performance and payment bonds

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Author Message Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 589 Registered: 01-2003 Posted on Tuesday, October 02, 2012 - 01:12 am:    The AIA A701 states, in 7.2.2, "The bonds shall be dated on or after the date of the Contract." An owner wants to change that to "before or on the date of the Contract." Does it matter? Is the reason for the A701 requirement that bonds aren't executed until the contract is awarded? Nathan Woods, CSI, CCCA, LEED AP Senior Member Username: nwoods Post Number: 483 Registered: 08-2005 Posted on Tuesday, October 02, 2012 - 01:35 am:    I would probably change it altogether, and state that the Bond shall be executed by the date of Notice to Proceed. Nathan Woods, CSI, CCCA, LEED AP Senior Member Username: nwoods Post Number: 484 Registered: 08-2005 Posted on Tuesday, October 02, 2012 - 01:37 am:    Actually, I should change that. The contractor doesn't control that date, so it's unreasonable to have it prepared by that date. However, it would be prudent to say something like, "Bond shall be fully executed effective on the date of the Contract, or within 5 business days from the Notice to Proceed, whichever comes first." spiper (Unregistered Guest) Unregistered guest Posted on Tuesday, October 02, 2012 - 09:36 am:    we list that the contract will not be valid (regardless of the date on the contract)and work shall not commence until all required insurnace and bonds are secured and provided to the owner. This does not require the paperwork to completed by a set date but allows the Owner to be protected in the event that a contractor fails to provide or is unable to secure the bonds. I am not sure how an Owner can ask a contractor to secure a bond for an award that they do not yet have. Maybe all they want is for the bond to be retroactive to the contract date but I don't understand the need for that either. Insurance retroactive to the contract date maybe but not P&P bonds. Robert W. Johnson Senior Member Username: robert_w_johnson Post Number: 215 Registered: 03-2009 Posted on Tuesday, October 02, 2012 - 10:24 am:    The bonds are for the performance of a contract. I don't think the bonding company will provide a bond for a contract that does not yet exist. I would talk to a bonding company before responding to the owner. Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 590 Registered: 01-2003 Posted on Thursday, October 04, 2012 - 02:33 pm:    Thanks for the comments. A surety confirmed my suspicion, i.e., they won't issue bonds until they see a signed contract. Maybe others will, but that sounds reasonable.