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Payment & Performance Bonds

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Hi there! If a general contractor is carrying a payment and performance bond on the total cost of the direct work, is it correct that at the subcontractor level, the pricing from each trade should not include additional bond dollars? Thanks!

1 reply

Jan 15, 2020
I'm not sure I totally understand the question, and that may be because I'm not all that versed in the accounting that takes place in bidding for jobs. It's relatively common for a contractor to require their subs to provide their own bonds, and if that's the case (i.e. if subcontractors will be securing their own bonds), then it'd make sense for subs to include the price of bonds in their bids. However, if subs and suppliers aren't required to supply bonds, themselves, then I'm not sure that the contractor's securing of bonds would impact the subs' bids at all. I hope this was somewhat helpful! For more discussion on payment and performance bonds, here are some resources that might help: - Payment Bonds 101 - Construction Performance Bonds | Protecting Cash Flow on Public Jobs
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