Article 7. Contract Requirements of California Public Contract Code >> Division 2. >> Part 2. >> Chapter 1. >> Article 7.

Every contract awarded under this part shall be submitted to the Attorney General or the attorney appointed according to law and authorized to represent the department under which it is to be performed. Such a contract is not binding on the state until the appropriate attorney finds it to be in accordance with the requirements of this chapter, and endorses such finding thereon. A certified copy of each contract shall be filed with the Controller, but the failure so to file does not invalidate it.

Every contract shall provide for the filing of separate performance and payment bonds by the contractor in the form of bonds executed by an admitted surety insurer and not deposits in lieu of bond, subject to the approval of the department.

(a) Each bond shall equal at least one-half of the contract price, except as otherwise provided in Section 9554 of the Civil Code, in the California Toll Bridge Authority Act (Chapter 1 (commencing with Section 30000) of Division 7 of the Streets and Highways Code), or in subdivision (b).
  (b) Notwithstanding subdivision (a), for projects with a contract price greater than two hundred fifty million dollars ($250,000,000), the Department of Transportation shall have the discretion to specify that the payment bond shall equal not less than one-half of the contract price or five hundred million dollars ($500,000,000), whichever is less.

The payment bond shall secure the payment of the claims of laborers, mechanics or materialmen employed on the work under the contract and shall contain all other provisions required by law.

The performance bond shall guarantee the faithful performance of the contract by the contractor.

No payment shall be made upon the contract to the contractor or any assignee of the contractor until any order by the director that a sufficient surety be substituted on the bond or that a new, additional, or supplemental bond be given, is satisfied. No cancellation of or withdrawal of a surety from a bond is effective unless approved by the director.

Every contract shall contain a provision in regard to the time when the whole or any specified portion of the work contemplated shall be completed, and shall provide that for each day completion is delayed beyond the specified time, the contractor shall forfeit and pay to the state a specified sum of money, to be deducted from any payments due or to become due to the contractor. The sum so specified is valid as liquidated damages unless manifestly unreasonable under the circumstances existing at the time the contract was made. A contract for a road project, flood control project, or project involving facilities of the State Water Resources Development System may also provide for the payment of extra compensation to the contractor, as a bonus for completion prior to the specified time, the provision, if used, to be included in the specifications and to clearly set forth the basis for the payment.

Every contract shall provide that the department may make changes in the plans and specifications pursuant to this part.

Every contract subject to this part shall contain a provision requiring each contractor to comply with all air pollution control rules, regulations, ordinances, and statutes which apply to any work performed pursuant to the contract, including any air pollution control rules, regulations, ordinances, and statutes specified in Section 11017 of the Government Code.

Every contract shall contain a statement by which the contractor swears under penalty of perjury that no more than one final, unappealable finding of contempt of court by a federal court has been issued against the contractor within the immediately preceding two-year period because of the contractor's failure to comply with an order of a federal court which orders the contractor to comply with an order of the National Labor Relations Board. For purposes of this section, a finding of contempt does not include any finding which has been vacated, dismissed, or otherwise removed by the court because the contractor has complied with the order which was the basis for the finding. The state may rescind any contract in which the contractor falsely swears to the truth of the statement required by this section.