The Alabama Legislature recently made several changes to requirements for public works projects that go into effect September 1, 2023. Here’s a summary of the notable changes:

Section 39-1-1

Section 39-1-1 mandates that a contractor performing public works furnish a performance bond equal to 100% of the contract price and a payment bond equal to at least 50% of the contract price. Prior to the recent amendment, this requirement applied to all contracts valued at $50,000 or greater. The new law increases the minimum contract requiring bonds to $100,000.

Section 39-1-1 previously required a contractor to give public notice of completion of a public works project in “a newspaper of general circulation published within the city or county in which the work has been done” for four consecutive weeks. The new law requires publication for only three weeks and expands the acceptable methods of publication to the websites of (1) the local newspaper and (2) the website utilized by the awarding authority for publishing notices.

The amended law also clarifies that completion notices on contracts for “road resurfacing materials that are awarded on an annual basis” and include options for unit prices need not be given for each proceed order and may instead be given annually.

Section 39-2-2

In Section 39-2-2,  the amended statute increases the minimum threshold for requiring competitive bids to contracts greater than $100,000, removes the requirement to advertise for sealed bids in three newspapers of general circulation throughout the state, and permits the submission of sealed bids electronically. It also expands the awarding authorities excluded from the bidding requirements to include those authorities subject to the statutes governing the state Division of Procurement (Code of Alabama, Article 5, commencing with Section 41-4-110).

The revised Section 39-2-2 also modifies when emergency situations are excepted from competitive bidding requirements, and it distinguishes between emergencies that would cause “immediate harm to a person or public property,” which may be let without public advertisement or bidding, and emergencies that affect “public health, safety, or convenience, as declared in writing by the awarding authority,” which may be let without public advertisement.

Finally, the new statute clarifies that an awarding authority may purchase materials or equipment without competitive bidding pursuant to certain subdivisions of Section 41-16-51(a), but the remaining portion of public works remains subject to all requirements for public works, even if the remaining portion of work is valued less than $100,000.

Section 39-2-6

Section 39-2-6 governs the award of a contract. The amended statute now allows an awarding authority to notify the successful bidder via electronic mail. It also permits any awarding authority other than the Department of Transportation to negotiate for the work with the lowest responsible and responsive bidder when two or more bids are received and all bids exceed the available funding for the contract.