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Bonding
The San Diego County Regional Airport Authority is committed to the San Diego region
and ensuring that local small, disadvantaged, disabled veteran, and other small
business enterprises have every opportunity to do business with the airport.
Recognizing that the main barriers for small businesses have been those that have
been imposed by a lack of access to bonding and to financing, the airport's
Bonding and Contract Financing Assistance Program assists small contractors in obtaining
bonding and financing for airport contract work.
Program Services:
- Bonding and Financing Consultation and Technical Assistance
- Bid, Performance and Payment Bond Guarantees
- Contract Financing Guarantees
- Contractor-Focused Workshops and Seminars
- Accounting Services
- Funds Administration Services
Enrollment Information - The San Diego County Regional Airport
Authority Bonding and Contract Financing Assistance Program is open to all experienced
and licensed small businesses interested in participating.
To obtain more information, please contact the bonding office at
(619) 400-2571 or click here
to send an appointment request.
Bid, Performance, and Payment Bond Guarantees
A surety bond is a three-party agreement whereby the surety company
assures the project owner (obligee) that the contractor
(principal) will perform a contract in accordance with the contract documents. When
a contractor requires its subcontractors to obtain bonds, the contractor is the
obligee and the subcontractor is the principal.
Surety is designed to prevent a loss. The surety pre-qualifies the contractor based
on financial strength and construction expertise.
There are three basic types of contract surety bonds:
- Bid Bond - Assures that the bid is submitted in good faith and
that the contractor will enter into the contract at the price bid and provide the
required performance and payment bonds.
- Performance Bond – Protects the owner from financial loss
should the contractor fail to perform the contract in accordance with its terms
and conditions.
- Payment Bond – Assures that the contractor will pay specified
subcontractors, laborers, and material suppliers associated with the project.
How Funds Administration Works
The San Diego County Regional Airport Authority's Bonding and Contract Financing
Assistance Program is administered by Merriwether & Williams Insurance Services,
a company that has developed, implemented and administered contract-specific surety
bonding and financing programs for many West Coast municipalities, and is pleased
to do so for the San Diego County Regional Airport Authority.
The 13-year success of these programs has resulted in the growth of numerous general
and subcontracting businesses, and has provided access to opportunities which heretofore
were unattainable because of the barriers imposed by lack of bonding and/or financing.
Key to the success of these programs has been the partnership between
Merriwether and Williams and the contractor, the broker, the lender, and the project
owner. Working together, these partnerships have served to mitigate the traditional
risks associated with these opportunities. Another key component of the program
is Funds Administration.
Funds Administration (“FA”) is an underwriting tool sometimes required
by a surety company as a condition of obtaining a bond. It is also required by the
surety bond program to protect a guarantee provided to a surety on the contractor's
behalf.
Although there are a number of FA companies utilized by various surety companies,
the process is often similar: Essentially, progress payments are sent to the FA
Company instead of directly to the contractor. It is the job of the FA to make sure
the right people get paid the right amount at the right time. This includes payment
to subcontractors, suppliers, etc., and to the contractor for their overhead and
profit.
To help you better understand the process and to incorporate these tools into the
management of your business, we regularly offer a workshop on Funds
Administration.
How Partnering Works
Key to the success of the Bonding and Contract Financing Assistance Program is the partnership
between Merriwether and Williams (program administrator) and the contractor, the
broker, the lender, and the project owner. Working together, these partnerships
have served to mitigate the traditional risks associated with contracting opportunities.
Our partners all specialize in working with contractors. One of the services
of our program is to link you to these partners and help you to establish a relationship.
Surety Brokers – Our surety broker partners help you to develop
a relationship with one of our surety partners to facilitate your obtaining bonding.
Lenders – Our lending partners make working capital loans
to program participants. They also provide counseling and training.
CPAs – Most contractors need to have a relationship with
a CPA who understands the industry and can provide them with timely financial statements.
Many surety companies and lenders often require CPA-prepared financial statements. One
of the features of the program is to help you establish these relationships and
access these tools.
Contracting Opportunities at the Airport
The Bonding and Contract Financing Assistance Program services can be used for all Airport
Contracting Programs.
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