder. If the department determines that a bid guaranty under this section shall be forfeited, the amount of the bid guaranty shall be transferred or, in the case of money paid on a forfeited bond, deposited into the state treasury, to the credit of the highway operating fund. Any investment earnings of the ODOT letting fund shall be distributed as the treasurer of state considers appropriate.

The director shall require all bidders to furnish the director, upon such forms as the director may prescribe, detailed information with respect to all pending work of the bidder, whether with the department of transportation or otherwise, together with such other information as the director considers necessary.

In the event a bidder fails to submit anything required to be submitted with the bid and then fails or refuses to so submit such at the request of the director, the failure or refusal constitutes grounds for the director, in the director's discretion, to declare as forfeited the bid guaranty submitted with the bid.

The director may reject any or all bids. Except in regard to contracts for environmental remediation and specialty work for which there are no classes of work set out in the rules adopted by the director, if the director awards the contract, the director shall award it to the lowest competent and responsible bidder as defined by rules adopted by the director under section 5525.05 of the Revised Code, who is qualified to bid under sections 5525.02 to 5525.09 of the Revised Code. In regard to contracts for environmental remediation and specialty work for which there are no classes of work set out in the rules adopted by the director, the director shall competitively bid the projects in accordance with this chapter and shall award the contracts to the lowest and best bidder.

The award for all projects competitively let by the director under this section shall be made within ten days after the date on which the bids are opened, and the successful bidder shall enter into a contract and furnish a contract performance bond and a payment bond, as provided for in section 5525.16 of the Revised Code, within ten days after the bidder is notified that the bidder has been awarded the contract.

The director may insert in any contract awarded under this chapter a clause providing for value engineering change proposals, under which a contractor who has been awarded a contract may propose a change in the plans and specifications of the project that saves the department time or money on the project without impairing any of the essential functions and characteristics of the project such as service life, reliability, economy of operation, ease of maintenance, safety, and necessary standardized features. If the director adopts the value engineering proposal, the savings from the proposal shall be divided between the department and the contractor according to guidelines established by the director, provided that the contractor shall receive at least fifty per cent of the savings from the proposal. The adoption of a value engineering proposal does not invalidate the award of the contract or require the director to rebid the project.

Cite as R.C. § 5525.01

Amended by 130th General Assembly File No. 7, HB 51, §101.01, eff. 7/1/2013.

Effective Date: 03-13-1997; 03-29-2005; 2008 HB562 09-22-2008

5525.011 Complying with federal surface transportation assistance act.

(A) The director of transportation shall award contracts pursuant to this chapter in conformity to the requirements of subsection (f) of section 105 of the federal "Surface Transportation Assistance Act of 1982," 96 Stat. 2099, 23 U.S.C.A. 105 .

(B) Notwithstanding sections 153.50 to 153.52 of the Revised Code, neither the director nor any political subdivision or other public authority is required to solicit separate bids or award separate contracts for any branch of work in a contract for the construction or improvement of a road or highway funded in whole or in part by or through the department of transportation.

(C) When the director estimates that more than fifty-one per cent of the dollar amount of work to be performed in a contract is to be performed by one branch of work, the director shall designate the prime contractor for the contract from that one branch of work. This division does not apply if the director does not receive any bids from a prequalified prime contractor from that branch of work.

(D) As used in this section:

(1) "Road" or "highway" does not include physical facilities, garages, district offices, or other buildings funded in whole or in part by or through the department of transportation.

(2) "Branch of work" means any of the following:

(a) Plumbing and gas-fitting;

(b) Steam and hot-water heating, ventilating apparatus, and steam-powered plant;

(c) Electrical equipment.

Cite as R.C. § 5525.011

Effective Date: 06-29-1999

5525.02 Qualification and classification of bidders.

Sections 5525.02 to 5525.09 of the Revised Code shall govern the qualification and classification of all bidders desiring to offer bids for the performance of contracts proposed to be awarded by the director of transportation, and all contracts attempted to be awarded to any person other than a bidder previously qualified in compliance with such sections shall be void, except that bidders submitting bids on environmental remediation and specialty projects for which there are no classes of work established by rules adopted by the director are not subject to the qualification requirements of sections 5525.02 to 5525.09 of the Revised Code. The director shall cause to be prepared the rules authorized to be made by the director, together with all printed forms for applications for qualification and statements of prospective bidders, and shall cause copies of the same to be disseminated as the director considers appropriate. All applications, statements, and other forms that applicants for qualification may be required to use shall be furnished by the director to any person on request.

