2006 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.
History: 1990 c 391 art 5 s 63