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90_SB1562
New Act
30 ILCS 805/8.22 new
Creates the Equitable Construction Act. Requires certain
provisions concerning notification of suspect physical
conditions of the surface or subsurface at the improvement
site, investigation of the improvement site, written
modification of time and cost provisions, suspension of work,
or termination of work to be included in any contract between
a contractor and governmental entity, except the City of
Chicago, for an improvement that exceeds $75,000. Provides
for modification of the contract in certain instances.
Allows the contractor, in certain instances, to complete
performance of a contract and later maintain a cause of
action against the governmental entity to recover costs.
Provides that this Act shall be enforced, to the extent
possible, consistently with other laws, but in the case of a
conflict, this Act shall prevail. Limits the concurrent
exercise of home rule powers. Amends the State Mandates Act
to require implementation without reimbursement. Effective
immediately.
LRB9009363KDks
LRB9009363KDks
1 AN ACT to create the Equitable Construction Act.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Equitable Construction Act.
6 Section 5. Definitions. As used in this Act:
7 "Contractor" means a person who contracts with a
8 governmental entity to improve real property or perform or
9 manage construction services. "Contractor" does not include a
10 person licensed under the Illinois Architecture Practice Act
11 of 1989, the Professional Engineering Act of 1989, or the
12 Illinois Professional Land Surveyor Act of 1989.
13 "Governmental entity" means the State, units of local
14 government, school districts, and agencies and political
15 subdivisions of any other governmental entity. For purposes
16 of this Act, "governmental entity" shall not include the City
17 of Chicago.
18 "Improve" means to build, alter, repair, or demolish an
19 improvement upon, connected with, or beneath the surface of
20 any real property, to excavate, clear, grade, fill, or
21 landscape any real property, to construct driveways and
22 roadways, or to perform labor upon improvements.
23 "Improvement" includes, but is not limited to, all or any
24 part of any building, structure, erection, alteration,
25 demolition, excavation, clearing, grading, filling,
26 landscaping, trees, shrubbery, driveways, and roadways on
27 real property.
28 "Person" means an individual, corporation, partnership,
29 association, governmental entity, or other legal entity.
30 "Real property" means the real estate that is improved,
31 including, but not limited to, lands, leaseholds, tenements,
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1 hereditaments, and improvements placed on the real property.
2 Section 10. Required contractual terms. A contract
3 between a contractor and a governmental entity for an
4 improvement that exceeds $75,000 shall contain all of the
5 following provisions:
6 (a) If a contractor discovers either of the following
7 physical conditions of the surface or subsurface at the
8 improvement site, before disturbing the physical condition,
9 the contractor shall promptly notify the governmental entity
10 of the physical condition in writing.
11 (1) A subsurface or a latent physical condition at
12 the site is differing materially from those indicated in
13 the improvement contract.
14 (2) An unknown physical condition at the site is of
15 an unusual nature differing materially from those
16 ordinarily encountered and generally recognized as
17 inhering in work of the character provided for in the
18 improvement contract.
19 (b) If the governmental entity receives a notice under
20 subsection (a), the governmental entity shall promptly
21 investigate the physical condition.
22 (c) If the governmental entity determines that the
23 physical conditions do materially differ and will cause an
24 increase or decrease in costs or additional time needed to
25 perform the contract, the governmental entity's determination
26 shall be made in writing and an equitable adjustment shall be
27 made and the contract modified in writing accordingly.
28 (d) The contractor cannot make a claim for additional
29 costs of time because of a physical condition unless the
30 contractor has complied with the notice requirements of
31 subsection (a). The governmental entity may extend the time
32 required for notice under subsection (a).
33 (e) The contractor cannot make a claim for an adjustment
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1 under the contract after the contractor has received the
2 final payment under the contract.
3 Section 15. Suspension of work. In addition to the
4 requirements of Sections 10 and 20, a contract between a
5 contractor and a governmental entity for an improvement that
6 exceeds $75,000 shall contain the following provisions:
7 (a) The governmental entity may order the contractor in
8 writing to suspend, delay, or interrupt all or any part of
9 the work for such period of time as the governmental entity
10 may determine to be appropriate for the convenience of the
11 governmental entity.
12 (b) If the performance of all or any part of the work is
13 suspended, delayed, or interrupted for an unreasonable amount
14 of time by an act of the governmental entity, or by the
15 governmental entity's failure to act within a reasonable
16 time, the governmental entity shall make an adjustment for
17 any increase in the cost of performance of the contract
18 (excluding profit) necessarily caused by the unreasonable
19 suspension, delay, or interruption and modify the contract in
20 writing. No adjustment shall be made under this Section,
21 however, for any suspension, delay, or interruption to the
22 extent (i) that performance would have been so suspended,
23 delayed, or interrupted by any other cause, including the
24 fault or negligence of the contractor, or (ii) for which an
25 equitable adjustment is provided for or excluded under any
26 other provision of the contract.
