(2) In case of any forfeiture, cancellation, or relinquishment of any contract to the state, the commission shall so declare and give notice once each week, for four weeks, in some newspaper of general circulation in the county in which the work is situated, and in one newspaper at the state capital in like manner and for a like period, of the forfeiture, cancellation, or relinquishment of the contract, and that upon a fixed day proposals will be received at the office of the commission for purchase of the incompleted works and for completion of the irrigation works in accordance with plans, specifications and other conditions prescribed by the commission, the time for receiving bids to be at least 60 days subsequent to the issuing of the last notice of forfeiture. The money received by the commission from sale of the partially completed works under the provisions of this section shall first be applied to the expenses incurred by the state in their forfeiture and disposal, and the surplus, if any exists, shall be paid to the original contractors with the state.