(a) Within five working days after the identification of the apparent low bidder for a construction contract, the apparent low bidder shall submit a list of the subcontractors the bidder proposes to use in the performance of the construction contract. The list must include the name and location of the place of business for each subcontractor, evidence of each subcontractor's valid Alaska business license, and evidence of each subcontractor's registration as a contractor under AS 08.18. If a subcontractor on the list did not have a valid Alaska business license and a valid certificate of registration as a contractor under AS 08.18 at the time the bid was opened, the bidder may not use the subcontractor in the performance of the contract, and shall replace the subcontractor with a subcontractor who had a valid Alaska business license and a valid certificate of registration as a contractor under AS 08.18 at the time the bid was opened.

(b) A construction contractor or the apparent low bidder for a construction contract may replace a listed subcontractor if the subcontractor

(1) fails to comply with AS 08.18;

(2) files for bankruptcy or becomes insolvent;

(3) fails to execute a contract with the construction contractor or bidder involving performance of the work for which the subcontractor was listed and the construction contractor or bidder acted in good faith;

(4) fails to obtain bonding;

(5) fails to obtain insurance acceptable to the state;

(6) fails to perform the contract with the construction contractor or bidder involving work for which the subcontractor was listed;

(7) must be substituted in order for the contractor to satisfy required state and federal affirmative action requirements;

(8) refuses to agree or abide with the labor agreement of the construction contractor or bidder; or

(9) is determined by the procurement officer not to be a responsible subcontractor.

(c) If a bidder for a construction contract fails to list a subcontractor or lists more than one subcontractor for the same portion of work and the value of that work is in excess of half of one percent of the total bid, the bidder shall be considered to have agreed to perform that portion of work without the use of a subcontractor and to have represented the bidder to be qualified to perform that work.

(d) A bidder for a construction contract who attempts to circumvent the requirements of this section by listing as a subcontractor another contractor who, in turn, sublets the majority of the work required under the contract violates this section.

(e) If a construction contract is awarded to a bidder who violates this section, the procurement officer may

(1) cancel the contract; or

(2) after notice and a hearing, assess a penalty on the bidder in an amount that does not exceed 10 percent of the value of the subcontract at issue.

(f) In addition to the circumstances described in (b) of this section, a construction contractor may request permission from the procurement officer to add or replace a listed subcontractor. The request must be in writing, specifically detailing the basis for the request, and include appropriate supporting documentation. The procurement officer shall approve the request if the procurement officer determines in writing that the requested addition or replacement is in the best interest of the state.

(g) The requirements of this section do not apply to a design-build construction contract.

(h) In this section, “construction contractor” means a person who enters into a construction contract with an agency.