Construction Company Do’s and Dont’s of Smart Contract Bidding

Nina Conner News

Posted by Collin Belcher, AFSB, for OldRepublicSurety

This article originally was published by the National Association of Surety Bond Producers and is being republished with the express permission of NASBP.

Placing a bid on a public construction project comes with a host of risks for both contractors and public entities. A surety bond is an essential risk management tool for contract bidding that guarantees a project will be completed successfully at the lowest possible price in an effort to save public tax dollars, while verifying that a contractor can deliver on their promise.

It’s important for construction companies to take the time to understand surety bonding when placing bids. Working with an agent who is well-versed in surety bonding and together with the surety underwriter can help ensure the bid is cost-effective for the principal (the entity or company the bond is being provided for and guaranteeing the work of; i.e., the contractor) and low-risk for the obligee (the public entity doing the hiring or the general contractor hiring out subcontractors).

Here are the do’s and don’ts of bidding smarter with bonding in mind from a contract surety underwriter who is a former electrical estimator who grew up in and around the construction industry.

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