A. Solicitation Agent May Require Bonds: The solicitation agent may require bid security and a good and sufficient performance and payment bond even though the contract is of a class that is exempt from the requirement.
B. Bid Security: Except as otherwise exempted, the solicitations for all contracts that include the construction of a public improvement and for which the estimated contract price will exceed seventy five thousand dollars ($75,000.00) shall require bid security. Bid security for a request for proposal may be based on the city of Heppner's estimated contract price.
C. Performance Bonds:
1. General: Except as provided in these regulations, all public contracts are exempt from the requirement for the furnishing of a performance bond.
2. Contracts Involving Public Improvements: Prior to executing a contract for more than fifty thousand dollars ($50,000.00) that includes the construction of a public improvement, the contractor must deliver a performance bond in an amount equal to the full contract price conditioned on the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract. The performance bond must be solely for the protection of the city of Heppner and any public agency that is providing funding for the project for which the contract was awarded.
3. Cash In Lieu: The purchasing manager may permit the successful offeror to submit a cashier's check or certified check in lieu of all or a portion of the required performance bond.
D. Payment Bonds:
1. General: Except as provided in these regulations, all public contracts are exempt from the requirement for the furnishing of a payment bond.
2. Contracts Involving Public Improvements: Prior to executing a contract for more than fifty thousand dollars ($50,000.00) that includes the construction of a public improvement, the contractor must deliver a payment bond equal to the full contract price, solely for the protection of claimants under Oregon Revised Statutes 279C.600.
E. Design/Build Contracts: If the public improvement contract is with a single person to provide both design and construction of a public improvement, the obligation of the performance bond for the faithful performance of the contract must also be for the preparation and completion of the design and related services covered under the contract. Notwithstanding when a cause of action, claim or demand accrues or arises, the surety is not liable after final completion of the contract, or longer if provided for in the contract, for damages of any nature, economic or otherwise and including corrective work, attributable to the design aspect of a design-build project, or for the costs of design revisions needed to implement corrective work.
F. Construction Manager/General Contractor Contracts: If the public improvement contract is with a single person to provide construction manager and general contractor services, in which a guaranteed maximum price may be established by an amendment authorizing construction period services following preconstruction period services, the contractor shall provide the bonds required by subsection A of this section upon execution of an amendment establishing the guaranteed maximum price. The city of Heppner shall also require the contractor to provide bonds equal to the value of construction services authorized by any early work amendment in advance of the guaranteed maximum price amendment. Such bonds must be provided before construction starts.
G. Surety; Obligation: Each performance bond and each payment bond must be executed solely by a surety company or companies holding a certificate of authority to transact surety business in Oregon. The bonds may not constitute the surety obligation of an individual or individuals. The performance and payment bonds must be payable to the city of Heppner or to the public agency or agencies for whose benefit the bond is issued, as specified in the solicitation documents, and shall be in a form approved by the purchasing manager.
H. Emergencies: In cases of emergency, or when the interest or property of the city of Heppner probably would suffer material injury by delay or other cause, the requirement of furnishing a good and sufficient performance bond and a good and sufficient payment bond for the faithful performance of any public improvement contract may be excused, if a declaration of such emergency is made in accordance with the provisions of subsection 1-13-8G of this chapter, unless the Heppner city council requires otherwise. (Ord. 550-05, 3-14-2005)