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    Subdivision 1. Plans and specifications, advertisement for bids. When the council
determines to make any improvement, it shall let the contract for all or part of the work, or order
all or part of the work done by day labor or otherwise as authorized by subdivision 2, no later than
one year after the adoption of the resolution ordering such improvement, unless a different time
limit is specifically stated in the resolution ordering the improvement. The council shall cause
plans and specifications of the improvement to be made, or if previously made, to be modified, if
necessary, and to be approved and filed with the clerk, and if the estimated cost exceeds $50,000,
shall advertise for bids for the improvement in the newspaper and such other papers and for such
length of time as it may deem advisable. If the estimated cost exceeds $100,000, publication shall
be made no less than three weeks before the last day for submission of bids once in the newspaper
and at least once in either a newspaper published in a city of the first class or a trade paper. To be
eligible as such a trade paper, a publication shall have all the qualifications of a legal newspaper
except that instead of the requirement that it shall contain general and local news, such trade
paper shall contain building and construction news of interest to contractors in this state, among
whom it shall have a general circulation. The advertisement shall specify the work to be done,
shall state the time when the bids will be publicly opened for consideration by the council, which
shall be not less than ten days after the first publication of the advertisement when the estimated
cost is less than $100,000 and not less than three weeks after such publication in other cases, and
shall state that no bids will be considered unless sealed and filed with the clerk and accompanied
by a cash deposit, cashier's check, bid bond, or certified check payable to the clerk, for such
percentage of the amount of the bid as the council may specify. In providing for the advertisement
for bids the council may direct that the bids shall be opened publicly by two or more designated
officers or agents of the municipality and tabulated in advance of the meeting at which they
are to be considered by the council. Nothing herein shall prevent the council from advertising
separately for various portions of the work involved in an improvement, or from itself, supplying
by such means as may be otherwise authorized by law, all or any part of the materials, supplies, or
equipment to be used in the improvement or from combining two or more improvements in a
single set of plans and specifications or a single contract.
    Subd. 2. Contracts; day labor. In contracting for an improvement, the council shall require
the execution of one or more written contracts and bonds, conditioned as required by law. The
council shall award the contract to the lowest responsible bidder or it may reject all bids. If
any bidder to whom a contract is awarded fails to enter promptly into a written contract and to
furnish the required bond, the defaulting bidder shall forfeit to the municipality the amount
of the defaulter's cash deposit, cashier's check, bid bond, or certified check, and the council
may thereupon award the contract to the next lowest responsible bidder. When it appears to the
council that the cost of the entire work projected will be less than $50,000, or whenever no bid is
submitted after proper advertisement or the only bids submitted are higher than the engineer's
estimate, the council may advertise for new bids or, without advertising for bids, directly purchase
the materials for the work and do it by the employment of day labor or in any other manner the
council considers proper. The council may have the work supervised by the city engineer or other
qualified person but shall have the work supervised by a registered engineer if done by day labor
and it appears to the council that the entire cost of all work and materials for the improvement will
be more than $25,000. In case of improper construction or unreasonable delay in the prosecution
of the work by the contractor, the council may order and cause the suspension of the work at any
time and relet the contract, or order a reconstruction of any portion of the work improperly done,
and where the cost of completion or reconstruction necessary will be less than $50,000, the
council may do it by the employment of day labor.
    Subd. 2a. Best value alternative. As an alternative to the procurement method described in
subdivision 2, the council may issue a request for proposals and award the contract to the vendor
or contractor offering the best value as described in section 16C.28, subdivision 1, paragraph
(a), clause (2), and paragraph (c).
    Subd. 3. Day labor; detailed report. When the council has performed construction work by
day labor, it shall cause a detailed report to be filed with the clerk and certified by the registered
engineer or other person in charge, if there is no registered engineer. The report shall show:
(a) the complete cost of the construction;
(b) final quantities of the various units of work done;
(c) materials furnished for the project and the cost of each item thereof;
(d) cost of labor, cost of equipment hired, and supervisory costs.
The report shall have attached a certificate by the registered engineer or other person in
charge that the work was done according to the plans and specifications, or, if there were any
deviations from them, an itemized statement of those deviations.
    Subd. 4. Alternate procedure on street improvements. As to any improvement or
improvements consisting of grading, graveling, or bituminous surfacing of streets and alleys, the
council may proceed in the manner provided in this chapter, except that it may
(1) order the work done by day labor, regardless of the estimated cost of such improvement
or improvements, and
(2) use municipal equipment or hire equipment and purchase materials for all such
improvements to be done by day labor in any 12-month period by advertising once therefor, such
advertisement to call for bids for the furnishing of equipment, if the municipality does not use
its own equipment, and for materials at unit prices based on the quantities which the council
estimates will be required.
(3) contract at one time on a unit price basis for part or all of the street improvements to
be constructed by the municipality during the current year, including improvements which may
thereafter be ordered constructed.
    Subd. 5. Cooperation with state or local government. When an improvement is made
under a cooperative agreement with the state or another political subdivision by the terms of
which the state or other subdivision is to construct or contract to construct the improvement, it
shall not be necessary to comply with subdivisions 1 and 2.
    Subd. 6. Percentage payment on engineer's estimate. In case the contractor properly
performs the work, the council shall, from month to month before completion of the work, pay
the contractor not to exceed 95 percent of the amount already earned under the contract, upon
the estimate of the engineer or other competent person selected by the council, and the contract
shall so provide, and shall further agree that when the work is 95 percent or more completed
upon the recommendation of the engineer such portions of the retained price shall be released
as the governing body of the municipality determines are not required to be retained to protect
the municipality's interest in satisfactory completion of the contract. Failure to pay any amount
due and payable under the terms of the contract within 30 days of a monthly estimate or 90
days after the final estimate of the amount earned shall obligate the municipality to pay to the
contractor simple interest on the past due amount at an annual rate equal to the monthly index of
long term United States bond yields for the month prior to the month in which this obligation is
incurred plus an additional one percent per annum. Interest shall not be imposed with respect to
any amount which a municipality may legally withhold as a result of breach of contract or other
contractual claim or if the delay is caused by the contractor.
    Subd. 7. Modification of contracts. After work has been commenced on an improvement
undertaken pursuant to a contract awarded on a unit price basis the council may, without
advertising for bids, authorize changes in the contract so as to include additional units of work at
the same unit price if the cost of the additional work does not exceed 25 percent of the original
contract price. Original contract price means that figure determined by multiplying the estimated
number of units required by the unit price.
History: 1953 c 398 s 4; 1957 c 430 s 2,3; 1961 c 525 s 3,4; 1973 c 123 art 5 s 7; 1976 c
156 s 1; 1977 c 278 s 1; 1978 c 518 s 2; 1980 c 464 s 8; 1985 c 174 s 3; 1986 c 444; 1993 c 38 s
1,2; 2001 c 5 s 1,2; 2004 c 278 s 6,7; 2007 c 148 art 3 s 25

Official Publication of the State of Minnesota
Revisor of Statutes