04-10-2019 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 10/15/2018 Expenditures, Purchasing, and Contracts Chapter 22 | Page 40 G. Audits Minn. Stat. § 16C.05, subd. 5. A contract must include an audit clause that provides that the books, records, documents, and accounting procedures and practices of the contractor (with regard to the contract) are subject to examination by the city and the state auditor, as appropriate, for a minimum of six years. H. Prompt payment of subcontractors Minn. Stat. § 471.425, subd. 4a. A city contract must require that the prime contractor pay subcontractors within 10 days of the prime contractor’s receipt of payment from the city. The contract also must require the payment of 1.5 percent interest per month (or any part of a month) on a late payment. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the prime contractor shall pay the actual penalty due. I. No damages-for-delay clauses Minn. Stat. § 15.411. A clause in a public works construction contract that waives, releases, or extinguishes the right of a contractor to seek costs or damages for delays, disruptions, or acceleration in performance is unenforceable if the public entity or a person acting on the entity’s behalf caused the delay, disruption or acceleration. However, clauses that require notice of a delay, disruption, or acceleration by the party affected; provide for reasonable liquidated damages; or provide for arbitration (or other procedure for settling contract disputes) are enforceable. LMC information memo, Competitive Bidding Requirements in Cities. Other potential considerations often arise, depending upon the specific circumstances and the city’s needs. All cities should have their city attorney involved in the actual drafting and review of their contracts. X. Retainage Minn. Stat. § 15.71, subd. 5. The retainage laws apply to any public contract for any city purchase, lease, or sale of personal property, public improvements or services other than agreements exclusively for personal services. Retainage is the difference between what a contractor earned or is owed on a public contract and what the public entity has paid. A. Progress payments Minn. Stat. § 15.72. Unless the terms of the contract provide otherwise, a city must make monthly progress payments on a public contract for a public improvement.