Pennsylvania updates payment bond requirement for projects $10,000 or more

payment

Approved by Pennsylvania governor Tom Corbett on May 17, 2012, House Bill 1702 from the 2011-2012 legislation session serves to amend the existing payment bond structure in the Pennsylvania Borough Code. Prior to the bill’s passing, payment bonds — a form of construction bonding in place to ensure contractors pay subcontractors for exerted labor and materials — covered 50-100 percent of a contract price and were required for contracts totaling more than $1,500.

However, the new legislation, pushed forth by Representative Mauree Gingrich, changes payment bond requirements in Pennsylvania to cover 100 percent of a contract price and pushes the requirement to contracts totaling $10,000 or more.

Page 288 of the most recently amended legislation details the change.

“Before any contract exceeding ten thousand dollars ($10,000) is awarded to any prime contractor or construction manager…the contractor shall furnish to the borough a payment bond for the protection of claimants supplying labor or materials to the contractor to whom the contract is awarded, at one hundred percent of the contract amount…”

Click here for a full text on PA HB 1702.

If you need a surety bond in Pennsylvania or any other state, contact SuretyBonds.com online 24/7 or by phone at 1 (800) 308-4358 Monday through Friday, 8 a.m. to 7 p.m. CST. You’ll be connected with an expert surety specialist who will walk you through each step of the bonding process.