Municipal and other government construction projects are not only profitable for you but they are integral to your business growth. Not every construction company can bid on these projects since there are so many requirements you need to meet in order to even qualify to put in a bid. One of these requirements are contractor bonds. They are required for all public construction in America and they are to ensure that there are only serious bidders that are vying for a project. If you want to learn how to win municipal construction projects you first need to understand contractor bonds and how they work.
Protection Under the Law
When contracts are awarded to private firms like yours, the municipal government wants to ensure that the project doesn’t end up a failure and even governments don’t have bottomless pockets. They want to make sure that you actually have the resources to complete the project and you don’t abandon the project half way through. The taxpayer don’t want to assume extra costs nor do they want to be stuck with half-finished projects. They also do not want City Hall filled with subcontractors who weren’t paid for their services, bonds protect everyone from that happening.
It was way back in 1894 that Congress first authorized the use of a security bond to guarantee projects would be completed. It wasn’t until 1935 that payment bonds along with performance bonds were required in order to be awarded any contract in the public sector. This was to make sure that everyone including the laborers, project owner and suppliers were protected in case the contractor failed.
Securing a Bond
In order to get contractor bonds for your company there are some things that you need to be aware of, such as the terms of the municipal project and what bonds are required for that project. Bonds are not free either, but they are an investment in your business and you will see a flat fee of $100 per contract. You can check on the website for the details of the project and proof of license, insurance and a bond will be required when you submit your application. If you are unsure of which bonds you need you can check with your insurance agent they are familiar with the process and will be able to help you.
Winning a municipal contract gets you noticed not only by the city and for future upcoming contacts but you also build a reputation with the local business community as someone who gets things done.