Tips for small contractors who need to post a surety bond
One of the...
Starting a small contractorship company involves so many administrative and business details to take care of that it can get disheartening.
One of the common requirements that contractors need to meet is to post a surety bond as a part of their licensing process. When bidding on construction projects, they might also have to obtain other types of contractor surety bonds.
This licensing or bidding criterion can seem a serious hurdle, but is not as complex or costly as you may think.
It is necessary to become acquainted with the way bonds work, so that you can make them work for your business. For contractors’ clients, a surety bond can be a strong sign that the contractorship company is safe to work with and can be trusted.
There are several important tips that small contractors should keep in mind.
1. Understand how bonds function
Before starting a bonding application, it’s crucial to differentiate between surety bonds and insurance. Unlike the latter, bonds are not protecting your business. They are a tool that provides extra security for your clients.
A surety bond is, in practice, a contract between your business, the authority that requires the bonding and the surety underwriter. The bond provider takes on the responsibility to back your company in front of relevant state or local bodies.
Depending on the exact type and amount of the bond, they offer compensation to affected parties in case you do not abide by state rules, contracts or the statutes set in the bond language. That’s why it’s important to avoid claims and make sure projects are completed on time and in high quality.
2. Differentiate between contractor license bonds and contract bonds
Contractors are required to post different types of bonds in various situations. It’s worth getting acquainted with those cases in advance.
When getting a contractor license, you are likely to be required to post a contractor license bond. It is an indispensable criterion for obtaining your license and being able to operate legally in your state. Its purpose is to provide extra security for the state and your clients that you will follow all applicable laws.
Additionally, if you would like to participate in public or private projects, you will have to obtain construction contractor bonds. They are a different set of bonds that are project-specific and not related to your license.
The most common contractor bonds include bid bonds, payment bonds and performance bonds. They are needed at the consecutive stages of the project bidding process. Their goal is to protect project owners from non-completion of the project, as well as subcontractors and suppliers from non-payment of materials and work.
3. Learn how you can decrease your bond costs
One of the biggest concerns of contractors is the price they need to pay to get bonded. Understanding how your surety bond cost is set is the only way to reduce this price successfully.
When applying for a bond, you need to provide your surety with a range of documents that showcase your financial situation. Your personal credit score, business finances, assets and liquidity and professional experience are all factors that are considered when assessing a bond application. The surety has to measure the level of risk that bonding you present. On the basis of this judgment, it sets your bond premium, which is a few percent’s of the bond amount you need to post.
Even if your credit situation is not that perfect, you can work to improve it over time and reduce your bond cost. During the application process, it’s important to present all your financial assets and paperwork that can illustrate your business strength. In this way, you can reduce the percentage of the bond that you will end up paying.
4. Market your business with the fact that you’re bonded
There is a smart hack related to bonds that not all small contractors might be aware of. While they are a licensing and administrative requirement, bonds are also proof of your company’s trustworthiness.
As you have already paid for them and gone through a rigorous bonding assessment, it’s only natural to use the fact that you are bonded in your interest. That’s why you can use the title ‘licensed and bonded’ when marketing your services to your clients.
Since people would like to avoid problematic contractors, they prefer to work with licensed and bonded construction specialists. Often your clients will specifically check whether you have obtained the necessary license and bond. This is a form of security for them and a sign that they can choose your business safely.
If you are required to post a contractor surety bond, it is necessary to become familiar with the basics about bonding, bond costs and how bonds can work for your business. Then you’ll be better off during your bonding process.
Read the September 2016 issue of Construction Global magazine
Why engineers must always consider human-induced vibration
Human induced vibration, or more accurately vibrations caused by human footfall, often conjures images of Millennium Bridge-style swaying or collapsing buildings.
But in reality, the ‘damage’ caused by human-induced vibrations is less likely to ruin a structure and more likely to cause discomfort in people. Though not as dramatic as a structural failure, any good engineer wants to make sure the people using their structures, be it bridges or buildings or anything in between, can do so safely and comfortably. This is why human-induced vibration must be considered within the design process.
Resonance v Impulse
There are two ways that human-induced vibrations affect structures: resonant, and impulse or transient response. Put simply, resonance occurs when Object A vibrates at the same natural frequency as Object B.
Object B resonates and begins to vibrate too. Think singing to break a wine glass! Although the person singing isn’t touching the glass, the vibrations of their voice are resonating with the glass’s natural frequency, causing this vibration to get stronger and stronger and eventually, break the glass. In the case of a structure, resonance occurs when the pedestrian’s feet land in time with the vibration.
On the other hand, impulse or transient vibration responses can be a problem on structures where its natural frequencies are too high for resonance to occur, such as where the structure is light or stiff. Here the discomfort is caused by the initial “bounce” of the structure caused by the footstep and is a concern on light or stiff structures.
Engineers must, of course, design to reduce the vibration effects caused by either impulse or resonance.
Potential impacts from human induced vibration
Human induced vibration can lead to a number of effects upon the structure and its users. These include:
- Interfering with sensitive equipment Depending on the building’s purpose, what it houses can be affected by the vibrations of people using the building. Universities and laboratories, for example, may have sensitive equipment whose accuracy and performance could be damaged by vibrations. Even in ordinary offices the footfall vibration can wobble computer screens, upsetting the workers.
- Swaying bridges One of the most famous examples of human-induced resonance impacting a structure occurred with the Millennium Bridge. As people walked across the bridge, the footsteps caused the bridge to sway, and everybody had to walk in time with the sway because it was difficult not to. Thankfully, this feedback can only occur with horizontal vibrations so building floors are safe from it, but footbridges need careful checking to prevent it.
- Human discomfort According to research, vibrations in buildings and structures can cause depression and even motion sickness in inhabitants. Tall buildings sway in the wind and footsteps can be felt, even subconsciously by the occupants. It has been argued that modern efficient designs featuring thinner floor slabs and wider spacing in column design mean that these new builds are not as effective at dampening vibrations as older buildings are.
- Jeopardising structural integrity The build-up of constant vibrations on a structure can, eventually, lead to structural integrity being compromised. A worse-case scenario would be the complete collapse of the structure and is the reason some bridges insist that marching troops break step before crossing. Crowds jumping in time to music or in response to a goal in a stadium are also dynamic loads that might damage an under-designed structure.
How to avoid it
As mentioned, modern designs that favour thinner slabs and wider column spacing are particularly susceptible to all forms of vibration, human-induced or otherwise, but short spans can also suffer due to their low mass. Using sophisticated structural engineering software is an effective method for engineers to test for and mitigate footfall and other vibrations at the design stage.