Common use of CONTRACT SECURITY Clause in Contracts

CONTRACT SECURITY. .1 The successful Contactor must submit a Performance Bond and a Labour and Material Bond, each in the amount of fifty percent (50%) of the Contract, such Performance Bond and Labour and Material Bond are to be delivered to the Metropolitan Regional Housing Authority prior to signing of the Contract and shall be on the form enclosed as part of these documents, or to like effect. .2 Where the contract amount is less than $1,000,000 (one million Canadian dollars), the Metropolitan Regional Housing Authority will accept a certified cheque, bank draft, or Government of Canada Bearer Bonds, in an amount of ten percent (10%) of the Contract price. .3 If the successful Bidder elects to provide security other than the Performance, Labour and Material Bonds and has provided security in the form of Government of Canada Bearer Bonds, certified cheque, or bank draft, then said security must be fully paid for, assigned to the Metropolitan Regional Housing Authority and deposited with the Metropolitan Regional Housing Authority in trust. Contracts in excess of $1,000,000 (one million Canadian dollars) can only be secured by Performance, Labour and Material Bonds. .4 If the Work is taken out of the Contractor's hands, or if the Contract is terminated pursuant to the General Conditions, or if the Contractor is in breach or in default under the Contract, the Metropolitan Regional Housing Authority may negotiate the security deposit, in the case of bonds, or Term Deposit Certificate, or convert the security deposit to its own use, in the case of negotiable security, and the amount realized by the Metropolitan Regional Housing Authority shall be deemed to be a debt payable by the Metropolitan Regional Housing Authority to the Contractor and the Metropolitan Regional Housing Authority shall have the right of set-off against the debt any sum or amount which the Contractor may be liable to pay to the Metropolitan Regional Housing Authority and the balance of the debt, if any, after the right of set-off has been exercised, and if such balance, in the opinion of the Project Manager, is not required for the purposes of the Contract shall be paid by the Metropolitan Regional Housing Authority to the Contractor. .5 If the Contractor is not in breach of, or default under, the Contract at the time the Project Manager's Interim Certificate of Completion is issued by the Regional or Project Manager, the Metropolitan Regional Housing Authority will return the security deposit to the Contractor. Notwithstanding the above, the Metropolitan Regional Housing Authority, may, under circumstances where it is considered advantageous, release the security deposit to the Contractor prior to one hundred percent (100%) completion but in no event at less than ninety percent (90%) completion. Such a release at less than ninety-five percent (95%) completion of the project shall be submitted to the Metropolitan Regional Housing Authority and have approval.