Maine Bid Bonds
Surety Bond Professionals is a family owned and operated bonding agency with over 75 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your bid bond needs.
What Are Maine Bid Bonds?
Maine bid bonds provide important financial protection for both public and private construction project owners by guaranteeing that the bidding contractor (known as the bid bond’s “principal”):
- Has submitted a bid that is accurate and realistic,
- Can furnish the necessary performance and payment bonds if chosen as the winning bidder, and
- Will accept the job and enter into a contract with the government contracting authority or private project owner (the bond’s “obligee”).
The principal is legally obligated to compensate the obligee for any failure to live up to that guarantee.
Who Needs Them?
Most government contracting authorities in Maine will require contractors vying for a project through competitive bidding to furnish bid security, typically in an amount equal to five to ten percent of the estimated project value. While other forms of security, such as escrowed cash or an irrevocable letter of credit, most contractors prefer not to tie up their cash or credit and purchase a bid bond for much less.
Private project owners of larger construction projects often require bid bonds as financial protection for themselves and any investors.
How Do Maine Bid Bonds Work?
The bond’s guarantor (the surety) is the third party to any Maine bid bond. Although the principal is legally obligated to pay a valid claim by the obligee, the surety guarantees payment. To execute that guarantee, the surety will pay the claimant directly, creating a debt the principal must then repay according to the surety’s credit terms. Failure to do so typically results in the surety taking legal action to recover the debt.
How Much Do They Cost?
When bidding on construction projects in Maine, it is important to consider the cost of bid bonds. Because of this, Surety Bond Professionals provides its bid bonds at no cost to you, on the understanding that you will use our surety to get the Performance and Payment (P&P) bonds required to start the building project.
The obligee, or project owner, determines the necessary bond amount, which is normally fixed at 5% or 10% of the project's total bid price. The intricacy and scale of the project determine how much bonds cost in Iowa. The contractor's personal credit history is the main factor used to evaluate smaller contracts and organizations. Bigger projects could require a more thorough assessment that takes into account variables including the project's location, the contractor's creditworthiness overall, and their financial health, all of which have an impact on the bond's ultimate cost.
Call Us Today
Our surety bond professionals will help you grow your revenue by maximizing your surety capacity. Call us today!