(1) If an agency requires bid or proposal security and/or contract performance security, the types of security that may be used are those specified in 18-4-312, MCA.

(2) The department will supply bid and proposal security bond forms and contract performance security bond forms when security is required. These are the only acceptable forms for surety bond or irrevocable letter of credit submission.

(3) Facsimile, electronic, or photocopy copies of bid or contract security are not acceptable.

(4) Certificates of deposit or money market certificates will not be accepted as security for bid, proposal, or contract security unless the certificates are assigned only to the state.

(5) Factors to consider in requiring bid/proposal security and in determining the amount of the security include:

(a) type of commodity;

(b) past state experience;

(c) labor required to perform contract;

(d) materials required to perform contract.

(6) All negotiable instruments provided as bid security and proposal security will be returned to the unsuccessful bidders/offerors within 30 days from date of the award.

(7) Factors to consider in requiring contract performance security and in determining the amount of security include:

(a) type of commodity;

(b) past state experience;

(c) labor required to perform contract;

(d) materials required to perform contract;

(e) amount and number of subcontracts;

(f) damages chargeable to the state if the contractor defaults; and

(g) estimated dollar amount of total contract.

(8) The division shall timely return to the contractor all contract performance security, except bonds, following notification to the division that:

(a) the contract was satisfactorily completed; and

(b) the agency waives all rights and claims to the performance security as described in ARM 2.5.305.