Participation in tenders for the construction of infrastructure requires the submission of proposals to choose the best option. Proposals are needed as all the construction tenders should be legalized at first.
Commonly, the proposals include the subcontracting of third parties, which requires an analysis to make sure that they effectively have the technical, operational, financial and moral capacity to face the acquired obligations and thus avoid breaches in the assigned contracts.
Likewise, surety bonding agents and intermediaries are obliged to identify the client to avoid fictitious clients or illegal transactions. They minimize all possible risks.
A common practice in the market needed to analyze each contractor or subcontractor to validate that they can effectively execute a work; in addition to following up on the administration of the bond in terms of compliance with the terms and conditions of the construction insurance.
It is worth mentioning that for this type of works contracts, the minimum suggested guarantees that must be contracted are:
Advance payment: guarantees the appropriate investment and / or amortization or refund of the amount. Generally, it ranges between 10 and 30%, but can reach up to 50 or 100% of the total contract amount; this will depend on the negotiations that are agreed with the beneficiary.
Compliance: it supports the delivery in time and form of the services, goods or works according to the strong document and covers 10% of the total amount of the contract.
Labor contingency: guarantees the payment of amounts derived from the non-payment of worker-employer contributions. It covers 10 to 20% of the total contract amount.
Good quality and / or hidden defects: endorses the good quality of the work or the repair of hidden defects attributable to the guarantee according to the strong document. This bond is requested once the work has been delivered or within the compliance bond and protects 10% of the total amount of the contract.
Conventional penalties: guarantees the payment of the penalties established in the works and supply contracts up to the amount indicated in them, normally between 10 and 20% of the total amount of the contract.
What to take into account
Of course you need to deal with professional ones. They should be advised by experts in the field, and verify that the texts of the bonds to be contracted are a mirror of the clauses of the assigned contract. Also, make sure that the bonds acquired are issued by the bondholders authorized by the Ministry of Finance and Public Credit, or intermediaries authorized by the National Insurance and Bonding Commission.
Benefits of the construction bond
The construction bond program is designed according to the specific and real needs of the client and / or beneficiary, and that in case of claim, have the advice of the experts. It is of vital importance to follow up on the administration of the guarantees granted, so the program allows keeping a control of each one of the suppliers in various aspects.