2005 Minnesota Statutes

     103E.501 Contract and bond. 

    Subdivision 1.    Preparation.  The county attorney, the 
 engineer, and the attorney for the petitioners shall prepare the 
 contract and bond.  The contract and bond must include the 
 provisions required by this chapter and section 574.26 for bonds 
 given by contractors for public works and must be conditioned as 
 provided by section 574.26 for the better security of the 
 contracting counties and parties performing labor and furnishing 
 material in performance of the contract.  The prepared contract 
 and bond must be attached and provided to the contractor for 
 execution.  

    Subd. 2.    Contractor's bond.  The contractor shall 
 file a bond with the auditor for an amount not less than 75 
 percent of the contract price of the work.  The bond must have 
 adequate surety and be approved by the auditor.  The bond must 
 provide that the surety for the bond is liable for all damages 
 resulting from a failure to perform work under the contract, 
 whether the work is resold or not, and that any person or 
 political subdivision showing damages from the failure to 
 perform work under the contract may maintain an action against 
 the bond in their own names.  Actions may be successive in favor 
 of all persons injured, but the aggregate liability of the 
 surety for all the damages may not exceed the amount of the 
 bond.  The surety is liable for the tile work guaranteed by the 
 contractor.  The contractor is considered a public officer and 
 the bond an official bond within the meaning of section 574.24 
 construing the official bonds of public officers as security to 
 all persons and providing for actions on the bonds by a party 
 that is damaged.  

    Subd. 3.    Contract.  The contract must contain a 
 specific description of the work to be done, either expressly or 
 by reference to the plans and specifications, and must provide 
 that the work must be done and completed as provided in the 
 plans and specifications and subject to the inspection and 
 approval of the engineer.  The contract must provide that time 
 is of the essence of the contract, and that if there is a 
 failure to perform the work according to the terms of the 
 contract within the time given in the original contract or as 
 extended, the contractors shall forfeit and pay the affected 
 counties an amount stated in the contract as liquidated 
 damages.  The amount must be fixed by the auditor for each day 
 that the failure of performance continues.  

    Subd. 4.    Contract provisions for changes during 
 construction.  The contract must give the engineer the right, 
 with the consent of the drainage authority, to modify the 
 detailed survey report, plans, and specifications as the work 
 proceeds and as circumstances require.  The contract must 
 provide that the increased cost resulting from the changes will 
 be paid by the drainage authority to the contractor at a rate 
 not greater than the amount for similar work in the contract.  A 
 change may not be made that will substantially impair the 
 usefulness of any part of the drainage project or system, 
 substantially alter its original character, or increase its 
 total cost by more than ten percent of the total original 
 contract price.  A change may not be made that will cause the 
 cost to exceed the total estimated benefits found by the 
 drainage authority or that will cause any detrimental effects to 
 the public interest under section 103E.015, subdivision 1.  

    Subd. 5.    Contract with federal unit.  If any portion 
 of the work is to be done by the United States or an agency of 
 the United States, a bond or contract is not necessary for that 
 portion of the work, except that a contract must be made if the 
 United States or its agencies require a contract with the local 
 governmental units.  The contract must contain the terms, 
 conditions, provisions, and guaranties required by the United 
 States or its agencies to proceed with the work.  

    Subd. 6.    Guaranty of tile work.  If tile is used to 
 construct any part of the drainage project, a majority of the 
 persons affected may file a written request with the auditor to 
 contract the tile work separately.  The request must be filed 
 before advertising for the sale of the work has begun.  If the 
 request is properly made, the tile work must be contracted 
 separately.  The contractor must guarantee the tile work under 
 the contract for three years after its completion against any 
 fault or negligence on the part of the contractor.  The 
 advertisement for bids must include this requirement.  

    Subd. 7.    Modification of contract by agreement.  This 
 chapter does not prevent the persons with property affected by 
 the construction of a drainage project from uniting in a written 
 agreement with the contractor and the surety of the contractor's 
 bond to modify the contract as to the manner or time when any 
 portion of the drainage project is constructed, if the 
 modification is recommended, in writing, by the engineer and 
 approved by the drainage authority.  

    HIST: 1990 c 391 art 5 s 63