One of the dreams of building and construction contractors is to secure a large contract with the government. One of the requirements of getting a federal contract that is over $35,000 is a payment bond. The payment bond has to be 100 percent of the contract value. The purpose of the bond is to ensure that subcontractors and the suppliers of the materials will be paid. Usually the payment bond is in conjunction with a performance bond. If a contractor really wants to get in on the best deals for federal government contracts, he or she should realize the importance of securing payment bonds.
There is a company that issues Payment Bonds in Arizona. Here are some things contractors should know about payment bonds for construction contracts. The payment bond is a three way contract with the contractor, the surety and the owner. The contractor promises through the payment bond that the contract will be performed according to the terms specified. The surety is the company that is authorized and licensed to write the bond in the state in which the work is being performed.
The most popular payment bond is the AIA A312-2010 Performance and Payment Bond. This combination is used for the majority of the federal government contracts that are awarded to contractors. In the fulfilling of a payment bond, the surety will have 45 to 60 days to answer the claim of a claimant. However, there are many companies that are using the older version of the performance and payment bond. The premium on most performance and payment bonds are between one and two percent, but that can change according to the credit and background history of the contractor.
Southwest Bond Services, Inc. is a bonding agency that has been providing over 25 years of experience in the Peoria, Arizona, Phoenix, Arizona and the surrounding areas. The company uses only the best insurance companies, and the companies meet or exceed the regulatory requirements for sureties. Contractors who use them can be assured of getting quality service. If any contractors are interested in securing payment bonds in Arizona, the agency is available. Check out website for more information.
