Appendix 7 - Bonds.pdf
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- Solicitation number
- BPM058986
- Issued by
- Maryland
About this file
This is an Appendix document from the State of Maryland (effective July 2024) outlining bond requirements for state and local construction contract solicitations. The document provides guidance on four primary bond types that may be required: Bid Bonds, Performance Bonds, and Payment Bonds, with detailed references to Appendix 11 (DGS Instructions to Bidders for Construction Projects) for specific implementation procedures. Acceptable security for these bonds is limited to surety company bonds authorized to conduct business in Maryland, as defined under COMAR 21.06.07.01. The specific bond requirements, submission deadlines, and submission procedures will be identified within individual solicitations by the Procurement Officer.
The document outlines the Maryland Small Business Development Financing Authority (MSBDFA) Surety Bond Assistance Program, which provides bonding support to qualifying small businesses. MSBDFA can directly issue bid, performance, or payment bonds up to $750,000 and guarantee up to 90% of a surety's losses with a maximum exposure of $900,000 per bond. To qualify, businesses must have been denied bonding by at least one surety within ninety days, employ fewer than 500 full-time employees or have gross sales below $50 million annually, maintain a principal place of business in Maryland or be Maryland residents, not subcontract more than 75 percent of the work, and demonstrate good moral character and financial responsibility with measurable economic impact through job creation. Applicants must work through bonding agents to apply for assistance; additional information is available from MMG Ventures at (410) 333-4270.
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Appendix 7. Bonds Effective Date: July 2024
Appendix 7. Bonds
Below is a list of the types of Bonds that may be required for this solicitation and resulting contract. If required, it will be noted in the solicitation when to submit the requested Bond to the Procurement Officer.
7.1. Bid Bond
Refer to Section 5 of Appendix 11 - DGS Instructions to Bidders for Construction Projects
7.2. Performance Bond
Refer to Section 20 of Appendix 11 - DGS Instructions to Bidders for Construction Projects
7.3. Payment Bond
Refer to Section 20 of Appendix 11 - DGS Instructions to Bidders for Construction Projects
7.4. Acceptable security
Acceptable security shall be as described below, identified within and excerpted from COMAR 21.06.07.01:
Acceptable security for bid/proposal, performance, and payment bonds is limited to:
1) A bond in a form satisfactory to the State underwritten by a surety company authorized to do business in this State;
7.5. Surety Bond Assistance Program
Assistance in obtaining bid/proposal, performance and payment bonds may be available to qualifying small businesses through the Maryland Small Business Development Financing Authority (MSBDFA). MSBDFA can directly issue bid/proposal, performance or payment bonds up to $750,000. MSBDFA may also guarantee up to 90% of a surety's losses as a result of a Contractor’s breach of Contract; MSBDFA exposure on any bond guaranteed may not, however, exceed $900,000. Bonds issued directly by the program will remain in effect for the duration of the Contract, and those surety bonds that are guaranteed by the program will remain in effect for the duration of the surety’s exposure under the Contract. To be eligible for bonding assistance, a business must first be denied bonding by at least one surety on both the standard and specialty markets within ninety
(90) days of submitting a bonding application to MSBDFA. The applicant must employ fewer than 500 full-time employees or have gross sales of less than $50 million annually, have its principal place of business in Maryland or be a Maryland resident, must not subcontract more than 75 percent of the work, and the business or its principals must have a reputation of good moral character and financial responsibility. Finally, it must be demonstrated that the bonding or guarantee will have a measurable economic impact, through job creation and expansion of the state’s tax base. Applicants are required to work through their respective bonding agents in applying for assistance under the program. Questions regarding the bonding assistance program should be referred to:
Maryland Department of Commerce Maryland Small Business Development Financing Authority
MMG Ventures 826 E. Baltimore Street
Baltimore, Maryland 21202 Phone: (410) 333-4270 Fax: (410) 333-2552
| Below is a list of the types of Bonds that may be required for this solicitation and resulting contract. If required, it will be noted in the solicitation when to submit the requested Bond to the Procurement Officer. |
| 7.1. Bid Bond |
| 7.2. Performance Bond |
| 7.3. Payment Bond |
| 7.4. Acceptable security |
| 7.5. Surety Bond Assistance Program |
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