The rural community shall require in all project construction contracts that:
  (1) each bidder furnish a bid guarantee equivalent to five percent of the bid price;
  (2) each contractor awarded a construction contract furnish performance and payment bonds as follows:
    (A) the performance bond must include guarantees that work done under the contract will be completed and performed according to approved plans and specifications in accordance with sound construction principles and practices; and
    (B) the performance and payment bonds must be in a penal sum of not less than 100 percent of the contract price and remain in effect for one year after the date of approval by the engineer of the rural community;
  (3) payment will be made in partial payments as the work progresses;
  (4) each partial payment shall not exceed 95 percent of the amount due at the time of the payment, as shown by the engineer of the project, but if the project is substantially complete, a partial release of the five percent retainage may be made by the rural community with the approval of the executive administrator;
  (5) payment of the retainage remaining due on completion of the contract shall be made only after:
    (A) approval by the engineer for the rural community;
    (B) approval by the rural community by resolution or other formal action of the governing body; and
    (C) certification by the executive administrator that the work to be done under the contract has been completed and performed in a satisfactory manner and in accordance with approved plans and specifications;
  (6) no valid approval shall be granted unless the work done under the contract has been completed and performed in a satisfactory manner according to approved plans and specifications; and
  (7) labor from inside the rural community has been used to the extent possible.

Source Note: The provisions of this §363.951 adopted to be effective November 7, 2001, 26 TexReg 8848; amended to be effective November 26, 2014, 39 TexReg 9209