For certain public-works contracts over $50,000, the department must require a payment bond, and the contractor and surety must follow recording, notice, and payment rules for materialman claims.
SUBPART C. CLAIMS BY SUBCONTRACTORS, SUPPLIERS AND LABORERS §256.3. Payment bond A.(1) Whenever the department enters into a contract in excess of fifty thousand dollars for the construction, maintenance, alteration, or repair of any public works, the department shall require of the contractor a bond with good, solvent, and sufficient surety in a sum not less than fifty percent of the contract price for the payment by the contractor or subcontractor to claimants as defined in R.S. 48:256.5. (2) The bond furnished shall be a statutory bond and no modification, omissions, additions in or to the terms of the contract, in the plans or specifications, or in the manner and mode of payment shall in any manner diminish, enlarge, or otherwise modify the obligations of the bond. The bond shall be executed by the contractor with surety or sureties approved by the department and shall be recorded with the contract in the office of the recorder of mortgages in the parish where the work is to be done not later than thirty days after the work has begun. (3) The recorded portion of the contract shall state that the undersecretary is the official of the department to whom claims against the contractor or surety or both shall be made and shall state with particularity the address for delivery of claims to the department pursuant to R.S. 48:256.5. B.(1) The payment provisions of all bonds furnished for department contracts described in this Subpart, regardless of form or content, shall be construed as and deemed statutory bond provisions. Except as provided in Paragraph (2) of this Subsection, nothing in this Part shall be construed to preclude a surety who has furnished such a bond from asserting any defense to the principal obligation that its principal could assert except lack of capacity or discharge in bankruptcy of the principal obligor. Any such bond which fails to contain any of the requirements set forth in this Subpart shall be deemed to incorporate all of the requirements set forth in this Section. Language in any such bond containing any obligations beyond the requirements set forth in this Part shall be deemed surplusage and read out of such bond. Sureties and contractors executing payment bonds for department contracts under this Subpart shall be immune from liability for or payment of any claims not required by this Subpart. (2) The surety shall be obligated and required to issue payment to a materialman for claims by a materialman under the following conditions: (a) The claim is for material delivered in conformity with material specifications provided in the order for such material. (b) No sooner than forty-five days after delivery of the material, the materialman sends a notice of nonpayment to the general contractor, the surety, and the owner. (c) The materialman has not been paid in full on or before ninety days after delivery of the material. (3) If the requirements of Paragraph (2) of this Subsection are satisfied, the surety shall pay the materialman within ten days after the materialman sends a payment notice to the surety. (4) The claim of a materialman and right to payment as provided in this Subsection are in addition to and not in derogation of any other rights, claims, or remedies available to a materialman in this Part. (5) Any notice required under this Section shall be served by mailing the same by registered or certified mail, postage prepaid, in an envelope addressed to the last known address of the general contractor, the surety, and the owner. The return receipt indicating that registered mail or certified mail was properly addressed to the last known address of the general contractor, the surety, and the owner and deposited in the United States mail regardless of whether the registered or certified mail was actually delivered, refused, or unclaimed satisfies the notice provision of this Section. C. A bond issued pursuant to this Section shall not create, nor shall such bond be construed to create, any cause of action in favor of the department, or any third party, for personal injury or property damages sustained by any third party during the effective period of the bond. Nothing contained herein shall in any way limit the liability on the bond for the performance of the work pursuant to the contract in question; however, to the extent that the department contract in question should contain any provisions for a hold harmless or indemnity agreement, or both, by the contractor, in favor of the public entity, for personal injury or property damages sustained by third parties, the hold harmless or indemnity agreement, or both, shall not be deemed or construed to be secured by the bond, conditioned upon the concurrence of the contractor and the surety. D. Any provisions of a bond issued pursuant to this Section which are contrary to Subsection C of this Section are hereby declared to be contrary to the public policy of the state of Louisiana and are null and void. E. The provisions of this Section shall not be subject to waiver by contract. Acts 1997, No. 1112, §1, eff. July 14, 1997; Acts 1999, No. 607, §1, eff. June 30, 1999; Acts 2024, No. 761, §2, eff. June 19, 2024.