As surety professionals, most would agree the best working relationships are those with great communication. The communication that leaves both the agent and the contractor on exactly the same page. The surety is rarely surprised and the contractor always knows where they stand in terms of their ability to bond projects. A win-win. When communication is poor, both parties are left with surprises costing a lot of wasted time and money. While most communication between a contractor and agent circles around profitability, bonded jobs that are having issues, shareholder distributions, ownership changes, etc., sometimes overlooked is the importance of communicating upcoming projects that need to be bonded.
Contractors and surety bond professional understand that preparing bid packages takes time and money. This is an instance when time and money can be wasted because of poor communication. Sometimes this occurs when the bonding requirement was simply overlooked and the agent and contractor are scrambling to get information together to write the bond. This is construction after all, and surprises are sometimes unavoidable – the surety understands this and will work around these occasional occurrences.
Other times, the contractor wishes to bid something much larger than he is either capable of doing, or much larger than his bond capacity permits. This is a scenario that before the contractor spends any time on the bid, the first call he should make is to his bond agent; the agent would be able to tell him right away if there is any chance of bonding the job. If a contractor is unsure, they should error on the side of caution and give the courtesy phone call or email.
In construction, the preparation of bid packages are known as “indirect” costs which have an impact on a company’s administrative costs. Help manage these costs with excellent communication. It will not only lead to a better working relationship between contractor and agent, it will lead to a better bottom line!