A. Except where specifically exempted by statute, before any contract is executed with any person for the construction, alteration, or repair of any public building, a public work or improvement of any county, city or town, or officer, board or commission thereof, and irrigation, power, electrical, drainage, flood protection and flood control districts, tax levying public improvement districts, and county or city improvement districts, the person shall furnish to the agent entering into such contract the following bonds that shall become binding on the award of the contract to such person, who, for purposes of this article, means "contractor":
1. A performance bond in an amount equal to the full contract amount conditioned on the faithful performance of the contract in accordance with plans, specifications and conditions thereof. Such bond shall be solely for the protection of the public body awarding the contract.
2. A payment bond in an amount equal to the full contract amount solely for the protection of claimants supplying labor or materials to the contractor or his subcontractors in the prosecution of the work provided for in such contract.
B. Each such bond shall include a provision allowing the prevailing party in a suit on such bond to recover as a part of the judgment such reasonable attorneys' fees as may be fixed by a judge of the court.
C. Notwithstanding any other statute, each such bond shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance and financial institutions pursuant to title 20, chapter 2, article 1. The bonds shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied. The bonds shall be payable to the public body concerned.
D. Such bonds shall be filed in the office of the department, board, commission, institution, agency or other contracting body awarding the contract.
E. It shall be illegal for the invitation for bids or any person acting or purporting to act on behalf of the contracting body to require that such bonds be furnished by a particular surety company or through a particular agent or broker.
F. The conditions and provisions in the payment bond regarding the surety's obligations shall follow the following form:
Now, therefore, the condition of this obligation is such, that if the principal promptly pays all monies due to all persons supplying labor or materials to the principal or the principal's subcontractors in the prosecution of the work provided for in the contract, this obligation is void. Otherwise it remains in full force and effect.
Provided, however, that this bond is executed pursuant to the provisions of title 34, chapter 2, article 2, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions, conditions and limitations of title 34, chapter 2, article 2, Arizona Revised Statutes, to the same extent as if they were copied at length in this agreement.
The prevailing party in a suit on this bond shall recover as a part of the judgment reasonable attorney fees that may be fixed by a judge of the court.
G. The conditions and provisions in the performance bond regarding the surety's obligations shall follow the following form:
Now, therefore, the condition of this obligation is such, that if the principal faithfully performs and fulfills all of the undertakings, covenants, terms, conditions and agreements of the contract during the original term of the contract and any extension of the contract, with or without notice to the surety, and during the life of any guaranty required under the contract, and also performs and fulfills all of the undertakings, covenants, terms, conditions and agreements of all duly authorized modifications of the contract that may hereafter be made, notice of which modifications to the surety being hereby waived, the above obligation is void. Otherwise it remains in full force and effect.
Provided, however, that this bond is executed pursuant to the provisions of title 34, chapter 2, article 2, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions of title 34, chapter 2, article 2, Arizona Revised Statutes, to the extent as if it were copied at length in this agreement.
The prevailing party in a suit on this bond shall recover as part of the judgment reasonable attorney fees that may be fixed by a judge of the court.
H. If the prime contract or specifications require any persons supplying labor or materials in the prosecution of the work to furnish payment or performance bonds, these bonds shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance and financial institutions pursuant to title 20, chapter 2, article 1. Notwithstanding the provisions of any other statute, the bonds shall not be executed by an individual surety or sureties, even if the requirements of section 7-101 are satisfied.
I. All bonds given by a contractor and surety pursuant to the provisions of this article, regardless of their actual form, will be deemed by law to be the form required and set forth in this article and no other.
Notes of Decisions
A. Miner Contracting, Inc. v. Toho-Tolani Cnty. Improvement Dist., 311 P.3d 1062 (Ariz. Ct. App. 2013).
· cites it 10× “The bidder to whom the district awards a contract for improvement must execute a performance bond that complies with A.R.S. § 34-222 (2011). 5 The board of directors is authorized to hold a hearing if it believes the contractor’s work on the project is not “being prosecuted with…”
Fid. & Deposit Co. v. Bondwriter Sw., Inc., 263 P.3d 633 (Ariz. Ct. App. 2011).
· cites it 7× “The court subsequently ruled the bonds were not valid: The Court finds that pursuant to A.R.S. § 34-222 the original bond was not delivered to the City of Flagstaff and therefore was an invalid bond.”
Advance Leasing & Crane Co. v. Del E. Webb Corp., 573 P.2d 525 (Ariz. Ct. App. 1977).
· cites it 6× “Appellant urges us to construe that A.R.S. §§ 34-222 and 34-223 to create a cause of action for one who has no contractual relationship with the general contractor but who supplied equipment and labor directly on the job site pursuant to a contract with a materialman.”
Brown Wholesale Elec. Co. v. Safeco Ins. Co. of Am., 659 P.2d 1299 (Ariz. Ct. App. 1982).
· cites it 4× “§ 33-981 was amended to add its notice provision, A.R.S. § 34-222 contained a different notice provision, requiring notice to be given within ninety days from the date on which such claimant last performed the labor or furnished or supplied the last of the material for which…”
Paul Schoonover, Inc. v. Ram Constr. Inc., 630 P.2d 27 (Ariz. 1981).
· cites it 4× “We incorporate into the bond, A.R.S. § 34-222. * This statute required Ram to *207 furnish a performance bond for the “construction, alteration, or repair of any public building.”
