Working with the government can be a beneficial way to generate income. There is less risk involved when taking on the government as a client, since you can count on being paid for the work you perform. In order to ensure that the services you provide meet minimum quality standards, you may have to obtain a surety bond before you can bid on government contracts.
Here are three tips that you can use to ensure the surety bonding process doesn't hinder your ability to complete government work in the future.
1. Research bond rates before placing a bid.
One of the most important things that you can do as you strive to secure a government contract is research the cost of a surety bond before placing your bid. Bond rates can vary based on your past performance, the amount of money specified in a contract, and the bond company you opt to partner with.
When you know the approximate rate that will be charged to secure the necessary bonds, you can build these costs into your bid so that you are not losing money on government projects.
2. Ask about bond requirements.
Before you place a bid on a government contract, you should inquire about the bond requirements for that particular contract. Most public works contracts require a performance bond that ensures the quality of the work performed by an independent contractor will meet minimum safety standards.
Some government agencies might also require a payment bond before awarding a contract. The payment bond assures the government agency that you will pay any subcontractors hired to work on a given project. When you know the bond requirements for each project, you can determine which government contracts you want to bid on in the future.
3. Make sure you are prepared to secure a bond.
In order to successfully partner with government agencies for the completion of major projects, you need to ensure that you can obtain the required bonds prior to bidding on available contracts.
Meet with a bond agency to determine what type of documentation will be needed to secure the necessary bonds. Gather this information and send it to the bond company for pre-approval. Having the assurance that you will be able to secure a bond can help a government agency feel more confident awarding you a lucrative contract in the future.
Don't let bonds interfere with your ability to secure government contracts. Make sure that you research bond rates and ask about bond requirements before bidding on a contract, and take the time to get pre-approved for a bond to improve your chances of being awarded a valuable government contract in the future. Contact a company, like NFP, P & C, Inc., for more help.