Surety Bonds Are Important To Big Projects
John S. Reidy, PLLC, serves the needs of contractors and subcontractors required to post surety bonds on Big Dig projects and other government construction jobs throughout eastern Massachusetts. Our clients include many of the east coast’s largest building and construction firms. We handle every aspect of the surety bond process and offer fast turnarounds. Our attorney also handles surety bond dispute resolution in the event of payment disputes arising at any time during or after the completion of a project.
Contact our office in Quincy for answers to your surety bond questions and to start the performance bond process.
What Is A Surety Bond?
Federal, state and municipal governments often require construction contractors to provide payment and performance bonds, known as surety bonds, before beginning work on a contract. Surety bonds ensure that work will be performed to the standards of the contract and that the contractor will assume all responsibility for payments made to subcontractors and materials suppliers.
Under the Miller Act (40 U.S.C. Section 3131 to 3134), contractors are required to post surety bonds for performance and labor and material payment before accepting a contract on any federally funded government construction project exceeding $100,000.
Covering Tax Liabilities
Contractors who are new to bidding on federal projects may be surprised to learn that surety bonds must also cover the amount of taxes the federal government would collect on the payments for labor, services and materials. The government is required to notify contractors, in writing, about their intent to collect payment for collectible taxes in the event of failed performance. Without written notification, the government cannot bring a civil action.
In addition, there are alternatives to the required surety bonds for federal projects between $25,000 and $100,000. We can help you make sense of surety bonds and how the Miller Act affects your bid and contract.