Legal Documents of Newport

Code of Newport

Table of Contents » Title 5 Municipal Finance and Taxation » Chapter 3 Purchasing Policy » § 5-315 Surety requirements.
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Title 5
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Title 5, Chapter 1
5-101
§ 5-101
Newport
Title 5 : Municipal Finance and Taxation
Chapter 3 : Purchasing Policy

5-315 : Surety requirements.

  1. Bid bond. A bid bond issued by a surety company licensed to do business in the State of Tennessee may be required for a specified solicitation. The amount of the bid bond shall be stated as a set amount or as a percentage of the bid price. In no event may it exceed five percent (5%) of the total contract price. Bid bonds submitted by unsuccessfu1 vendors will be returned upon award of a contract. Personal checks are not acceptable in the place of bid bonds; however, bank cashier's checks, a certified check or any other direct obligation drawn on a bank doing business in the United States is acceptable.
  2. Performance bond. A performance bond issued by a surety company licensed to do business in the State of Tennessee and acceptable to the City of Newport may be required for a specified solicitation. The amount of the performance bond shall be stated as a percentage of the contract price but may not exceed one hundred percent (100%) of the total contract price. Personal checks are not acceptable in the place of performance bonds; however, bank cashier's checks are acceptable. An irrevocable letter of credit from a state or national bank or a state or federal savings and loan association having its principal office in Tennessee may be accepted instead of a performance bond, subject to approval of the terms and conditions of said irrevocable letter of credit. If the successful bidder fails to furnish a performance bond and execute a contract within the time allowed, the bid deposit of the bidder shall be retained by the City of Newport as liquidated damages and not as a penalty. In addition, the city shall remain free to pursue any other remedies it may have.
  3. Payment bond. A payment bond issued by a surety company licensed to do business in the State of Tennessee may be required for a specified solicitation. The bond shall be not less that twenty-five percent (25%) or more that one hundred percent (100%) of the contract price. The bond is to ensure that the contractor will pay for all labor and materials used by the contractor or any immediate or remote subcontractor under the contractor. (Ord. #07-19-05-01, July 2005)