The contractor’s bond must be made payable to the district and must be conditioned:

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1.    That the contractor well and faithfully will perform the work bid for in accordance with the terms of and within the time provided for in the contract, and pursuant to the plans and specifications for the work on file in the district office; 2.    That the contractor will pay for all labor and material used in that work; and

3.    That in case of a default on the part of the bidder or contractor in the performance of the work as provided in the contract, the sum named in the bond must be taken and held to cover the amount necessary to compensate the district for the correction, repair, or replacement caused by the default, and that the full amount may be recovered from the bidder and the bidder’s sureties in an action by the district against them on the bond only in the event of a complete failure of performance on the part of the contractor. Nothing in this section may be construed to prevent the district from receiving the amount, not in excess of the amount of the bond, necessary to compensate the district for correction, repair, or replacement caused by default of the contractor which does not constitute complete failure of performance by the contractor.