{"id":302,"date":"2023-07-15T11:51:59","date_gmt":"2023-07-15T11:51:59","guid":{"rendered":"https:\/\/blogbuiz.com\/index.php\/2023\/07\/15\/bond-secrets-160-no-more-performance-bonds\/"},"modified":"2023-07-15T11:51:59","modified_gmt":"2023-07-15T11:51:59","slug":"bond-secrets-160-no-more-performance-bonds","status":"publish","type":"post","link":"https:\/\/blogbuiz.com\/index.php\/2023\/07\/15\/bond-secrets-160-no-more-performance-bonds\/","title":{"rendered":"Bond Secrets 160: No More Performance Bonds"},"content":{"rendered":"<p>This is the Bonding Company&#8217;s worst nightmare.  In this article #160 of our Guarantee series, we&#8217;ll cover situations where you don&#8217;t need a performance or payment guarantee!  Some projects are large and federal, some are private, and all are unrelated.  here we are!<\/p>\n<p>As a point of reference, you might expect federal, state, and municipal contracts to require a performance and payment (P&#038;P) guarantee equal to the contract amount.  usually they do.  General contractors working for a private owner, such as building an office building or a residential project, may face the same requirements.  This can apply to subcontractors as well.<\/p>\n<p><u>Federal projects<\/u><\/p>\n<p>This region includes all branches of the federal government.  Examples: Army Corps of Engineers, General Services Administration, Department of Energy, etc.  Their contracts are administered according to the rules of the Federal Acquisition Regulations (FAR).<\/p>\n<p>FAR says no P&#038;P bonds are required on contracts under $150,000.<\/p>\n<p>For contracts of $150,000 or more that require a security, there are times when the bond requirement may be reduced to less than 100% or waived entirely.  These include:<\/p>\n<\/p>\n<ul>\n<li>    External contracts<\/li>\n<li>    emergency acquisitions<\/li>\n<li>    Sole Source Projects<\/li>\n<\/ul>\n<p>    If the condition of the bond <em>He is<\/em> Mandatory, the FAR lists acceptable alternatives:<\/p>\n<\/p>\n<ul>\n<li>    US government bonds (investment)<\/li>\n<li>    Certified check<\/li>\n<li>    bank transfer<\/li>\n<li>    money transfer<\/li>\n<li>    currency<\/li>\n<li>    Irrevocable letter of credit<\/li>\n<\/ul>\n<p>    Here&#8217;s another option: For contracts made in a foreign country, the government can accept a bond from a <em>Warranty not included in the T-list. <\/em>(Circular 570)<\/p>\n<p><u>Government and municipal contracts<\/u><\/p>\n<p>Bonding requirements may vary by state, but its flavor is generally similar to Federal.<\/p>\n<p><u>private contracts<\/u><\/p>\n<p>Anything goes.  In private contracts, the owner has complete discretion to determine bonding requirements\u2014including not needing a bond.  Keep in mind that the cost of the bond is added to the contract, so the owner can save some money <em>no <\/em>require bond.  They may take other precautions to protect themselves.  some examples:<\/p>\n<\/p>\n<ul>\n<li>    require retention.  This is money that is withheld from the contractor and only released when the project is fully accepted<\/li>\n<li>    Foreclosure releases may be required each month to demonstrate that suppliers and subcontractors are being paid appropriately<\/li>\n<li>    Money Control\/Trilateral Agreement &#8211; A teller is employed to handle contract funds<\/li>\n<li>    Joint checks are issued to the Contractor and the below payees &#8211; to ensure that funds reach the intended parties<\/li>\n<li>    Physical site inspections to check progress<\/li>\n<\/ul>\n<p><u>the nightmare<\/u><\/p>\n<p>In these articles we talk a lot about how contractors obtain and administer surety bonds.  But it&#8217;s interesting to note: A construction company can go on forever, doing state and federal projects\u2014and never get a bond.  it&#8217;s the truth!<\/p>\n<p>If everyone did this, it would be the worst nightmare ever.  But in fact, there are financial advantages to using P&#038;P bonds, so bonding is usually the first choice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is the Bonding Company&#8217;s worst nightmare. In this article #160 of our Guarantee series, we&#8217;ll cover situations where you don&#8217;t need a performance or payment guarantee! Some projects are large and federal, some are private, and all are unrelated. here we are! As a point of reference, you might expect federal, state, and municipal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46],"tags":[],"class_list":["post-302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bond"],"_links":{"self":[{"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/posts\/302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/comments?post=302"}],"version-history":[{"count":0,"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/posts\/302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/media\/303"}],"wp:attachment":[{"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/media?parent=302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/categories?post=302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogbuiz.com\/index.php\/wp-json\/wp\/v2\/tags?post=302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}