A bid bond is a surety's guarantee, submitted with a bid, that the bidder will sign the contract and furnish the required performance and payment bonds if awarded; if the bidder backs out, the surety pays the government the difference up to the bond amount.
A performance bond guarantees the contractor will complete the contract according to its terms; a payment bond guarantees that subcontractors, laborers and suppliers will be paid. On federal construction above the Miller Act threshold both are required before work begins.
The Miller Act is the federal statute, 40 U.S.C. 3131 to 3134, that requires performance and payment bonds on federal construction contracts above a dollar threshold and gives unpaid subcontractors and suppliers the right to sue on the payment bond.
Your performance bond rate will drop once you have a few jobs done, especially if they are similar in size and scope to the city park project. The...
I'm an electrical contractor, NAICS 238210, with ten years of private sector experience, a good crew, and all the equipment I need. I'm trying to get...