Cite as R.C. § 5525.02

Effective Date: 03-13-1997

5525.03 Application for qualification.

All prospective bidders other than environmental remediators and specialty contractors for which there are no classes of work provided for in the rules adopted by the director of transportation shall apply for qualification on forms prescribed and furnished by the director. The application shall be accompanied by a certificate of compliance with affirmative action programs issued pursuant to section 9.47 of the Revised Code and dated no earlier than one hundred eighty days prior to the date fixed for the opening of bids for a particular project. The director shall act upon an application for qualification within thirty days after it is presented to the director. Upon the receipt of any application for qualification, the director shall examine the application to determine whether the applicant is competent and responsible and possesses the financial resources required by section 5525.04 of the Revised Code. If the applicant is found to possess the qualifications prescribed by sections 5525.02 to 5525.09 of the Revised Code and by rules adopted by the director, including a certificate of compliance with affirmative action programs, a certificate of qualification shall be issued to the applicant, which shall be valid for the period of one year or such shorter period of time as the director prescribes, unless revoked by the director for cause as defined by rules adopted by the director under section 5525.05 of the Revised Code. The certificate of qualification shall contain a statement fixing the aggregate amount of work, for any or all owners, that the applicant may have under construction and uncompleted at any one time and may contain a statement limiting such bidder to the submission of bids upon a certain class of work. Subject to any restriction as to amount or class of work therein contained, the certificate of qualification shall authorize its holder to bid on all work on which bids are taken by the department of transportation during the period of time therein specified. An applicant who has received a certificate of qualification and desires to amend the certificate by the dollar amount or by the classes of work may submit to the director such documentation as the director considers appropriate. The director shall review the documentation submitted by the applicant and, within fifteen days, shall either amend the certificate of qualification or deny the request. If the director denies the request to amend the certificate, the applicant may appeal that decision to the director's prequalification review board in accordance with section 5525.07 of the Revised Code. Two or more persons, partnerships, or corporations may bid jointly on any one project, but only on condition that prior to the time bids are taken on the project the bidders make a joint application for qualification and obtain a joint certificate qualification.

The director may debar from participating in future contracts with the department any bidding company as well as any partner of a partnership, or the officers and directors of an association or corporation if the certificate of qualification of the company, partnership, association, or corporation is revoked or not renewed by the director. When the director reasonably believes that grounds for revocation and debarment exist, the director shall send the bidding company and any individual involved a notice of proposed revocation and debarment indicating the grounds for such action as established in rules adopted by the director under section 5525.05 of the Revised Code and the procedure for requesting a hearing. The notice and hearing shall be in accordance with Chapter 119. of the Revised Code. If the bidding company or individual does not respond with a request for a hearing in the manner specified in Chapter 119. of the Revised Code, the director shall revoke the certificate and issue the debarment decision without a hearing and shall notify the bidding company or individual of the decision by certified mail, return receipt requested. The debarment period may be of any length determined by the director and the director may modify or rescind the debarment at any time. During the period of debarment, the director shall not issue a certificate of qualification for any company, partnership, association, or corporation affiliated with a debarred individual. After the debarment period expires, the bidding company or individual, and any partnership, association, or corporation affiliated with the individual may make an application for qualification.

Cite as R.C. § 5525.03

Effective Date: 06-30-1997

5525.04 Financial statement and financial audit.

No bidder shall be given a certificate of qualification unless the bidder's financial statement and the investigation made by the director of transportation show that the bidder possesses net current assets or working capital sufficient, in the judgment of the director, to render it probable that the bidder can satisfactorily execute the bidder's contracts and meet all contractual obligations. Any applicant desiring a certificate of qualification in an amount of five million dollars or more shall submit on forms prescribed by the director a financial audit prepared and attested as correct by an independent certified public accountant. Any applicant desiring a certificate of qualification in an amount that is less than five million dollars shall submit a financial review on forms prescribed by the director. The aggregate amount of work set forth in either type of certificate of qualification shall not exceed ten times the applicant's net current assets or working capital. At the time of bidding, a bidder's qualification is determined by the bidder's qualification amount minus all of the bidder's pending work.

