Fractional COO and Outsourcing Firm
  • Welcome
  • About
  • Business Operations
  • Blog
  • Contact Us
  • Downloads
  • Accounting Solutions

A Journey of Innovation & Transformation

What Are the Basics of A Surety Bond?

4/26/2016

0 Comments

 
Picture
​If you do build a great experience, customers tell each other about that. Word of mouth is very powerful. – Jeff Bezos
What is a Surety Bond?

A surety bond ensures contract completion in the event of contractor default. A project owner (called an obligee) seeks a contractor (called a principal) to fulfill a contract. The contractor obtains a surety bond from a surety company. If the contractor defaults, the surety company is obligated to find another contractor to complete the contract or compensate the project owner for the financial loss incurred.
There are four types of surety bonds:
  1. Bid Bond: Ensures the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract.
  2. Payment Bond: Ensures suppliers and subcontractors are paid for work performed under the contract.
  3. Performance Bond: Ensures the contract will be completed in accordance with the terms and conditions of the contract.
  4. Ancillary Bond: Ensures requirements integral to the contract, but not directly performance related, are performed.​

When do I need a surety bond?

Any Federal construction contract valued at $150,000 or more requires a surety bond when bidding or as a condition of contract award. Most state and municipal governments as well as private entities have similar requirements. Many service contracts, and occasionally supply contracts, also require surety bonds.​
As a business owner it is important to establish your policies and procedures with key definitions to personnel understands the framework of the business.  Visit us to view our services available.
Source: SBA.gov
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

       get our Accounting & operations Tips and News in your Inbox 

    Subscribe Today

    Archives

    March 2025
    February 2025
    July 2022
    December 2019
    September 2019
    December 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    February 2018
    December 2017
    November 2017
    August 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016

    Categories

    All
    Accounting
    Accounting Education
    Accounting Solutions
    Account Reconciliations
    Business Solutions
    Entrepreneur News
    Newsletter
    Oil And Gas
    Policies & Procedures



    Author

    My mission is to offer the best accounting and operations solutions and tips for entrepreneurs and small to mid-size companies worldwide seeking to close their process gaps with actual solutions.  


      Sign up for our email newsletter

    Subscribe

    RSS Feed

we are committed to delivering unparalleled expertise

"Our team of innovative professionals use their knowledge and experience to set your business and team of professionals  up for success.  Our extensive accounting and operations skills are a start and  key tools to company growth, building team cohesiveness, establishing clear purpose and goals, and improving process  inefficiencies.  Our services are key to businesses of all sizes.  We handle providing the detail framework to your business so that you may focus on building your business.

We also additional services and support with monthly  operational and accounting task, reconciliation and training."

Contact Us

STAY CONNECTED

DREAMS & VISION IN YOUR INBOX
JOIN IN NOW
Photo from Rennett Stowe
  • Welcome
  • About
  • Business Operations
  • Blog
  • Contact Us
  • Downloads
  • Accounting Solutions