Most often, contracts are awarded through a solicitation procedure where eligible companies and individuals can bid on services, construction projects or goods. The process can include completion of a bid bond form and an application to a vendor system.
Contract Bonds are for the benefit of the "obligee," who is usually a federal government agency, a local municipality, county government, university or even a private entity. The process generally begins with a bidding process, and when a contractor is awarded the contract, a contract bond or payment and/or performance bond (such as for an ODot contract) may be required.
There are several categories of contract bonds which include:
Supply Bond: Guarantees that a contracted company will supply the goods or materials within a specific time period as outlined in the contract.
Performance Bond: Guarantees the contractor will perform the duties and obligations in the contract.
Payment Bond: Guarantees payment to subcontractors, suppliers and laborers working on a contract project.
Maintenance Bond: Guarantees material workmanship for a certain time period after a project is completed.
Bid Bond: Ensures that the surety pre-qualifies the contractor bidding on the project. The bond is a confirmation that if the contractor is the low bidder, the surety can issue the performance and payment bonds.
The Small Business Administration has a Bond Guarantee Program helps small or minority business contractors bid on projects.
SuretyGroup.com can often write Bid Bonds at no cost to you. Contact our Surety Bond Specialists to see if you qualify.
The premium that you pay for an Oklahoma contract bond varies and is dependent on business and personal financial statements, 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