Applicants for qualification shall expressly authorize the director to obtain any information that the director considers pertinent, with respect to the financial worth, assets, and liabilities of the applicant, from banks or other financial institutions, surety companies, dealers in material, equipment, or supplies, or other persons having business transactions with the applicant. Applicants shall expressly authorize all such financial institutions or other persons to furnish any such information requested from them by the director. All information filed with or furnished to the director by applicants or other persons, in connection with the administration of sections 5525.02 to 5525.09 of the Revised Code, shall be kept in confidence by the director and not revealed to any person, except upon proper order of a court. Failure to submit the required information or to expressly grant the director authority to obtain the required information shall result in the denial of a certificate of qualification. The director or the director's subordinates shall have access to the books of account and financial records of all applicants, unless the financial statement furnished by any applicant is prepared and attested as correct by a certified public accountant.

If an applicant for either type of certificate of qualification is or has been an employer in this state the application shall be accompanied by satisfactory evidence that the applicant has complied with Chapter 4123. of the Revised Code.

The director may require all qualified bidders to file financial statements at such intervals as the director prescribes. Sections 5525.02 to 5525.09 of the Revised Code shall be administered without reference to the residence of applicants, and the rules of the director shall apply equally to residents and nonresidents of this state. Sections 5525.02 to 5525.09 of the Revised Code, do not apply to the purchase of material, equipment, or supplies.

Cite as R.C. § 5525.04

Amended by 129th General AssemblyFile No.28, HB 153, §101.01, eff. 9/29/2011.

Effective Date: 03-13-1997

5525.05 Rules - lists of qualified bidders.

For the purpose of carrying into effect sections 5525.02 to 5525.09 of the Revised Code, and ensuring that the award of all contracts is made to competent and responsible bidders or the lowest and best bidders for environmental remediation and specialty work for which there are no classes of work set out in the rules adopted by the director, subject to and in accordance with Chapter 119. of the Revised Code, the director of transportation may adopt such rules as the director considers proper. The rules may cover the requirements of the department of transportation with respect to classes of work, joint ventures, subcontracting procedures, causes for revocation or nonrenewal of a certificate of qualification, establishment of a debarment process, equipment, past record and experience of applicant, personnel of organization, and any other matters the director considers necessary to enable the director to pass upon the qualifications of applicants. The director may make public lists of qualified bidders, but the lists shall not indicate the bidders' prequalification amounts.

Cite as R.C. § 5525.05

Effective Date: 03-13-1997

5525.06 Subcontractor must be properly qualified.

No successful bidder shall enter into a subcontract with any other person, involving the performance of any part of any work upon which the bidder may be engaged for the department of transportation, unless the subcontractor has been properly qualified for the work sublet to the subcontractor or the subcontractor is eligible for participation without previous qualification under rules adopted by the director of transportation under section 5525.05 of the Revised Code.

Cite as R.C. § 5525.06

Effective Date: 03-13-1997

5525.061 Subcontract approval.

The director of transportation shall not authorize or approve any subcontract pursuant to this chapter unless the subcontract is evidenced in writing and is in conformity with all applicable state and federal laws and regulations.

Cite as R.C. § 5525.061

Effective Date: 07-01-1983

5525.07 Notification of final action - prequalification review board.

All applicants for qualification shall be promptly notified by the director of transportation of the director's final action on their applications. Any applicant, other than one who has been debarred, aggrieved by the decision of the director may file a new application at any time for qualification or, within ten days after receiving notification of such decision, the applicant may request, in writing, a reconsideration of the application by a prequalification review board, which the director shall create within the department of transportation with the request for reconsideration, the applicant shall submit additional evidence bearing on the applicant's qualifications. The review board shall consider the matter and either may adhere to or modify the director's previous decision. The review board shall act upon any request for reconsideration within fifteen days after the hearing and shall notify the applicant of the action taken. Upon being notified of the final action of the review board upon reconsideration, any applicant that is still aggrieved by the decision, within ten days after receiving notification of the decision, may take an appeal therefrom to the court of common pleas of Franklin county. The appeal shall be perfected by the filing of a bond with the clerk of the court of common pleas in an amount determined by the clerk, conditioned for payment by the appellant of the costs of the appeal in case the decision of the review board is sustained, and by causing a summons to be served upon the review board as in other civil actions involving the department. The grounds of appeal shall be fraud or abuse of discretion by the review board. The court shall hear the evidence offered by the appellant and by the review board, and if it finds there was neither fraud nor abuse of discretion, it shall dismiss the appeal; otherwise it may make the order with respect to qualification which it finds should have been made by the review board.

