1. Whenever an order for improvement is made, the special road subdistrict commissioners of the subdistrict shall, in the name of the subdistrict, enter into a written contract with the lowest and best bidder, in the same manner as the letting of public works contracts by the department of transportation, 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 the time the work remains uncompleted, and the commissioners shall require the contractor to enter into a bond, to be approved by the commissioners, for the full performance of the contract, and payment for all labor and material used or employed in the performance of such contract.

2. The special road subdistrict commissioners shall advertise and let bids in the same manner as the letting of public works contracts by the department of transportation, and the contract shall in no case be let to any special road subdistrict commissioner, nor shall any special road subdistrict commissioner, directly or indirectly, have any pecuniary interest in the contract other than the performance of his official duties as required by sections 233.500 to 233.520.

3. The 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 county commission, plus ten percent, and shall not provide for payment of over 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 county treasurer for such payments.