I've had this question a few times during the hurricane recovery effort, what is this bond for the city of Panama City is requiring for me to do construction work for them? It's pretty simple and usually cheaper than you think. Here's some information that may save you the hassle of calling around and get you working instead.
First off, if you don’t know what kind of bond you need ask the person requiring it for a copy of the bond form they want. If they don’t have a specific form, see if you can at least get the name and description of the form. Call your bond agent next to see if they can help determine the correct form.
Bonds in this sense are not the kind of bonds you see used on Wall Street and they don’t prefer their martinis shaken. Bonds used in construction are guarantees. They can guarantee a huge variety of things, ranging from very specific to very broad.
Contractor's and Builder's Bond is the generic bond the City of Panama City is looking for to allow contractors to work on city projects or in city limits. The bond states that the contractor shall well and truly conform to the building regulations of the City, and building codes, and any other city ordinances. It also includes hold harmless wording in the City's favor (no surprise there).
Hopefully no contractor ever intends to do anything otherwise but the bond gives the city third party assurance that it will be so. The bond company signs their name along with the contractor's. The guarantee amount is $5,000 and the bond renews every year. Since it isn't tied to any specific project it's basically an admission ticket to work in the City and with premiums as low as $100 a year it's probably worth the trouble.
Specific bonds are usually tied to a contract that requires it. These often guarantee payments and performance of the contract. Prices for these vary based on experience but the obligation is usually clearly laid out in the project contract. Payment and Performance bonds for the city of Panama City will probably start coming up soon as they get funding to start repair projects on public facilities. Check the Bay County Bids website for updates on these projects and information on how to pursue them.
A lot of municipal work requires bonds, especially the bigger projects. So if you are interested in bidding some work, don’t let the bond requirement turn you away. Prequalifications are free and, depending on the size of the contract, may have same day turnaround. For more on these types of bonds and how to get one, check out this recent blog post for more.