Cite as R.C. § 5525.07

Effective Date: 06-30-1997

5525.08 Disposition of bids of unqualified bidders - nonresponsive bids.

Except as otherwise provided in this section, the director of transportation shall not consider any bid filed with the director by any person who has not been qualified to bid. Bids from unqualified bidders discovered by the director prior to the reading thereof to be from such persons shall be returned without being read. If the director finds, subsequent to the opening of bids, that facts exist that would disqualify the lowest bidder, or that such bidder either is not competent and responsible or has submitted a nonresponsive bid, the director shall reject such bid, despite the fact of prior qualification of such bidder. No contract shall be awarded to any bidder not qualified to bid thereon at the time fixed for receiving bids, except that the director may award contracts for environmental remediation and specialty work not set out in the director's rules governing classes of work to bidders that are not qualified under sections 5525.02 to 5525.09 of the Revised Code.

Cite as R.C. § 5525.08

Effective Date: 03-13-1997

5525.09 False statement with respect to financial worth.

No applicant for qualification shall knowingly make a false statement with respect to his financial worth in any application for qualification, financial statement, or other written instrument filed by him with the department of transportation, pursuant to sections 5525.02 to 5525.09 of the Revised Code, or the rules and regulations adopted pursuant thereto. Whoever violates this section shall be disqualified from submitting bids on contracts advertised for letting by the department of transportation for the period of two years following the date of his conviction.

Cite as R.C. § 5525.09

Effective Date: 09-28-1973

5525.10 Contracts not to be awarded for more than cost plus five per cent.

Except as provided in section 5525.15 of the Revised Code, no contract for any road improvement shall be awarded for a greater sum than the estimated cost thereof plus five per cent. The bids received for an improvement shall be opened at the time and place stated in the notice and the bids shall conform to such other requirements as the director of transportation prescribes. If no acceptable bid is made the director may readvertise the work at the original estimate or amend the estimate and again proceed to advertise for bids. The director may contract for the construction or improvement of bridges and culverts or the grading required in connection with an improvement and may defer making contracts for the remainder of said improvement until such grade has become stable and solid.

Cite as R.C. § 5525.10

Effective Date: 09-28-1973; 03-29-2005

5525.11 Contract upon a unit price basis.

The director of transportation may enter into any contract authorized by law upon a unit price basis. Where a contract is entered into upon a unit price basis, the contractor shall state in his bid the sum for which he offers to perform each unit of each different kind or class of work, and upon completion the quantities of each kind of work shall be measured and the contractor paid only for the quantities of work actually performed by him. Where the director elects to enter into a contract upon a unit price basis he may include in the estimate such reasonable sums as he deems necessary to cover variations in the actual quantities of work as compared with the estimated quantities. In the event the actual compensation earned by the contractor exceeds the estimate, any such excess shall be paid from any funds of the department of transportation which may be expended upon the improvement in question. In the event the actual compensation earned by the contractor is less than the estimate, the saving shall inure to the benefit of the state.

Cite as R.C. § 5525.11

Effective Date: 09-28-1973

5525.12 Lumber deemed material.

Lumber in highway work shall be deemed material within the meaning of sections 153.54 , 1311.26 , and 5525.16 of the Revised Code when it actually becomes part of the structure or improvement in which it is used, or when it is used as form material.

Cite as R.C. § 5525.12

Effective Date: 10-01-1953

5525.13 Limitation of surety bond and insurance.

Where surety bond is accepted from a surety company by the director of transportation on a contract it shall not be for more than ten per cent of the company's capital and surplus, unless the amount in excess of ten per cent is fully reinsured in some surety company that is authorized to transact business in this state.

The director may limit the total amount of insurance in force at any one time in any one company.

In the event of the insolvency of any surety, at any time prior to the completion of a contract, the director may require the contractor to furnish forthwith a new bond covering the uncompleted portion of the work.

