Construction bonding is the system by which a specialized bonding company serves as an alternate source of relief funds in the event that the hired company does not or is unable to complete the work as agreed upon. These types of bonds are known as “performance bonds,” and are a vital component of most public works projects.
Every bonding company is different, and every bond provided by these companies differs as well. Premiums for performance bonds trend in the range of 1-3% and are issued for the full amount of the given contract. The SharpeSoft Estimator provides multiple ways to enter and configure your bonding information so that nothing is missed.
Accessing Bond Information
Company Default
Access the Default Bond Rates table with the following instructions:
Click on the Defaults menu on the toolbar.
Select Company Configuration from the dropdown menu.
Select Bonds.
Double click on a company to open the Bond Rates table.
Activated Job
The bond rate that is being applied to the specific job you’re working on can be viewed in the Bonds tab of the Summary sheet. You can select the bond rates from those previously configured in the Bond table and modify them to whatever amounts you need.
Access the Bonds tab in the Summary sheet with the following instructions:
Select the Job menu from the toolbar.
Select Summary from the drop down menu.
In the Summary window, select the Bonding tab.
You can also click directly on the Summary sheet icon in the toolbar.
Entering Bonds
Enter the amounts shown on the bond rate table you received from your bonding company. Enter each dollar amount starting with the lowest and ending with the highest. Click in the first field, enter your Bid Amount, then press tab and enter the Bond Percentage. Repeat until you are finished. When finished, click OK, or press enter.
Bonding Rate Calculation and Example
To guarantee that you are entering your bonding amounts and percentages correctly, an example has been provided below. If you have questions, call SharpeSoft Support.
Enter the appropriate percentage for the given amount as shown in your bond rate table. As an example, if the rate is $7.20 per $1,000, enter ".720" in the Bond Percentage column, if it's $5.80 per $1,000, enter ".580" in the column, etc.
For example, let's say you receive bond rates from your insurer showing the increments as follows:
The bonding company has will have provided dollar increments, each with its own percent, per $1,000. The system requires these increments to be translated into thresholds with the correct percentage entered for each. To figure your thresholds for Estimator using the example above, add the increments together as outlined below and the percentages should be expressed as shown:
In the above example, you would enter these amounts and percentages into the Bond Rates window Threshold and Percentages columns as shown above.
It is important that you enter your bond rates correctly. If you are in any way uncertain as to how the information sent to you by your bond company should be entered into the window, call SharpeSoft Support for assistance and clarification.
The system allows for ten different values; however, you can enter the number appropriate for your bond table. Any spaces left blank (showing "0.00") will be ignored by the system.
Conclusion
Bonding is an important part of the construction process when working for public entities. Jobs may possess multiple different bonds from different companies, all with different applicable rates. This should never be any cause for stress or worry, as SharpeSoft has your back every step of the way.
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