Public Contract Code § 20541

If any bidder to whom a contract is awarded fails to enter into the contract and execute the required bonds, the board of directors shall declare the check accompanying the bid of such bidder to be forfeited. Upon cashing the check the proceeds shall be placed to the credit of the construction fund of the district. The board of directors may thereupon award the contract to the next lowest responsible and acceptable bidder, or may call for new bids.