Contracts are generally done through a solicitation procedure where an individual or companies 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 necessary requirements.
Contract Bonds are often required by local municipalities, federal government agencies, 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 a NYSDot contract or AIA contract) may be required.
There are several types of contract bonds which include:
Supply Bond: Guarantees that the company will supply goods within a specific time frame as outlined in the contract.
Bid Bond: Ensures that the surety prequalifies the contractor bidding on a project. The bond confirms that if the contractor is the low bidder, the surety will issue the performance and/ or payment bonds.
Performance Bond: Guarantees the contractor will perform the duties and terms listed in the contract, including finishing the project on time, staying within budget and other terms within the contract.
Payment Bond: Guarantees that payments are made to subcontractors, suppliers and laborers working on a contract project.
Maintenance Bond: Guarantees for a set period of time, material workmanship after a project is completed.
Proposal Guarantee Bond: Another term for Bid Bond
The Small Business Administration has a Bond Guarantee Program to help small contractors bid on projects.
The premium that you pay for a New York contract bond varies and is dependent on business and personal financials, scope of work, experience, the amount of the project, work on hand, and other conditions.
Contact our Surety Bond Specialists today at:
Hours: 8:00-5:00 CST, Monday through Friday