Completion guarantee is really a performance bond or sometimes call a completion bond. The completion guarantee or performance bond is a guarantee by an bonding company that the producer or contractor will complete and deliver the contract in full.
The contractor will agree to complete the job for the owner of the contract and if he does not complete the performance of the contract then the bonding company shall assume all his rights and responsibilities to finish the contract.
Since the bonding company is guaranteeing the completion of the contract then they are entitled to charge a fee for that services. Most of the fees are charged on a flat percentage of the contract and if if funds management is required additional fees may also be charged.
Most completion bonds or performance bonds require daily flow of productions paperwork,cash flow reports and cost reports. This allows the company to maintain some type of control over the completion time of the job. It also controls cost and allows the company the ability to see how the job is progressing.
The completion bond or the performance bond does not require all the paperwork if they use funds control.The funds manager controls all the payments and pays all the bill thus the funds manger is then responsibility to make sure that all paper work is complete.This relieves all the pressure from the contractor and guarantees the owner of the contract that the necessary forms are being filed correctly.
The completion guarantee or performance bond usually has a charge of 3-5% of the total amount of the job.
The completion of performance bonds are usually use for first time contractors and first time users of bonds.
The first times user of the bond needs to be educated in how the bond works and what type to paper work that the have to furnish the bonding company tin order to qualify for a completion bond or performance bond.
The key to the completion guarantee is the risk assessment process that is careful scrutinized by the companies management team to make sure that the contractor has the ability to compete the job. It they feel that that the contractors has the ability to finish the job then the bonding company will usually go ahead and approve the completion guarantee or performance bond for the contractor.
in most cases if the contractor is a first time user of a bond then the bonding company will want them to be enrolled into a funds management control program.
If you need help in finding a funds management group you make contact Ric Cline at 719-588-3601 or Anthony Gardunio at 1-505-702-1366. Both would very much like the oppurintiy to help you the the bond that you need.