Capital Indemnity Corporation Bond - Bid Bond Application (Performance Plus) in All States
Table of Contents
Brief Summary
The amount of a bid bond is set by the job, not by the surety. Read the bid documents for the required percentage or dollar figure, then apply here so Capital Indemnity Corporation can underwrite you and issue the bond in time for bid opening.
This is the application for a bid bond written through Capital Indemnity Corporation under its Performance Plus program. A bid bond guarantees the project owner that if your bid is accepted you will sign the contract and furnish the required performance and payment bonds. The penal sum comes from the bid documents. On federal work it is at least 20 percent of the bid price, capped at $3 million, under FAR 28.101-2.
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How to Apply for a Capital Indemnity Corporation Bond:
- Copy of the bid invitation or instructions to bidders showing the required bid security amount and form.
- Project name, owner, location, bid date and estimated contract price.
- Completed Capital Indemnity Corporation bid bond application.
- Company financial statements and work on hand schedule as requested by the underwriter.
- Owner and company credit information.
- Allow time before bid opening for underwriting and delivery of the signed bond with power of attorney.
Detailed Information About the All States Capital Indemnity Corporation Bond:
Where the bond amount comes from
There is no single bid bond amount. Each owner writes it into the invitation for bids, usually as a percentage of your bid price, a fixed dollar figure, or the lesser of the two. For federal contracts, FAR 28.101-2 says the bid guarantee must be at least 20 percent of the bid price and may not exceed $3 million. State and local agencies and private owners set their own figures, so check the instructions to bidders before you apply.
What the bond guarantees
A bid bond backs your promise that if the owner accepts your bid within the acceptance period, you will execute the contract and deliver the performance and payment bonds the job calls for. Under the federal clause at FAR 52.228-1, a bidder who fails to sign or furnish bonds within 10 days after receiving the forms can be defaulted, and is liable for any cost of getting the work done above its bid. The bid guarantee is available to offset that difference. Most public owners use similar language.
Missing or defective bid security is one of the most common reasons a low bid is thrown out. FAR 52.228-1 states that failing to furnish a bid guarantee in the proper form and amount by bid opening may be cause for rejection.
Forms
Federal agencies use Standard Form 24, Bid Bond, prescribed at FAR 53.228. Many state and municipal owners have their own bid bond form, and some private owners accept the AIA form or the surety's standard form. Use whatever form the bid documents require and confirm the form and submission steps with the project owner before the bond is issued.
How underwriting works
Capital Indemnity Corporation reviews the bid bond request much like it would the final bonds, because it is agreeing to stand behind your performance if you win. Expect questions about the project size, your work on hand, company financial statements, credit and completed project history. Approval on the bid bond is usually tied to the surety being willing to write the performance and payment bonds that follow.
Eligibility and Requirements for an All States Capital Indemnity Corporation Bond:
- Penal sum matching the bid documents, often a percentage of the bid price.
- On federal contracts, at least 20 percent of the bid price, not over $3 million, per FAR 28.101-2.
- The project owner named as obligee.
- The owner's required form, such as SF 24 for federal work.
- A surety acceptable to the owner. Federal work requires a Treasury listed surety.
- Surety willingness to issue the performance and payment bonds if the bid is awarded.
All States Capital Indemnity Corporation Bond FAQs:
Whatever the bid documents specify. Federal contracts require at least 20 percent of the bid price, not to exceed $3 million. State, local and private owners set their own amounts.
The owner can make a claim on the bid bond for its extra cost of awarding the work to someone else, up to the bond amount. The surety will then look to you for repayment.
Yes. Under FAR 52.228-1, a missing bid guarantee or one in the wrong form or amount at bid opening may be cause for rejection. Owners outside federal work commonly have similar rules.
Federal jobs use Standard Form 24. For other jobs, use the form in the bid package or confirm with the owner which form it accepts.
The underwriter reviews your financials, credit, experience and the size of the job. Pricing and approval are tied to the performance and payment bonds that would follow an award.
