Counselors,

City awarded a contract, and is set to approve contract at a council meeting Tuesday night.  Contract requires a performance bond (it's an annual services contract for a five year period).  Surety is refusing to issue a bond without substantial qualifiers, including provisions that give the surety the right upon default of the principal to:

1. Complete the contract performance.
2. Obtain and award bids for completing the contract performance.
3. Limit its liability for the "balance of the contract price" remaining due.
4. Limits the time to bring a claim under the bond to two years from the end of the contract.

The City's form of performance bond is fairly generic and does not give the surety the right to control who performs the remaining term of the contract (the contract is for a five year term).  The bond amount is significant, and the surety is refusing to issue a bond without these limits.

Has anyone approved a form of bond that gives the surety the right to take over completion of the contract?  In my view, approving this bond form would alter the contractual remedies under the contract form that was included in the bid packet.

Any thoughts are appreciated.

Jonathan E. Miller
City Attorney
City of Mustang
1501 N. Mustang Road
Mustang, Oklahoma 73064
Telephone: (405) 376-7746
Facsimile: (405) 376-7721

This email is sent by the City Attorney and may contain information that is privileged or confidential. If you received this email in error, please notify the sender by reply email and delete the email and any attachments.  If you are a and officer, employee or agent of the City of Mustang, you should not share this email with others.  Sharing this email may result in a loss of the attorney-client privilege.

I think 1-3  are standard and usual. I'm not sure about 4.  Is the project a T 61 project?

HARLAN S. PINKERTON, JR.900 N. McKinley AveSand Springs, OK 74063918-688-7465H: 918-245-4527

-----Original Message-----
From: Jon Miller JMiller@cityofmustang.org
To: oama (oama@lists.imla.org) oama@lists.imla.org
Sent: Mon, Jun 6, 2022 5:58 pm
Subject: [Oama] URGENT QUESTION ON PERFORMANCE BOND

Counselors,

City awarded a contract, and is set to approve contract at a council meeting Tuesday night.  Contract requires a performance bond (it's an annual services contract for a five year period).  Surety is refusing to issue a bond without substantial qualifiers, including provisions that give the surety the right upon default of the principal to:

  1.  Complete the contract performance.
  2.  Obtain and award bids for completing the contract performance.
  3.  Limit its liability for the "balance of the contract price" remaining due.
  4.  Limits the time to bring a claim under the bond to two years from the end of the contract.

The City's form of performance bond is fairly generic and does not give the surety the right to control who performs the remaining term of the contract (the contract is for a five year term).  The bond amount is significant, and the surety is refusing to issue a bond without these limits.

Has anyone approved a form of bond that gives the surety the right to take over completion of the contract?  In my view, approving this bond form would alter the contractual remedies under the contract form that was included in the bid packet.

Any thoughts are appreciated.

Jonathan E. Miller
City Attorney
City of Mustang
1501 N. Mustang Road
Mustang, Oklahoma 73064
Telephone: (405) 376-7746
Facsimile: (405) 376-7721

This email is sent by the City Attorney and may contain information that is privileged or confidential. If you received this email in error, please notify the sender by reply email and delete the email and any attachments.  If you are a and officer, employee or agent of the City of Mustang, you should not share this email with others.  Sharing this email may result in a loss of the attorney-client privilege.

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I think para 4 is legal

Sent from my iPhone

On Jun 6, 2022, at 7:43 PM, Harlan Pinkerton via Oama oama@lists.imla.org wrote:


I think 1-3  are standard and usual. I'm not sure about 4.  Is the project a T 61 project?

HARLAN S. PINKERTON, JR.
900 N. McKinley Ave
Sand Springs, OK 74063
918-688-7465
H: 918-245-4527

-----Original Message-----
From: Jon Miller JMiller@cityofmustang.org
To: oama (oama@lists.imla.org) oama@lists.imla.org
Sent: Mon, Jun 6, 2022 5:58 pm
Subject: [Oama] URGENT QUESTION ON PERFORMANCE BOND

Counselors,

City awarded a contract, and is set to approve contract at a council meeting Tuesday night.  Contract requires a performance bond (it's an annual services contract for a five year period).  Surety is refusing to issue a bond without substantial qualifiers, including provisions that give the surety the right upon default of the principal to:

1. Complete the contract performance.
2. Obtain and award bids for completing the contract performance.
3. Limit its liability for the "balance of the contract price" remaining due.
4. Limits the time to bring a claim under the bond to two years from the end of the contract.

The City's form of performance bond is fairly generic and does not give the surety the right to control who performs the remaining term of the contract (the contract is for a five year term).  The bond amount is significant, and the surety is refusing to issue a bond without these limits.

Has anyone approved a form of bond that gives the surety the right to take over completion of the contract?  In my view, approving this bond form would alter the contractual remedies under the contract form that was included in the bid packet.

Any thoughts are appreciated.

Jonathan E. Miller
City Attorney
City of Mustang
1501 N. Mustang Road
Mustang, Oklahoma 73064
Telephone: (405) 376-7746
Facsimile: (405) 376-7721

This email is sent by the City Attorney and may contain information that is privileged or confidential. If you received this email in error, please notify the sender by reply email and delete the email and any attachments.  If you are a and officer, employee or agent of the City of Mustang, you should not share this email with others.  Sharing this email may result in a loss of the attorney-client privilege.

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