regular forms furnished." The phraseology takes different forms in different Advertisements examined, and the following are samples of alternate phraseology taken from actual Advertisements:

K. Bidders must use the printed forms, as none other will be received.

L. The City Engineer will furnish bidders with a blank form of proposal. No proposal will be considered unless submitted on such form.

M. All proposals must be made on the regular forms furnished by the State Geological Survey Commission, to be obtained through the office of the Highway Commission. Bids otherwise made out will not be received.

The particular value of this provision is that the printed form of Proposal should further state that the bidder, if the Contract is awarded to him, agrees to "sign a Contract in the form on file with the City Engineer" or other official specified, leaving no opportunity for a claim by the bidder that he had always been ready to sign a Contract, but not in the form which he is asked to sign.

10. Another item refers to opening the bids, and the award of the Contract. The statement in the Advertisement is that the bids will be "publicly opened and read aloud." The word " aloud " does not appear in most Contracts, but it would seem that a Contractor thinking of bidding on the work would be favorably impressed with the fact that a distinct statement is made that he will have opportunity to hear the reading of the bids; his instinctive feeling is likely to be that everything is to be straight and above-board in the work, and that impression on his mind ought to have some commercial value to the municipality or party letting the work.

11. The signing of the formal Contract and furnishing the Bond follow. It has already been stated that the use of "the regular forms furnished requires the signing of the Contract in the form required, and also the furnishing of a satisfactory Bond. The function of the certified check or a preliminary Bond is to insure such action by the bidder.

The provision for a certified check needs some extended comment. First, as to the amount of the check, the proper statement is that the amount should be sufficient to cover the probable difference between the lowest bid and that next above it, together with a sufficient allowance to cover any delay liable to occur if it should become necessary to re-let the work, and in addition to this the cost of advertising and other items connected with the re-letting. Just what this amount should be can best be determined by the good judgment of any Engineer who is frequently letting work of a similar character.

The provision is made in some cases that a certified check shall be for

some specified per cent of the bid. This has been in actual cases, sometimes 2 per cent, sometimes 5 per cent, and sometimes 10 per cent. A provision in this form has been criticized because the filing of such a check with the City Clerk or some other official leaves an opportunity for unscrupulous people to get together and determine the amount of any bid from the check deposited. Sometimes a check for "not less" than 5 per cent is asked for. There appears to be no reason why a fixed sum should not be required, based upon the proper percentage of the Engineer's estimate of the cost of the work. The amount of the check will then be equal and fair to all the bidders.

While many matters of detail will best be left for Information for Bidders, the Advertisement should give sufficient information so that a bidder coming from a distance may secure his certified check before leaving home, making it possible for him to prepare his bid at the site of the work and file it at the specified place, and also await the opening of the bids, one trip only being necessary.

Instead of a certified check, provision is sometimes made for a surety company's Bond, for a draft on New York, for a cashier's check, or for cash, and the reading of the following extracts from actual Advertisements will give some idea of what people have done in this matter:

N. No bid will be received and deposited unless accompanied by a properly certified check for the sum of.....

...........

O. No bid will be received unless accompanied by a Bidder's Bond as hereinafter set forth on page . or by a certified check upon a State or National Bank or a Trust Company established in the City of Louisville (or the City of New York) for an amount not less than seven (7) per cent of the total amount of the accompanying bid, payable to the Commissioners of Sewerage, such check to be returned unless forfeited under the conditions herein stipulated.

P. No bid will be received unless it is made on the blank form furnished from this office and is accompanied either by gold coin or by a check equal to five per cent of the amount of the proposal, certified by a solvent bank in the State of California, payable to the order of the Secretary of the Board of State Harbor Commissioners.

Q. A bond with sufficient sureties or a certified check made payable to the City Treasurer for the sum of $200 must accompany each bid or the same will not be considered.

R. All bids must be accompanied by a City Clerk's or Treasurer's receipt showing the deposit of $100 in cash guaranteeing the execution of the contract after award of same.

S. Each proposal shall contain a certified check or a New York or Boston draft in the amount of $5,000 (five thousand dollars) payable to the order of John

J. Turner, Treasurer of Water Commissioners, Amsterdam, N. Y., as a guarantee that the bidder will enter into contract in case of award to him, or in case of his failure so to do, then said amount shall be absolutely forfeited to said Water Commissioners.

T. A certified check on a New Orleans bank, in the sum of $10,000, deposited in accordance with the terms of the specifications, will be required of each bidder.

U. Each bid shall be accompanied with a bond in the sum of $10,000 and signed by two sureties, for the acceptance of the contract, if awarded by the Board of Trustees, or the bidder may deposit with the Board of Trustees, in lieu of such bond, a certified check or bank certificate of deposit, payable to the order of the Board of Trustees, or cash equal in amount to the bond as above required.

V. The checks of unsuccessful bidders will be returned at once.

W. The check of the successful bidder will be returned as soon as he has executed the proper bond and it has been accepted.

X. No check or draft, thus presented to the Board of Water Commissioners, shall be returned to the bidders until after the award and signing of the contract and the furnishing of satisfactory sureties and bond for faithful performance by the successful proposer. No bids shall be withdrawn after they have been opened by the Water Commissioners.

