Category: Construction Bond

Predicting Asphalt Pricing in Construction: The New App

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. The Problem One of the most difficult aspects of running a construction contracting business is estimating costs with enough accuracy to submit a winning bid that provides a comfortable profit margin. The challenge is that the prices of building materials are dynamic, often changing in ways that are difficult to predict. The price of asphalt is one such moving target. It’s easy enough to figure out how much the asphalt for a certain project will cost at the time a bid is submitted. But months can go by between the time a winning bidder is chosen and the time the project breaks ground. And during those intervening months, the price the contractor must pay for asphalt may have changed significantly. The Solution One person with more than 30 years of experience in highway and heavy construction decided to do something to make it easier to predict the price of asphalt. Brian Lawrence recognized the inherent difficulty of predicting what...

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The Growing Need for ESG Reporting in Construction

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. What is ESG? ESG stands for “environmental, social, and governance,” specifically corporate governance. The abbreviation refers to the standards that enable organizations of all kinds to measure and track progress toward ESG-related internal and external initiatives, such as net-zero carbon goals. Today, ESG standards are most commonly used by investors looking for socially conscious companies to invest in. ESG standards help them determine a company’s: Commitment to safeguarding the environment and preserving the natural world Consideration of people and their interdependencies, including treatment of employees, management of supplier relationships, and impact on the communities within which they operate Logistics and process for operating the business, such as leadership practices, executive compensation, financial transparency, and shareholder rights Taken together, these factors reflect a company’s commitment to sustainability and accountability, which are growing concerns for all organizations, including those in the construction industry. Why Is ESG an Issue in Construction? Project owners, investors, lenders, developers, and building contractors all have good...

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What Contractors Need to Do to Bid on Larger Projects

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. Are You Ready to Make the Move? To land bigger projects, you have to get bigger. That’s a simplistic way to say that you must demonstrate the capacity to successfully execute any project you bid on. If you’re hoping to grow your business by winning bids on bigger jobs, you’ll need to prove that you have sufficient capital, equipment, workers, construction industry experience, administrative and management talent, credit, bonding capacity, and whatever else it will take to convince project owners that you have what it takes to run with the big dogs. You’ll also need to have subcontractors and suppliers with the capacity to meet your needs. If the ones you’ve been working with can’t scale up to support you on larger projects, you may have to expand your network. Cash Flow Considerations The bigger the project, the more important it is to be able to estimate and track costs accurately. That can be significantly more difficult for larger...

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How Emerging Contractors Can Master the Bidding Process

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. The Procurement Process Different project owners go about hiring contractors in different ways. The federal process is formal and highly regulated to ensure that it is fair for all parties while minimizing the risk to the government. The same is generally true of the process used to hire contractors to execute state-funded and municipal-funded public works projects. New contractors need to thoroughly understand the process to be used for a particular project before preparing and submitting a bid. All of the time, effort, and money that goes into preparing a bid is wasted if the contractor is disqualified for not following the correct process. Bid Solicitations Not all bids are advertised publicly for open bidding by any contractor. While government-funded projects typically are, some project owners, especially private ones, only advertise bids to contractors who previously went through a vetting process to be on a list of prequalified bidders. Open bidding, also known as open tendering, is an “equal...

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Advances of Technology in the Bidding Process for Procurement

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. The Procurement Process In the business world, organizations typically refer to the process through which they acquire goods and services or “purchasing.” Government agencies refer to the process through which they obtain what they need, from aircraft to paper clips, as “procurement.” Selecting a contractor to carry out a government-funded construction process falls into the procurement category. Government procurement at the federal level is carried out according to well-defined procedures and is highly regulated to ensure that it is fair for all parties while minimizing the risk to the government. The same is generally true of the process used to hire contractors to execute state-funded and municipal-funded public works projects. New contractors need to thoroughly understand the process to be used for a particular project before preparing and submitting a bid. All of the time, effort, and money that goes into preparing a bid is wasted if the contractor is disqualified for not following the correct procedures or providing...

