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Salem Area Mass Transit District/Marion County IFB 00-03 32 <br />TAB Services <br />The Contractor shall be required to obtain performance and payment bonds as follows: <br />2) Performance bonds <br />2) The penal amount of performance bonds shall be 100 percent of the original contract price, <br />unless the Recipient determines that a lesser amount would be adequate for the protection of <br />the Recipient. <br />2) The Recipient may require additional performance bond protection when a contract price is <br />increased. The increase in protection shall generally equal 100 percent of the increase in <br />contract price. The Recipient may secure additional protection by directing the Contractor to <br />increase the penal amount of the existing bond or to obtain an additional bond. <br />(b) Payment bonds <br />2) The penal amount of the payment bonds shall equal 100 percent of the contract price, unless <br />the Recipient determines that a lesser amount would be adequate for the protection of the <br />Recipient. <br />2) The Recipient may require additional payment bond protection when a contract price is <br />increased. The increase in protection shall generally equal 100 percent of the increase in <br />contract price. The Recipient may secure additional protection by directing the Contractor to <br />increase the penal amount of the existing bond or to obtain an additional bond. <br />Performance and Payment Bonding Requirements (Non-Construction Contracts) <br />The Contractor may be required to obtain performance and payment bonds when necessary to <br />protect the Recipient's interest. If the Recipient requires such bonding after execution of the <br />Contract, then Recipient will pay the reasonable cost of the bond premium. <br />2) The following situations may wanant a performance bond: <br />2) Recipient property or funds are to be provided to the Contractor for use in performing the <br />contract or as partial compensation (as in retention of salvaged material). <br />2) A contractor sells assets to or merges with another concern, and the Recipient, after <br />recognizing the latter concern as the successor in interest, desires assurance that it is <br />financially capable. <br />2) Substantial progress payments are made before delivery of end items starts. <br />4. Contracts are for dismantling, demolition, or removal of improvements. <br />(b) When it is determined that a performance bond is required, the Contractor shall be required to <br />obtain performance bonds as follows: <br />