J. Turner, Treasurer of Water Commissioners, Amsterdam, N. Y., as a guarantee that the bidder will enter into contract in case of award to him, or in case of his failure so to do, then said amount shall be absolutely forfeited to said Water Commissioners.

T. A certified check on a New Orleans bank, in the sum of $10,000, deposited in accordance with the terms of the specifications, will be required of each bidder.

U. Each bid shall be accompanied with a bond in the sum of $10,000 and signed by two sureties, for the acceptance of the contract, if awarded by the Board of Trustees, or the bidder may deposit with the Board of Trustees, in lieu of such bond, a certified check or bank certificate of deposit, payable to the order of the Board of Trustees, or cash equal in amount to the bond as above required.

V. The checks of unsuccessful bidders will be returned at once.

W.

The check of the successful bidder will be returned as soon as he has executed the proper bond and it has been accepted.

X. No check or draft, thus presented to the Board of Water Commissioners, shall be returned to the bidders until after the award and signing of the contract and the furnishing of satisfactory sureties and bond for faithful performance by the successful proposer. No bids shall be withdrawn after they have been opened by the Water Commissioners.

Y. Each tender must be accompanied by an accepted check, draft or cash deposit for the sum called for in the form of tender supplies, which will be subject to forfeiture in case of failure on the part of the contractor to enter into a written contract with approved sureties if called upon to do so.

This seems a trifle obscure in statement and is therefore an example not to be followed.

The statement below seems to be that all certified checks will be forfeited in case the successful bidder fails to enter into the contract. This, certainly, is not what is intended, but is what it says:

Z. A certified check for $350 must accompany each bid, which will be forfeited to the city in the event the successful bidder does not enter into contract with good and sufficient bond within ten days from the date of the award.

Whether a Bond or certified check or cash shall be used, deserves more than passing attention. In the sample advertisement, D, provision is made for a certified check, and this appears clearly to be the best practice. When a check is certified, the bank at once withdraws the amount of the check from the depositor's account. The bidder then loses a very small amount of interest on his deposit for the short time which elapses before his check is returned. The Advertisement should state that the checks of unsuccessful bidders will be promptly returned.

A surety company's Bond involves an expense to the Contractor which he does not care to assume. In addition to that a Bond seems inappropriate for this purpose. There is no contingency arising of the character that demands a Bond. The bidder, if he is to take the Contract, must have sufficient financial responsibility and credit so that the filing of a certified check is not in any way a serious burden to him, and he is clearly the proper party to protect the City, railroad, or Owner in case he fails to sign the Contract if awarded to him. A Bond in a general way is to cover a more remote contingency which neither he nor the party letting the Contract anticipates will ever occur. The Bond is appropriate to provide for the fulfilment of the Contract, but seems inappropriate for the preliminary deposit. Furthermore, the party letting the Contract is somewhat likely to find it necessary to sue on a Bond in case of dispute, so that the Bond is advantageous neither to the Contractor nor to the other party of the proceeding, the railroad, the City, the Owner.

A certified check without conditions is substantially equal to cash. Unless it is without conditions it should not be accepted. In the case of cash no suit is possible unless the bidder sues to recover it, in which case the burden of proof is on him and any delay is to his disadvantage. It seems somewhat harsh, also, to compel a bidder to furnish cash and in many cases such a requirement would operate to prevent bids being made and so defeat the object of the competition.

In the case of a certified check, it is conceivable that the bidder might send word to the bank to stop payment in case he had any disagreement or dispute with the party letting the Contract. But bankers state that, in general, a bank would be very slow to refuse payment on a certified check and the reasons for refusing payment would have to be very clear and satisfactory to the bank. The depositor has no legal right to stop payment. In the case of a bank in some small city or town, it might happen that the bidder was an officer or director of the bank and could secure nonpayment even of a certified check, in which case suit could be brought against the bank with good prospect of success. To avoid difficulty of this sort, it is wise to specify that the check shall be drawn on some bank either of a specified neighboring city or of one of the larger cities of the country.

It is wise in case of a certified check to carefully inspect the certification, because in some cases a rubber certifying stamp has been used for certification and the signature has been that of the cashier of the firm who bids and not of the cashier of the bank. In the Proposal a provision should be inserted to take care of this matter. It is clear that an informality of this sort whenever discovered should make a bid informal and require that it be thrown out.

Sometimes a New York draft is suggested, but in the opinion of some bankers this is not so good a protection to the party letting the Contract as a certified check, in the general practice of banking, because an order to stop payment on a New York draft might be accepted by a bank which would refuse to stop payment on a certified check. A cashier's check is seldom specified and has no particular advantage.

The provision is further made that a Bond shall be required for the faithful performance of the Contract. The amount of this Bond should be determined by the amount of protection needed, and in the case of some Contracts the percentage of the total amount of the Contract will be quite different from what it would be in others. Twenty-five per cent of the Contract price is a very common provision. According to present practice, the charge made by bonding companies depends upon the total Contract price, rather than upon the amount of the Bond required. A Bond unnecessarily large, however, should not be specified, because the bonding company may refuse to bond some efficient and desirable Contractor who has not acquired high financial standing and credit but who could readily secure a Bond for a reasonable amount. Good judgment should be used in fixing the amount of the construction Bond.

