As a contractor, winning a government contract can be both lucrative and a game-changer for your business. Under the Miller Act, prime contractors who bid on government projects must secure a bond for the total dollar amount of the project including the costs of materials and labor.
The bonding process can be a little confusing, but contractors must ensure they understand the requirements of their Asheville construction bond because they are essential to the development and completion of public projects.
Why an Asheville Contractor Surety Bond is Necessary
An Asheville contractor surety bond is a requirement for government-funded projects. Contractors obtain their surety bond from a surety. A surety bond is a risk management tool that protects project parties and ensures that a job will be completed properly and on time. It is a contract between three parties: the principal (contractor), obligee (project owner), and surety company. Under the bond agreement, the surety is providing the obligee a financially backed guarantee that the contractor will follow the terms of the bond.
The Most Common Construction Bonds
There are several bonds used to guarantee construction on certain federal and private projects. The most common bonds are:
Bid bonds: Guarantees a contractor’s bid is accurate and ensures the contractor executes the project at the price they placed in the proposal.
Performance bonds: Guarantees that the contractor will perform the work according to the conditions of the contract.
Payment bonds: Guarantees that all subcontractors, laborers, and suppliers are paid upon the completion of a project, even if a contractor defaults.
In North Carolina, contractors must secure a performance and payment bond in the amount of the full value of the contract. As with any construction project, contractors must have a deep understanding of the project contract conditions, plan their projects carefully, and be diligent in their work performance. A lack of performance can cause delays and increase project costs. If a contractor does not fulfill contract obligations, the project owner can file a bond claim against the surety bond.
Let Cotney Construction Law Handle Your Bond Claims
At Cotney Construction Law, we are well versed in bond law. We help our clients resolve bond claim issues with sureties with regard to performance bonds, payment bonds, and any other construction-related bond. If a bond claim has been filed against you, or you need help filing one, we can help you file a bond claim with all the necessary documents, including preliminary, final, and Miller Act notices. We can also file a suit on your bond claim and pursue it in court.
If you are in need of a professional construction law firm, please submit our contact request form for more information.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.