Do you need bonding for federal contracts?

Bonding requirements for federal contracts vary based on contract type, value, and agency requirements: **Construction contracts - mandatory bonding:** - Performance bond: 100% of contract price (guarantees completion) - Payment bond: 100% of contract price (guarantees subcontractor/supplier payment) - Required for construction contracts over $150,000 - Bid bonds: Typically 20% of bid price for contracts over $150,000 **The Miller Act requires:** - Performance bonds for construction contracts exceeding $150,000 - Payment bonds for construction contracts exceeding $150,000 - Surety must be on Treasury's approved list **Supply and service contracts:** - Generally no bonding required - Agency may require bonds for specific circumstances - Large IT implementations sometimes require performance bonds - Advance payment bonds if progress payments requested **Getting bonded:** - Work with surety company or bonding agent - Requires financial review of your company - Personal indemnity often required from owners - Bond capacity increases with experience and financial strength - SBA Surety Bond Guarantee Program helps small businesses **Costs:** - Bond premiums typically 1-3% of contract value - Rates depend on company financials, experience, contract type - Include bond costs in your pricing - Some companies bid only bonded work for competitive advantage **SBA bond guarantee program:** - Guarantees bonds up to $6.5 million - Helps small businesses obtain bonding - Lower requirements than commercial bonding