Here is an interesting case we SUCCESSFULLY bonded last week:
- The client was awarded a municipal contract. They performed the work previously as a subcontractor, and now obtained a direct (prime) contract with the city.
- There was no bidding process or bid results to evaluate the adequacy of the contract price.
- The intial multi-million dollar contract had a 3 year term with a 2 year option. The bond requirement was simply “a 100% Performance and Payment Bond” with no mention of the bond term. Therefore, the expected bond term was 3 or more years!
- The client presented an internally prepared, 10-month financial statement on the Cash Method (normally not acceptable)
How did we solve this for our agent?
- The client’s project costs while working as a subcontractor were compared to the new direct contract amount to determine the adequacy of the contract price. This enabled us to ovecome the absence of bid results.
- We bolstered the financial statement by obtaining supporting schedules.
- After direct discussions with the obligee, the city agreed to issue a contract amendment provding for an annual bond
- The customer agreed to provide an Accrual Method year-end statement going forward
What did it take to get this done for our agent? Determination to succeed. Creativity. Flexible underwriting. All stuff we do.
Is this what you want from your best surety carrier? You can have it!
For A rated, T-listed Contract, Site, and Subdivision Bonds in all states, call us and make your success story happen!
FIA Surety / First Indemnity of America Insurance Company “www.fiasurety.com”
2740 State Route 10 West, Suite 205
Morris Plains, NJ 07950-1258