                                 CODE OF VIRGINIA

PERFORMANCE AND PAYMENT BONDS (§ 2.2-4337)

A. Upon the award of any (i) nontransportation-related public construction
contract exceeding $500,000 awarded to any prime contractor or (ii)
transportation-related project authorized pursuant to Article 2 (§ 33.2-208 et
seq.) of Chapter 2 of Title 33.2 exceeding $350,000 that is partially or wholly
funded by the Commonwealth, the contractor shall furnish to the public body the
following bonds:

   1. A performance bond in the sum of the contract amount conditioned upon the
   faithful performance of the contract in strict conformity with the plans,
   specifications, and conditions of the contract, unless the contract is an
   indefinite delivery or quantity contract with a local public body and the
   local public body adopts an ordinance pursuant to subsection G.

   2. A payment bond in the sum of the contract amount, unless the contract is an
   indefinite delivery or quantity contract with a local public body and the
   local public body adopts an ordinance pursuant to subsection G. The bond shall
   be for the protection of claimants who have and fulfill contracts to supply
   labor or materials to the prime contractor to whom the contract was awarded,
   or to any subcontractors, in furtherance of the work provided for in the
   contract, and shall be conditioned upon the prompt payment for all materials
   furnished or labor supplied or performed in the furtherance of the work.

B. Each of the bonds shall be executed by one or more surety companies selected
by the contractor that are authorized to do business in Virginia.

C. If the public body is the Commonwealth, or any agency or institution thereof,
the bonds shall be payable to the Commonwealth of Virginia, naming also the
agency or institution thereof. Bonds required for the contracts of other public
bodies shall be payable to such public body.

D. Each of the bonds shall be filed with the public body that awarded the
contract, or a designated office or official thereof.

E. Nothing in this section shall preclude a public body from requiring payment
or performance bonds for construction contracts below $500,000 for
nontransportation-related projects or $350,000 for transportation-related
projects authorized under Article 2 (&#xA7; 33.2-208 et seq.) of Chapter 2 of
Title 33.2 and partially or wholly funded by the Commonwealth.

F. Nothing in this section shall preclude the contractor from requiring each
subcontractor to furnish a payment bond with surety thereon in the sum of the
full amount of the contract with such subcontractor conditioned upon the payment
to all persons who have and fulfill contracts that are directly with the
subcontractor for performing labor and furnishing materials in the prosecution
of the work provided for in the subcontract.

G. For indefinite delivery or quantity contracts awarded pursuant to subsection
A, any locality may by ordinance allow the contractor awarded such contract to
furnish to the local public body a performance bond and a payment bond, each of
which shall be equal to the dollar amount of the individual tasks identified in
the underlying contract. Such contractor shall not be required to pay the
performance bond and payment bond in the sum of the contract amount if the
contracting locality has adopted such an ordinance pursuant to this subsection.
For purposes of this section, &#8220;indefinite delivery or quantity
contract&#8221; means a contract that only requires performance of contractual
obligations upon the request of the locality and which establishes an annual cap
for the total work that may be authorized for such contract.

HISTORY: 1982, c. 647, § 11-58; 1984, c. 160; 2001, c. 844; 2002, cc. 556, 643,
682; 2006, cc. 694, 925; 2011, c. 789; 2012, c. 783; 2017, c. 789; 2022, c. 565;
2023, c. 211.