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Indiana Federal Construction Contract Provisions
Required Contract Provisions
Federally Assisted Construction Contracts
SECTION 1 General Information
IC 36-1-12-4.5, IC 36-1-12-13.1, IC 36 1-12-14 e
The minimum requirements for contracts exceeding $100,000
for construction shall be as follows:
1. A Bid Bond or a certified check shall be filed with each
bid equivalent to 5% of the bid price as assurance that
the bidder will, upon acceptance of their bid, execute
such contractual documents as may be required within
the time specified.
2. A Performance Bond for 100% of the contract price to
assure fulfillment of the contractor’s obligations under
the contract.
3. A Payment Bond for 100% of the contract price to
assure payment of all persons supplying labor and
material in the execution of the work provided for in
the contract.
NOTE: The Bid Bond must be submitted with the bid and the
Performance Bond and Payment Bond must be provided to the
project owner before construction begins on the project.
RETAINAGE: IC 36-1-12-14
Public work contracts in excess of $100,000 require the
retainage of 5% of the dollar value of all work satisfactorily
completed by the contractor(s). The escrow agent shall be
selected by mutual agreement between the board of the
awarding agency and the contractor(s). The contractor shall be
paid in full within sixty one (61) days after the date of
substantial completion. If upon substantial completion of the
public work there remain uncompleted minor items, an amount
equal to two hundred percent (200%) of the value of each item
as determined by the architect/engineer shall be withheld until
the item is completed.
CHANGE ORDERS: IC 36-1-12-18
A change order may not be issued before commencement of
the actual construction except in the case of an emergency. In
such a case, the board of awarding agency must make a
declaration and the board’s minutes must show the nature of
the emergency. The total of all change orders issued that
increase the scope of the project may not exceed twenty
percent (20%) of the amount of the original contract. A change
order issued as a result of circumstances that could not have
been reasonably foreseen does not increase the scope of the
project. All change orders must be prepared by the project
engineer or architect and approved and signed by the board of
the awarding agency and the contractor. All change orders
must be directly related to the original public work project.
In the procurement of supplies, equipment, construction
and/or services by recipients and subrecipients, any conflict of
interest is prohibited. No persons who exercise or have
exercised any functions or responsibilities with respect to CDBG
activities assisted under this part or who are in a position to
participate in a decision making process or gain inside
information with regard to such activities, may obtain a
financial interest or benefit from a CDBG-assisted activity, or
have a financial interest in any contract, subcontract, or
agreement with respect to a CDBG-assisted activity, or with
respect to the proceeds of the CDBG-assisted activity, either for
themselves or those with whom they have business or
immediate family ties, during their tenure or for one year
On each CDBG funded project, the grantee is required to
maintain documentation supporting their best efforts to
achieve the state goal of 10% MBE/WBE participation. Only
those businesses duly registered on IDOA’s Minority and
Women’s Business Enterprises List may be counted toward the
10% goal. That list is available at
The recipient of CDBG grant funds shall maintain written
standards of conduct governing the performance of employees
engaged in the award and administration of contracts stating
that no employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported by
Federal funds if a real or apparent conflict of interest would be
Financial records, supporting documents, statistical records and
all other records pertinent to a grant shall be retained for a
period of five years. If any litigation, claim, negotiation, audit
or other action is started before the expiration of the five-year
period, the records shall be retained until all litigations, claims
or audit findings involving the records have been resolved. The
retention period starts from the date of the submission of the
final expenditure report or, from the date of the submission of
the annual financial status report covering the last expenditure
of grant funds for that year.
In addition to provisions defining a sound and completed
procurement contract, any recipient of federal funds shall
include the following:
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