Performance & Payment
Performance and Payment Bond (Final Bond)
Performance and payment bonds, often called final bonds, are the bonds a contractor provides after winning a job: one guarantees the work gets done, the other guarantees subcontractors and suppliers get paid.
- Required by
- Federal agencies under the Miller Act, state and local governments, and private owners or lenders
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The performance bond promises the owner the contract will be completed per its terms, and the surety steps in if the contractor defaults. The payment bond promises that subcontractors, laborers, and suppliers will be paid, and they can claim on it instead of filing liens on public property. Both run to the project owner.
Who needs it
- General contractors awarded public works contracts
- Subcontractors whose general contractor requires bonds
- Contractors on private jobs where the owner or lender requires bonds
What the underwriter looks at
- Contractor's financial statements and working capital
- Experience with similar size and type of work
- Backlog of work in progress
- Bank line of credit
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
When are these bonds required on public jobs?
Federal construction contracts over $100,000 need both under the Miller Act. Alabama public works over $100,000 need a performance bond of 100 percent of the contract and a payment bond of at least 50 percent, per the 2023 amendments to Code 39-1-1.
How fast can I get final bonds?
If BaySide already wrote your bid bond and your file is current, final bonds usually follow quickly once you send the contract. Use the Final Bond Request.