IPVMU Certified / IPVM Admin | 02/11/15 08:38pm
As an integrator, project bonding was common.
For background, there were two major types of bonds required by the projects we bid:
1) Bid Bond: This is 'quote insurance' so if you win low bid but then decide you don't want the job, the customer (bid solicitor) files a claim against your bond and then picks the next lowest bidder. This Bond guarantees they still get pay the 'low number' no matter who actually does the job, because the bond pays the difference.
2) Performance Bond: An even stronger type, this essentially is insurance that the bidder will successfully finish their work. If they start on a $5M job, but only completes $2M of it (ie: abandon the project, go out of business, welch on a deal, etc), this Bond pays the difference to the customer so they can finish the job or correct bad work.
If you handle bid responses, can you give feedback on how they typically are used?
Which bond type do you deal with, and how much money are they typically written for? Have you ever seen a bond used?