Chapter 27.24

BONDS, INSURANCE AND INDEMNITY

Parts:

  - **1 Bonds** 

  - **2 Insurance** 

  - **3 Indemnification Part 1 Bonds** 

2. Quality of user training;

3. Supplies and replacement parts;

4. Modification of existing equipment, materials or systems;

5. Future upgrades and updates;

6. Estimated amount and cost of reasonably foreseeable future purchases of equipment that would be required to be compatible or functional with the designated manufacturer or product; and

7. Administrative costs.

• (Ord. 30308.)

The Director must include in the procurement documents the written finding(s) made in accordance with Section 27.20.110. (Ord. 30308.)

Sections:

27.24.010 Application of chapter.

• 27.24.020 Payment bonds.

• 27.24.030 Payment bond requirements.

• 27.24.040 Performance bonds.

• 27.24.050 Work on public property.

• 27.24.060 Director's discretion.

• 27.24.070 Multiple sureties.

• 27.24.080 Other bonds.

• 27.24.090 Alternative security.

• 27.24.100 Cost of bonds.

• A. Except as provided in Subsection B, this Chapter 27.24 sets forth payment bond, performance bond, insurance and indemnity requirements for Public Works Contracts.

T27:25

SAN JOSÉ CODE

§ 27.24.010

• B. Notwithstanding Subsection A, this Chapter 27.24 does not apply to bond, insurance or indemnity requirements governed by a different Title of the San José Municipal Code, including subdivision improvement agreements governed by Title 19 and encroachment permits issued pursuant to Titles 13 or 15.

• (Ord. 30308.)

In accordance with California Civil Code Section 9550, as it may be amended, the Director will require a Contractor that is awarded a Public Works Contract involving an expenditure of over $25,000 to provide a payment bond meeting the requirements of this Part 1 of this Chapter 27.24. (Ord. 30308.)

• A. The payment bond amount cannot be less than 100 percent of the total amount payable under the Public Works Contract.

• B. The Contractor must provide an acceptable payment bond within the time set forth in the Public Works Contract, provided that under no circumstances can the Contractor start construction work until the required payment bond has been provided to the Director and approved by the City.

• C. An acceptable payment bond is one that:

  1. Is executed by the Contractor as principal;

  2. Is executed as surety by a corporate surety authorized to be a corporate surety under the laws of California;

  3. Otherwise complies with all California laws applicable to such bonds, including California Civil Code Sections 9550 through 9566, inclusive, as those sections may be amended; and

4. Complies with all other requirements reasonably required by the Director.

(Ord. 30308.)

• A. The Director will require a Contractor to provide a performance bond whenever a payment bond is required.

• B. Only the Council can waive the performance bond requirement.

• C. A performance bond must meet the same requirements as set forth for payment bonds in Section 27.24.030 of this Chapter 27.24.

• (Ord. 30308.)

The bond requirements in Sections 27.24.020 through 27.24.040 also apply to each Person performing construction work on any Public Property pursuant to a permit, except for any work that is done by the owner or occupier of property abutting upon a public street pursuant to a permit and that has a reasonable value of one hundred dollars or less.

(Ord. 30308.)

For any construction project in which a payment and performance bond is not otherwise required under this Chapter 27.24, the Director has the discretion to require such bonds if the Director determines they would protect the City from nonperformance by the Contractor or Persons working on the project from non-payment by the Contractor.

(Ord. 30308.)

The Contractor can satisfy its performance and payment bond obligations by submitting multiple bonds from multiple sureties provided each bond meets the requirements of this Chapter 27.24. (Ord. 30308.)

In addition to payment and performance bonds, the Director may require any other kinds of bond(s) and may fix the amount of such bond(s) as part of a Public Works Contract. (Ord. 30308.)

T27:26

PROCUREMENT OF PUBLIC WORKS

§ 27.24.160

• A. The Director cannot accept any alternative form of security for a payment bond.

• B. For all bonds other than a payment bond, the Director may accept an alternative form of security, such as a certificate of deposit or a letter of credit, if the Director, after coordinating with the Office of the City Attorney, determines that the alternative form of security adequately protects the City against the risk being covered.

• (Ord. 30308.)

A Person required to provide bonds in accordance with this Part 1 of this Chapter 27.24 must do so at that Person's sole cost. (Ord. 30308.)

ing coverages and coverage amounts, for all Public Works Contracts and all other contracts governed by this Title 27.

• (Ord. 30308.)

Public Works Contracts entered by the Director must conform to the insurance coverage and requirements established by the Risk Manager. (Ord. 30308.)

• A. Proof of insurance must be in the form of a complete and properly issued certificate of insurance, together with copies of all required endorsements.

• B. Proof of insurance must be submitted to, and approved by, the Risk Manager.

• (Ord. 30308.)

Part 2

INSURANCE

Sections:

27.24.110 Risk manager defined.

• 27.24.120 Insurance requirements.

• 27.24.130 Contract requirement.

• 27.24.140 Proof of insurance.

• 27.24.150 Time for providing proof of insurance.

• 27.24.160 Waiver.

• A. No Contractor can start performing any work pursuant to the Public Works Contract until the required proof of insurance has been submitted to, and approved by, the Risk Manager.

• B. The Director may include provisions in a Public Works Contract requiring that proof of insurance be provided at the time the contract is executed or at any other time before the start of construction.

• (Ord. 30308.)

For purposes of this Part 2, "Risk Manager" means the person from the City responsible for reviewing, determining and establishing appropriate insurance coverage and requirements for City contracts.

(Ord. 30308.)

Only the Council can waive the insurance required by this Part.

• (Ord. 30308.)

Part 3

INDEMNIFICATION

Sections:

The Risk Manager will determine and establish the appropriate insurance requirements, includ-

T27:27

SAN JOSÉ CODE

§ 27.24.170

Every Public Works Contract must include an appropriate provision, approved by the City Attorney, requiring the Contractor to indemnify and hold harmless the City. (Ord. 30308.)

Only the Council can waive the indemnification required by this Part. (Ord. 30308.)