Wyoming House Bill 0052 went into effect on July 1, 2020, amending certain requirements for public works projects. The bill was signed into law by Governor Mark Gordon back in early February of 2020. This bill amended multiple statutes regarding construction bonds, retainage, and payment on public projects. Let’s take a look at a few of these changes that contractors, subs, and suppliers on public works projects in Wyoming should know.
Wyoming Public Works Law: Definitions to key terms
Before we dive into all of the specific changes to Wyoming public projects; the new laws also come with some clarity in the form of definitions to key words contained in the statute.
Here are three of particular importance:
- “Public entity” means the state of Wyoming, any state office, board, council, commission, separate operating agency, department, institution or other instrumentality or operating unit of the state, including the University of Wyoming, any political subdivision of the state, any county, city, then, school district, community college district or any public corporation of the state
- “Public work” includes the alteration, construction, demolition, enlargement, improvement, major maintenance, reconstruction, renovation and repair of any highway, public building, public facility, public monument, public structure or public system.
- “Substantial completion” or “substantially complete” means the public entity has determined that the construction of the public work or designated portion thereof is sufficiently complete in accordance with the contract and associated documents so that the work may be occupied or utilized for its intended purposes.
Now that we’ve established what the terms mean in the context of the statutes, let’s get to the good stuff.
Changes to Public Works Projects in Wyoming
Payment bond thresholds increased
Under these new regulations, every public works project for over $150,000 requires a performance and payment bond to be posted by the prime. This is a steep increase from the previous contract price threshold of just $50K.
For public works project whose overall contract price is less than $150K, the public entity may require the prime contractor to provide some other form of guarantee. Also, the amount of the bond should now equal 100% of the total contract price, as opposed to the previous 50%.
Preliminary notices by email
The Notice to Contractor requirements under W.S. §16-6-121 also changed. The same required information, and deadlines are still intact. And the requirement applies, as does this majority of this section, to projects over $150,000, with one notable difference.
This preliminary notice can now also be sent by “electronic means.” This means that preliminary notices can now be sent by email in Wyoming — on the same day, in fact. If the notice is sent by email, the notice is deemed “served” once the email is sent.
Retainage limits decreased
Previously, retainage on Wyoming public projects was set at a maximum of 10%. Once the project reached 50% completion, if the project is making satisfactory progress, the remaining progress payments could be made without withholding any retainage. This whole practice has been revamped under these new laws.
Now, retainage is capped at 5% of each progress payment. Also, gone are the days of 50% completion option to stop withholding retainage.
Instead, if the project is making satisfactory progress, the contractor may request payment from the withheld retainage in any phase of the contract; pending approval by the entity. Additionally, a general contractor can request that the public entity deposit the retained funds interest bearing account.
Substantial completion & final completion
Once the project has reached substantial completion, the public entity is required to issue a certificate of substantial completion. This certificate is now required to be published once a week in a newspaper of general circulation for two consecutive weeks. It must also be posted on the Wyoming State Construction Procurement Website or the public entity’s official website.
After the notice is published and posted, the prime contractor will be entitled to collect final payment, along with any withheld retainage. If there is any work that is either incomplete, or not completed in accordance with the contract, the reasonable value of that work can be withheld.
There is now also a certificate of final completion as well. This will be issued when all portions of the work is deemed acceptable under the contract and any other associated documents. The final completion date will then be posted on the state procurement website or the public entity’s official website.
Once this date is posted online, the public entity should authorize the release of any remaining amounts withheld from final payment/retainage.
Actions against the payment bond
Lastly, the new laws make a slight tweak to the timing for bond claims in Wyoming. Previously, the deadline to file a lawsuit was one year from the “first publication of notice of final payment of the contract.” Now, the same one year timeframe remains, but the clock starts to tick on the date of final completion posted on the state procurement website or the public entity’s official website.