Commonwealth Self Bonding Program by the Department of General Services – Division of Engineering and Buildings Department of Treasury – Division of Risk Management

Self Bonding - Authorization Department of Treasury Division of Risk Management is administering a risk management plan for nontransportation-related state construction contracts less that $500,000, where bid bond requirements are waived (§ ). Nontransportation-related construction contracts in excess of $100,000 but less than $500,000 where the bid, performance, and payment bond requirements (§ & § ) are waived, prospective contractors shall be prequalified (§ ) for each individual project.

Self Bonding - Purpose Agency project costs are reduced by lower bonding costs for projects less than $500,000 Agencies are protected by a bond for projects less than $500,000 Contractor responsibility and liability is assured through review and inclusion in the program Subcontractors and Material Suppliers are protected from default

Self Bonding - Process Agency makes a determination to submit project to program for consideration Agency to submit form DGS – Transmittal for the Commonwealth’s Self-Bonding Program to Division of Engineering and Buildings for review and approval Division of Engineering and Buildings will notify agency if the project is approved for inclusion in the program DGS

Self Bonding – Process (cont’d) Division of Engineering and Building Assessment Criteria Complexity of the project Agency Project Manager Experience Past performance of the Contractor Past performance of the A/E

Self Bonding – Process (cont’d) Agency shall select prequalified contractors from the DEB Prequalified SWaM Contractors List ( or the Agency Prequalified SWaM Contractors List and request submission of attachments one and two OR Agency shall advertise to prequalify contractors with the CO-16 and attachments one and two CO-16Attachment 1Attachment 2

Self Bonding – Process (cont’d) Agency shall perform an evaluation to determine if contractors are prequalified Agency shall submit acceptable submissions to Division of Risk Management Division of Risk Management shall make a determination of financial acceptability for inclusion in the program

Self Bonding – Process (cont’d) Division of Risk Management Assessment Criteria DRM will conduct an independent review of: – Character – Capital – Capacity This will include: References and reputation Experience matching requirements Necessary equipment to do work Ability to meet obligations Financial strength to support work Credit history, banking relations Claim, default history Insurance

Self Bonding – Process (cont’d) Agency shall notify acceptable contractors in accordance with CPSM and follow procedures to bid the project within the pool of prequalified contractors Agency shall determine if the apparent low bidder is both responsive and responsible in accordance with CPSM and shall issue a contract for signature Agency shall forward signed contract to Division of Risk Management for issuance of bonds

Self Bonding – Process (cont’d) Agency shall pay cost of issuance directly to Division of Risk Management, bond cost will be 2% of the bid amount Division of Risk Management will issue the Labor, Material and Payment Bond and Performance Bonds to the agency within 15 days of receipt of the contract Agency shall, upon successful completion of the project and final payment, notify Division of Risk Management by sending form DGS to so the bonds may be retired