Press enter to begin your search
Construction Law Authority / Posts tagged "bond"

A Performance Bond’s Fixed and Flexible Scope.

The scope of a performance bond's protection is limited, but can be expanded. To ensure that the surety will be responsible for all applicable work, it is important to keep the bond's scope in mind throughout the course of the project, and expand it as necessary, to make sure the bargained-for protection is available, in the event you need it....

The “Infallible” Surety, Is Not Immune From The Impact Of A Bad Economy

When negotiating for payment and performance bonds, you should realize that even if you obtain the added protection, you are not 100% safe. Even though they might not be as likely as other construction entities to go out of business, sureties also go out of business. Furthermore, when they do, it can be as difficult to recover from a surety's estate as it is to recover from any other bankrupt construction entity....

Why Should the Condominium Association Require Bonds from the Renovation Contractor

               We often encounter Condominium Associations who have difficulty understanding why they should bond their exterior renovation contract.   Many Associations consider it money wasted on another layer of liability protection when they would rather spend the money on actual scope – sticks, bricks, and finishes. They do not expect the surety to pay the claims even if they are made against the Contractor’s Performance and Payment Bonds.  Association Boards often ask, “Isn’t the risk already covered by all the insurance required from the Contractor?” The short answer is, “No”, and here’s why.             A performance bond, unlike insurance, assures the Association that the Contractor, or its Surety, will complete the project even if the contractor goes bankrupt or cannot competently perform to complete the contract. In addition, sometimes a Surety can be required to pay Association claims for work not properly performed even after occupancy. See, Federal Ins. Co. v. The Southwest Florida Retirement Center, Inc.,...

So, You Think You’re Protected Because You Have a Performance Bond

Well, you might not be. While you might have prudently thought ahead and gotten a performance bond from an entity downstream, to protect you from its defective work, the protection afforded by a performance bond only lasts so long. After some point, if you have not filed a lawsuit against the performance bond surety, you lose your right to make a claim and it is as if the performance bond never existed. As explained below, it might be relatively easy to determine the deadline for an owner to file a lawsuit against its general contractor’s performance bond surety, but calculating the deadline for a general contractor to file a lawsuit against one of its subcontractors’ performance bond sureties might not be so easy. A lawsuit against a performance bond must be filed within five years from the date the work at issue was completed and accepted, or the lawsuit will be...

Government Bid Protests – An Overview (Part I of III)

One purpose of the government procurement process is for each bidder or proposer to be on equal terms to get fair consideration of their submissions. If the bidding process has been violated, however, a losing bidder or proposer may be able to protest the government agency’s decision.

Generally, the way to win a protest is to show that an agency did something that was clearly erroneous, contrary to competition, arbitrary, capricious or fraudulent.  An arbitrary decision is one that is not supported by facts or logic.  A decision is capricious if it is adopted without thought or reason, or is irrational.

Keep in mind that almost every agency’s rules and regulations are different. That means agencies generally have different protest procedures and deadlines. Usually the deadline to file a protest, or a Notice of Intent to protest if required, is very short. It can be a matter of hours or days. And the information required in the protest, and in submitting the protest, can be very specific.

As mentioned above, some agencies require a Notice of Intent to Protest an award before a formal protest is due. The Notice is usually a short statement from the protestor that it is going to file a protest. Sometimes, however, the complete protest grounds must be stated in the Notice. 

The formal protest is usually the more substantive letter, memorandum, or other written submission that discusses in detail all the protest grounds raised.