Washington State Administrative Board, 111053 WAAGO, AGO 1953 - 168

Case DateNovember 10, 1953
CourtWashington
Washington State Administrative Board
AGO 1953 - 168
No. 1953 - 168
AGO 53-55-168
Washington Attorney General Opinion
Washington State Office of the Attorney General
November 10, 1953
         CONTRACTOR'S BOND ‑- HIGHWAY CONSTRUCTION ‑- LEGALITY OF BLANKET BOND          Blanket contractor's bond for highway construction contracts under $15,000, as detailed in opinion, would satisfy statutory requirements.          Washington State Administrative Board          c/o Governor's Office          Legislative Building          Olympia, Washington          Gentlemen:          By letter as previously acknowledged you have requested the opinion of this office upon a proposal for blanket performance bond coverage on highway construction contracts awarded in amounts of $15,000. or less.  Upon inquiry, we have been informed that coverage of this type is available under the following arrangement.  At the beginning of each month a bonding company would deliver a bond to the highway department.  The bond would include, as principal, each person awarded a contract for an amount within the coverage during the month if such person applied therefor to the bonding company.  The bond would run to the state in a sum equal to the full contract price in each particular contract, conditioned upon faithful performance of the contract and upon payment by the contractor of the persons designated by RCW 39.08.010.  Upon the award of a contract, the contractor could, at his option, either procure a bond in the customary manner or apply to the bonding company for coverage under the blanket bond.  At the end of the month the department would compute the premium due upon the total coverage of the bond at a fixed rate per $100., with a certain minimum per contract.  The department itself would pay the premium to the bonding company.          You ask if such an arrangement would be lawful, in view of the requirements of RCW 39.08.010.          [[Orig. Op. Page 2]] It is our opinion that the proposed arrangement would satisfy the statutory requirements.          ANALYSIS          The question presented is apparently unique.  We have found no judicial precedent.  Consequently, we shall examine the various specific requirements as to such bonds in the light of the purpose for which they are to be exacted.          RCW 39.08.010 provides in relevant part:
"Whenever any board, council, commission, or body acting for the state * * * shall contract with any person to do any work for the state, * * * such board, council, commission or body shall require the person with whom such contract is made to make, execute and deliver to it a good and sufficient bond, with two or more sureties, or with a surety company as surety, conditioned that such person will faithfully perform all the provisions of the contract and pay all laborers, mechanics, subcontractors, and material men * * *.  The bond shall be filed with the county auditor of the county where the work is performed or improvement made, * * *."
         RCW 39.08.030 provides in part:          "The bond shall be in an amount equal to the full contract price agreed to be paid for the work or improvement, and shall run to the state:  * * *."
A supplementary provision is found in RCW 47.28.100, as amended by section 1, chapter 53, Laws of 1953, which provides a penalty for failure to "furnish" such a bond within a specified period of time in the case of public highway construction contracts.
         These statutes disclose the following requirements, which will be discussed seriatim:
[[Orig. Op. Page 3]] 1. The contractor is to "make, execute and deliver" and "furnish" the bond.  The sum of the quoted words is that the contractor is to provide the security demanded by the statute.
         For example, in Gerlach v. Spokane, 68 Wash. 589...

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