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...