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(a) When Required. The Procurement Officer is authorized to require bid security and surety bonds, including payment and performance bonds, as well as specific types and amounts of insurance coverage in connection with contracts for public works, goods, general services, professional services, and wholesale utility commodities and services to the extent required by California or federal law, or this chapter, or upon a determination that it is in the best interest of the city to do so by the City Manager or, if the City Manager does not make a determination, by the Procurement Officer in consultation with the City Attorney.
(b) Bid Security. Bid security shall be submitted with the bid and shall be in the form of a certified check, cashier’s check or surety bond. Any surety bond shall be issued by an admitted surety authorized to conduct business in the State of California and shall be in a form acceptable to the City Attorney and as specified in the solicitation for bids document. If a bidder fails to submit the required bid security with the bid, the bid shall be deemed nonresponsive. After bids are opened, bid security shall be irrevocable for the period specified in the invitation for bids. If the successful bidder fails to execute the contract within the time specified, the total amount of the bid security shall be forfeited to the city. The bid security of an unsuccessful bidder shall be returned to the bidder by no later than sixty days from the date of contract award. Bids for public works projects costing in excess of $85,000.00 shall require the submission of bid security in an amount equal to at least ten percent of the bid. On public works projects costing $85,000.00 or less, and all other procurements of goods and services without regard to price, the Procurement Officer is authorized to determine whether any bid security in any amount shall be required on a project-by-project basis.
(c) Surety bonds. Payment and performance security shall be required of contractors and take the form of surety bonds acceptable to the City Attorney and issued by an admitted surety authorized to conduct business in the State of California. Contracts for public works projects costing in excess of $25,000.00 shall require the submission of payment bond and performance bond, each in an amount equal to one hundred percent of the contract price at the time the contract is executed. Where the contract is with a governmental agency or a public utility the requirement for performance and payment security may be waived, in writing, by the Procurement Officer if the contracting governmental agency or public utility agrees, in writing, that, to the extent all work is not to be done by its own employees, it will require any and all contractors it awards contracts for the performance of any of the work to provide, before commencement of the work, the payment bond and performance bond, on terms and conditions it establishes, which is satisfactory to the Procurement Officer and complying with the provisions of applicable California law. Payment bond and performance bond for public works projects shall be extended in the full amount of the contract for a one-year warranty period beyond the date of acceptance of the public works project by the city. On public work projects costing $25,000.00 or less, and on all acquisitions of goods and services without regard to price, the Procurement Officer is authorized to determine whether any payment and performance security in any amount shall be required on a case-by-case basis.
(d) Form of Bonds. The only bonds acceptable to the city shall be those executed on forms approved by the City Attorney and as specified in the invitation for bids or request for proposals.
(e) Insurance. The insurance risk manager acting on behalf of the City Manager by the authority conferred by Section 2.28.170 of this municipal code shall determine the insurance requirements to be imposed upon any third party doing business with the city pursuant to this chapter. The successful bidder or proposer shall submit certificates of insurance and endorsement forms, as applicable, as evidence that it has obtained and will maintain the types and amounts of insurance coverages required by the bid or proposal solicitation documents. Such evidence shall be submitted to the Procurement Officer promptly upon request and shall be issued by an admitted insurer authorized to conduct business in the State of California and is acceptable to the city. The insurance risk manager may waive the insurance requirement where the contract is an intergovernmental agency contract or a city-public utility contract, and the governmental, public or quasi-public agency or the public utility, to whom the contract is awarded, agrees, in writing, that it will obtain and maintain and provide evidence of the required insurance coverage before the commencement of work, naming the city, its officials, officers, employees and agents as additional insureds to such policy.
(Ord. 5494 § 29, 2020: Ord. 5387 § 1 (part), 2016: Ord. 4827 § 1 (part), 2004)