27 (c) No claim under this Section shall be allowed (i) for
28 costs incurred more than 20 days before the contractor
29 notified the governmental entity in writing of the act, or
30 failure to act, involved (this requirement does not apply to
31 a claim resulting from a suspension order) and (ii) unless
32 the amount claimed is asserted in writing as soon as
33 practical after the termination of the suspension, delay, or
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1 interruption, but not later than the date of final payment
2 under the contract.
3 Section 20. Termination. In addition to the
4 requirements of Sections 10 and 15, a contract between a
5 contractor and a governmental entity for an improvement that
6 exceeds $75,000 shall contain the following provisions:
7 (a) The contract may be terminated in whole or in part
8 in writing by a governmental entity in the event of
9 substantial failure by the contractor to fulfill its
10 obligations under this contract, provided that no termination
11 may be effected unless the contractor is given (i) not less
12 than 10 calendar days' written notice (delivered by certified
13 mail, return receipt requested) of intent to terminate and
14 (ii) an opportunity for consultation with the governmental
15 entity prior to termination.
16 (b) The contract may be terminated in whole or in part
17 in writing by the governmental entity for its convenience,
18 provided that the contractor is given (i) not less than 10
19 calendar days' written notice (delivered by certified mail,
20 return receipt requested) of intent to terminate and (ii) an
21 opportunity for consultation with the terminating party prior
22 to termination.
23 (c) If termination for default is effected by the
24 governmental entity, an equitable adjustment in the price
25 provided for in the contract shall be made, but (i) no amount
26 shall be allowed for anticipated profit on unperformed
27 services or other work and (ii) any payment due to the
28 contractor at the time of termination may be adjusted to
29 cover any additional costs to the governmental entity because
30 of the contractor's default. If termination for default is
31 effected by the contractor, or if termination for convenience
32 is effected by the governmental entity, the equitable
33 adjustment shall include a reasonable profit for services or
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1 other work performed. The equitable adjustment for any
2 termination shall provide for payment to the contractor for
3 services rendered and expenses incurred prior to the
4 termination, in addition to termination settlement costs
5 reasonably incurred by the contractor relating to commitments
6 that had become firm prior to the termination.
7 (d) Upon receipt of a termination action under
8 subsections (a) or (b), the contractor shall (i) promptly
9 discontinue all affected work (unless the notice directs
10 otherwise) and (ii) deliver or otherwise make available to
11 the governmental entity all data, drawings, specifications,
12 reports, estimates, summaries, and other information and
13 materials that may have been accumulated by the contractor in
14 performing the contract, whether completed or in process.
15 (e) Upon termination under subsections (a) and (b), the
16 governmental entity may take over the work and may award
17 another party a contract to complete the work under the
18 contract.
19 (f) If, after a termination for failure of the
20 contractor to fulfill contractual obligations, it is
21 determined that the contractor had not failed to fulfill
22 contractual obligations, the termination shall be deemed to
23 have been for the convenience of the governmental entity. In
24 this event, adjustment of the contract price shall be made as
25 provided in subsection (c).
26 Section 25. Completion of performance; cause of action.
27 If the contractor does not agree with the governmental
28 entity's determination, with the consent of the governmental
29 entity the contractor may complete performance on the
30 contract and bring a cause of action to recover the actual
31 increase in contract time and costs incurred because of the
32 physical condition of the improvement site.
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1 Section 30. Incorporation of terms. If an improvement
2 contract does not contain the provisions required under
3 Sections 10, 15, and 20, those provisions are deemed to be
4 incorporated into and considered part of the improvement
5 contract.
6 Section 35. Resolution with other laws. This Act does
7 not limit the rights or remedies otherwise available to a
8 contractor or the governmental entity under any other law;
9 exempt that in the event of any conflict between this Act and
10 any other law, this Act shall prevail and control.
11 Section 50. Home rule. Home rule units may not enter
12 into contracts inconsistent with this Act. This Act is a
13 limitation on the exercise of concurrent power by home rule
14 units under subsection (i) of Section 6 of Article VII of the
15 Illinois Constitution.
16 Section 55. The State Mandates Act is amended by adding
17 Section 8.22 as follows:
18 (30 ILCS 805/8.22 new)
19 Sec. 8.22. Exempt mandate. Notwithstanding Sections 6
20 and 8 of this Act, no reimbursement by the State is required
21 for the implementation of any mandate created by this Act.
22 Section 99. Effective date. This Act takes effect upon
23 becoming law.