Bill > H1103

This bill modifies Section 8(a) of Chapter 149A of the Massachusetts General Laws, which governs trade contracts for public construction projects. Specifically, the bill allows construction management at risk firms to use subcontractor default insurance (SDI) as an alternative to requiring performance and payment bonds for trade contractors. Previously, trade contracts were required to be secured by performance and payment bonds from a surety company licensed in Massachusetts and listed on the U.S. Treasury Department's Circular 570. Under the new provision, the construction manager can obtain a subcontractor default insurance policy instead of mandating that each trade contractor secure individual bonds. However, the awarding authority and construction manager must disclose their intention to use SDI before receiving trade contractor bids. This change provides more flexibility in how construction projects can manage financial risk and protect against potential contractor defaults, while still maintaining a mechanism to ensure project completion and payment to subcontractors.

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https://malegislature.gov/Bills/194/H1103