If you are a general contractor or subcontractor, bonding is a topic you should know about—whether you need it to protect your business, what it entails, and how to go about getting it. The Charles County Economic Development Department is holding a “Contractor’s Guide to Bonding” workshop for local businesses on January 15, 11 a.m. to 2 p.m. at the Waldorf West Library.
Guest presenters Joanne Brooks, Esq, Founding Director and CEO of JSSB Consulting and Reggie Jarvis, VP of Centennial Surety Associates, will share their expertise. We asked Joanne to answer a few questions ahead of the event.
EDD: What is a surety bond?
Joanne Brooks (JB): A surety bond is a product issued by an insurance company, called a surety, that serves as a risk mitigation tool for states and localities. There are 3 major types of bonds: contract, commercial, and fidelity. For the purpose of this workshop, we will be focused on contract bonds, which assure completion of public works projects and payment of subcontractors.
EDD: Are bonds required by law?
JB: Yes, the Miller Act and the states' Little Miller Acts require bonding for public works projects. Performance bonds protect taxpayer dollars by assuring a construction contract gets completed according to its terms and conditions, while a payment bond protects subcontractors and laborers from nonpayment. Since most public works projects cannot be liened, surety bonds provide the only protection for lower-tier subcontractors who do not have a contract with the procuring entity.
EDD: What is a benefit of having surety bonding capacity?
JB: Having bonding capacity makes a contractor more competitive and less risky. The large majority of contractors have not pursued the process of obtaining a surety line. Having a surety is like a seal of approval; it forces you to run your business profitably and focus on those areas that support your business, banking, legal, insurance, and accounting.
EDD: Is a surety bond difficult to obtain?
JB: The key to obtaining a bond is to be prepared and to provide the documentation needed to complete the underwriting process. Small bonds are very easy to obtain, and there are quick application programs for smaller bonds. I recommend, however, that a firm find a trusted agent who understands the contractor's goals and business and focuses on building a strong sustainable business. If you simply want a bond, you are missing out on the benefits of bonding and building a sustainable business and legacy wealth.
More information will be shared at the workshop on January 15. Businesses will learn all they need to know about bonding and find out if they quality for bonds, as well as learn how bonding can make their business more competitive, profitable, and successful.
Registration is at no cost, and lunch is included. Learn more and register at ContractorBondingWorkshop.eventbrite.com. Contact Lucretia Freeman-Buster, Chief of Business Development, at 301-885-1344 or BusterL@MeetCharlesCounty.com with questions.