(A) The city may, at its discretion, require bid or proposal security and/or contract performance security for the procurement of services and supplies.
(B) Bid or proposal security and contract performance security requirements must be stated in the invitation for bids or the request for proposals.
(C) The preferred types of security are bonds as described in M.C.A. § 18-4-312(3)(a) and cash as described in M.C.A. § 18-4-312(3)(c) and (d). The security must be payable to the city and the contract performance security must remain in effect for the entire contract period.
(1) If a certificate of deposit, money market certificate, cashier’s check, certified check, irrevocable letter of credit, bank money order or bank draft is determined to be acceptable, it must be issued from a federally chartered or state-chartered bank or savings and loan association that is insured by or for which insurance is administered by the federal deposit insurance corporation or that is drawn and issued by a credit union insured by the National Credit Union Share Insurance Fund.
(2) Irrevocable letters of credit in excess of $100,000 will not be accepted as security for contracts.
(3) Facsimile copies of bid or contract security are not acceptable.
(4) Certificates of deposit or money market certificates will not be accepted as security for bid, proposal or contract security unless the certificates are assigned only to the city. All interest income from these certificates must accrue only to the contractor and not the city.
(D) Factors to consider in requiring bid security and in determining the amount of the security include:
(1) Type of commodity;
(2) Past city experience;
(3) Labor required to perform contract; and
(4) Materials required to perform contract.
(E) All bid security and proposal security, except bonds, will be returned to the unsuccessful bidders within 30 days from date of the award.
(F) Factors to consider in requiring contract performance security and in determining the amount of security include:
(1) Type of commodity;
(2) Past city experience;
(3) Labor required to perform contract;
(4) Materials required to perform contract;
(5) Amount and number of subcontracts;
(6) Damages chargeable to the city if the contractor defaults; and
(7) Estimated dollar amount of total contract.
(G) All contract performance security, except bonds, will be returned to the successful bidder or offeror upon completion of the contract, or at the discretion of the procurement official as documented to assure contract completion, or warranty period as declared within the contract.
(Ord. 173, passed 9-10-2001)