WHAT IS A BID BOND & WHAT DOES A BID BOND DO?
This keeps you as the contractor from increasing the bid on a project after entering into a contract with the project owner (obligee). A bid bond gives the project owner the peace of mind that the low-bidding contractor will adhere to the contract price quoted in the winning bid.
This is why a very important aspect of getting the bonding you need is evaluating not only the contractor's experience but also key team members like Project managers and estimators.
Bid bonds also contain contract language that the contractor will secure all necessary performance and payment required for the project This simply guarantees your work and protects the project owner.
The bid bond is only 5% of the total contract. Why am I being evaluated for a bond the size of the entire contract?
The bid bond is both a percentage of contract security and evidence of prequalification for the ultimate contract value. Thus, consideration of the full contract amount on bid day is necessary at the same time the bid bond is being considered. If the contractor is deemed qualified to perform the contract, the bid bond is issued. If the contractor is deemed unqualified to perform the work, the bid bond will not be approved, notwithstanding that the bid bond is only a small percentage of the contract amount.
What is the cost of a bid bond?
Unlike other agencies, we do not charge for bid bonds. Once your bond line is established with one of our 70+ sureties we provide free bid bonds at no cost. We will also supply you with a letter of bondability also sometimes referred to as a good guy letter at no cost.
How do I get a bid bond?
Often a contractor new to bonding will do the leg work on the bid and worry about setting up their bond line at the last minute. Considering the time and money spent on pursuing a project can be costly we recommend being proactive and having a clear understanding of what your single and aggregate bond program is. In any event depending on how quickly you can produce the needed items we have turned around bonds in as little as a few hours. We are dedicated to finding the right partner to match your company and given the proper time to present you to the right surety market can also benefit you on your rate. To learn what documents are needed CLICK HERE
NIELSON HOOVER AND COMPANY
220 CONGRESS PARK DRIVE, SUITE 100 DELRAY BEACH, FLORIDA 334455