Contracts are generally done through a solicitation procedure where companies and individuals can bid on construction projects, services or goods. The process could include completion of a bid bond form, application to a vendor system, and other requirements.
Contract Bonds are often required by local municipalities, counties, federal agencies, 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 for a NJDot contract) may be required.
Bonds that are associated with contracts include:
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.
Supply Bond: Guarantees that the company will supply the goods within a specific time period 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.
Proposal Guarantee Bond: Another term for Bid Bond and includes the same aspects.
Maintenance Bond: Guarantees materials workmanship for a certain period of time after a project is finished.
The Small Business Administration has a Bond Guarantee Program to help small contractors bid on projects.
The premium that you pay for a New Jersey contract bond will vary and be dependent on business and personal financials, scope of work, the amount of the project, experience, and other conditions.
Contact our Surety Bond Specialists today at:
Hours: 8:00-5:00 CST, Monday through Friday