What is a Bid Bond in Washington DC?
A bid bond is a type of surety bond, which guarantees that the bidder will take the job and complete the contract according to its terms. The bid bond provides assurance to the project owner that the bidder has the expertise and capability to finish the job once you are selected after the bidding process. The simple reason is that you need one in order to get the job. However, the larger question is why are more owners/developers requiring a bid bond? The simple answer is risk. Given the uncertainty of the marketplace, which includes long-term contractors closing shop, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable complete the work. Accordingly, they require a some protection.
Just fill out our bond application here and email it to [email protected] - click here to get our Washington DC Bid Bond Application
A bid bond is issued as part of a bid by a surety bond company to the project owner. The owner is then assures that the winning bidder will take on the contract under the terms at which they bid.
Most bid bonds contain a bid percentage (usually five (5%) or ten (10%) percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Washington DC?
Swiftbonds does not charge for a surety bid bond (with two exceptions, see below). The reason that we don't charge for a bid bond is that we will charge for the performance bond if you win the contract. The cost of a performance bond can vary widely depending on the amount of coverage that is required (see below).
Two exceptions for bid bond charges:
1) We do charge for Overnight fees
2) We will charge you if there is NOT going to be a performance bond.
How much do bonds cost in DC?
Bond prices fluctuate based on the job size (that is, it's based on the cost of the underlying contract). The cost of a bond is estimated through a couple of back-of-the-envelope calculations. In general, the cost is approximately three percent (3%) for jobs under $800,000 and then the percentage is lower as the contract amount increases. We work diligently to find the lowest premiums possible in the state of Washington DC. Please call us today at (913) 286-6501. We'll find you the very best rate possible for your maintenance bond or completion bond. Things that can affect this pricing are the perceived risk of the job, the financial position of the entity being bonded, plus other factors.
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These rates are for Merit clients, Standard rates are higher
How do I get a Bid Bond in Washington DC?
We make it easy to get a contract bid bond. Just click here to get our Washington DC Bid Bond Application. Fill it out and then email it and the Washington DC bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at (913) 286-6501. We thoroughly review each and every application for bid and P&P bonds and then submit it to the surety that we believe will provide the best bid and performance bond for your contract. We have a very high success rate in getting our clients bid and performance bonds at the very best rates possible.
What is a Washington DC Bid Bond?
A bid bond is a bond that guarantees that you will accept the work if you win the contract. The bid fee (usually 5% or 10%) is a damages calculation that is paid when you win the bid, but then back out of doing the work.
Find a Bid Bond near Me
Typically, a bid bond and payment and performance bond are done together in the same contract by the surety. This way, the owner of the project is assured that the project can be completed pursuant to the terms of the contract and that it will not be liened by any contractor. This is performance security for the owner of the project.
Who Gets the Bond?
The general contractor is the entity that obtains the bond. It is for the benefit of the owner (or in the case of government contract work, the governmental entity). However, it's the general contractor that has to apply for the bond and be underwritten before the performance and payment bond is written by the surety. This is also known as bonding a business.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Step-By-Step Specifics Of Considering Bid Bonds in the District of Columbia
You will need to understand that a Surety Bid Bond is vital for anyone, but this is complex if you don't know anything about it. This is not an insurance claim as this is a kind of guarantee that the principal will effectively complete the task. You have to understand that some folks expect you to get a bond before they will consider your services since it could be considered as a kind of assurance to them. They actually need this kind of thing from you so you have to look for an insurance company which will offer this. If you really want to look at a license bond, permit bond, commercial bond and more, you have to know what it means.
An Explanation On Bid Bonds in DC
Bid Bonds will invariably be asked for by the public because it will secure them and it'll guarantee that the principal will fulfill their obligations. You are the principal so you have to get a license Surety Bid Bond to guarantee that your company will invariably stick to the laws and you must obtain a contract bond to guarantee that a public construction project will likely be completed. These are just a few examples that will offer you an idea about Bid Bonds.
This is actually made for the clients since they will likely be protected by the bond, but it may offer benefits to you as well as they would trust you in case you have this.
The Main Work Of A Surety Bid Bond in the District
Bid Bonds are a three-party agreement between the principal, the obliged and the surety company. The obliged is actually the project owner and the principal is the employer or company that will perform the work. Construction companies will always be required by the law to get Bid Bonds if they're chosen for a public project. The government will be requiring a construction company to get a host of bonds before they actually work on a specific project. The bond will guarantee that the sub-contractors and the other workers will be paid even if the contractor will default. The contractor will probably be covering the losses, but when they already reached their limit, the duty will fall to the surety company.
Applying For A Surety Bid Bond in DC
Insurance businesses usually offer Bid Bonds, but there are standalone surety businesses that usually focus on these unique products. Surety companies will absolutely be licensed by a state Department of Insurance so you should check it first before you avail. It will not be simple to apply for a bond because the applicants will need to proceed through a background checking procedure. The bond underwriters will first review you the financial history of the candidates, credit profile and other important aspects.
It implies that there's a chance that you won't be approved for a Surety Bid Bond, specifically if you have a bad credit rating.
The Cost Of A Surety Bid Bond in the District of Columbia
There is no specific cost for a Surety Bid Bond because it will depend on a number of reasons like the bond type, bond amount, where the bond will be issued, contractual risk, the credit rating of the applicant and many more.
There are a lot of bonds available right now and the cost will usually depend upon the type of bond that you are going to get. The amount of bond that you are going to get may also be an issue because you could obtain a $10,000 bond or a $25,000 bond.
In case you have a credit rating of above or near 700, you will certainly be eligible for the standard bonding market and you only have to pay a premium that is 1 to 4 percent of the Surety Bid Bond amount. If you'll get a $10,000, it will cost around $100 to $400.
Is There A Chance Of Being Denied?
There is a chance that your license and permit bond will probably be denied by the insurance companies and it would depend upon the background check that they did. If they actually believe that you're a big risk to them, they will deny your application. Credit rating can also be a deciding factor because if you actually have a bad credit rating, it will probably be hard for you to obtain a Surety Bid Bond because companies are considering you as a risk. For those who have a bad credit rating, you could still be approved, but you will have to pay an interest rate of 10 to 20 percent.
If you're going to get a Surety Bid Bond, make sure that you understand what it can provide before you decide. It won't be a simple task to be approved for this, but if you recognize how it works, you will also know if you're qualified or not.