From 1951 to 1959 Dragnet was a process police series that featured Jack Webb as Sgt. Joe Friday. Joe was famed for associate interrogation line he typically used: “Just the facts, ma’am!”
Bonding firmsought to gather facts too, once a bid bond has been issued. it’sa crucialmethod with implications for each the surety and also the contractor.
So here area unit the facts, ma’am!
Bid results area unitthe assorted proposal amounts submitted by contractors followinga selected project. The bids area unit submitted at a chosen time and place. The list of low bidder, second, third, etc., as well asthe corporate name and $ quantity, area unit the bid results.
The first party to understand this datacould also be the contractor. They typically attend the bid gap and write down the results. Remember, they need a unconditional interest within the outcome. they are hoping to amassa replacement project.
It is vital for them to report the results promptly to the bonding company. Here’s why:
Timely supply of bond certificate
If the contractor is low bidder (offering the foremost favorable worthto try to to the work), a bequestwill beexpected. The performance and payment bond are going to berequired by a group date to avoid loss of the project. coverage the bid results is that thebeginningduring thismethod.
Excessive Bid Spreads
A “bid spread” happensoncethere’sa major (>10%) distinction between the low and also the second bidder. this can be a red flag for the surety and contractor. All the bidders wished the work. They enjoyed time and cashdeveloping their proposal. associate excessive bid unfoldmeans that the low bidder features adistinctiveadvantage (better experience, previousexpertise, special instrumentality, lower material costs, etc.) over the opposite bidders OR they created a bid mis-calculation and area unit underpriced. (*Why is that this a concern?)
If the contractor features a special advantage, they have to share this data with the bonding company so asto getthe P&P bond onceneeded. The surety should be assured that the project are going to be completed properly.
If they createda mistake, they have toinform the obligee / project owner that they want to withdraw their bid. If done promptly, they’ll avoid having a bid bond claim (for failing to maneuver forward.)
When a bid bond is issued, beneathwriters take into accounta little of the contractors surety line to be in use – under the expectation that they’ll win the project and want a P&P bond. If the contractor / bidder isn’t the low bidder, the capability is restored to their surety line to support another project – as presentlybecause the surety is notified.
For of these reasons, the prompt coverage of bid results is important. a good bid could be a win for the contractor and surety. The bidder acquires extra sales volume and also the surety books a premium. It’s howeverwe tend toall createcash.
* Why is associate excessive bid unfold a concern?
If the contractor takings with a project that’s underpriced, they’llfind yourself losing cash on the work.
It’s a problem for the surety too, as a result ofthey’re the warrantor of the project. they have to complete the work if the contractor defaults, and that theysupposethe actual fact that the contract quantity is up to accomplish this. If it’s not, the surety may face a internet loss.
Excessive bid spreads area unitunhealthyfor everybody, even the obligee. If they award associate underpriced project, they’llfind yourself with poor craft, incomprehensible deadlines and presumably a defaulted contract, ma’am!
Steve Golia is that theselling Manager for FIA Surety, initial Indemnity of America insurance firm.
The company provides bid, performance, website and subdivision bonds with speed and ability.
Contact USthese days and let’s discuss howeverwe are able tofacilitate – even though others have unsuccessful.