Contracts are generally done through a solicitation procedure where companies and individuals can bid on services, construction projects or goods. The process could include completion of a bid bond form, application to a vendor system, and other requirements. Below are links that provide more details to contract processes.
Contract Bonds are often required by the federal government, local municipalities, counties, universities or private entities. The process generally begins with a bidding process, and if awarded the contract, a contract bond or payment and/or performance bond (such as an IDot contract) may be required. There are several categories that fall under the umbrella of contract bonds which include:
Supply Bond: Guarantees that the company will supply the goods with a specific timeline as outlined in the contract.
Bid Bond: Ensures that the surety prequalifies the contractor bidding on the project. The bond confirms that if the contractor is the low bidder, the surety will issue the performance and payment bonds.
Performance Bond: Guarantees the contractor will perform the contract, including finishing the project on time, staying within budget and other terms within the contract.
Proposal Guarantee Bond: Another term for Bid Bond and includes the same aspects.
Payment Bond: Guarantees that subcontractors, suppliers and laborers are paid.
Maintenance Bond: Guarantees materials workmanship for a certain period of time after a project is completed.
The premium that you pay for an Illinois Contract Bond will vary and is dependent on: work on hand, business and personal financial statements, scope of work, the amount of the project and other conditions.
The Small Business Administration has a Bond Guarantee Program to help small contractors bid on projects.
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