(1)    Contracts; how let; exception for donated materials and labor. All public construction, the estimated cost of which exceeds $25,000, shall be let by contract to the lowest responsible bidder; all other public construction shall be let as the council may direct. If the estimated cost of any public construction exceeds $5,000 but is not greater than $25,000, the board of public works shall give a class 1 notice, under ch. 985, of the proposed construction before the contract for the construction is executed. This provision does not apply to public construction if the materials for such a project are donated or if the labor for such a project is provided by volunteers. The council may also by a vote of three-fourths of all the members-elect provide by ordinance that any class of public construction or any part thereof may be done directly by the city without submitting the same for bids.

   (1a)   Escalator clauses. Contracts may include escalator clauses providing for additional charges for labor and materials if as a result of general inflation the rates and prices of the same to the contractor increase during performance of the contract. Such escalator provision shall be applicable to all bidders and shall not exceed 15 percent of the amount of the firm bid nor the amount of the increase paid by the contractor. Each bid on a contract that is to include an escalator provision shall be accompanied by a schedule enumerating the estimated rates and prices of items of labor and materials used in arriving at the bid. Only as to such items as are enumerated shall an increased charge be allowed the contractor.

   (1b)   Exception as to public emergency. The provisions of sub. (1) and s. 281.41 are not mandatory for the repair and reconstruction of public facilities when damage or threatened damage thereto creates an emergency, as determined by resolution of the board of public works or board of public utility commissioners, in which the public health or welfare of the city is endangered. Whenever the city council determines by majority vote at a regular or special meeting that an emergency no longer exists, this subsection no longer applies.

   (1c)   Increased quantity clauses. Contracts may include clauses providing for increasing the quantity of construction required in the original contract by an amount not to exceed 15 percent of the original contract price.

   (1d)   Limitation on highway work performed by a county. Notwithstanding ss. 66.0131, 66.0301, and 83.035, a city having a population of 5,000 or more may not have a highway improvement project performed by a county workforce except as provided under s. 86.31 (2) (b).

   (1e)   Donated improvement. Subsection (1) does not apply to the construction by a private person of an improvement that is donated to the city after the completion of construction.

   (2)   Plans; contract; bond. When the work is required or directed to be let to the lowest responsible bidder, the board of public works shall prepare plans and specifications for the same, containing a description of the work, the materials to be used and such other matters as will give an intelligent idea of the work required and file the same with the city clerk for the inspection of bidders, and shall also prepare a form of contract and bond with sureties required, and furnish a copy of the same to all persons desiring to bid on the work.

   (3)   Advertisement for bids. After the plans, specifications and form of contract have been prepared, the board of public works shall advertise for proposals for doing such work by publishing a class 2 notice, under ch. 985. No bid shall be received unless accompanied by a certified check or a bid bond equal to at least 5 percent but not more than 10 percent of the bid payable to the city as a guaranty that if the bid is accepted the bidder will execute and file the proper contract and bond within the time limited by the city. If the successful bidder so files the contract and bond, upon the execution of the contract by the city the check shall be returned. In case the successful bidder fails to file such contract and bond the amount of the check or bid bond shall be forfeited to the city as liquidated damages. The notice published shall inform bidders of this requirement.

   (4)   Sureties, justification. The sureties shall justify as to their responsibility and by their several affidavits show that they are worth in the aggregate at least the amount mentioned in the contract in property not by law exempt from execution. A certified check in amount equal to 5 percent of the bid, and a provision in the contract for the retention by the city of 20 percent of the estimates made from time to time may be accepted in place of sureties.

   (4m)   Substantial compliance. If any certified check or bid bond is in substantial compliance with the minimum guaranty requirements of subs. (3) or (4), the letting authority may, in its discretion, accept such check or bid bond and allow such bidder 30 days to furnish such additional guaranty as may be required by said authority. Substantial compliance hereunder may be found if said check or bond is insufficient by not more than one-fourth of one percent of the bid.

   (5)   Rejection of bids; performance of work by city.

      (b)    If the council finds that any of the bids are fraudulent, collusive, excessive, or against the best interests of the city, it may, by resolution adopted by two-thirds of its members, reject any bids received and order the work done directly by the city under the supervision of the board of public works.

      (c)    If a city performs any work under par. (b), it may secure all necessary materials to perform the work.

      (d)    The city shall collect the cost of all work performed under par. (b) in the same manner as if done by any other person under contract with the city and may, subject to par. (e), defray such costs by special assessment.