Cite as R.C. § 5525.13

Effective Date: 09-28-1973

5525.14 Written change orders or orders for extra work.

(A) Notwithstanding sections 125.01 to 125.11 of the Revised Code, the director of transportation, by written instruction to the contractor, may increase the quantities of any item specified or not specified in a competitively bid construction contract but, except as provided in division (B) of this section, the additional cost incurred by the increase shall not exceed the lesser of one hundred thousand dollars or five per cent of the total contract price. Any such provision for increased quantities or extra work shall be made in the form of a written change to the original contract and does not require competitive bidding.

(B) The one hundred thousand dollar or five per cent restriction in division (A) of this section does not apply to change orders or extra work contracts when the total dollar amount of the increase is twenty-five thousand dollars or less or to change orders or extra work contracts resulting from any of the following:

(1) An increase in the plan quantity that is determined during the final measurement of an item of work.

(2) Federally mandated requirements that did not exist at the time of the original contract award.

(3) Circumstances that would create a life-, safety-, or health-threatening situation or would unduly delay the completion of a project and increase its costs, but only if the director makes a finding of such fact, declares an emergency, and issues the finding. Extra work that the director contracts for in these circumstances may include not only construction needed to complete a project, but also adjustments needed to meet changed conditions, alterations in original plans, unforeseen contingencies, or payments necessitated by contract terminations or suspensions.

All change orders or extra work contracts set forth in division (B) of this section shall be reported to the controlling board quarterly in writing.

(C) The director, by written instruction to the contractor, may decrease or cancel the quantity of any item specified in a contract or portion of a contract and authorize payment to the contractor for reasonable costs incurred to date.

Cite as R.C. § 5525.14

Effective Date: 04-05-2001

5525.15 Cost estimates may be confidential.

The director of transportation may provide that prior to the bid opening, the official engineer's estimate of cost of any project to be constructed by the department of transportation shall be confidential information . After the bid opening, only the total official engineer's estimate of cost may be published.

The unit price components and the estimate of cost of any particular item of work involved therein shall be kept and regarded by the director and all the director's subordinates as confidential, and are not public records for purposes of section 149.43 of the Revised Code . This section does not prohibit the department from furnishing unit price components and the estimate of cost for any particular item of work involved therein to the federal government, counties, municipal corporations, or other local political subdivisions or to railroad or railway companies proposing to pay any portion of the cost of an improvement. Planning estimates are those estimates created for management of the capital program of the department and are public records for purposes of section 149.43 of the Revised Code.

Section 5525.10 of the Revised Code, which provides that no contract for any improvement shall be awarded for a greater sum than the estimated cost thereof plus five per cent, does not apply in the case of any project with respect to which the authority conferred by this section is exercised. In cases in which the authority conferred by this section is exercised and in which the bid of the successful bidder exceeds the estimate, the director, before entering into a contract, shall determine that the bid of the successful bidder is fair and reasonable, and as long as the federal government imposes regulation on prices charged for construction service, shall require the successful bidder to certify that the bidder's bid does not exceed the maximum permitted by such federal regulation.

Cite as R.C. § 5525.15

Amended by 129th General AssemblyFile No.7, HB 114, §101.01, eff. 6/29/2011.

Amended by 128th General Assemblych.7, HB 2, §101.01, eff. 7/1/2009.

Effective Date: 09-17-1996; 03-29-2005

5525.16 Contract performance bond and payment bond.

(A) Before entering into a contract, the director of transportation shall require a contract performance bond and a payment bond with sufficient sureties, as follows:

(1) A contract performance bond in an amount equal to one hundred per cent of the contract amount, conditioned, among other things, that the contractor will perform the work upon the terms proposed, within the time prescribed, and in accordance with the plans and specifications, will indemnify the state against any damage that may result from any failure of the contractor to so perform, and, further, in case of a grade separation will indemnify any railroad company involved against any damage that may result by reason of the negligence of the contractor in making the improvement.

(2) A payment bond in an amount equal to one hundred per cent of the contract amount, conditioned for the payment by the contractor and all subcontractors for labor or work performed or materials furnished in connection with the work, improvement, or project involved.

(B) In no case is the state liable for damages sustained in the construction of any work, improvement, or project under this chapter and Chapters 5501., 5503., 5511., 5513., 5515., 5516., 5517., 5519., 5521., 5523., 5527., 5528., 5529., 5531., 5533., and 5535. of the Revised Code.

This section does not require the director to take bonds as described in division (A) of this section in connection with any force account work, but the director may require those bonds in connection with force account work.

