Possible bond threshold increase legislation: another consideration

01/19/2011

I was at a trade association meeting today and the possible bond threshold increase legislation discussed in my earlier blog came up. Another aspect to increasing the threshold we discussed was that in addition to the payment bond implications I discussed in the earlier blog that there is also a performance bond aspect. That is that if the thresholds increase then it will open procurements to bidders or offerors that otherwise would not have the financial means to perform the work.

While on the one hand this can open doors that might not otherwise exist to participate in public procurements, on the other hand those persons might not be capable of doing or financing the work, and if they cannot then it would leave the awardee governmental entities at significant risk. More thought for consideration on this pending legislation.

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