Section 1. Section 8 (a) of Chapter 149A of the General Laws as appearing in the 2012 Official Edition is hereby amended by striking out paragraph 2 and inserting in place thereof the following new paragraph:-
All trade contracts entered into in accordance with this chapter shall be secured by performance and payment bonds in the full amount of the trade contract from a surety company licensed to do business in the commonwealth and whose name appears on United States Treasury Department Circular 570; provided that the bonds are subject to subsection (3) of section 44F of chapter 149 except for those subcontracts subject to a subcontractor default insurance policy obtained by the construction management at risk firm. The construction manager at risk firm shall have the option to obtain a subcontractor default insurance policy in lieu of payment and performance bonds for some or all trade contractors. The intention to use a subcontractor default insurance policy shall be made known by the construction manager at risk firm and the awarding authority after the receipt of trade contractor bids pursuant to subsection (g) of this section. Any trade contractor not covered through the subcontractor default insurance policy program must submit a payment and performance bond at no additional cost to the construction manager at risk firm or the awarding authority. All trade contractor bidders shall include anticipated bonding costs in their bids and, in the event of inclusion in a subcontractor default insurance program, trade contractors shall remit to the construction manager at risk firm a credit equivalent to those anticipated bonding costs.
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