Declaration of Default

Section
 8.7.1, “Declaration of Default”, of the
Standard Specifications
 provides a list of reasons a contractor may be declared in default of the contract.
It is important to follow specific procedures for initiating and processing contractor defaults. Important things to consider prior to default:
  • do not default a contractor if they have filed for bankruptcy protection. Contact the Construction Division/Construction & Maintenance Contract Letting Section (CST/CMCL) immediately when bankruptcy is legally declared by the contractor. Permission must be obtained from the bankruptcy court to default a contractor that has filed for bankruptcy protection.
  • do not default a contactor for insufficient insurance. CMCL sends notification to the district to stop work for insufficient insurance. Suspend all work and continue time charges until CMCL notifies the district to allow the contractor to begin work again. If the suspension of work becomes excessive, or the contractor fails to return to work after submittal of sufficient insurance, the contractor may be defaulted for failure to perform the work in accordance with the contract requirements.
  • do not default a contractor for insufficient surety bond coverage. Do not allow them to perform any work on the project should their bonds lapse or are inadequate for any reason. Suspend all work and working day charges for 15 calendar days or until an acceptable surety bond is provided, whichever is less. If an acceptable surety bond is not provided at the end of the 15 calendar days, the contractor may be defaulted for failure to perform the work in accordance with the contract requirements.
  • do not default a contractor at the request of the surety. Allow the contractor to continue work until they are declared in default.