D.C. Mun. Regs. tit. 22, r. 22-B9807
The CO may require any of the following types of security for any solicitation or contract, other than a small purchase, regardless of the estimated amount of the contract when determined to be in the best interest of the Hospital or when required by District law or regulation:
A payment security shall be required only when a performance security is required and the use of the payment security is in the best interest of the Hospital, unless the CO determines, in writing, that either type of security would, by itself, protect the best interests of the Hospital.
When a security is required by the CO, the CO may accept any of the following types of security:
When the Hospital's independent price estimate for a construction contract exceeds seventy-five thousand dollars ($75,000), the CO shall require a bid security for the invitation for bids or request for proposals. For a construction project less than seventy five thousand dollars ($75,000), the CO may require a bid security.
The bid security for a construction contract shall be in an amount equal to at least five percent (5%) of the amount of the bid or price proposal. The bid security for non-construction contracts shall be in an amount set by the CO.
When a bid security is required, the solicitation shall contain the following:
No action shall be taken against the bid security of a bidder or offeror that is permitted to withdraw a bid or proposal prior to award due to a mistake in the bid or proposal.
If a bid fails to comply with the bid security requirements set forth in the solicitation, the CO shall reject the bid. However, the CO may accept the bid if the CO determines that acceptance of the bid or proposal would be in the best interests of the Hospital and for one of the following reasons:
The CO shall require a contractor to furnish performance and payment bonds or other security on any construction contract when the Hospital's independent estimate of the cost of the contract exceeds seventy-five thousand dollars ($75,000). The CO may require a contractor to furnish a payment or performance bond or other security for any construction or non-construction contract, regardless of amount, when the CO determines that the security is necessary or advisable to protect the interests of the Hospital.
The amount of the performance security shall be one hundred percent (100%) of the original contract price, unless the CO determines that a lesser amount or percentage would be adequate for the protection of the Hospital. The CO shall state the amount or percentage in the solicitation.
The CO shall require additional performance security when a contract price is increased. The increase in performance security shall equal one hundred percent (100%) of the increase in the contract price, unless the CO determines that a lesser amount or percentage is adequate for the protection of the Hospital.
The CO may require additional performance security by directing a contractor to increase the original sum of the existing security or to obtain an additional security.
The payment security shall be in an amount of not less than fifty percent (50%) of the total amount of the contract price.
When a contract price is increased, the Hospital may require additional payment security in an amount adequate to protect suppliers of labor and material. However, in no event shall the amount of payment security fall below fifty percent (50%) of the increased contract price.
When performance or payment security is required, the solicitation shall contain the following:
If the CO uses a letter contract to allow the contractor to proceed with work before execution of the definitive contract, the letter contract shall contain a clause that no payments shall be made under the letter contract until the required payment and performance securities have been received.
Security requirements shall be in accordance with Local Small Disadvantaged Business Enterprises (LSDBE) Act 9-223 as amended.
EDITOR'S NOTE: For current provisions regarding contracting with local, small, and disadvantaged businesses, please refer to D.C. Code, 2001 Ed. §§ 2-217.01 to 2-217.07.
A new surety bond covering all or part of the obligation on a security previously approved may be substituted for the original security, if approved by the CO. The CO shall require the contractor to notify the principal and surety on the original bond of the effective date of the new bond.
The CO shall, upon request, furnish the name and address of the surety or sureties to any subcontractor or supplier who has furnished or been requested to furnish labor or material for a contract. In addition, general information concerning the work progress, payments, and the estimated percentage of completion may be furnished to persons who have provided labor or material and have not been paid.
During the performance of contracts requiring payment and performance security, the Hospital shall not withhold payments that are due to contractors or assignees because subcontractors or suppliers have not been paid.
If, after completion of a contract requiring payment and performance security, the Hospital receives written notice from the surety regarding the contractor's failure to meet its obligation to its subcontractors or suppliers, the CO shall withhold final payment. However, the surety shall agree to hold the Hospital harmless from any liability resulting from withholding the final payment. The CO shall authorize final payment upon agreement between the contractor and surety or upon a judicial or other binding determination of the rights of the parties.
The Hospital shall obtain adequate security for bonds (including coinsurance and reinsurance agreements), required or used with a contractor for supplies or services, including construction. A bond security may be obtained from a corporate or individual surety; provided, that an individual surety shall not be used for any construction contract in excess of seventy-five thousand dollars ($75,000). At least two (2) individual sureties shall be required to execute a security. Each corporate surety shall be a company authorized to do business in the District of Columbia.
The CO shall determine the acceptability of all individuals proposed as sureties.
If a contract is modified, the CO shall obtain the consent of surety in the following circumstances:
The CO shall obtain the consent of surety for a novation agreement.
The CO shall obtain the consent of surety when a contract is to be awarded after the deadline set for contract award unless the written commitment of the surety extends to or beyond the date the contract is signed.
The Hospital shall require each contractor to obtain insurance, by purchase, for the risks to which the contractor is exposed, except when the contract specifically relieves the contractor of liability for loss or damage suffered by Hospital personnel and property.
When the Hospital requires a contractor to provide insurance coverage, the policies shall contain an endorsement that any cancellation or material change in the coverage or terms and conditions of the coverage shall not be effective unless the insurer or the contractor gives prior written notice of the cancellation or change to the Hospital in the manner required by the contract or the CO.
The Hospital requires malpractice insurance to be carried by specific contractors performing under a Health Care Service contract. The insurance amount required is in accordance with the dollar minimum as stated in the contract. The liabilities arising from performance is the responsibility of the contractor.
If reinsurance is contemplated, the CO may require reinsurance agreements to be executed and submitted with the securities before making a final determination on the securities.
The CO shall require contractors to comply with applicable federal and Hospital workers' compensation and occupational disease statutes. If occupational diseases are not compensable under those statutes, they shall be covered under the employer's liability section of the insurance policy, except when contract operations are so commingled with a contractor's commercial operations that it would not be practical to require the coverage.
Each contractor shall be required to carry employer's liability coverage of at least one hundred thousand dollars ($100,000).
The CO shall require each contractor to have bodily injury liability insurance coverage written on the comprehensive form of policy of at least five hundred thousand dollars ($500,000) per occurrence.
Property damage liability insurance shall be required only in special circumstances, as determined by the CO.
The CO shall require automobile liability insurance written on the comprehensive form of policy. The policy shall provide for bodily injury and property damage liability covering the operation of all automobiles used in connection with performing the contract.
Policies covering automobiles shall provide coverage of at least two hundred thousand dollars ($200,000) per person and five hundred thousand dollars ($500,000) per occurrence for bodily injury and twenty thousand dollars ($20,000) per occurrence for property damage.
When an aircraft is used in connection with performing a contract, the CO shall require aircraft public and passenger liability insurance. Coverage shall be at least two hundred thousand dollars ($200,000) per person and five hundred thousand dollars ($500,000) per occurrence for bodily injury, other than passenger liability, and two hundred thousand dollars ($200,000) per occurrence for property damage. Coverage for passenger liability bodily injury shall be at least two hundred thousand dollars ($200,000) multiplied by the number of seats or passengers, whichever is greater.
D.C. Mun. Regs. tit. 22, r. 22-B9807