Bonding
General
A LG may include provisions for bid guaranties or bonds, or warranty bonds, in invitations for the receipt of bids. Bonding is grouped into five basic classifications: bid bonds; performance bonds; payment bonds; retainage bonds; and warranty bonds. These are described in more detail in the
.
Federal Requirements
- – Specifies the procurement or contract documents may not contain criteria that restrict competition.
State Requirements
- – Calls for a municipality to require the successful bidder to execute a good and sufficient bond. The bond must be executed with a surety company authorized to do business in Texas.
- – Allows a county to require the successful bidder to provide a performance bond. The bid bond must be executed with a surety company authorized to do business in Texas.
- – Requires a contractor to execute a performance bond issued by a surety company authorized to do business in this state in an amount determined by the contracting state agency but not to exceed the contract price. Requirement applies to TxDOT only and is not applicable to a regional mobility authority (RMA) or regional tollway authority.
- – Requires a contractor to execute a performance bond if the contract is in excess of $100,000 and a payment bond if the contract is in excess of $25,000 ($50,000 for municipalities).
- (comprehensive development agreement by TxDOT) – Requires a private entity to provide a performance and payment bond or an alternative form of security in an amount equal to the cost of constructing or maintaining the project.
- (comprehensive development agreement by RMA) – Requires a private entity to provide a performance and payment bond or an alternative form of security in an amount equal to the cost of constructing or maintaining the project or an amount sufficient to ensure performance and protect the beneficiaries.
Required Practices
In general, the LG must get TxDOT approval of procedures used to bond contractors and must include these procedures in the contract documents. The
provides a description of the required practices and responsibilities of each party in the bonding process.