      (e)    If the city imposes a special assessment under par. (d), it may not assess against any property an amount that is greater than would have been assessed against the property had the lowest bid received under this section been accepted. The city shall bear any costs in excess of that bid.

   (6)   Incompetent bidders. Whenever any bidder shall be, in the judgment of said board, incompetent or otherwise unreliable for the performance of the work on which the bidder bids, the board shall report to the council a schedule of all the bids for such work, together with a recommendation to accept the bid of the lowest responsible bidder, with their reasons; and thereupon the council may direct said board either to let the work to such competent and reliable bidder or to readvertise the same; and the failure to let such contract to the lowest bidder in compliance with this provision shall not invalidate such contract or any special assessment made to pay the liability incurred thereunder.

   (7)   Patented material or process. Any public work, whether chargeable in whole or in part to the city, or to any lot or lots or parcels of land therein, may be done by the use of a patented article, materials or process, in whole or in part, or in combination with articles, materials, or processes not patented, when the city shall have obtained from the owner of the patented article, materials or process, before advertising for bids for such work, an agreement to furnish to any contractor, desiring to bid upon such work as a whole, the right to use the patented article, materials and processes in the construction of said work, and also to furnish to any contractor the patented article itself upon the payment of what the authorities of said city charged with the duty of letting a contract for such public work shall determine to be a reasonable price therefor, which price shall be publicly stated and furnished upon application to any contractor desiring to bid on said work.

   (8)   Alternative plans and specifications. Different plans and specifications for any public work may be prepared by the proper authorities requiring the use of different kinds of materials, whether patented or not, thereby bringing one kind of article, material or process in competition with one or more other kinds of articles, materials or processes designed to accomplish the same general purpose, and bids received for each such kind of article, material or process, and thereafter a contract let for one kind of article, material or process; provided, that before any contract is let all the bids received shall be opened, and considered before the kind of article or process to be used in such work shall be decided upon by the proper city authorities, and thereupon the proper city authorities shall first determine which kind of article, material or process shall be used in the work, and the contract shall be let to the lowest responsible bidder for the kind of article, material or process so selected for use in the proposed public work.

   (9)   Guaranty.

      (a)    Any contract for doing public work may contain a provision requiring the contractor to keep the work done under the contract in good order or repair for not to exceed 5 years.

      (b)    The inclusion in the contract of a provision described in par. (a) shall not invalidate any special assessment or certificate thereof or tax certificate based thereon.

   (10)   Estimates; deposit; default; completion. As the work progresses under any contract for the performance of which a surety bond has been furnished, s. 66.0901 (9) (b) shall apply. All contracts shall contain a provision authorizing such board, in case the work under any contract is defaulted or not completed within the time required, to take charge of or authorize the surety to take charge of the work and finish it at the expense of the contractor and the sureties, and to apply the amounts retained from estimates to the completion of the work. In no case shall the 5 percent deposit described in sub. (4) be returned to a successful bidder until the contract is performed; but it, together with the retained amounts, shall be used in whole or in part to complete the work. Any amount remaining from the deposit or from retained estimates after the completion of a contract shall be paid to the contractor.

   (11)   Street obstruction. All contractors doing any work which shall in any manner obstruct the streets or sidewalks shall put up and maintain barriers conforming to the standards for traffic control devices in the manual adopted by the department of transportation under s. 84.02 (4) (e) to prevent accidents, and be liable for all damages caused by failure so to do. All contracts shall contain a provision covering this liability, and also a provision making the contractor liable for all damages caused by the negligent digging up of streets, alleys or public grounds, or which may result from the contractor’s carelessness in the prosecution of such work.

   (12)   Contracts; how executed. All contracts shall be signed by the mayor and clerk, unless otherwise provided by resolution or ordinance, and approved as to form by the city attorney. No contract shall be executed on the part of the city until the comptroller shall have countersigned the same and made an endorsement thereon showing that sufficient funds are in the treasury to meet the expense thereof, or that provision has been made to pay the liability that will accrue thereunder.

   (14)   Report to council of nonbid contracts.

      (b)    Upon the completion of the work described in par. (a), the board of public works shall make a complete report of the work to the council, stating in detail the items of cost and the total cost of doing the work. The city clerk shall publish the report as a part of the proceedings of the council.

      (c)    Any member of the board of public works who fails to comply with the provisions of this subsection shall be liable to a forfeiture of $50 to be recovered as in the case of other penalties.