WHAT SURETY COMPANIES ARE ACCEPTABLE TO THE OWNER?
Since a surety bond essentially is a guarantee by the surety, the owner has an interest in deciding which sureties are acceptable. One means of identifying responsible sureties is to refer to the list of sureties approved in Circular 570. WHO PAYS THE BOND PREMIUM? Of course, the owner eventually pays all costs anticipated in the contractor s bid, whether the project is fixed-price or is a cost-plus-fee arrangement. A private owner may want to provide separate reimbursement for the contractor s bond premium cost when the bond is delivered to the owner. This procedure ensures that bonds actually are furnished. SPECIFYING THE AMOUNT OF BONDS. Premiums rise along with the penal sum of the bond, and the owner ultimately pays these costs in the contract price. Nonetheless, the owner has an interest in setting the bond penal sum high enough to provide the desired protection to the project. A fairly good guideline for setting penal sums is the FAR requirement discussed hereinabove. The penal
