As a contractor on the lookout for ways of getting your surety and performance bonds approved, you need to understand the process in depth. Do you know that you also have to be approved for a performance bond facility to be able to bid for, and go about the fulfillment of most government or public jobs?
As per The Performance Bond experts, there are different types of contract bonds. These can be outlined as:
- Construction Bonds offer a guarantee that the specific construction company is equipped to complete the assigned project as promised.
- Bid Bonds provide a guarantee that contractors will agree to finish the project in time and at the bid price that has been agreed upon earlier. Also, they should be in a position to meet up with all the other bond requirements in case the bid is accepted.
- Performance Bonds provide the guarantee that a contractor will complete the job and perform in line with the terms and conditions of the contract as agreed.
- Payment Bonds give the guarantee that subcontractors, laborers as well as the suppliers will get their payment, as agreed.
- Maintenance Bonds offer guarantee against all defects in the materials used or workmanship
- Permit or License Bonds offer adequate assurance to those who wish to get a permit or license under the state/province or regional/local laws.
- Material and Labor Bonds guarantee the payment of laborers and material suppliers.
Benefits Linked to Bonding for Contractors
Performance Bonds go a long way in allowing contractors to adhere to regulatory compliances and conform to the bidding requirements laid down by government as well as private projects. However, it is important to note that the surety so provided cannot be bracketed in the same space as insurance. Overall, a surety bond happens to be a financial guarantee only. By being bonded, there is an increase in the size and number of jobs that contractors get the opportunity to bid upon. Therefore, by facilitating the provision of surety bonds, rather than other forms of security such as letters of credit, contractors are able to retain their overall working capital in better ways.
To initiate the process, do get requisite information pertaining to all that is needed in the surety bond for the project undertaken by you. You may want to take a look at the tender documents to understand the bid requirements. Very soon, you will be on your way to having your bid approved for the purposes of a construction bond facility.