Category: Business Service Bond

Maximizing Bonding Capacity as a Federal Contractor

Fast-Track Programs are suitable for small, infrequent, or one-off construction performance and payment bonds under $500,000. This simple application process only requires the applicant’s credit, with the surety company approving within 24 hours. Bonds exceeding $500,000, however, will need larger or Standard Bond Programs. This involves more detailed financial information from the applicant so the surety can develop a clear picture of the contractor’s stability. This could include a financial statement that is internally prepared for jobs up to $2MM or a CPA Reviewed Statement for jobs more than $2-3MM. The surety must be satisfied that the contractor can meet both current and future obligations. The reputation of the contractor will also be evaluated along with the contractor’s previous, the size of work staff, equipment, and the processes in place that are necessary to perform the work. Unlike a Fast-Track Program, a Standard Program will enable contractors to take on larger government projects that require construction bonds, bid bonds, payment and performance bonds, or supply bonds. Under the Miller Act, construction bonds are a requirement for contractors providing services on federal projects over $100,000. Similarly, each state has its own “Little Miller Act” specifying the contract amount above which construction...

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By Surety Bond Professionals

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Key Action Items to Achieve an Effective Bonding Program

With the new $1.2 Trillion Infrastructure Bill in Manufacturing, Construction, and Energy passed, many contractors are looking for ways to diversify their backlog with government contracts so their businesses can remain operational during an economic recession and/or another potential industry slowdown. A major attraction to public work is that government construction projects are always available and the fact that payment is almost guaranteed. The Federal Prompt Payment Act protects all tiers of contractors, subcontractors, and suppliers from late payments on federally funded construction projects. Though it would be naïve to suggest that payment is made 100% on time, the projects are ALWAYS 100% financed. There is no fear of banks cutting off financing or owners running out of money. One of the requirements for bidding and performing public work is surety bonding. Under the Miller Act, construction bonds are required for contractors performing on federal projects over $100,000. Similarly, every state has its own “Little Miller Act” which specifies the contract amount above which construction bonds are required. The different types of construction bonds that will be required are: Bid Bonds, Performance Bonds and Payment Bonds. To be successful in the public arena, the single most important thing a...

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By Surety Bond Professionals

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Business Service Bond – Apply Now

The U.S. service sector is a growing industry and has expanded over the last decade.  A service industry includes any form of outsourcing, such as human resources, IT, leadership development, home cleaning services, in home personal care, etc.  If a company outsources, it is important that they protect themselves from any form of negligence or fraud. Benefits of Bonding So what are the benefits of requiring a bond for a business that you work with?  The first is to protect yourself from liability due to an employee committing fraud when dealing with a customer.  Another reason, is that you give your customers added assurance by letting them know that your employees or the businesses that you work with are bonded, which could potentially bring in more business.  If a business is taking the extra steps to protect their customers, it helps to build a positive reputation.  In comparison to a standard fidelity bond, a business services bond protects for on-premises incidences. Summary: The service sector is growing exponentially.  Therefore, many businesses are  hiring additional outside employees to continue providing their business’ services to their customers. A business services bond provides protection against any sort of fraudulent or negligent work by...

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