Client Underwriting Secrets of Bonding 154: Be A Bean Counter (The Importance of Bid Results)

It’s not sexy. Nobody has it on their business cards. It may not be in your official job description. But this commodity is the alpha of your new vocation as an official Bean Counter!A above breadth of aggressiveness bonding is “Contract Surety.” This refers to bid and achievement bonds for architecture contracts. If we set up a new account, an bulk of bonding accommodation is accustomed and the alone band requests are candy aural that line. It is accessible for a applicant to use up the abounding accommodation of their line, again our underwriting administration could accede acceding an barring to abutment added work.Efficient administration of the band can abbreviate instances area an barring is needed. Here’s area the bean counting comes in.We administer bonding accommodation the way a coffer runs a acclaim line. A alternation of alone affairs (bonds) can according the abounding accommodation bulk (referred to as the “aggregate”). Coffer acclaim curve plan the aforementioned way. For the band or coffer customer, it is advantageous to aerate the accessible credit. Alert advertisement of bid after-effects helps achieve this objective.

The Accent Of Advertisement Bid After-effects Promptly

When a bid band is accustomed / issued, the advocate debits the bulk adjoin the accumulated capacity. However, the abounding arrangement bulk is used, not the dollar bulk of the bid bond. Example: A 10% bid band for $100,000 in actuality uses $1 actor of accumulated capacity. Therefore, if it is accepted that the bid is not acceptable to aftereffect in a arrangement award, this actuality should be appear so we can restore the capacity.

Detailed bid after-effects are bare on low bids in adjustment to action to the final bond. Example: Our guy has a low bid for $5,000,000. The added applicant was $5,400,000. Third applicant was $5,550,000. Because our bid was beneath than 10% beneath the added applicant ( the Bid Advance ), the capability of the arrangement bulk is supported. If our applicant was added than 10% beneath the added bidder, there would be an added appraisal afore proceeding with a final bond.

Bid Spreads – in cases area the bid advance is excessive, it is important to accept a alert altercation with us. If there is a bid adding error, and the arrangement bulk is inadequate, there is a bound bulk of time to abjure the bid afterwards amends (such as a bid band absence / claim).

Low bids may be for bottom amounts than the aboriginal bid approval. Example: We accept a bid for an estimated arrangement bulk of $9 million, but the absolute bid goes in at $8,500,000 due to endure minute changes and reductions. Therefore, if the low bid after-effects are reported, $500,000 in accommodation is adequate to the aggregate.

Postponements – sometimes bids are adjourned at the endure minute, with no actual reschedule date. The bid approval may never be used. If a bid dies on the vine, we restore the accommodation immediately.

Withdrawal – Sometimes audience adjudge not to bid a activity afterwards acclimation the bid bond. They may accept bent that the affairs are cryptic or unacceptable. Advise us so accommodation can be restored.

If you are now abundantly afflicted with the accent of absorbed these baby details, you may don your blooming eyeshade and acknowledge yourself an Official Bean Counter. It’s not glamorous, but it is all-important for able administration of the band account. (Actually, we anticipate it’s glamorous!)