10-Bid Bonds, Performance and Payment Bonds, and Surety Qualification Requirements.pdf

BID BONDS, PERFORMANCE AND PAYMENT BONDS, AND SURETY QUALIFICATION REQUIREMENTS

A. Bid Bonds or Alternate Bid Security:

1. A Vendor must submit with its response a bid bond in the form of the County’s approved bid bond form, including all substantive terms set forth therein, which shall be executed by a surety company meeting the Surety Qualifications Requirements stated below. Failure to submit a bid bond by the solicitation’s closing date and time and in accordance with the solicitation’s instructions will deem the Vendor nonresponsive.

Unless an different bid form is included in the solicitation, the applicable County-approved Bid Bond Form is located at: https://www.broward.org/Purchasing/Pages/StandardTerms.aspx under the section “Standard Guaranty and Bond Forms.”

2. Alternate Bid Security: In lieu of a bid bond, the Vendor may furnish alternate forms of security in the form of money order, certified check, cashier’s check, or unconditional letter of credit (Bid Security - Unconditional Letter of Credit ) drawn from any national or state bank (United States). Such alternate forms of security shall be subject to the approval of the Director of Purchasing. A personal check or a company check of a Vendor is not a valid bid security.

3. The bid bond or alternate bid security shall be in an amount equal to five percent (5%) of the total price offered by the Vendor, payable to Broward County, and conditioned upon the successful Vendor providing the required performance and payment bonds (or approved alternate security), evidence of insurance, and any other requirements expressly set forth within the solicitation as required upon or before award, within 10 calendar days after notification of award of the contract.

4. The bid bond or alternate bid security of the successful Vendor shall be forfeited to the County, not as a penalty but as liquidated damages for the cost and expense incurred by the County, if said Vendor fails to timely provide the required performance and payment bonds (or approved alternate security) and evidence of insurance, or fails to comply with any other requirements expressly set forth in the solicitation as required upon or before award of the contract. Upon request, bid securities of unsuccessful Vendors will be returned after award of contract or expiration of bid validity.

5. Vendors must either:

a. Obtain an electronically issued bid bond using Surety2000 and attach a .pdf copy of the

Surety2000-issued electronic bid bond to Vendor’s solicitation response through the County’s electronic bidding system; or

b. Submit an original bid bond or original alternate bid security to the Purchasing Division, by the solicitation’s closing date and time.

Failure to submit a bid bond or alternate bid security by the solicitation’s closing date and time, and in accordance with the instructions herein, will render the Vendor nonresponsive to the solicitation.

6. Instructions:

a. To obtain an electronically issued bid bond, the Vendor must use Surety2000. Vendors, bonding agents, and surety companies must register with Surety2000 to use the service; contact Surety2000 to find out information regarding their service (www.surety2000.com or 800-660- 3263).

i. The Vendor must provide their bonding agent with the following:

Obligee Name: Broward County Obligee Address: 115 S. Andrews Avenue, Room 212, Fort Lauderdale, Florida 33301

ii. The Vendor’s submittal must include a copy of the electronically issued Surety2000 bid bond as a pdf attachment in the electronic bidding system.

iii. Vendors must allow enough time to secure a bid bond and submit a copy to their submittal in case there are any errors or issues. Contact Surety2000 for additional assistance.

http://www.surety2000.com/ https://www.broward.org/purchasing/documents/Form%20007500-5%20Unconditional%20Letter%20of%20Credit%20Form(1112394.1).docx https://www.broward.org/purchasing/documents/Form%20007500-5%20Unconditional%20Letter%20of%20Credit%20Form(1112394.1).docx https://www.broward.org/Purchasing/Pages/StandardTerms.aspx https://www.broward.org/purchasing/documents/Bid%20Bond%20Form(1112379.1).docx https://www.broward.org/purchasing/documents/Bid%20Bond%20Form(1112379.1).docx

iv. The County will verify, thru Surety2000, that an electronically issued Surety2000 bid bond is valid.

v. An original bid bond will not be required when a copy of an electronically issued Surety2000 bid bond is submitted through the electronic bidding system.

b. To submit an original bid bond or original alternate bid security to the Purchasing Division, the Vendor must submit the original bid bond or original alternate bid security in a sealed envelope, with the solicitation number, solicitation title, date and time of bid opening, and Vendor’s address listed on the envelope. A copy of the bid bond or alternate bid security should also be uploaded into the County’s electronic bidding system. The uploaded copy of the bid bond or alternate bid security is in addition to, and does not replace, the original bid bond or original alternate bid security submission requirement. Vendors must submit the required documents, by the solicitation’s closing date and time, to:

Broward County Purchasing Division 115 South Andrews Avenue, Room 212 Fort Lauderdale, FL 33301

B. Performance and Payment Bonds:

1. Within 10 calendar days after notice by the County of the recommended contract award, the successful Vendor must furnish a completed Performance Bond and a completed Payment Bond containing all the provisions of the Performance Bond Form and Payment Bond Form .

