Have You Considered The Additional Security Provided
By Having Your Bid and Order Bonded?

The customer, for a nominal charge, can obtain the assurance of an independent financial institution, that it will receive the product which is the subject of the purchase contract or be compensated for damages it may incur.

Following an extensive qualification process, the issuance of the bond is an indication that a surety company (e.g. Travelers) has confidence in a manufacturer’s (e.g. Pierce) ability to complete the terms of its customer contracts and/or support the financial obligations of the contract. A customer benefits from this intervention by the surety company since unqualified bidders will probably be unable to provide surety support for the transaction.

To further assist you in understanding the benefit of holding a surety bond, we have outlined below certain additional information concerning surety bonds:

What Is a surety bond? A third party (surety) will issue a noncancelable guarantee (bond) on behalf of a manufacturer (principal) for the benefit of a customer (obligee) that the terms and specifications of the bid or contract will be complied with. Who qualifies to have a surety bond issued? A manufacturer that meets stringent financial strength tests and demonstrates a consistent capability to meet customer contractual obligations, will be able to qualify for bonding. What benefit is derived from holding a surety bond? A surety is liable for the failure of the manufacturer to comply with the terms of the contract with the customer. A surety will do one of the following: make arrangements to have the contractual obligations fulfilled; compensate the customer directly for financial loss incurred; or forfeit the full amount of the bond as a penalty for default. The manufacturer cannot unilaterally modify the protection afforded by the bond nor does the manufacturer receive any benefit under the surety bond. Who is qualified to issue a surety bond? The customer should insist upon reputable and licensed surety companies. What types of bonds can be issued? Bid, performance, warranty, maintenance, supply and special purpose bonds (e.g. bonds to cover prepayments made by Oshkosh Capital). If you would like to have the assurance that a bidder on a contract secures a bond and can provide you with this assurance, we suggest that you insert the following wording into your bid specification/contract to require bonding: Bid Bonds All bidders shall provide a bid bond as security for the bid in the form of a 10% bid bond, to accompany their bid made payable to (entity whom manufacturer has contract with). This bid bond shall be issued by a Surety Company who is listed on the U.S. Treasury Department’s list of acceptable sureties as published in Department Circular 570. The bid bond shall be issued by an authorized representative of the Surety Company and shall be accompanied by a certified power of attorney dated on or before the date of bid. The bid bond shall include language which assures that the bidder/principal shall give a bond or bonds, as may be specified in the bidding or contract documents, with good and sufficient surety for the faithful performance of the contract, including the warranty, and for the prompt payment of labor and material furnished in the prosecution of the contract. Performance Bonds The successful bidders shall provide, within 30 days of award of the contract, and along with a signed copy of the contract, a performance bond payable to (entity whom manufacturer has contract with), which guarantees performance of all terms and conditions of the contract and warranty agreement. The performance bond will specifically cover the performance of the contract according to its terms and conditions, as well as payment of all related bills and encumbrances. This performance bond shall be issued by a surety company who is listed by the U.S. Treasury Department’s list of approved sureties, as published in Circular 570, as of the bid date. The performance bond shall be issued in an amount equal to 100% of the contract amount and shall be dated concurrent to, or subsequent to, the date of the contract. If you have additional questions concerning surety bonds, and the additional security provided to you, please contact your local Pierce representative. Pierce Manufacturing Inc. is a qualified principal under a master surety line with the Travelers Property and Surety Company of America, a surety company headquartered in Hartford, CT. The Travelers has received an A++ (superior) claims-paying/financial strength and XV (highest level) financial size rating from A.M. Best Company. Customers should validate each bidders ability to provide surety support for their transactions by including the above surety bond wording in bid and contract documents.