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The recession of the mid 90`s resulted in heavy losses for the surety industry in Canada and the result was a change to the whole underwriting system. Contractors needed to be able to produce accurate inhouse financial information on a regular basis. Smaller contractors had a hard time complying and the increase in paper meant higher expense for the bonding company to keep a file open. The result was an increase in miminum requirements because the premium produced by those smaller companies simply didn`t pay for the costs incurred by the bonding company.

In 2009 I decided enough was enough. Joe`s Paving couldn`t bid on a $40,000 project for his local town hall because municipalities usually require bonds. It was never a case of Joe being unqualified; just that due to circumstances beyond his control – bonds were not available to him any longer. Being a part-time computer geek I started working on the development of a surety underwriting system to address the administrative costs to the surety company and so Quickbond was born.

The Quickbond program meets the needs of smaller contractors, weaker contractors, companies who rarely need bonds and companies who don’t have the time required to set up a traditional facility. Now they can secure public contracts with confidence knowing they have the needed security and prequalification. It’sdesigned with limited underwriting requirements that make it easier for them to apply,and less administration background work and costs.

Program information

• Affordable – low annual fees means you pay for the documents you need
• Qualification is based on the financial strength of the owners, and the combined experience of the owners and the company
• Quick turnaround time, usually within 48 hours
• Affinity programs available for construction associations, offering a significant discount to members
• Single Limit is a maximum of $1,000,000 but be warnedyou may qualify for a lesser amount In bonding there are 2 kinds of limits – one is single job which is self explanatory – it is the CONTRACT size we think you are technically and financially capable of performing. Then there is an aggregate limit which represents the maximum total you can have in bonded work on hand at any one time. If your application is successful you will be given a single job limit and an aggregate limit

• Size: Will be disclosed after your file has been underwritten
• Project location must be in same province
• Cannot subcontract more than 75 percent of the contract price.
• Bid results must be within 10 percent.
• Completion time must be 12 months or less.
• Maintenance/Warranty term must not exceed two years.
• Liquidated damages cannot exceed $1000 per day.
• Excluded Type of Work: Environmental work, curtainwall, subdivision agreements, completion guarantees, high tech

We also do Traditional (non Quickbond) bond facilities which will vary in size and project location but will likely be similar to the above.

Applicant Qualifications for Quickbond:

• An acceptable personal financial statement from at least 1 shareholder
• Credit scores of at least 600
• Total personal credit outstanding (excluding house mortgage) cannot exceed 50%
• indicated salary level (e.g., salary of $100,000 -- total debt cannot exceed $50,000).
• At least 5 years prior construction experience (foreman level or higher)
• Current company in business at least 12 months.
• No past or present surety bond claims
• At least 5 previously completed commercial projects
• Liability Insurance with a limit of at least $2,000,000
• An acceptable company credit score
• Traditional bond facilities will vary according to the bonding company and the result of the underwriting process

Determine the stage of construction you are at. Remember there are 3 stages; Prequalification, Tender and Contract. You will see the 3 choices listed there.

TIMING
Bonds have to be signed sealed originals – by you and by the bonding company. Make sure you leave enough time for the bonds to be prepared (2 days or more) and enough time to have your bonds sent via courier or you will have to make arrangements to pick them up.

ACCURACY
If the person providing the information is guessing – one of two things are likely to happen. We will recognize it and this would affect our opinion of your knowledge and professionalism or worse yet – your bonds will be rejected. At tender stage this will mean your bid will be disqualified

ORDERING A TENDER BOND

• At tender stage you should request your bonds early and if the estimate gets adjusted closer to closing then you just have to call your broker and get permission to go ahead because bid bonds are typically issued in the amount of `TEN PERCENT OF ATTACHED TENDER` and you only have to permission to use those bonds if your final price is within 10% of the estimate you originally provided.
• Tick the boxes of the documents you need – make sure you check the spec carefully and remember that sometimes the agreement to bond is called the surety`s consent.
• Fill in your name – we need to know who to contact if we have questions
• Fill in your email for the same reason and note that unless this is filled in the request will be rejected
• Next is the Obligee`s FULL LEGAL NAME and their mailing address. If you don`t provide the correct name your bid will be disqualified
• The project description should include what you are doing and where and should not be more than a sentence or two
• Estimate – Please read the note at the top of this page
• Closing Date – this is the closing date of the tender and if you put in an incorrect date your bid will be disqualified.
• Next you have to tell us the amount of the bid bond if one is required. Again; an error here will result in your bid being disqualified
• All tender specs will stipulate how long you have to keep your offer (tender) open for acceptance. If there was no date then they could approach you in 10 years expecting you to do the job and at the price you originally quoted.
• Even if no agreement to bond is required, you still have to stipulate what the spec says about the final bonds which would be required if you are the successful bidder. This is part of the underwriting information which is required to approve your bond request
• Payment terms will be stipulated in the spec and would typically be monthly
• Maintenance – this is an important one!!!! CCDC includes a 12 month maintenance period but that can be changed in the spec and often is. If you don`t notice there is a 3 year maintenance term for instance, and are low bidder, your bonding company may not be willing to support such a maintenance term which would result in a claim on your bid bond and remember you are responsible for paying for any such claim.
• Start Date – what we are trying to find out is an estimate of when the job will start i.e. You might be tendering a job in the Fall but it won’t start till the Spring. This is important when examining your work load
• Completion Date – same as above but we’re also trying to determine how long the project is
• Next we’re looking to find out what the liquidated damages and penalties are
• Design Build is a special situation and requires a discussion with your broker and a special supplementary bond application form
• Environmental risks likewise would require a conversation with your broker
• Many obligees include their own bonds forms in the spec. Once it’s there you (and your bonding company) are obligated to use it. Some forms are so onerous your bonding company may not agree to that so if there are forms– send them with the request so you know before it’s too late – that you have a problem.
• Further down the form you will see you have the opportunity to attach files to the bond request and this can be used for parts of the spec you are concerned about and wish to discuss or any bond forms that have been included. Even though this is tender stage, if a performance and/or labour and material payment bond are provided it is important to send them with your tender bond request.

WHEN ORDERING A FINAL BOND (CONTRACT STAGE)

• Make sure you check the spec to see if you are required to purchase the builders risk (all risk property policy). The CCDC contract states the General Contractor is required to do that so unless that requirement is removed in the supplementary conditions you should double check with the obligee but assume it is your responsibility. The process is the same as it is for the bid bonds until you get down to the Bonds section
• The contract price should include any taxes so either include them or we will with your answer to the following question
• The contract date must be correct but if you have not been provided with the contract yet; the letter of intent date will suffice.
• Again everything follows the tender bond request process until you hit the “Other Bidders” question. The bonding company needs this information to see how much you left on the table. Anything over 10% will require some conversation with us