The rural community shall require in all project construction
contracts that:
(1) each bidder furnish a bid guarantee equivalent
to five percent of the bid price;
(2) each contractor awarded a construction contract
furnish performance and payment bonds as follows:
(A) the performance bond must include guarantees that
work done under the contract will be completed and performed according
to approved plans and specifications in accordance with sound construction
principles and practices; and
(B) the performance and payment bonds must be in a
penal sum of not less than 100 percent of the contract price and remain
in effect for one year after the date of approval by the engineer
of the rural community;
(3) payment will be made in partial payments as the
work progresses;
(4) each partial payment shall not exceed 95 percent
of the amount due at the time of the payment, as shown by the engineer
of the project, but if the project is substantially complete, a partial
release of the five percent retainage may be made by the rural community
with the approval of the executive administrator;
(5) payment of the retainage remaining due on completion
of the contract shall be made only after:
(A) approval by the engineer for the rural community;
(B) approval by the rural community by resolution or
other formal action of the governing body; and
(C) certification by the executive administrator that
the work to be done under the contract has been completed and performed
in a satisfactory manner and in accordance with approved plans and
specifications;
(6) no valid approval shall be granted unless the work
done under the contract has been completed and performed in a satisfactory
manner according to approved plans and specifications; and
(7) labor from inside the rural community has been
used to the extent possible.
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