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Contract performance security and payment bonds - 62 Pa. Cons. Stat. § 903

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     § 903.  Contract performance security and payment bonds.
        (a)  When required and amounts.--For construction contracts
     awarded for amounts between $25,000 and $100,000, the purchasing
     agency shall require contract performance security, in an amount
     equal to at least 50% of the contract price, as the purchasing
     agency in its discretion determines necessary to protect the
     interests of the Commonwealth. When a construction contract is
     awarded in excess of $100,000, the following bonds shall be
     delivered to the purchasing agency and shall be binding on the
     parties upon the execution of the contract:
            (1)  A performance bond, executed by a surety company
        authorized to do business in this Commonwealth and made
        payable to the Commonwealth, in an amount equal to 100% of
        the price specified in the contract and conditioned upon the
        faithful performance of the contract in accordance with the
        plans, specifications and conditions of the contract.
            (2)  A payment bond, executed by a surety company
        authorized to do business in this Commonwealth and made
        payable to the Commonwealth, in an amount equal to 100% of
        the price specified in the contract and conditioned upon the
        prompt payment for all materials furnished or labor supplied
        or performed in the prosecution of the work. Labor or
        materials include public utility services and reasonable
        rentals of equipment for the periods when the equipment is
        actually used at the site.
        (b)  Protection.--A performance bond shall be solely for the
     protection of the purchasing agency which awarded the contract.
     A payment bond shall be solely for the protection of claimants
     supplying labor or materials to the prime contractor to whom the
     contract was awarded or to any of its subcontractors in the
     prosecution of the work provided for in the contract, whether or
     not the labor or materials constitute a component part of the
     construction.
        (c)  Authority to require additional bonds.--Nothing in this
     section shall be construed to limit the authority of the
     Commonwealth agency to require a performance bond, payment bond
     or other security in addition to those bonds or in circumstances
     other than specified in subsection (a).
        (d)  Actions on payment bonds.--
            (1)  Subject to paragraph (2), any claimant who has
        performed labor or furnished material in the prosecution of
        the work provided for in any contract for which a payment
        bond has been given under subsection (a) and who has not been
        paid in full before the expiration of 90 days after the day
        on which the claimant performed the last of the labor or
        furnished the last of the materials for which it claims
        payments may bring an action on the payment bond in its own
        name, in assumpsit, to recover any amount due it for the
        labor or material and may prosecute the action to final
        judgment and have execution on the judgment.
            (2)  Any claimant who has a direct contractual
        relationship with any subcontractor of the prime contractor
        who gave the payment bond but has no contractual
        relationship, express or implied, with the prime contractor
        may bring an action on the payment bond only if it has given
        written notice to the contractor within 90 days from the date
        on which the claimant performed the last of the labor or
        furnished the last of the materials for which it claims
        payment, stating with substantial accuracy the amount and the
        name of the person for whom the work was performed or to whom
        the material was furnished.
            (3)  Notice shall be served by registered mail in an
        envelope addressed to the contractor at any place where its
        office is regularly maintained for the transaction of
        business or served in any manner in which legal process may
        be served in the manner provided by law for the service of a
        summons except that the service need not be made by a public
        officer.
        (e)  Adjustment of threshold amount.--The dollar thresholds
     set forth in subsection (a) shall be adjusted annually by the
     department to reflect the annual percentage change in the
     Composite Construction Cost Index of the United States
     Department of Commerce occurring in the one-year period ending
     on December 31 of each year.
     (Dec. 3, 2002, P.L.1147, No.142, eff. imd.)

        2002 Amendment.  Act 142 amended subsec. (e).
        Cross References.  Section 903 is referred to in section 533
     of this title.

Last modified: November 27, 2007