Hartford Accident & Indem. Co v. Arizona Dep't of Transp., 838 P.2d 1325 (Ariz. Ct. App. 1992).
· cites it 8× “section 270a, requires a performance bond with a surety satisfactory to the officer awarding the public contract and, in subsection (d), states that every performance bond required under the section shall specifically cover taxes imposed by the United States.”
Honeywell, Inc. v. Arnold Const. Co., Inc., 654 P.2d 301 (Ariz. Ct. App. 1982).
· cites it 4× “On the same day Arnold executed a payment bond, required by A.R.S. § 34-222, naming Safeco Insurance Company of America as its surety.”
Butch Randolph & Assocs., Inc. v. Int'l Fid. Ins., 136 P.3d 232 (Ariz. Ct. App. 2006).
· cites it 3× “”) section 34-222 (2000). ¶ 3 The subcontractor, a park and playground equipment seller, agreed to supply barbecue grills and ramadas for the park project.”
E & S Insulation Co. of Arizona, Inc. v. E. L. Jones Constr. Co., 591 P.2d 560 (Ariz. Ct. App. 1979).
· cites it 4× “Because this was a public works project, Jones obtained USF&G as a surety and filed a payment and performance bond as required by A.R.S. § 34-222. Southwest accepted E & S’s bid to perform certain work for a fixed price.”
B. J. Cecil Trucking, Inc. v. Tiffany Constr. Co., 597 P.2d 184 (Ariz. Ct. App. 1979).
· cites it 4× “These statutes, with respect to public contracts, parallel the “owner’s agent” provisions of our mechanics lien law in that a payment bond required to be given by public contractors is “solely for the protection of claimants supplying labor or materials to the contractor or his…”
— Ariz. Rev. Stat. § 34-222(A) — 4 cases
Advance Leasing & Crane Co. v. Del E. Webb Corp., 573 P.2d 525 (Ariz. Ct. App. 1977).
“Appellant urges us to construe that A.R.S. §§ 34-222 and 34-223 to create a cause of action for one who has no contractual relationship with the general contractor but who supplied equipment and labor directly on the job site pursuant to a contract with a materialman.”
Hartford Accident & Indem. Co v. Arizona Dep't of Transp., 838 P.2d 1325 (Ariz. Ct. App. 1992).
“section 270a, requires a performance bond with a surety satisfactory to the officer awarding the public contract and, in subsection (d), states that every performance bond required under the section shall specifically cover taxes imposed by the United States.”
— Ariz. Rev. Stat. § 34-222(A)(1) — 2 cases
A. Miner Contracting, Inc. v. Toho-Tolani Cnty. Improvement Dist., 311 P.3d 1062 (Ariz. Ct. App. 2013).
“The bidder to whom the district awards a contract for improvement must execute a performance bond that complies with A.R.S. § 34-222 (2011). 5 The board of directors is authorized to hold a hearing if it believes the contractor’s work on the project is not “being prosecuted with…”
— Ariz. Rev. Stat. § 34-222(A)(2) — 11 cases
Brown Wholesale Elec. Co. v. Safeco Ins. Co. of Am., 659 P.2d 1299 (Ariz. Ct. App. 1982).
“§ 33-981 was amended to add its notice provision, A.R.S. § 34-222 contained a different notice provision, requiring notice to be given within ninety days from the date on which such claimant last performed the labor or furnished or supplied the last of the material for which…”
B. J. Cecil Trucking, Inc. v. Tiffany Constr. Co., 597 P.2d 184 (Ariz. Ct. App. 1979).
“These statutes, with respect to public contracts, parallel the “owner’s agent” provisions of our mechanics lien law in that a payment bond required to be given by public contractors is “solely for the protection of claimants supplying labor or materials to the contractor or his…”
Honeywell, Inc. v. Arnold Const. Co., Inc., 654 P.2d 301 (Ariz. Ct. App. 1982).
“On the same day Arnold executed a payment bond, required by A.R.S. § 34-222, naming Safeco Insurance Company of America as its surety.”
— Ariz. Rev. Stat. § 34-222(A)(l) — 3 cases
A. Miner Contracting, Inc. v. Toho-Tolani Cnty. Improvement Dist., 311 P.3d 1062 (Ariz. Ct. App. 2013).
“The bidder to whom the district awards a contract for improvement must execute a performance bond that complies with A.R.S. § 34-222 (2011). 5 The board of directors is authorized to hold a hearing if it believes the contractor’s work on the project is not “being prosecuted with…”
Hartford Accident & Indem. Co v. Arizona Dep't of Transp., 838 P.2d 1325 (Ariz. Ct. App. 1992).
“section 270a, requires a performance bond with a surety satisfactory to the officer awarding the public contract and, in subsection (d), states that every performance bond required under the section shall specifically cover taxes imposed by the United States.”
— Ariz. Rev. Stat. § 34-222(B) — 5 cases
Hartford Accident & Indem. Co v. Arizona Dep't of Transp., 838 P.2d 1325 (Ariz. Ct. App. 1992).
“section 270a, requires a performance bond with a surety satisfactory to the officer awarding the public contract and, in subsection (d), states that every performance bond required under the section shall specifically cover taxes imposed by the United States.”
— Ariz. Rev. Stat. § 34-222(C) — 1 case
— Ariz. Rev. Stat. § 34-222(F) — 3 cases
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