Contracts for construction - bond - default

(1) Except as provided in this section, all local improvements made under the provisions of this part 5 shall be constructed by independent contract, and all contracts shall be let by the mayor with the approval of the governing body. All such contracts shall be let to the lowest reliable and responsible bidder after public advertisement once a week for three consecutive weeks in a newspaper of general circulation in such municipality; but, after such advertisement, if it is determined by the governing body that the bids are too high or that the proposed improvement can be made by the municipality for less than the bid of the lowest reliable and responsible bidder, such municipality is hereby empowered to provide for doing the work by hiring labor by the day or otherwise and to arrange for purchasing necessary material, all under the supervision of the governing body. (2) Except when the municipality does the work, no contract shall be made without a surety bond for its faithful performance with sufficient sureties to be approved by the governing body. No surety shall be accepted or approved by the governing body or mayor, other than a corporate surety company, unless he is the owner of real estate in this state, free and clear of all encumbrances, in double the amount of his liability on all bonds upon which he may then be surety. Upon default in the performance of any contract, the governing body may advertise and relet the remainder of the work in like manner without further ordinance and deduct the cost from the original contract price or, with the approval of the governing body, advance any excess out of the funds of the municipality and recover the same by suit on the original bond. In all advertisements the right shall be reserved to reject any or all bids and, upon rejecting all bids, if deemed advisable by the governing body, other bids may be advertised for.