Y. Each tender must be accompanied by an accepted check, draft or cash deposit for the sum called for in the form of tender supplies, which will be subject to forfeiture in case of failure on the part of the contractor to enter into a written contract with approved sureties if called upon to do so.

This seems a trifle obscure in statement and is therefore an example not to be followed.

The statement below seems to be that all certified checks will be forfeited in case the successful bidder fails to enter into the contract. This, certainly, is not what is intended, but is what it says:

Z. A certified check for $350 must accompany each bid, which will be forfeited to the city in the event the successful bidder does not enter into contract with good and sufficient bond within ten days from the date of the award.

Whether a Bond or certified check or cash shall be used, deserves more than passing attention. In the sample advertisement, D, provision is made for a certified check, and this appears clearly to be the best practice. When a check is certified, the bank at once withdraws the amount of the check from the depositor's account. The bidder then loses a very small amount of interest on his deposit for the short time which elapses before his check is returned. The Advertisement should state that the checks of unsuccessful bidders will be promptly returned.

A surety company's Bond involves an expense to the Contractor which he does not care to assume. In addition to that a Bond seems inappropriate for this purpose. There is no contingency arising of the character that demands a Bond. The bidder, if he is to take the Contract, must have sufficient financial responsibility and credit so that the filing of a certified check is not in any way a serious burden to him, and he is clearly the proper party to protect the City, railroad, or Owner in case he fails to sign the Contract if awarded to him. A Bond in a general way is to cover a more remote contingency which neither he nor the party letting the Contract anticipates will ever occur. The Bond is appropriate to provide for the fulfilment of the Contract, but seems inappropriate for the preliminary deposit. Furthermore, the party letting the Contract is somewhat likely to find it necessary to sue on a Bond in case of dispute, so that the Bond is advantageous neither to the Contractor nor to the other party of the proceeding, the railroad, the City, the Owner.

A certified check without conditions is substantially equal to cash. Unless it is without conditions it should not be accepted. In the case of cash no suit is possible unless the bidder sues to recover it, in which case the burden of proof is on him and any delay is to his disadvantage. It seems somewhat harsh, also, to compel a bidder to furnish cash and in many cases such a requirement would operate to prevent bids being made and so defeat the object of the competition.

In the case of a certified check, it is conceivable that the bidder might send word to the bank to stop payment in case he had any disagreement or dispute with the party letting the Contract. But bankers state that, in general, a bank would be very slow to refuse payment on a certified check and the reasons for refusing payment would have to be very clear and satisfactory to the bank. The depositor has no legal right to stop payment. In the case of a bank in some small city or town, it might happen that the bidder was an officer or director of the bank and could secure nonpayment even of a certified check, in which case suit could be brought against the bank with good prospect of success. To avoid difficulty of this sort, it is wise to specify that the check shall be drawn on some bank either of a specified neighboring city or of one of the larger cities of the country.

It is wise in case of a certified check to carefully inspect the certification, because in some cases a rubber certifying stamp has been used for certification and the signature has been that of the cashier of the firm who bids and not of the cashier of the bank. In the Proposal a provision should be inserted to take care of this matter. It is clear that an informality of

this sort whenever discovered should make a bid informal and require that it be thrown out.

Sometimes a New York draft is suggested, but in the opinion of some bankers this is not so good a protection to the party letting the Contract as a certified check, in the general practice of banking, because an order to stop payment on a New York draft might be accepted by a bank which would refuse to stop payment on a certified check. A cashier's check is seldom specified and has no particular advantage.

The provision is further made that a Bond shall be required for the faithful performance of the Contract. The amount of this Bond should be determined by the amount of protection needed, and in the case of some Contracts the percentage of the total amount of the Contract will be quite different from what it would be in others. Twenty-five per cent of the Contract price is a very common provision. According to present practice, the charge made by bonding companies depends upon the total Contract price, rather than upon the amount of the Bond required. A Bond unnecessarily large, however, should not be specified, because the bonding company may refuse to bond some efficient and desirable Contractor who has not acquired high financial standing and credit but who could readily secure a Bond for a reasonable amount. Good judgment should be used in fixing the amount of the construction Bond.

The Bond should be from an approved surety company; a personal Bond is less satisfactory in many ways. In the majority of cases, an individual acting as bondsman would probably refuse to pay unless suit was brought against him. Experience has shown that in a city a citizen serving as bondsman on a city Contract has seldom been sued; there is an element of unpopularity about it. A surety company is in business of that kind and has a reputation to maintain, and any trivial refusal might seriously affect its reputation, so that suit would seldom be necessary. Furthermore, the surety company fully understands that it is part of its business to investigate the bidder, as to both his financial responsibility and his ability as a Contractor, before accepting him, so that the surety company's Bond is a considerable assurance against any difficulty occurring, while a personal bond simply serves to make good a loss. Furthermore, in case of the death or failure of the Contractor, the surety company often has facilities for putting another Contractor promptly upon the work, and this is a further assurance against trouble occurring and one which does not exist in the case of a personal Bond. Similar advantages of a surety company's Bond exist where bank or public officials are required to be under Bond.

If the Contractor is a man of unquestioned financial responsibility, the requirement of a Bond from a surety company would seem to be unnecessary, unless, in the case of State or City, some statute or ordinance requires it. The Chief Engineer of a railroad might often show good judgment in not requiring it. In the long run the Company pays the cost of the Bond.