Section 375.21 applies to county contracts which meet the dollar
threshold of required advertisement for bidding found in Minn. Stat.
§ 471.345. Advertising for bids is required under §
471.345 where the contract is estimated to exceed $15,000,
$50,000 or $60,000 for rental of equipment. An exception
exists under § 471.345 for contracts involving repairs and
maintenance of ditches, in which bids are not required if the
estimated amount of the contract does not exceed the amount specified
in Minn. Stat. § 106A.705, subj. 4,5, and 6.
2. Minn. Stat. § 574.26:
a. Minn. Stat. § 574.26 requires the contractor to give bond to
the state or other public body contracted with on contracts for the
doing of any public work. This statute does not apply to
forestry development related contracts under Minn. Stat. § 574.263 or §
574.264 and those contracts not exceeding $10,000.
Under Minn. Stat. § 574.263 the Commissioner of Natural Resources
may require a bid deposit in lieu of a performance bond in forestry
development project contracts. Such bid deposits may not be less
than five percent of the contract.
The bond under § 574.26 must be conditioned to ensure: (1) the
payment of claims of such work, skill, tools, machinery, materials,
insurance premiums, equipment, taxes incurred under Minn. Stat. §
190.92 or Chapter 297A and supplies for the completion of the
contract; (2) saving the obligee harmless from all costs and charges
that may accrue on account of the doing of the work; (3) enforcing the
terms of the bond; and (4) the compliance with the law appertaining
thereto.
Thus, the bond under § 574.26 may be characterized as both a
performance bond and a payment bond with three named classes of
beneficiaries: the obligee or county; those laborers and materialmen
furnishing work, labor, materials and other items; and the State for
the purpose of payment of withholding taxes pursuant to § 190.92 and
general sales tax pursuant to Chapter 297A.
b. Minnesota cases construing this provision note in dicta that
this provision requires a bond for the benefit of the several named
beneficiaries, thus distinguishing between the needs of the
contracting governmental unit for its own protection and needs of
subcontractors for surety in lieu of mechanic's lien rights.
Such dicta supports the conclusion that this provision requires one
multi purpose bond and not separate performance or payment
bonds. Den Mar Construction Co. v. American Insurance Co.,
290 N.W.2d 737, 741 (Minn. 1979); Healy Plumbing & Heating Co.
v. Minneapolis-St. Paul San. Dist., 169 N.W. 2d 50 (Minn. 1969).
3. Several different sections of Minn. Stat. Ch. 574 allow security
in lieu of bond in certain circumstances. Under §
574.261, a certified check or cashier's check in the same amount as
would be required for a bond may be submitted as security for
protection of
