Illinois Compiled Statutes
Information maintained by the Legislative
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process.
Recent laws may not yet be included in the ILCS database, but they are found on this site as Public
soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the
Because the statute database is maintained primarily for legislative drafting purposes,
statutory changes are sometimes included in the statute database before they take effect.
If the source note at the end of a Section of the statutes includes a Public Act that has
not yet taken effect, the version of the law that is currently in effect may have already
been removed from the database and you should refer to that Public Act to see the changes
made to the current law.
30 ILCS 550/1
(30 ILCS 550/1)
(from Ch. 29, par. 15)
Except as otherwise provided by this Act, all officials, boards,
commissions, or agents of this State, or of any political subdivision thereof, in making contracts for public work of
any kind costing over $50,000 to be performed for the State, or of any political subdivision thereof,
shall require every contractor for the work to furnish, supply and deliver
a bond to the State, or to the political subdivision thereof entering into
the contract, as the case may be, with good and sufficient sureties. The surety on the bond shall be a company that is licensed by the Department of Insurance authorizing it to execute surety bonds and the company shall have a financial strength rating of at least A- as rated by A.M. Best Company, Inc., Moody's Investors Service, Standard & Poor's Corporation, or a similar rating agency. The
amount of the bond shall be fixed by the officials, boards, commissions,
commissioners or agents, and the bond, among other conditions,
conditioned for the completion of the contract, for the payment of material, apparatus, fixtures, and machinery
used in the work and for all labor performed in the work, whether by
subcontractor or otherwise.
If the contract is for emergency repairs as provided in the Illinois
Code, proof of payment for all labor, materials, apparatus, fixtures, and
machinery may be
furnished in lieu of the bond required by this Section.
Each such bond is deemed to contain the following provisions whether
such provisions are inserted in such bond or not:
"The principal and sureties on this bond agree that all the
undertakings, covenants, terms, conditions and agreements of the contract
or contracts entered into between the principal and the State or any
political subdivision thereof will be performed and fulfilled and to pay
all persons, firms and corporations having contracts with the principal or
with subcontractors, all just claims due them under the provisions of such
contracts for labor performed or materials furnished in the performance of
the contract on account of which this bond is given, when such claims are
not satisfied out of the contract price of the contract on account of which
this bond is given, after final settlement between the officer, board,
commission or agent of the State or of any political subdivision thereof
and the principal has been made.".
Each bond securing contracts between the Capital Development Board or any board of a public institution of higher education and a contractor shall contain the following provisions, whether the provisions are inserted in the bond or not:
"Upon the default of the principal with respect to undertakings, covenants, terms, conditions, and agreements, the termination of the contractor's right to proceed with the work, and written notice of that default and termination by the State or any political subdivision to the surety ("Notice"), the surety shall promptly remedy the default by taking one of the following actions:
(1) The surety shall complete the work pursuant to a
written takeover agreement, using a completing contractor jointly selected by the surety and the State or any political subdivision; or
(2) The surety shall pay a sum of money to the
obligee, up to the penal sum of the bond, that represents the reasonable cost to complete the work that exceeds the unpaid balance of the contract sum.
The surety shall respond to the Notice within 15 working days of receipt indicating the course of action that it intends to take or advising that it requires more time to investigate the default and select a course of action. If the surety requires more than 15 working days to investigate the default and select a course of action or if the surety elects to complete the work with a completing contractor that is not prepared to commence performance within 15 working days after receipt of Notice, and if the State or any political subdivision determines it is in the best interest of the State to maintain the progress of the work, the State or any political subdivision may continue to work until the completing contractor is prepared to commence performance. Unless otherwise agreed to by the procuring agency, in no case may the surety take longer than 30 working days to advise the State or political subdivision on the course of action it intends to take. The surety shall be liable for reasonable costs incurred by the State or any political subdivision to maintain the progress to the extent the costs exceed the unpaid balance of the contract sum, subject to the penal sum of the bond.".
The surety bond required by this Section may be acquired from the
company, agent or broker of the contractor's choice. The bond and sureties
be subject to the right of reasonable approval or disapproval, including
suspension, by the State or political subdivision thereof concerned. Except as otherwise provided in this Section, in the
case of State construction contracts, a contractor shall not be required to
post a cash bond or letter of credit in addition to or as a substitute for the
surety bond required by this Section.
When other than motor fuel tax funds, federal-aid funds, or other
funds received from the State are used, a political subdivision may allow
the contractor to provide a non-diminishing irrevocable bank letter of
credit, in lieu of the bond required by this Section, on contracts under
$100,000 to comply with the requirements of this Section. Any such bank
letter of credit shall contain all provisions required for bonds by this
In order to reduce barriers to entry for diverse and small businesses, the Department of Transportation may implement a 5-year pilot program to allow a contractor to provide a non-diminishing irrevocable bank letter of credit in lieu of the bond required by this Section on contracts under $500,000. Projects selected by the Department of Transportation for this pilot program must be classified by the Department as low-risk scope of work contracts. The Department shall adopt rules to define the criteria for pilot project selection and implementation of the pilot program.
For the purposes of this Section, the terms "material", "labor", "apparatus", "fixtures", and "machinery" include those rented items that are on the construction site and those rented tools that are used or consumed on the construction site in the performance of the contract on account of which the bond is given.
(Source: P.A. 101-65, eff. 1-1-20; 102-968, eff. 1-1-23