A contract surety bond is a bond that typically deals with the performance at some or all stages of a construction project. These bonds include bid bonds, performance bonds, payment bonds, maintenance bonds and subdivision bonds. Contract surety is relationship driven.
Public Works Projects
Most public works project requires Bid, Performance & Payment bonds to protect the interest of public or federal funding for that project. Any federal government construction project that exceeds $100,000 is required to have a performance bond. Most Cities, School Districts or County’s require projects over $25,000 to be bonded. It will be fully outlined in the specs prior to bidding the project.
Private Commercial Projects
Most commercial Projects do not require bonding however if a bank is involved with the construction loan then the likelihood of Performance/ Payment bonds being required substantially increases. Chances are a project owner has told you that you need a surety bond to be a contractor on their project. You should familiarize yourself with the types of bonds required & the process of obtaining them before you enter into a contract.
The first step toward establishing a relationship and getting a contract bond is to fill out an application.