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Salem Area Mass Transit DistricUMarion County IFB 00-03 33 TAB Services 2) The penal amount of performance bonds shall be 100 percent of the original contract price, unless the Recipient determines that a lesser amount would be adequate for the protection of the Recipient. 2) The Recipient may require additional performance bond protection when a contract price is increased. The increase in protection shall generally equal 100 percent of the increase in contract price. The Recipient may secure additional protection by directing the Contractor to increase the penal amount of the existing bond or to obtain an additional bond. ~ A payment bond is required only when a performance bond is required, and if the use of payment bond is in the Recipient's interest. (d) When it is determined that a payment bond is required, the Contractor shall be required to obtain payment bonds as follows: 2) The penal amount of payment bonds shall equal: 2) Fifty percent of the contract price if the contract price is not more than $1 million; (ii) Forty percent of the contract price if the contract price is more than $1 million but not more than $5 million; or (iii) Two and one half million if the contract price is increased. Advance Payment Bonding Requirements The Contractor may be required to obtain an advance payment bond if the contract contains an advance payment provision and a performance bond is not furnished. The Recipient shall determine the amount of the advance payment bond necessary to protect the Recipient. If the Recipient requires such bonding after execution of the Contract, then Recipient will pay the reasonable cost of the bond premium. Patent Infringement Bonding Requirements (Patent Indemnity) The Contractor may be required to obtain a patent indemnity bond if a performance bond is not furnished and the financial responsibility of the Contractor is unknown or doubtful. The Recipient shall determine the amount of the patent indemnity to protect the Recipient. If the Recipient requires such bonding after execution of the Contract, then Recipient will pay the reasonable cost of the bond premium. Warranty of the Work and Maintenance Bonds (Construction Contracts) 2) The Contractor warrants to Recipient, the Architect and/or Engineer that all materials and equipment furnished under this Contract will be of highest quality and new unless otherwise specified by Recipient, free from faults and defects and in conformance with the Contract Documents. All work not so conforming to these standards shall be considered defective. If required by the Recipient, the Contractor shall furnish satisfactory evidence as to the kind and quality of materials and equipment.