If any bonds taken under this section are executed by a surety company, the director may not approve such bonds unless there is attached a certificate of the superintendent of insurance that the company is authorized to transact business in this state, and a copy of the power of attorney of the agent of the company. The superintendent, upon request, shall issue to any licensed agent of such company the certificate without charge.

The bonds required to be taken under this section shall be executed by the same surety, approved by the director as to sufficiency of the sureties, and be in the form prescribed by the attorney general.

(C) Any person to whom any money is due for labor or work performed or materials furnished in connection with a work, improvement, or project, at any time after performing the labor or furnishing the materials but not later than ninety days after the acceptance of the work, improvement, or project by the director, may furnish to the sureties on the payment bond a statement of the amount due the person. If the indebtedness is not paid in full at the expiration of sixty days after the statement is furnished, the person may commence an action in the person's own name upon the bond as provided in sections 2307.06 and 2307.07 of the Revised Code.

An action shall not be commenced against the sureties on a payment bond until sixty days after the furnishing of the statement described in this section or, notwithstanding section 2305.12 of the Revised Code, later than one year after the date of the acceptance of the work, improvement, or project.

(D) As used in this section, "improvement," "subcontractor," "material supplier," and "materials" have the same meanings as in section 1311.01 of the Revised Code, and "contractor" has the same meaning as "original contractor" as defined in that section.

Cite as R.C. § 5525.16

Amended by 130th General Assembly File No. 7, HB 51, §101.01, eff. 7/1/2013.

Effective Date: 03-13-1997; 03-30-2007

5525.17 Failure of contractor or surety to complete work.

If a contractor has not commenced his work within a reasonable time, or does not carry the same forward with reasonable progress, or is improperly performing his work, or has abandoned, or fails or refuses to complete a contract entered into under Chapters 5501., 5503., 5511., 5513., 5515., 5516., 5517., 5519., 5521., 5523., 5525., 5527., 5528., 5529., 5531., 5533., and 5535. of the Revised Code, the director of transportation shall make a finding to that effect and so notify the contractor in writing, and the rights of the contractor to control and supervise the work shall immediately cease. The director shall forthwith give written notice to the sureties on the bonds of such contractor of such action. If, within ten days after the receipt of such notice, such sureties on the contract performance bond or any one or more of them notify the director in writing of their intention to enter upon and complete the work covered by such contract, such sureties shall be permitted to do so and the director shall allow them thirty days, after the receipt of such notice in writing, within which to enter upon the work and resume construction, unless such time is extended by the director for good cause shown. If such sureties do not carry the same forward with reasonable progress, or if they improperly perform, abandon, or fail to complete the work covered by any such contract, the director shall complete the same in the manner provided in this section. In the event the sureties on the contract performance bond, or any one or more of them, notify the director in writing of their intention to enter upon and complete the work covered by such contract, and then fail or refuse to so complete, any additional costs reasonably incurred by the director as a result of such failure or refusal shall be computed by the director and become the liability of such surety, which is not limited by the amount of the contract performance bond. If the surety fails to pay such amount, the director shall certify the facts to the attorney general, who shall proceed to collect such additional costs from the surety and the amount so collected shall be paid into the state treasury to the credit of the fund from which the excess cost was originally paid.

If, after receiving notice of the action of the director in terminating the control of the contractor over the work covered by his contract, the sureties on such contract performance bond do not within ten days give the director the written notice provided for in this section, the director shall cause that portion of the work which remains uncompleted to be re-estimated and relet in accordance with the requirements applicable to original bids; or in the event the director determines with the approval of the controlling board that an extraordinary emergency exists, he may contract for the completion of the work without advertising the bids, if he considers it to be in the best public interest.

Before entering into a contract for the completion of any such improvement, the director shall require a contract performance bond and a payment bond with sufficient sureties each in an amount equal to one hundred per cent of the estimated cost of completing the work, and conditions relating to the bonds of original contractors shall apply to such bonds.

If the cost of completing such work exceeds the amount set aside or apportioned therefor, the remainder of the cost shall be paid from the appropriations from the state highway operating fund available for the use of the department of transportation and against which no contractual obligations exist.

