03/14/11 Board of Public Works - Laserfiche WebLink

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REGULAR MEETING MARCH 14, 2011 78 WHEREAS, HUD, as the awarding agency, requires bonding pursuant to 24 C.F.R. §85.36(h) (the "Bonding Requirement"); and WHEREAS, in this economic environment, meeting the Bonding Requirement is an extreme hardship or impossibility for one or more Contractors; and WHEREAS,the Bonding Requirement permits a grantee such as the Board to establish a Bonding Policy so long as HUD's interests are adequately protected; and WHEREAS, the Board desires to: (i) establish a Bonding Policy consistent with 24 C.F.R. §85.36 which will protect the interests of the Board; and (ii) ensure that HUD's interests are adequately protected. NOW THEREFORE, BE IT RESOLVED BY THE SOUTH BEND BOARD OF PUBLIC WORKS AS FOLLOWS: 1, The Board hereby adopts its Policy Establishing Bonding Requirements Related to HUD Funding of Various Programs (the "Policy") as stated herein. 2. In the event a Contractor is awarded a Project contract by a Sub-Recipient pursuant to one of the Programs, and such Contractor is unable to obtain a bond or bonds which meet the Bonding Requirement due to financial hardship or impossibility, the Contractor and Sub-Recipient may jointly apply to the Board for a bonding guaranty pursuant to the Policy adopted by this Resolution in order to comply with HUD Requirements. 3. Upon a finding by the Board that the Contractor is not able to meet the Bonding Requirement and that the application submitted by the Contractor demonstrates that the Contractor is well qualified and of an acceptable risk, the Board shall guarantee One Hundred Percent (100 %) of the Contractor's performance of the contract awarded as well as One Hundred Percent (100 %) of the Contractor's payment to all subcontractors for the contract awarded consistent with the Bonding Requirement upon the following terms and conditions: A. The Contractor shall execute a written promise to repay any funds expended by the Board pursuant to this Policy, in the event of a default in performance or payment by the Contractor. In addition thereto, at the sole discretion of the Board, the principal or principals of the Contractor shall execute a written promise to repay such funds. B. The Sub-Recipient shall execute a written promise to repay any funds expended by the Board and not repaid by the Contractor, in the event of a default by the Contractor in performance or payment, which promise by the Sub-Recipient shall be secured by a pledge of the Real Estate which is owned and being developed by the Sub- Recipient. C. The Sub-Recipient shall monitor the progress of the Project and will certify such progress to the Board ("Certifications") before any progress payments are made to the Contractor by the Sub-Recipient. D. Certifications will be made at least every thirty (30) days. E. The Sub-Recipient shall establish a retainage account for all amounts withheld from progress payments to the Contractor and shall assign such retainage account to the Board as security for repayment of any fiends expended by the Board pursuant to this Policy, in the event of a default by the Contractor in performance or payment. 4. Since the Board is providing a One Hundred Percent (100 %) guarantee of the contract price, HUD's interests are adequately protected, because the risk of non-performance or non-payment by the Contractor is assumed by the Board. 5. The Board appoints the Director of Economic Development and the City Controller as agents of the Board for the purpose of implementing the Policy. The agents so