Payment Bonds in Public Construction Projects
Expert-defined terms from the Professional Certificate in Construction Liens and Bonds course at London School of Business and Administration. Free to read, free to share, paired with a globally recognised certification pathway.
**Bid Bond** #
**Bid Bond**
A bid bond is a type of surety bond that contractors may be required to provide… #
It guarantees that the contractor will enter into the contract if they are the lowest bidder and will also provide the necessary payment and performance bonds.
**Consent of Surety** #
**Consent of Surety**
Consent of surety is the agreement of the surety company to a modification or al… #
This is often required in construction projects when there is a change in the scope of work or contract price.
**Contract Bond** #
**Contract Bond**
A contract bond is a type of surety bond that guarantees the contractor's perfor… #
It is typically required for public construction projects and ensures that the contractor will complete the project according to the contract specifications and terms.
**Default** #
**Default**
Default refers to the failure of a contractor to fulfill their obligations under… #
This can include failure to complete the project on time, failure to meet the contract specifications, or failure to pay subcontractors or suppliers.
**Fidelity Bond** #
**Fidelity Bond**
A fidelity bond is a type of surety bond that protects against employee dishones… #
It is often required for construction projects to protect the project owner from financial loss due to employee fraud or misconduct.
**Miller Act** #
**Miller Act**
The Miller Act is a federal law that requires contractors on public construction… #
It applies to contracts over $100,000 and is designed to protect subcontractors, suppliers, and laborers from non-payment.
**Payment Bond** #
**Payment Bond**
A payment bond is a type of surety bond that guarantees payment to subcontractor… #
It is typically required for public construction projects and ensures that these parties will be paid for their work, even if the contractor defaults.
**Performance Bond** #
**Performance Bond**
A performance bond is a type of surety bond that guarantees the contractor's per… #
It is typically required for public construction projects and ensures that the contractor will complete the project according to the contract specifications and terms.
**Surety Bond** #
**Surety Bond**
A surety bond is a three #
party agreement between the surety company, the contractor, and the project owner. It guarantees that the contractor will fulfill their obligations under a construction contract and provides financial protection to the project owner if the contractor defaults.
**Subdivision Bond** #
**Subdivision Bond**
A subdivision bond is a type of surety bond that guarantees that a developer wil… #
It is typically required by local governments before issuing permits or approving the subdivision.
**Surety Company** #
**Surety Company**
A surety company is a type of insurance company that issues surety bonds #
They guarantee the performance of the contractor and provide financial protection to the project owner if the contractor defaults.
**Treasury Listing** #
**Treasury Listing**
A Treasury listing is a list of surety companies that are approved by the U #
S. Department of the Treasury to write surety bonds for federal contracts. Contractors must use a Treasury-listed surety company to provide the required payment and performance bonds on federal construction projects.
**United States Surety Company** #
**United States Surety Company**
A United States surety company is a surety company that is incorporated and has… #
These companies are typically more familiar with U.S. laws and regulations and are preferred by many project owners for construction projects.
**Wage Bond** #
**Wage Bond**
A wage bond is a type of surety bond that guarantees payment of wages and benefi… #
It is often required for public construction projects to ensure that workers are paid in a timely manner.