It discovered that the private contractor often was insolvent when the job was awarded, or became insolvent before the project was finished. To protect itself and those who worked on its projects, the government tried using individuals to serve as sureties. However, many of these individual sureties failed to honor their commitments, often because they did not have the financial resources to cover their obligations. So, in , Congress passed the Heard Act to authorize the use of corporate surety bonds to secure privately performed federal construction contracts.
In , the Heard Act was replaced by the Miller Act, which is the current law requiring performance and payment bonds on federal construction projects. It is important to note that bid, performance, and payment bonds are not intended to protect the contractors that have to post them. Instead, these bonds are intended to protect the owner of the construction project against contractor failure and to protect certain laborers, material suppliers, and subcontractors against nonpayment.
There are only two alternative methods of performing public construction. The government may perform the contract with its own forces or retain a private contractor to perform the construction contract. If the government uses private contractors, which ones should be chosen? Those who are solvent or those who are insolvent?
Those who will comply with the plans and specifications or those who will cheat? Those who follow safety procedures and operate a safe job site or those who cut corners? Please contact our Contract department today for a free consultation. We can generally provide an indication of the approval terms by answering a few simple questions. We realize that in a volatile economy Contractors can and do fall on hard times. We have programs in place to assist those that might not otherwise qualify for Bonding capability.
Please contact one of our Contract bond specialists to discuss the particulars of these programs. Our Contract Department is trained to gather information over the phone in initial consult so as to gain and offer a general idea of what terms would be available to you or your Contractor client on a given project.
We offer this service regardless of the amount of the contract or state in which the work is to be done. Viking Bond Service does not share or release email addresses, phone numbers or ANY other personal information to unauthorized third parties.
Information is used for underwriting purposes only. View our Privacy Policy. The process of becoming Bonded and insured explained. Get the information you need to obtain both. Cost of a Surety Bond. Surety Bond Types. Bad Credit Surety Bond Program. Surety Bond Terminology. Obtaining a Surety Bond. License and Permit. What is a Performance Bond. Performance Bond Requirements. Typical Performance Bond Costs. What is a Construction Bond. Surety Bonds for Infrastructure.
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