Contract Amounts?

[apprentice35]

Must a performance bond always be 100% of the contract amount? is there any precedent for it being more or less than the overall contract amount? This is for a $300million roadway construction project expected to take 5-6 years. Thank you

[PT]

Originally Posted by apprentice35

Must a performance bond always be 100% of the contract amount? is there any precedent for it being more or less than the overall contract amount? This is for a $300million roadway construction project expected to take 5-6 years. Thank you

No - performance bonds aren't always for 100% of the contract amount. However, some surety companies will charge for a 100% bond even if the bond is for say 50%. You'll have to find a very large company to handle a bond/contract of that large amount.

[bondman]

Originally Posted by PT

No - performance bonds aren't always for 100% of the contract amount. However, some surety companies will charge for a 100% bond even if the bond is for say 50%. You'll have to find a very large company to handle a bond/contract of that large amount.

It wouldn't have to be one company. Bonds of that size would usually be done on a co surety basis between two or more Surety companies.