Bidding On A Big Construction Project? Consider These Tips

25 October 2017
 Categories: Finance & Money, Blog

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In your area, large construction projects may be happening all the time. Your company may have been too small to participate in the past, but you may finally be at a point where you feel comfortable bidding on these major projects. Remember these bidding and operation tips as you work through this project.

Get Appropriate Payment and Performance Bonds

For many major state and federal projects, bidding includes more than simply submitting your information and plans to the entity overseeing the project. In most cases, these projects will also require that you have various kinds of surety bonds. These bonds are in place to protect everyone against incomplete or shoddy work and unscrupulous financial decisions. In particular, you may be asked for payment and performance bonds.

Payment and performance bonds are not identical, although most of the time, they are issued together. A performance bond requires that contractors and subcontractors perform their work adequately and fulfill contract terms. A payment bond ensures that the bonded contractor--hopefully you--to pay subcontractors, vendors, and others involved in the work that's done. Without having these bonds in hand, you may not even be eligible for certain major projects.

Work with an Accountant

If you've been handling your company's financial details on your own or sharing those responsibilities with a partner, now is the appropriate time to have a CPA check out your documents. The surety bond companies you're interacting with and the entities overseeing the projects you want to bid on will ask for a lot of financial information. They will need to be certain that your company is financially able to follow through with your commitments. You can, of course, submit paperwork that you've completed, but know that if it doesn't meet the appropriate standards they may ask for more financial details or refuse your bid altogether. Prevent this by securing professional CPA help.

Keep Excellent Records

If you're awarded the project, it's time to get to work. However, simultaneously, you must be sure you're meeting the requirements set out in your various bonds. Pay subcontractors and others on time, and keep detailed, accurate records of those payments. You may even contact them directly every time you send a payment to ensure it was received and logged on their end.

Big construction projects can bring wealth and acclaim to your construction company. Entertain these suggestions so your business can avoid pitfalls that threaten the success of the projects.