CE 460 Chapters 7-8

CE 460 Chapters 7-8 - CE 460 Lecture Notes Chapter 7...

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CE 460 Lecture Notes Chapter 7 Contract Surety Bonds
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Contract Surety Bond Definition – Third Party Indemnification Covers Private Work Public Work Foreign work Bid and Proposal
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Surety Bonds in Construction The bonders agree to indemnify the owner against any default or failure of the prime contractor. Contract bonds guarantee that the work will be completed in accordance with the contract documents and that all construction cost will be paid.
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Types Performance Payment Subcontract Bonds Maintenance Bonds Subdivision Bonds Fidelity Bonds Paragraph 7.18
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Performance Bonds A performance bond acts primarily for the protection of the owner. It guarantees that the contract will be performed and that the owner will receive its structure, built in substantial accordance with the terms of the contract. It protects the owner against liquidated damages.
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Payment Bonds A payment bond acts primarily for the protection of third parties to the contract and guarantees payment for labor and materials used or supplied in the performance of the construction.
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The Miller Act The Miller Act prescribes the requirements of performance and of payment bonds in c federally funded construction projects.
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Statutory vs. Common- Law Bonds Miller Act - $25,000 Plus on Federal Construction Projects
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Investigation by Surety Before a surety will furnish an unknown contracting firm with a bid bond or contract bond, a thorough program of investigation is carried out to establish the past record and current commitments of the company Characteristics of the project Total amount of uncompleted work The adequacy of working capital and the availability of credit Spread between the low bid and the next highest
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This note was uploaded on 04/21/2009 for the course CE 460 taught by Professor Koffman during the Spring '08 term at USC.

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CE 460 Chapters 7-8 - CE 460 Lecture Notes Chapter 7...

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