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RELEVANT LINKS: <br />A.G. memorandum to public <br />officials (Feb. 22, 1974). <br />Minn. Stat. § 429.041, subd. <br />6. <br />See Form 23. <br />See Form 25. <br />See Form 26. <br />Minn. Stat. § 290.97. <br />Minnesota Department of <br />Revenue Form IC -134. <br />Minn. Stat. § 429.041, subd. <br />2. <br />See Form 24. <br />See Forms 27 and 28. <br />Minn. Stat. § 429.041, subd. <br />7. <br />See Form 11 and 29A. <br />The council must award the contract to the lowest responsible bidder or it <br />may reject all bids. Note: the attorney general suggests that cities should <br />take great care in specifying the contractual obligations of both parties in bid <br />advertisements. Cities may want to address the city's right to reject all bids <br />in the bid advertisements and in the bid specifications. If any bidder to <br />whom a contract is awarded fails to enter promptly into a written contract <br />and to furnish the required bond, the defaulting bidder shall forfeit to the <br />municipality the amount of the defaulter's cash deposit, cashier's check, bid <br />bond, or certified check, and the council may then award the contract to the <br />next lowest responsible bidder. <br />State law governs ongoing payments to contractors performing work on <br />local improvements. Cities may retain 5 percent of the amount the contractor <br />actually earns each month. The percentage retained protects the city's <br />interest in getting the work done satisfactorily. The city engineer <br />recommends to the council when such retained funds should be released and <br />final payment made to the contractor. The city council may accept the work <br />by resolution. However, if the city fails to pay the amount due within 30 <br />days of a monthly estimate, or 90 days after the final estimate, the city must <br />pay interest on the past due amount as prescribed by law. <br />Note: Cities may not make final payment to a contractor until the contractor <br />has shown proof of compliance with the state income tax withholding <br />requirements. The Department of Revenue requires all contractors and <br />subcontractors to file a Form IC -134 to show compliance with the <br />withholding requirements. This certificate is the contractor's proof of <br />compliance. A city should request a copy of this document from contractors <br />before making the final payment on a contract. <br />If the contractor improperly constructs or unreasonably delays work on the <br />local improvement, the council may order suspension of the work at any <br />time and re -let the contract, or order reconstruction of any portion of the <br />work improperly done. If the cost of completing or reconstructing the <br />improvement is less than $100,000, the council may do it by use of day <br />labor. <br />Chapter 429 provides that once work begins on an improvement involving a <br />unit price contract, the council may, without advertising for bids, authorize <br />changes to include additional units of work at the same unit price. This may <br />be done, however, only if the additional work costs no more than 25 percent <br />of the "original contract price." To determine the "original contract price" <br />multiply the estimated number of units required by the unit price. <br />League of Minnesota Cities Information Memo: 9/22/2011 <br />Special Assessment Guide Page 19 <br />