(1) As required by chapter 58, Laws of 1989, the bond and/or alternate form(s) of security for a contract for construction, maintenance or repair of a marine vessel by the Washington state department of transportation (hereafter "contract"), shall be in an amount adequate to protect one hundred percent of the state's exposure to loss on such contract. The contractor shall provide either:

(a) An executed contract bond, as described in RCW 39.08.010, in the amount of one hundred percent of the state's exposure to loss and in the form required in the bid specifications; or

(b) A combination of security, totaling one hundred percent of the state's exposure to loss, consisting of:

(i) An executed payment bond in the amount of the state's payment exposure (see WAC 468-320-030) as stated in the bid specifications, which is adequate to fully protect the state against claims for work done by laborers, mechanics, subcontractors, materialmen and all persons who supply such person or persons, or subcontractors, with provisions and supplies for the carrying on of such work, when such persons have not been paid by the contractor, and the state has paid for such work; and

(ii) An executed contract bond and/or alternate form(s) of security totaling one hundred percent of the state's performance exposure (see WAC 468-320-030) as provided herein; or

(c) An executed contract bond and/or alternate form(s) of security totaling one hundred percent of the state's performance exposure, if the state, in performing the analysis described in WAC 468-320-030, determines that contract payment procedures completely eliminate its payment exposure (see WAC 468-320-030), and the state so provides in the bid specifications.

(2) Subject to the warranty coverage requirements of WAC 468-320-060 and 468-320-070, such bond and/or alternate form(s) of security shall remain in effect from the date of contract execution until the state has accepted the contract work, the lien claim period has passed, any liens filed under chapter 60.28 RCW have been settled, and all releases from other state of Washington agencies have been received.