Based on the contracting and bidding requirements, CDS has decided to highlight three items that are either newer or items we have noticed inconsistencies with when working on client fieldwork. The items are in the Minnesota Legal Compliance Guides that can be found on the Minnesota OSA website.

Responsible Contractor Requirement

For each construction contract in excess of $50,000, awarded pursuant to a lowest responsible bidder, the successful contractor is required to submit a verification of compliance signed under oath by an owner or officer verifying compliance with the minimum criteria set forth in Minnesota Statute § 16C.285, subdivision 3.The City or School District is required to obtain this documentation from the contractor and keep it on file.

Performance and Payment Bonds

Contractors doing public work are required to give (1) a performance bond to the public body with whom the contractor entered into the contract, for the use and benefit of the public body to complete the contract according to its terms, and conditioned on saving the public body harmless from all costs and charges that may accrue on account of completing the specified work, and (2) a payment bond for the use and benefit of all persons furnishing labor and materials engaged under, or to perform the contract, conditioned for the payment, as they become due, of all just claims for the labor and materials. Based on Minnesota Statute § 574.26 this is required if the contract is more than $175,000.

Form IC-134 or Withholding Affidavit

Per Minnesota Statute § 270C.66, before making final settlement with any contractor under a contract requiring the employment of employees for wages by said contractor and by subcontractors, the City or School District is required to obtain a certificate by the Commissioner of Revenue that the contractor or subcontractor has complied with the withholding requirements of Minnesota Statute § 290.92 (either Form IC-134 or a Contractor’s Withholding Affidavit Confirmation). This is required regardless of the dollar amount of the project.

For the three above mentioned items, the government’s engineer or lawyer can help with any questions or processes if additional assistance is needed.

Questions? Contact one of our governmental auditing experts.