contractor holding his bid documents for tender date


Running a business in Texas will prove to be profitable. After all, the state is one of the friendliest for businesses, and the taxes are lower than others.

With business booming thanks to the Texas oilfields, business owners need to jump on this opportunity. Just remember that you cannot begin accepting contracts until you’ve placed a bid on those jobs.

To do that, you’ll first need to obtain a bid bond. If you’ve never worked with bonds, you need to catch up quickly. Stokes Surety Bonds can help construction companies interested in purchasing bid bonds in Texas.


Ideally, the cost of a bid bond ranges from 5% to 20%. Whereas, for smaller projects, there may be a flat fee of $100 or $200. However, many factors can either increase or decrease the costs significantly.


Texas’s construction companies will be required to work with a handful of bonds. Before the project can get underway, they will need to obtain a bid bond, and the turnaround time for bid bonds is extremely low. As such, this is a crucial step toward obtaining a contract and getting the project. As the name implies, a bid bond in construction is a type of bond required for placing a bid. A bid bond needs to be obtained before the bid is placed.

Don’t worry. The process doesn’t have to be overly complicated. And, you’ll be glad to know that you can obtain a bid bond in a matter of days. In some cases, the process can be expedited. Contacting Stokes Surety Bonds is a good way to get the assistance you need.


Bid bonds are immensely important to Texas’s construction industry. Without them, the industry would be chaotic and unregulated. Anyone would be able to place a bid on a project even if they were unable to fulfill their obligations. This is one of the best things about a bid bond. The  purpose of bid bonds is to help protect all parties. Again, the bid bond is acquired before the bid is placed. It helps to ensure that the contractor is going to stick with the initial bid.

In addition to this, the bid bond requirement greatly reduces the likelihood that the owner will have to deal with frivolous bids. Once the bid bond is purchased, the construction company is obligated to complete the job. Therefore, this also gives the owner peace of mind since the bid bond ensures that the bidder is financially sound.


Will you be required to obtain a bid bond before placing your bid? Ultimately, there is no universal answer. For some projects, you may not need a bond. However, you likely will. Most projects require bidders to obtain a bond before making their bid. In the United States, the Miller Act requires all bidders to obtain a bid bond when bidding on a federal project.

Furthermore, many private firms follow this guideline. The Miller Act has set the standard, so you should be prepared to obtain a bid bond before placing your bid. You may also need to obtain a construction surety bond when getting a permit or license. With that being said, all Texas construction companies need to know more about surety bonds.

The US surety market was valued at more than $16 billion in 2019. Suffice to say, it is growing and surety bonds will always play an important role in the industry.


The cost and rates of bid bonds will be very important for any construction company. It is vital to weigh the costs to make sure you can make a profit after the project is complete. So, how much will you be required to pay to obtain a bid bond? Ultimately, there is no set price for bid bonds. Instead, the asking price of bid bonds will vary depending on several factors. For small projects, you may pay a flat fee of $100 to $200. However, it will depend on the type of project you’re dealing with, its location, and your financial history.

On the other hand, bid bonds may be free. It depends on the circumstances and the project you’re bidding on. Once you’ve finished with the bid bond, you will need to obtain a performance bond. The cost of performance bonds could be from 1 to 3%. The costs of bonds are important and must be factored in when budgeting your next project.


When bidding on a project, you will purchase a bid bond and submit it alongside your bid. Once you complete this, you will need to wait for the company to decide which bid is best. If you’re awarded the project, you will be need to acquire a performance bond. Surety bonds are similar because they protect the project’s owner. The bid bond guarantees that you’re going to stick with your initial bid. The performance bond guarantees that the client will receive compensation if you default on your obligations.

Once you’ve submitted the performance bond, the bid bond is no longer relevant. With that being said, the bid bond will be returned to you. The bid bond is held as collateral until the client has the performance bond.


Before your Texas company can acquire a bid bond, you will need to contact a surety agency. This may be an insurance company or bank. The agency will want to make sure that you’re financially stable and capable of completing the project. Bid bonds are essential when bidding on projects that will also require payment and performance bonds. Either way, you need to start by finding a good surety agency. Once you’ve done that, you will be guided through the process of acquiring the bid bond.

It doesn’t have to be difficult. You just need to find a good agent who is willing to walk you through the process step by step. To get started, you should contact Stokes Surety Bonds. They’re eager to begin helping you today!


Surety bond costs may be expensive, but they don’t have to be outrageous. The good news is that you can take steps to minimize your cost. As a result, this is very important since every bit will help. One of the best ways to reduce your bond costs is by working hard and satisfying your customers. If you’ve had several claims filed against your company, surety agents may be hesitant to work with you. Or, they may work with you but charge higher premiums. It is crucial to satisfy your customers to avoid such problems.

Furthermore, your company successful should be successful. If your finances are poor, the surety company will consider your company a higher risk. To offset this problem, you should work hard and keep your books in order. By doing this, you can guarantee that you’ll be able to impress the surety company. That could lead to lower premiums. More importantly, you need to choose the best surety company in Texas.

Before purchasing surety bonds, you should search the industry and learn more about the surety agents serving Texas. Research these companies until you find the one that will serve you best. Need help finding a surety agent? Stokes Surety Bonds is here to aid you! Contact Stokes Surety Bonds so you can get started today.


There are no guarantees when it comes to hiring a construction contractor. But, with the help of a bid bond, project owners can feel more freely to accept bids and choose a winning bid with minimal risks. With that being said, there is still some level of risk involved. One particular risk comes to mind when speaking of construction projects. This risk is contract breaches. Even though the construction firm is bonded, a breach of contract is still a possibility.

While construction firms do their best to completely fulfill contracts, a small mishap can prevent it from happening. Just to give you an example, a construction firm is working in a town that is hit by a tornado, resulting in thousands of dollars in equipment damage. If the construction firm does not have quick access to replacement equipment, it will be impossible to meet the contractual agreement deadline.

What will happen in this case? Well, the outcome will depend solely on the principal and obligee. If the two can work together to resolve the issue, the deadline will be extended for a few weeks or months. Most obligees are aware that such risks exist. While some obligees accept their risks, others tend to ignore them. So, when a mishap happens, the obligee will immediately file a claim against the principal’s bid bond.

Surety companies act as mediators between obligees and the principles. Most sureties encourage communication between the two parties in an attempt to settle the dispute. If the dispute can be settled, the surety company will void the obligee’s complaint. If not, a claim will be initiated to determine if the obligee’s claim is legit.

It is important to note that a claim can not only be filed at the bid bond stage, but it can also be filed at the performance bond stage. For instance, once you start performing the work, you may fail to uphold your end of the agreement and this provides the obligee with a right to file a claim. To learn more about this in detail, please take a look at a performance bond being called.


Besides the bid bond, Texas companies may be required to obtain other bonds as well. For instance, you may be asked to obtain a performance bond and a payment bond. Both are equally important, so you can expect to deal with them frequently. The good news is that finding a good surety agency will make things significantly easier. Do that, and you’ll be one step away from securing the contract.