DO BID BONDS EXPIRE?
COUNT ON STOKES SURETY BONDS
As the owner of a Texas construction company owner, it is important to know as much as possible about surety bonds. You’re going to be using them regularly. Just remember that some surety bonds are more important than others. Before you can receive construction projects, you have to bid on those projects.
To do that, you need to obtain a bid bond before placing your bid. While this can be frightening, it doesn’t have to be. Once you’ve worked with surety bonds a few times, you’ll be good to go.
If you’re struggling in this area, you should contact Stokes Surety Bonds because they’ll guide you through the surety bond acquisition process.
TOO LONG; DIDN’T READ (TL;DR)
Generally, bid bonds do expire 120 days post their execution date. However, to extend the expiry date, it is best to speak directly with your surety company as they can guide you through this process.
WHAT ARE BID BONDS?
Bid bonds are one of the most common types of construction surety bonds. The bond is obtained before a contractor places their bid. While there are other ways to put up collateral, the bid bond works best. It offers the highest level of protection to the owner and contractor. Bid bonds let the project owner know that your business is serious and financially stable enough to complete the project.
Remember that there are three parties in this arrangement. They include the principal, obligee, and surety. The obligee is the owner, while the contractor will be the principal. The bond protects the obligee should the principal fail to complete their obligations.
To learn more about this in detail, please take a look at the following links:
HOW THE BID BOND HELPS
The purpose of bid bonds is to offer protection to owners. When hiring a construction contractor, it is essential to choose a good one. However, there is always a risk that the owner will pick the wrong contractor. A bid bond can help reduce the risks involved.
With a bid bond, the owner knows that they can receive compensation if the contractor doesn’t fulfill their duties. If they are given the project but turn it down, a claim can be filed against the bid bond. This guarantees that the owner will receive some compensation and will be able to work with the contractor who made the second lower bid.
Furthermore, the bid bond will remove bad companies from the competition pool. This makes it easier for respectable contractors to find and secure work.
ARE THERE ANY BID BOND ALTERNATIVES?
Initially, you may hate the idea of acquiring bid bonds. It can be frustrating, so you may look at alternatives. There are two alternatives.
There is always the possibility of posting cash or using an irrevocable letter of credit. Although there are two viable options, they’re not good choices. You may not have enough cash to use as collateral. Furthermore, there is a risk that there will be a problem or claim. If this happens, the ILOC will be gone.
The best option is to obtain a bid bond and use it.
AVERAGE BID BOND COSTS
Contractors will need to purchase bid bonds. They’re normally inexpensive but the costs of bid bonds will depend on the size of the project. When dealing with a higher bid cost, the bond cost will be higher as well. Furthermore, the location, owner, and contractor’s financial history will play a role in determining the final price. However, it is important to note that things can be very different for contractors with no previous surety bonding history. When dealing with a smaller project, you will likely be asked to pay a flat fee. It may be a few hundred dollars.
To learn more about the costs in detail, please take a look at the following links:
GETTING A BID BOND
When you’ve decided to submit a bid on an upcoming project, you need to get a bid bond. The process isn’t too difficult. In most cases, you will be able to fill out an application online. You may also need to submit certain documents. Then, the surety company will send you a free quote. If you are happy with the quote, you can purchase the bond online. The turnaround time for bid bonds is extremely low. As such, Stokes Surety Bonds is here to aid you. Contact Stokes Surety Bonds to learn more about surety bonds for construction projects and the application process.
DO BID BONDS EXPIRE?
You may be interested in knowing if your bid bond is going to expire. Will it? In most cases, a bid bond will expire 120 days after its execution date. However, it may be possible to push back the expiration date by speaking to the surety. If your submitted bid was accepted, the surety bond will ultimately be replaced by performance and payment bonds. Again, you’ll need to speak with your surety agent, so you can obtain the necessary bonds.
NEED A CONSTRUCTION SURETY BOND FOR A JOB? COUNT ON STOKES SURETY BONDS