If the cost of completing any such improvement exceeds the portion of the contract price remaining unpaid to the original contractor at the time of his default, such excess shall be computed by the director and becomes the liability of such contractor or surety or both. If either the contractor or surety fails to pay such amount, the director shall certify the facts to the attorney general, who shall proceed to collect such excess cost from the contractor and the sureties upon his contract performance bond, and the amount so collected shall be paid into the state treasury to the credit of the fund from which the excess cost was originally paid.

Where the estimated cost of completing a defaulted contract does not exceed five thousand dollars, the director may complete the same by force account, or by a contract let without advertisement.

Cite as R.C. § 5525.17

Effective Date: 11-23-1977

5525.18 Contract with foreign corporation.

No contract shall be entered into by the director of transportation, if the bidder awarded the contract is a foreign corporation, until the secretary of state has certified that the corporation is authorized to do business in this state, and, if the bidder awarded the contract is a person or partnership nonresident of the state, until the person or partnership has filed with the secretary of state a power of attorney designating the secretary of state as its agent for the purpose of accepting service of summons in any action brought in this state against the person, firm, or corporation relating to the contract, or under the highway laws or under Chapter 4123. of the Revised Code. No estimate shall be paid to any contractor by the director until the administrator of workers' compensation has certified that the contractor has complied with every condition of Chapter 4123. of the Revised Code, and all acts amendatory thereof and supplementary thereto. The certificate of compliance shall be valid for fifteen days following the period for which the employer has paid an advance premium, and shall warrant and require the payment of all estimates dated during the fifteen-day period, other than final estimates, unless the certificate is revoked by the administrator. Upon the request of any contractor upon state highway work, or person, firm, or corporation intending to engage in contracting upon such work, the administrator, upon the receipt of any premium due, shall forward the certificate to the director.

Cite as R.C. § 5525.18

Effective Date: 11-03-1989

5525.19 Payment of costs.

Payment for the cost of the establishment, construction, reconstruction, improvement, maintenance, and repair of a highway under Chapters 5501., 5503., 5511., 5513., 5515., 5516., 5517., 5519., 5521., 5523., 5525., 5527., 5528., 5529., 5531., 5533., and 5535. of the Revised Code shall be made at intervals of not less than once a month as the work progresses, upon estimates made by the district deputy director of transportation in charge of the improvement and upon approval of the director of transportation. When an estimate is allowed on account of material delivered on the site of the work or in the vicinity thereof, but not yet incorporated therein, the material shall become the property of the state, but if the material is stolen, destroyed, or damaged by casualty before being used, or for any reason becomes unfit for use, the contractor shall replace the material at the contractor's own expense.

In addition to the estimates provided for by law, the director, under such conditions as the director prescribes, may allow and pay to a contractor a sum not exceeding the value of the material delivered by the contractor and safely stored at an approved site. When such estimate is allowed, the material on which it is allowed shall become the property of the state, but in case the material is stolen, destroyed, or damaged by casualty before being used, or for any reason becomes unfit for use, the contractor shall replace the material at the contractor's expense. A contractor may insure against loss or damage by fire or otherwise all materials on which estimates have been allowed.

Cite as R.C. § 5525.19

Effective Date: 09-16-1998

5525.20 Incentive and disincentive contract provisions.

(A) Subject to division (B) of this section, the director of transportation may include incentive and disincentive provisions in contracts the director executes for projects or portions or phases of projects that involve any of the following:

(1) A major bridge out of service;

(2) A lengthy detour;

(3) Excessive disruption to traffic;

(4) A significant impact on public safety;

(5) A link that completes a segment of a highway.

(B) No such provisions shall be included in any particular contract without the prior consent of the municipal corporation, or, if outside a municipal corporation and off the state highway system, the prior consent of the board of county commissioners of the county, in which the bridge, detour, disruption, impact, or link will be located or occur.

(C) If the director decides to include incentive and disincentive provisions in such contracts, the director shall make those provisions part of the bid proposal issued by the director pursuant to this chapter and shall also adopt rules, in accordance with Chapter 119. of the Revised Code, governing the formulation and use of those provisions. The rules shall be equivalent in scope, content, and coverage to the regulations the federal highway administrator issues concerning the use of such provisions in state contracts.

As used in this section, "incentive and disincentive provisions" means provisions under which the contractor would be compensated a certain amount of money for each day specified critical work is completed ahead of schedule or under which the contractor would be assessed a deduction for each day the specified critical work is completed behind schedule. The director also may elect to compensate the contractor in the form of a lump sum incentive for completing critical work ahead of schedule.

