Payment Bond

Payment Bond

A payment bond is a surety bond posted by a contractor to guaranty that his subcontractors and material suppliers on the project will be paid.[1] They are required in contracts over $30,000 with the Federal Government and must be 100% of the contract value. [2] They are often required in conjunction with performance bonds.

For payment bonds on U.S. Government construction contracts, see Miller Act.
For payment bonds on state government construction contracts, see Little Miller Act.

References

  1. ^ "Business Dictionary". http://www.businessdictionary.com/definition/payment-bond.html. Retrieved August 15, 2010. 
  2. ^ "Federal Acquisition Regulation Site". http://farsite.hill.af.mil/vffara.htm. Retrieved August 15, 2010.