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IIJA Funding and Cyber Security Risks in Construction

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. The Threat of Cyber Attack Cybersecurity experts have warned us for several years of the threat that cyber attacks pose to critical infrastructure and those who rely on it. Water supplies, electrical grids, banking, and communication systems are particularly vulnerable to disruption through cyber attacks. Sensitive personal and corporate information can be acquired through data breaches and sold, held for ransom, or used for other nefarious purposes. The construction industry is far from immune to cyber attacks. In 2021, construction was the third most frequently targeted industry as far as ransomware is concerned, accounting for 13.2% of all ransomware attacks in North America. It’s a favored target because of a lack of awareness and inadequate cybersecurity measures. One study found 74% of businesses in the construction industry are unprepared to respond to a cyber attack, despite the abundance of sensitive data and financial information they accumulate. And as the use of artificial intelligence and degree of connectivity in construction...

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Bridge Formula Program Set to Improve Infrastructure in the U.S.

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. What is the Bridge Formula Program? The Bridge Formula Plan is another name for the Bridge Replacement, Rehabilitation, Preservation, Protection, and Construction Program created by the passage of the Infrastructure Investment and Job Acts (IIJA), better known as the Bipartisan Infrastructure Law. The Bridge Formula Program establishes rules and guidelines for allocating the billions of dollars earmarked for the repair, replacement, preservation, protection, and construction of highway bridges throughout the United States and Puerto Rico. Described by Transportation Secretary Buttigieg as the “single largest dedicated bridge investment since the construction of the interstate highway system,” the total amount to be distributed over five years to states, Washington D.C., and Puerto Rico is $26.5 billion with another $825 million going to Tribal transportation facilities. What Bridge Projects Will Be Funded? The Bridge Formula Program funds repairs and upgrades to highway bridges as well as “off-system” bridges. These typically are owned by county, city, town, or other local government entities and...

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Subdivision Bonds for Developers: A Guide

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. What Are Subdivision Bonds? A subdivision bond, also called a plat bond, developer bond, or completion bond, is a specialized type of performance bond guaranteeing that certain improvements will be made in a subdivision. Such improvements include streets, sidewalks, streetlights, curbs, gutters, sewers, water mains, fire hydrants, and more—anything considered to be public infrastructure. A subdivision bond guarantees these improvements will be completed and tied in with public infrastructure according to municipal code. The bond gives the municipal authority or other party requiring the bond (the “obligee”) a way to recover monetary damages from the developer (the bond’s “principal”) if the subdivision work is not completed satisfactorily. Who Needs a Subdivision Bond and Why? Developers, not contractors, are required to purchase subdivision bonds. A subdivision bond is needed when a developer divides a piece of land to build homes for individual sale. With a subdivision bond in place, the developer can go ahead and sell individual lots or homes...

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Top Women in Construction in 2023

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. Women in Construction Today As of October 2022, the Bureau of Labor Statistics reported that 14% of the 7.7 million people working in the U.S. construction industry were female. The number of women in construction is increasing every year. As the construction labor pool continues to shrink with the aging of the construction workforce and the number of young people entering the trades declines, employers increasingly are hiring female candidates. And more women are launching their own construction businesses, though relatively few of them have annual revenues in excess of $500,000. Construction Champions Clearly, there is still plenty of room for growth for women in construction. Women with some construction experience are a valuable resource for bringing more women into the industry and helping them advance in their construction careers. Every year, Construction Dive selects from hundreds of nominees the women doing the most to elevate the industry and make it an attractive employment option for women. These are...

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Guide to Commercial Construction Loans

Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs. Purpose of Commercial Construction Loans Few project owners can put up all of the capital to pay for a commercial building project without borrowing from a bank or other lender. There may be several different sources of funds, different layers in the “capital stack,” that go into financing a commercial building project—often a combination of equity and debt. While certain stakeholders and investors contribute equity, our concern here is with the commercial construction loans that constitute the debt portion of a project’s financing. A commercial construction loan is a business loan obtained by a project owner to finance the construction or renovation of a commercial structure. Sources of Commercial Construction Loans Up to $5 million in construction financing can be obtained through one of the Small Business Administration’s commercial construction loan programs: CDC/504 loans or SBA 7(a) loans. Many project owners prefer to finance construction with a commercial construction loan from a bank they have an established relationship with. Even...

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