Houston Airport System Construction: City Terms, Badging and Bonds

The insurance and bond terms below come from the City's Document 00700 General Conditions dated October 28, 2024, the City's standard document. We could not read Houston Airports' own bid documents, because the host that serves its addenda and pre-bid materials did not respond, so we cannot confirm whether a given airport solicitation uses the 00700 terms unchanged. Supplementary conditions can raise limits, add an airside auto or excess requirement or add coverages such as pollution or builder's risk, and the solicitation controls.

We also found no official confirmation that Houston Airports has adopted an owner-controlled or rolling wrap-up program for its construction. A 2018 conference presentation by a City attorney mentioned that the City was developing options that included a rolling owner-controlled insurance program for aviation construction projects, but that is not evidence of a program in place. Price each bid on the assumption that the contractor carries its own program unless the solicitation states otherwise, and ask at the pre-bid meeting if it is unclear.

Table 1 of the 2024 General Conditions sets the baseline below. All policies except workers' compensation must extend coverage to the City as an additional insured, each policy must carry a waiver of subrogation in favor of the City and each must apply as primary insurance. Insurers must be admitted in Texas or be eligible nonadmitted carriers with a Best's rating of at least B+.

The General Conditions list general liability exclusions the City will not accept, including explosion, collapse and underground property damage, work height, subsidence and construction defect completed operations. Work-height and subsidence exclusions turn up on some contractor programs and can matter on terminal steel, jet bridges and paving over soft soils, so the policy forms need checking before bid. Subcontractors must carry general liability, workers' compensation and auto that meet the same section, and the contractor remains responsible for loss to its own tools and equipment on site.

Texas Insurance Code Chapter 151 limits additional insured requirements tied to prohibited indemnity but excludes certain indemnity provisions on municipal public works projects. How that applies to a Houston Airports contract is a broker review item and may need counsel.

• Workers' compensation: Texas statutory limits, with employer's liability of $500,000 each accident, disease policy limit and disease each employee
• Commercial general liability: $1 million each occurrence and $2 million general aggregate, with completed operations for one year after completion
• Owner's and contractor's protective liability and an installation floater for stored materials not yet incorporated
• Automobile liability: $1 million combined single limit on any auto, or on all owned, hired and non-owned autos
• Excess liability: $1 million

Paragraph 11.4.1 requires bonds on contracts over $25,000, written under Chapter 2253 of the Texas Government Code at 100 percent of the original contract price. That is stricter than the statute's own floor for a municipality, which requires a performance bond over $100,000 and a payment bond over $50,000. Paragraph 11.5 adds a one-year maintenance bond for 100 percent of the original contract price, which keeps the surety on the hook for a year after completion.

The surety must be admitted in Texas, and bonds over $100,000 need a surety listed by the U.S. Treasury or qualifying reinsurance. Progress payments are made less 5 percent retainage under paragraph 9.6.1.3. On a large terminal or airfield contract, the maintenance bond and the retainage both bear on the surety's view of capacity for the next pursuit, so surety conversations typically start well before bid day.

Houston Airports' badging page says federal regulations at 49 CFR 1542 require all airport workers, including contractors, to obtain and display an identification badge. New applicants must be fingerprinted and pass a background and criminal history record check. For a contractor, that turns crew planning into a schedule item: workers who have not cleared badging cannot start, and replacement workers face the same steps.

Badging is an owner and federal process. A broker cannot badge workers or speed it up, but the insurance program should reflect who will be working airside, how vehicles will move on the airfield and whether the solicitation adds airside limits. Ask the airport's badging office and the solicitation for escort rules and the current application steps.

The General Conditions require federal wage decisions or City prevailing wage rates, with certified payrolls sent to the Office of Business Opportunity, and they reference the City's Pay or Play Program. Federally funded airport work can bring federal wage rules into the same contract, so the solicitation's wage determination controls.

The Office of Business Opportunity says Houston Airports has a DBE program under 49 CFR Part 26. The goal page we read is stale: it lists current goals for federal fiscal years 2017 through 2019 and proposed goals for 2020 through 2022. Federal DBE program rules have since changed, so do not rely on an old goal; check the current solicitation and OBO for any contract goal and certification requirement.