There shall be required, in connection with all contracts mentioned in ORS § 381.275 and involving the employment of labor and materials, a satisfactory bond in a sum not less than 50 percent of the total amount of the contract. The bond:

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(1) Shall be conditioned upon the faithful performance of the contract.

(2) Shall contain a condition that the contractor shall promptly, as due, make payments to all persons supplying the contractor, or the subcontractors, labor and materials of the contractor for the performance of the work, and that such contractor shall pay all contributions or amounts due to the State Industrial Accident Fund from such contractor or subcontractors of the contractor incurred in the performance of the contract.

(3) May contain such other conditions or provisions as the Oregon authority performing the work or the lawful constituted authority of the adjoining state may require.