The Bond should be from an approved surety company; a personal Bond is less satisfactory in many ways. In the majority of cases, an individual acting as bondsman would probably refuse to pay unless suit was brought against him. Experience has shown that in a city a citizen serving as bondsman on a city Contract has seldom been sued; there is an element of unpopularity about it. A surety company is in business of that kind and has a reputation to maintain, and any trivial refusal might seriously affect its reputation, so that suit would seldom be necessary. Furthermore, the surety company fully understands that it is part of its business to investigate the bidder, as to both his financial responsibility and his ability as a Contractor, before accepting him, so that the surety company's Bond is a considerable assurance against any difficulty occurring, while a personal bond simply serves to make good a loss. Furthermore, in case of the death or failure of the Contractor, the surety company often has facilities for putting another Contractor promptly upon the work, and this is a further assurance against trouble occurring and one which does not exist in the case of a personal Bond. Similar advantages of a surety company's Bond exist where bank or public officials are required to be under Bond.

If the Contractor is a man of unquestioned financial responsibility, the requirement of a Bond from a surety company would seem to be unnecessary, unless, in the case of State or City, some statute or ordinance requires it. The Chief Engineer of a railroad might often show good judgment in not requiring it. In the long run the Company pays the cost of the Bond.

It seems to be well recognized that the Advertisement should state when the work is to be begun and when completed, and this seems to be wise and proper provision; a Contractor whose force is engaged upon a Contract not quite completed may often find it undesirable to bid on work which must start before his other Contract is out of the way. A difference of a few weeks sometimes would make a difference as to whether or not he should bid, and the information is sufficiently valuable so that it ought to appear in the Advertisement of every Contract.

There are sometimes peculiar legal requirements to be observed in connection with the letting of Contracts or in making bids, and in such cases it is often extremely desirable that these provisions should be specified as early as in the Advertisement and not left for the Information for Bidders. The following examples illustrate this point:

a. The usual conditions relating to tendering as prescribed by City By-Law must be strictly complied with, or the tenders will not be entertained.

b. No bid will be considered unless accompanied by a certificate from the City Solicitor that the provisions of an ordinance requiring proposal bonds when the bids exceed in amount five hundred dollars, approved May 25, 1860, have been complied with.

C. All contracts for State highway construction are subject by law to the approval of the State Geological Survey Commission and must be so approved before they can be executed.

d. All bids and the contract shall be subject to all the provisions, terms and conditions of said ordinance and of an Act of the General Assembly of Colorado entitled, "An Act to Provide for the Construction of Local Improvements in Cities of all Classes," etc., approved April 8, 1899, being Chapter 151 of the Session Laws of 1899.

e. Bidders must have paid their City License in order that their bids may be accepted.

In the case of State or municipal work, or other public work, the services of an attorney are commonly available, and compliance with all technical requirements of law should depend upon their advice. Labor laws in particular have of late years attained such importance that a lawyer's advice as to proper compliance with them is substantially necessary in all public work.

Provisions for reserving the right to reject all bids depends somewhat on the requirements of Statute Law. Where there is a requirement that the Contract shall be let to the lowest bidder, the form of statement must be different from that where, as is very common, the "right to reject any or all bids is reserved."

Forms in use appear as follows:

f. The right to reject any or all bids is reserved.

g. Commissioners reserve the right to reject any and all bids.

h. The Commission reserves the right to reject any or all proposals and to accept the proposal deemed best for the Commonwealth.

The statement as to where the forms of Proposal, etc., and as to where the plans may be seen is sometimes modified by statements that plans and forms may be seen also in some central place, perhaps in New York City, Chicago, Boston, or Washington. The office of Engineering News, or of the Engineering Record (now consolidated) in New York has been sometimes used for this purpose in accord with good practice. Sometimes an Engineer in New York City acts as Consulting Engineer and the Advertisement specifies his office as a place where plans may be seen.

A further provision sometimes made is that a deposit will be required in order to take plans, or plans and Specifications, from the office. This is a provision by no means uncommon, but in the case of many Contracts there is no occasion for it, so that this provision is not made a part of the sample Contract. Examples of such provisions are shown below:

i. Sets of plans may be taken from the office upon making a deposit of two dollars for each set taken; this deposit to be refunded upon return of plans.

j. A deposit of $10 (Ten Dollars) will be required for use of plans and specifications, which will be returned upon letting of contracts.

k. The specifications and blue-prints of Contract plans may be seen at the office of the Bureau of Filtration, and a limited edition can be obtained by bonafide intending bidders on making a deposit varying from $10 to $25 for the specifications, and from $50 to $200 for the Contract plans, which amounts will be returned on return of the specifications and plans in good condition.

1. A payment of two dollars ($2) will be required for copies of the pamphlet containing the contract, specifications, etc.; the same to be returned in case the person taking the copy makes a bid for the work in the form contained in said pamphlet, or returns the pamphlet before the time of opening the bids.

These provisions apparently should occur in the Advertisement rather than in the Information for Bidders, but may, perhaps, properly occur in both.