Since 2,750 BC construction contract owners have required performance bonds from their project’s contractors to ensure project completion. A performance bond is a type of surety bond that guarantees a contract will be fully carried out by the contractor. Under the Federal Acquisition Regulation (FAR), performance bonds are required for all contracts in excess of $150,000 (FAR 28.102-1). Additionally, many non-governmental owners will require performance bonds to ensure that their contracts will be completed.
In order to streamline the process of obtaining a performance bond, a contractor should ensure that they have met the “4 C’s” noted below: