1. Whenever an order for improvement is made, the commissioners of the district shall, in the name of the district, enter into a written contract with the lowest and best bidder for making such improvement in compliance with such order. Such contract shall require that the work be completed within a certain time, and shall provide a penalty for each day beyond said time said work remains uncompleted, and said commissioners shall require said contractor to enter into a bond, to be approved by the commissioners, for the full performance of said contract, and payment for all labor and material used or employed in the performance of such contract.

2. Said special road district commissioners may advertise for bids for such contract in any manner they choose; and the contract shall in no case be let to any special road district commissioner, nor shall any special road district commissioner, directly or indirectly, have any pecuniary interest therein other than the performance of his official duties as herein required.

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3. Said contract shall in no case provide for the payment of a sum in excess of the estimated cost of the work, as found by the commission, plus ten percent thereof, and shall not provide for payment of exceeding eighty percent of the value of the work actually performed and materials furnished until the entire improvement is completed.

4. As payments to the contractor become payable by the terms of the contract, the commissioners shall cause warrants to be drawn on the district treasurer therefor.