Perf Bond and Payment/Material Bond for Design Professionals
Perf Bond and Payment/Material Bond for Design Professionals
(OP)
I posted this elsewhere, but may be more appropriate here.
Has anyone any experience with obtaining a performance bond and a payment/material bond for design services? I have typically required bonds from contractors for construction, but now I am being asked from a government agency (Maryland) to provide bonds as a design professional providing design services only.
My firm is a small civil/environmental company that has been operating for almost two years. My insurance provider indicated I would typically need 3 threes of financial statements before a bonding company would even look at supplying a bond. Any guidance/suggestions would be greatly appreciated. Thank you.
Has anyone any experience with obtaining a performance bond and a payment/material bond for design services? I have typically required bonds from contractors for construction, but now I am being asked from a government agency (Maryland) to provide bonds as a design professional providing design services only.
My firm is a small civil/environmental company that has been operating for almost two years. My insurance provider indicated I would typically need 3 threes of financial statements before a bonding company would even look at supplying a bond. Any guidance/suggestions would be greatly appreciated. Thank you.
RE: Perf Bond and Payment/Material Bond for Design Professionals
I would be interested in hearing more on this subject.
Don Phillips
http://worthingtonengineering.com
RE: Perf Bond and Payment/Material Bond for Design Professionals
Payment and performance bonds are linked and will typically cost about 2% of the gross, so it is a significant part of the profit if you don't get reimbursed. Also bonding is much harded to get these days if you are not already bonded. It is not like getting an insurance policy.
I would try to find out what is going on. Sounds like someone got moved from construction contracts to design contracts.
If sombody still wants something, a cheaper and faster answer may be an irrevocable letter of credit, generally issued for about 10% of the contract value. These are issued by your bank, and you will be charged for it also. (plus you need to have at least 10% of the contract in an account at the bank)
RE: Perf Bond and Payment/Material Bond for Design Professionals