Contracts are generally done through a solicitation process where individuals and companies can bid on goods, services or construction projects. 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 Surety Bonds are often required by private entities, universities, the federal government, local municipalities and counties. The process generally begins with a bidding process and if awarded the contract, a contract bond or payment and/or performance bond (such as for an MDot contract) may be required. There are several categories that fall under the umbrella of contract bonds which include:
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.
Proposal Guarantee Bond: Another term for Bid Bond and includes the same aspects.
Supply Bond: Guarantees that the company will supply the goods with a specific timeline as outlined in the contract.
Payment Bond: Guarantees that subcontractors, suppliers and laborers are paid.
Performance Bond: Guarantees the contractor will perform the contract, including finishing the project on time, staying within budget and other terms within the contract.
Maintenance Bond: Guarantees materials workmanship for a certain period of time after a project is completed.
The Small Business Administration has a Bond Guarantee Program to help small contractors bid on projects.
Most contractors qualify for a Bid Bond at no cost. The premium that you pay for a Maryland Contract Bond will vary and will be dependent on business and personal financial statements, scope of work, the amount of the project and other conditions.
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