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this obligation shall be of no effect; otherwise it shall remain in full force and virtue in law.
(Signed, Sealed and Witnessed.)
(e) Some bonds include in the last clause a reference to alterations, to negligence or to default on the part of the Principal, to patent infringements, to payment for labor and materials and the like. In connection with certain work, separate bonds (in addition to the "faithful performance" bond) are required, each covering one of these several risks. For example, a “Labor Bond” might differ from the illustration given simply in the last clause, which might read:
“The Condition of this Obligation is such that if the said Principal shall well and truly pay in full at least once a month all laborers who may be employed on the work specified in such contract, then this obligation shall be void, otherwise it shall remain in full force and effect."
ADVERTISEMENT (OR NOTICE TO CONTRACTORS) )
AND INFORMATION FOR BIDDERS
This Chapter treats of advertising, more particularly as applied to public work; the essential features of the Advertisement and its sequel, the Information for Bidders, are discussed.
12. Necessity for Advertising. — Unless circumstances are exceptional, contracts for engineering construction work are let only after a more or less extensive competition among contractors, which is secured by inviting a number of them to submit each an offer to do the work.
(a) If the work is unimportant, not likely to attract a large number of prospective bidders and is to be done for private individuals or corporations, contractors may be communicated with somewhat informally.* For example, the Engineer or the Owner may speak or write to those whom they think will be interested. Where the work is of some magnitude, however, this method may be neither strictly fair to all contractors nor most advantageous to the Owner and the plan outlined in (b) may be more or less completely followed.
(6) In connection with work where the Owner is a public corporation (as a borough, village, town, city, county, state or nation) it is by law or ordinance generally provided that a wide and formal invitation be given through the public prints to all interested.f This formal invitation is called an Advertisement, or Notice to Contractors. Some ordinances provide that copies of the Advertisement be also posted in certain public places.
* Public service and other corporations, as well as private persons do, of course, advertise when it appears to them advisable.
† It is common to except work of a trivial nature involving the expenditure of only a few hundred dollars) and sometimes emergency work — although the word emergency may be subject to varying interpretations.
Further than this it is frequently desirable, and some local ordinances so provide, that the Advertisement be published in one or more of the technical papers which have a circulation among contractors likely to be interested. The Advertisement should first appear a sufficiently long time in advance to give prospective bidders a reasonable period in which to make their necessary business arrangements. Less than two or three weeks is seldom sufficient and a much longer period is allowed on extensive and complicated contracts. The Advertisement should appear at stated intervals during the period.*
A typical city ordinance relating to the advertisement of public work follows:
“All contracts to be made or let for work to be done or for supplies to be furnished to said City, except shall be made by the departments, boards, or by the officers having the subject matter in charge. Whenever any work is necessary to be done to execute or perfect a particular undertaking, or any supply is needful for any particular purpose, and the several parts of the said work or supplies shall together involve the expenditure of more than two hundred and fifty dollars, a written contract for such work shall be made ..., which contract shall be founded on sealed bids or proposals, made in compliance with public notice, duly advertised by publication, at least ten days before the time fixed for opening said bids or proposals, provided, however, that all street cleaning, general repairs and general maintenance of the highways in said city may be performed at the expense of said city under the supervision of the proper department thereof without calling for any bids or making any contract.”
13. Essentials of an Advertisement. — The essential points to be covered by an advertisement are:
(a) Character of work indicated by title of Advertisement.
An advertisement headed simply “Notice to Contractors" or “Bids Required” will not be so likely to catch the eye of a contractor (for example) who makes a specialty of waterworks construction as will one entitled, “Water Supply System,” or
* Major Gillette (Engineering News, 1907, vol. 57, p. 587) cites an instance in which public work aggregating $4,000,000 was advertised 18 days in obscure papers. He says that $9 out of every $10 which the city paid out as a result of this practice was wasted. Fortunately for the taxpayers the contract was broken before more than a fraction of the work had been performed.
“Pipe Laying" or "Filter Beds.” A suggestive title attracts the attention of men whom the advertisement is designed to reach and does not waste the time and attention of others.
(6) Name of person who will receive bids, with place, date and hour.
Remembering that a prospective bidder may be a stranger in the locality and that he may read the advertisement hastily, make this point so clear that it cannot be misconstrued. It is customary to state that bids will be received not later than a certain hour of a certain day.
(c) Name of Owner. (Person or corporation for whom the work is to be done.)
This is simply to inform the prospective bidder as to whom he will have to deal with in his business relations.
(d) Brief description of work with approximate quantities.
A contractor of large resources would not be looking for small contracts, nor would a contractor with limited capital, meager plant and little experience be apt to be looking for a very extensive contract. (e) A specific statement as to character of bids desired.
(i) Will bids for sections of the work be considered? For example, a sewerage system might advantageously be built by several contractors, each working in a separate locality. Or a steel bridge might be erected by two contractors, one building the substructure and the other the superstructure. Such a division into several contracts may result in a lower total cost, allowing as it does greater competition among bidders. The advantage of lower cost resulting from subdivision of the contract is sometimes more than offset by increased engineering and other expenses incident to delay and lack of coördination or coöperation.
(ii) Will bids for labor only, or for materials only, be considered? There is an increasing tendency on the part of municipalities to adopt one or the other of these plans. Sometimes the Owner may be in position to furnish material or labor more cheaply than any one else. For example, a city or other corporation may own a stone quarry, or it may have a force of laborers under salary. In any event it should be clearly stated in the Advertisement just what option, if any, will be allowed the bidder in these directions. (8) Security required with proposal.
This security is required as “earnest money," to make reasonably certain that each bidder is acting in good faith, and is consequently willing to sign the contract if it is awarded to him. The advertisement should state:
(i) The purpose for which the security is required, or the conditions under which it is to be offered. This is so generally understood that many advertisements contain no reference to it. The time and place of the return of this security might be given.
(ii) The character or form of the security. It should be in the equivalent of cash; often a certified check is required, sometimes a bond; if a check it is important that the payee be here specified.
(iii) The amount of the security. In case the successful bidder refuses to enter into contract the delay is likely to cost the Owner many incidental losses, some of which, as interest charges, salaries, etc., are apt to be overlooked. The security should therefore be large enough to somewhat more than compensate him for the bare expense of readvertising. The actual amount fixed is seldom less than one per cent or more than five per cent of the cost of the work. Some advertisements require each bidder to furnish the same sum, while others require a uniform percentage of the several bids. The latter plan has furnished unscrupulous officials and others a means of learning the amounts of some of the bids before they were formally opened. (8) Amount of security required with contract.
The student should not confuse this with the security mentioned in (). It is particularly desirable that the amount be here stated if it is larger than would be expected. Why? (See Art. 11.)