52-118. Public building construction; bond required for benefit of laborers, mechanics, and suppliers; exception.
(1) Except as provided in subsection (2) of this section, it shall be the duty of the State of Nebraska or any department or agency thereof, the county boards, the contracting board of all cities, villages, and school districts, all public boards empowered by law to enter into a contract for the erecting, furnishing, or repairing of any public building, bridge, highway, or other public structure or improvement, and any officer or officers so empowered by law to enter into such contract, to which the general provisions of the mechanics' lien laws do not apply and when the mechanics and laborers have no lien to secure the payment of their wages and suppliers who furnish material and who lease equipment for such work have no lien to secure payment therefor, to take from the person as defined in section 49-801 to whom the contract is awarded a payment bond or bonds in a sum not less than the contract price with a corporate surety company and agent selected by such person, conditioned for the payment of all laborers and mechanics for labor that is performed and for the payment for material and equipment rental which is actually used or rented in the erecting, furnishing, or repairing of the public structure or improvement or in performing the contract.
(2) The labor and material payment bond or bonds referred to in subsection (1) of this section shall not be required for (a) any project bid or proposed by the State of Nebraska or any department or agency thereof which has a total cost of fifteen thousand dollars or less or (b) any project bid or proposed by any county board, contracting board of any city, village, or school district, public board, or officer referred to in subsection (1) of this section which has a total cost of ten thousand dollars or less unless the state, department, agency, board, or officer includes a bond requirement in the specifications for the project.
(3) The bond or bonds referred to in subsection (1) of this section shall be to, filed with, approved by, and safely kept by the State of Nebraska, department or agency thereof, officer or officers, or board awarding the contract. No contract referred to in subsection (1) of this section shall be entered into by the State of Nebraska, department or agency thereof, officer or officers, or board referred to in subsection (1) of this section until the bond or bonds referred to in subsection (1) of this section has been so made, filed, and approved.
(4) The bond or bonds referred to in subsection (1) of this section may be taken from the person to whom the contract is awarded by the owner and owner's representative jointly as determined by the owner. The corporate surety company referred to in subsection (1) of this section shall have a rating acceptable to the owner as the owner may require.
Source
Annotations
1. Provisions of contract
2. Actions
3. Coverage of materials
4. Miscellaneous
1. Provisions of contract
Covenants and conditions of bond of contractor erecting school building will not be read into or construed as part of contract, or to alter it. American Surety Co. v. School Dist. No. 64, 117 Neb. 6, 219 N.W. 583 (1928).
Subcontractor furnishing millwork, etc., for schoolhouse is not bound by provision of contract between owner and principal contractor that architect shall arbitrate all matters in dispute. Central Nebraska Millwork Co. v. Olson & Johnson Co., 111 Neb. 396, 196 N.W. 707 (1923).
2. Actions
One furnishing labor or supplies to highway contractor may sue in own name on surety bond as contract made with third person for his benefit. West v. Detroit Fidelity & Surety Co., 118 Neb. 544, 225 N.W. 673 (1929).
Public officers are not liable individually to one furnishing material or labor on public work, for failure to require bond in accordance with this section. Paxton & Vierling Iron Works v. Village of Naponee, 107 Neb. 784, 186 N.W. 976 (1922); Sailling v. Morrell, 97 Neb. 454, 150 N.W. 195 (1914).
Action will lie by unpaid materialman against sureties on bond of contractor for public building, although bond was not conditioned as required by this section, and, since statute requires such bond to provide for payment of material and labor, it will be so construed. Nye-Schneider-Fowler Co. v. Roeser, 103 Neb. 614, 173 N.W. 605 (1919).
One furnishing labor or material in construction of building may maintain action against contractor and sureties, and no act or neglect of contractor will defeat right. Forburger Stone Co. v. Lion Bonding & Surety Co., 103 Neb. 202, 170 N.W. 897 (1919).
3. Coverage of materials
A contractor's bond is security for only material and rental equipment actually used in the performance of a contract described in this section. Quality Equip. Co. v. Transamerica Ins. Co., 243 Neb. 786, 502 N.W.2d 488 (1993).
Purpose of this section is to obligate a surety company to pay for material which is actually used in performing public contract. Peter Kiewit Sons' Co. v. National Casualty Co., 142 Neb. 835, 8 N.W.2d 192 (1943).
Coal used in performance of contract is material within obligation of surety on contractor's bond. Iddings Co. v. Lincoln Constr. Co., 104 Neb. 124, 175 N.W. 643 (1919).
Bond secures payment for material actually used in performing contract. Higgins & Coufal v. Massachusetts Bonding & Ins. Co., 112 F.Supp. 390 (D. Neb. 1953).
4. Miscellaneous
Purpose of this section is to provide protection to materialmen and laborers in the construction or repair of public buildings where the provisions of the general mechanic's lien laws do not apply. Dukane Corp. v. Sides Constr. Co., 208 Neb. 227, 302 N.W.2d 721 (1981).
In suit against principal and bonding company as surety where issue of liability of surety was not presented to jury and judgment was against principal, only attorney's fee was not recoverable. Ritzau v. Wiebe Constr. Co., 191 Neb. 92, 214 N.W.2d 244 (1974).
Subcontractor has no cause of action against department or agency in absence of express or implied contract and must look to contractor or his bond for payment. Boyd v. Benkelman Public Housing Authority, 188 Neb. 69, 195 N.W.2d 230 (1972).
Materialman or supplier can be a subcontractor; factors in determination discussed in holding one who sold and delivered gravel to road construction site to be a subcontractor; purpose and construction of section discussed. McElhose v. Universal Surety Co., 182 Neb. 847, 158 N.W.2d 228 (1968).
Duty is imposed upon state and public boards to take bond for benefit of materialmen before entering into construction contract. Westinghouse Electric Supply Co. v. Brookley, 176 Neb. 807, 127 N.W.2d 465 (1964).
Materialmen do not have a lien upon debt owing by county to contractor. Fremont Foundry & Machine Co. v. Saunders County, 136 Neb. 101, 285 N.W. 115 (1939).
Contractor for public building purchasing material from dealer and paying for same is not liable on his bond to manufacturer or jobber from whom dealer purchased. Concrete Steel Co. v. Rowles Co., 101 Neb. 400, 163 N.W. 323 (1917).
Surety who pays claims for labor or material on public building, after contractor's default, has interest in balance due contractor superior to one who advanced money and took assignment from latter. First Nat. Bank of Auburn v. Pesha, 99 Neb. 785, 157 N.W. 924 (1916).
Labor necessarily employed in performing contract for public building is protected by this section. Nye-Schneider-Fowler Co. v. Bridges, Hoye & Co., 98 Neb. 27, 151 N.W. 942 (1915).