Bid Bonds

[KRG9729]

We are a young electrical contracting company looking to grow our business.
We currently subscribe to Mcgraw Hill Dodge Reports and find that the majority of the project require bid bonds, payment bonds etc. I'm looking for real world advice pertaining to costs, how the whole system operates, value (is it worth it) and any other info from people that have knowledge on the subject.

 

[Curtis4President]

I have had to deal with these bid bonds, mostly on large residential projects we do. Its different everywhere, but from what i can tell its to let them know your a serious contractor bidding the work. good luck

 

[Rewire]

We use CNA surety for bonds we have our insurance agent do the paper work price will vary with bond amount.We have a $2500.00 permit bond filled with the city that just costs 100.00 a year

 

[tlaidman]

In order to get a bond for a large job the insurance company requires financial information on your company. If you do not meet their requirments they will not issue the bond. They will also set a limit on the total value of bonds they issue to you.

 

[ITO]

You really should talk to your insurance agent about this, I use a company that only does bonds for construction.

A bid bond is SOP for government jobs, they are pretty cheap and basically guaranty you wont pull your bid after you get the job, so if you bid it, you have to stand behind your price or they call your bond. The few I get each year run about $250 each.

A performance bond is a lot worse, they are priced on a percentage of the contract total and to get one you have to put up your business, bank accounts and personal assets as collateral and if your bond gets called, you could potentially lose everything, and if you do somehow stay in business you can forget ever getting another bond.

 

[KRG9729]

Thank you for the replies. Upon further researching, we realize there is a lot involved, and will work towards getting there. Thank you again for the info.