1-10B-9: INSURANCE AND BONDS:
A. General Requirements: When directed by the city council, city manager or purchasing manager, or when required by state statute or city ordinance, insurance certificates and/or bonds, whether permit, bid, performance or materialmen’s, shall be provided by a party contracting with the city to the purchasing manager in a form approved by the city attorney. Such bonds or insurance shall: (1) name the city as an additional insured; (2) be cancellable; provided, that no cancellation thereof may be made without first giving the city at least ten (10) days’ prior written notice; and (3) be in sums listed in the city’s purchasing policy that are sufficient to adequately protect the city and its interests. All corporate guarantors or sureties shall be licensed to do business in the state and shall be sound and reputable firms, as determined acceptable to the city attorney.
B. Bid Security:
1. Bid security in an amount equal to at least five percent (5%) of the amount of the bid shall be required for all competitive sealed bidding for construction contracts where the total value of the contract is in excess of ten thousand dollars ($10,000.00). Bid security shall be a bond provided by a surety company authorized to do business in this state, the equivalent in cash, or any other form satisfactory to the city.
2. When a bidder fails to comply with the requirement for bid security set forth in the invitation for bids, the bids shall be rejected unless it is determined that the failure to comply with the security requirements is nonsubstantial.
3. After the bids are opened, they shall be irrevocable for the period specified in the invitation for bids, except as provided below. If a bidder is permitted to withdraw a bid before award, no action shall be taken against the bidder or bid security.
4. If after being accepted the bid fails, the bid security bond shall be forfeited unless there has been a mistake in the bid of such consequence as to make it apparent that: (a) a meeting of the minds never occurred and that enforcement of the contract would be unconscionable; (b) where the mistake related to a material feature of the contract; (c) where the mistake does not constitute culpable negligence or violation of a positive legal duty; (d) where the city has been placed in status quo so that it suffers no serious prejudice; or (e) in such other circumstances as determined by the city council.
C. Performance Bonds:
1. The contractor on a project to construct public improvements shall be required to post a performance bond and a labor and materialmen’s bond; provided, however, that if the estimated construction cost is under two thousand dollars ($2,000.00), or if, in the opinion of the city council, the cost of requiring the bond will exceed the risk or benefit to the city, the city may waive the performance bond requirement, provided other arrangements are made to assure that laborers and materialmen on the project will be paid in full.
2. The purchasing manager shall have the authority to require a performance bond before a contract is entered into to purchase or acquire supplies or services, in such amount as may be reasonably necessary to protect the best interest of the city. (Ord. 2022-12-006, 12-15-2022; amd. Ord. 2023-026, 10-19-2023. Formerly 1-10B-8)