On or before the fifteenth day of March in each year, the city auditor of each city within the state may at the discretion of the governing board advertise in the official newspaper once each week for two consecutive weeks for bids for the furnishing of gravel in place for gravel surfacing of highways within the city, upon a cubic yard [0.76 cubic meter] basis. The bids must be made in accordance with such specifications as to type, grade, and quality of material as specified by the city engineer and approved by the governing board and must provide for the delivery of such gravel along such streets of the city as may thereafter be designated, in such manner as may be designated in the specifications. The notice must specify that payment for such gravel will be in cash or by special assessment warrants issued against the graveling special assessment fund created by this chapter and each bid must specify the lowest rate of interest that the bidder will accept upon such warrants and that payment for such gravel will be accepted by the bidder in the manner herein provided. Each bid must be accompanied by a separate envelope containing a certified or cashier’s check in such amount as may be fixed by the governing board and the award of the contract shall be made only to such person who shall furnish good and sufficient bond for the performance thereof, in such amount as shall be fixed by the governing board at the time of calling for bids.