2. For fixed contracts, the bonds must be in the amount of one hundred percent (100%) of the total contract amount; if the total contract amount changes, the Vendor must ensure that at all times the amount of the bonds is no less than one hundred percent (100%) of the total contract amount inclusive of any change orders, amendments, or other changes.

For open-end contracts, the bonds must be in the amount of NA% (if none stated, then 50%) of the total expected contract amount for the then-current annual contract term as stated in the solicitation (if not stated in the solicitation, then as stated in writing by the County in connection with notice of award or renewal); and the Vendor must ensure that at all times the amount of the bonds is no less than the total of (a) all open work orders, and (b) the total value of work performed within the immediately preceding one-year period. Within 10 calendar days after any event or occurrence that increases the required bond amount, the Vendor must furnish an additional bond or rider in compliance with the requirements of this section to meet the increased bond requirements.

3. The bonds must guarantee to the County the completion and performance of the work covered in such contract as well as full payment of all suppliers, laborers, and subcontractors employed pursuant to the project. Each bond must be with a surety company that is qualified pursuant to the Surety Qualifications Requirements stated below.

4. For construction contracts only: Pursuant to the requirements of Section 255.05(1), Florida Statutes, the successful Vendor must ensure that the performance and payment bonds are promptly recorded in the Official Records of Broward County and must provide the County with evidence of such recording.

5. In lieu of the required performance and payment bonds, the successful Vendor may furnish an alternate form of security, which may be in the form of money order, certified check, cashier's check, or an original Unconditional Letter of Credit on the County’s form. Such alternate forms of security shall be subject to the approval of the Director of Purchasing, shall be for the same purpose as the bonds and subject to the same conditions as those stated above, and shall be held by the County for one year after final completion and acceptance of the work.

6. The successful Vendor is required at all times to have valid performance and payment bonds (or approved alternate security) in force covering the work being performed. The successful Vendor must keep such performance and payment bonds (or approved alternate security) in effect for the duration of the contract, and until one year after final completion and acceptance of the work at issue. If the contract is extended or renewed, it shall be subject to the same bonding (or approved alternate security) requirements.

https://www.broward.org/purchasing/documents/Form%20007500-5%20Unconditional%20Letter%20of%20Credit%20Form(1112394.1).docx https://www.broward.org/purchasing/documents/Form%20007500-2%20Payment%20Bond(1112386.2).docx https://www.broward.org/purchasing/documents/Form%20007500-1%20Performance%20Bond(1112380.1).docx

C. Surety Qualification Requirements:

1. For all Bid Bonds, Performance Bonds, and Payment Bonds over $500,000:

a. Each bond must be executed by a surety company of recognized standing, authorized to do business in the State of Florida as surety, having a resident agent in the State of Florida, and having been in business with a record of successful continuous operation for at least the past five years.

b. The surety company shall hold a current Certificate of Authority as acceptable surety on federal bonds in accordance with the United States Department of Treasury Circular 570, current revision. If the amount of the bond exceeds the underwriting limitation set forth in the circular, the net retention of the surety company must not exceed the underwriting limitation in the circular and the excess risks must be protected by coinsurance, reinsurance, or other methods in accordance with Treasury Circular 297, Revised (31 CFR Sections 223.10 and 223.11). Further, the surety company must provide the County with evidence satisfactory to the County that such excess risk has been protected in an acceptable manner.

A surety company that is rejected by the County may be substituted by the Vendor with a surety company acceptable to the County, but only if the bid or contract amount does not increase.

c. All bonds shall be written through surety insurers authorized to do business in the State of Florida as surety, with the following qualifications according to the latest edition of Best’s Insurance Guide, published by AM Best Company, Oldwick, New Jersey:

Amount of Bond Minimum Policy Holder’s Ratings Strength/Financial Size

$500,001 to $1,500,000 A / III $1,500,001 to $2,500,000 A / VI $2,500,001 to $5,000,000 A / VII $5,000,001 to $10,000,000 A / VIII Over $10,000,000 A / IX

2. For projects that do not exceed $500,000:

a. The County shall accept bid bonds, performance bonds, and payment bonds from a surety company that has at least twice the minimum surplus and capital required by the Florida Office of Insurance Regulation at the time the solicitation is issued, provided that the surety company is otherwise in compliance with the provisions of the Florida Insurance Code and the surety company holds a currently valid Certificate of Authority issued by the United States Department of the Treasury under Section 9304 to 9308 of Title 31 of the United States Code.

b. A completed Certificate and Affidavit for Bonds $500,000 or Less (Form 007500-4, available at https://www.broward.org/Purchasing/Pages/StandardTerms.aspx) must also be submitted with the applicable bid bond, performance bond, or payment bond.

3. If the surety company fails to meet the minimum standards, a bond from a surety that meets the minimum standards must be timely provided to satisfy the bonding requirements.

Form Date 5/14/25 https://www.broward.org/Purchasing/Pages/StandardTerms.aspx