Cite as R.C. § 5525.20

Effective Date: 03-31-2003

5525.21 Authorizing minimal amount of foreign steel products in bridge projects.

In conjunction with the requirements of section 153.011 of the Revised Code, the director of transportation may, in connection with any bridge project for which a contract has been entered into, authorize in writing the use of a minimal amount of foreign steel products if either of the following is true:

(A) The cost for each contract item used does not exceed one-tenth of one per cent of the total contract cost, or two thousand five hundred dollars, whichever is greater. For the purposes of this section, the cost is the value of the steel product as delivered to the project.

(B) The director determines that specified steel materials are not produced in the United States in sufficient quantity or otherwise are not reasonably available to meet contract requirements.

Cite as R.C. § 5525.21

Effective Date: 07-20-1992

5525.22 Demolition contracts.

For contracts for projects that involve the demolition of property for a right-of-way, the director of transportation shall include in the contract adequate provision for liquidated damages and a requirement that the contractor inform the department of the method for disposal of demolition debris prior to the start of work.

Cite as R.C. § 5525.22

Effective Date: 06-30-1995

5525.23 Binding dispute resolution for contract controversies.

(A) The director of transportation may include in any construction contract a provision authorizing a binding dispute resolution method for any controversy subsequently arising out of the contract. The binding dispute resolution method may proceed only upon agreement of all parties to the controversy. If all parties do not agree to proceed to binding dispute resolution, a party having a claim against the department of transportation shall exhaust its administrative remedies specified in the construction contract prior to filing any action against the department in the court of claims.

No appeal from the determination of a technical expert lies to any court, except that the court of common pleas of Franklin county may issue an order vacating such a determination upon the application of any party to the binding dispute resolution if any of the following applies:

(1) The determination was procured by corruption, fraud, or undue means.

(2) There was evident partiality or corruption on the part of the technical expert.

(3) The technical expert was guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been prejudiced.

(B) The director, not later than the first day of February of every year, shall provide the governor, the attorney general, the president of the senate, and the speaker of the house of representatives with a written list detailing the claims resolved in the manner provided by division (A) of this section during the preceding calendar year.

(C) As used in this section, "binding dispute resolution" means a binding determination after review by a technical expert of all relevant items, which may include documents, and by interviewing appropriate personnel and visiting the project site involved in the controversy. "Binding dispute resolution" does not involve representation by legal counsel or advocacy by any person on behalf of any party to the controversy.

Cite as R.C. § 5525.23

Effective Date: 06-29-2001

5525.25 Warranty specifications in bidding documents.

(A) For each fiscal year, not more than one-fifth of the department of transportation's capital construction projects shall be bid requiring a warranty as specified in the bidding documents and in division (B) of this section.

(B) A warranty period under this section shall be:

(1) Not more than seven years, for pavement in the case of new construction;

(2) Not more than five years, in the case of bridge painting and pavement resurfacing and rehabilitation;

(3) Not more than two years, in the case of pavement preventative maintenance, pavement markings, raised pavement markers, guardrail, and other project items as determined by the director.

This section does not apply to contracts the director makes on behalf of a political subdivision.

Cite as R.C. § 5525.25

Effective Date: 06-29-2001; 03-29-2005

5525.26 Employment of residents and local businesses.

Except as provided in federal law, if a project for the construction, reconstruction, or other improvement to a road or highway is administered by the department of transportation or any local public authority authorized under division (C) of section 5501.03 of the Revised Code, if the project is located in a municipal corporation with a population of at least four hundred thousand that is in a county with a population of at least one million two hundred thousand, and if the project is funded with at least one hundred thousand dollars from a political subdivision, then a contractor for the project shall comply with regulations or ordinances of the political subdivision that are in effect before July 1, 2009, and that specifically relate to the employment of residents and local businesses of the political subdivision in the performance of the work of the project, and such ordinances or regulations shall be included by reference unambiguously in the contract between the department of transportation or public authority and the contractor for the project.

Cite as R.C. § 5525.26

Added by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 1/1/2010.

5525.99 Penalty.

(A) Whoever violates sections 5525.02 to 5525.99, inclusive, of the Revised Code, shall be fined not less than one hundred nor more than five hundred dollars.

Cite as R.C. § 5525.99

Effective Date: 10-01-1953