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General contractors and others providing construction services pursuant to a contract with the City shall deliver a bond from a surety authorized to do business in the state of Utah or other approved form as provided in this chapter.

A. A bid security bond in an amount equal to five percent of the amount of the bid is required for all construction projects in which the bid amount exceeds fifty thousand dollars.

B. Payment and performance bonds in an amount equal to one hundred percent of the contract price are required for all construction contracts in excess of fifty thousand dollars, unless alternative security is authorized pursuant to this chapter.

C. The City Manager and purchasing agent may waive or alter the bonding requirements on contracts with a total contract price of not more than five hundred thousand dollars where: (1) it is determined that bonding in the required amount cannot be reasonably obtained; and (2) alternative means of security which provide an adequate substitute for payment and performance bonds are sufficient. This staff-level waiver shall be made in writing, with notice to the City Council.

D. In every construction contract where there is a modification of bonding requirements, or where no bonding is required (e.g., contracts under fifty thousand dollars in value), the construction contract shall contain one or more alternative security mechanisms to secure performance by the contractor and/or payment to subcontractors, laborers, and material suppliers. Alternative security mechanisms may include: (1) an irrevocable letter of credit payable to the City; (2) a first position deed of trust on real property; (3) a cash deposit to be held by the City; or (4) other collateral, contract, or security instruments as approved by the City Attorney.

E. In every construction contract where there is a modification of bonding requirements, or where no bonding is required, the City is authorized to: (1) issue payment in the form of joint payee checks payable to the general contractor and subcontractors, laborers, or material suppliers; (2) require that subcontractors, laborers, and material suppliers execute payment waivers extinguishing claims against the City, in a form acceptable to the City Attorney, concurrent with progress payments and at final completion; and/or (3) alter retainage disbursements. (Ord. 18-03 (part), 2018)