Bid, Payment, and Performance Bond Update for Virginia Public Projects


Effective July 1, 2011, the threshold at which contractors must furnish bid bonds, performance bonds, and payment bonds to Virginia public bodies for construction projects, will increase under certain circumstances. House Bill 1951ER2 amends the Virginia Public Procurement Act, specifically Va. Code § 2.2-4336 and § 2.2-4337, to raise the threshold when bonds are required for non-transportation-related construction contracts. Prior to July 1, 2011, the threshold for when bonds were required for non-transportation-related construction contracts was for "contracts in excess of $100,000." Effective July 1, 2011, the new threshold for such contracts, provided that the public body has prequalified prospective contractors in accordance with Va. Code § 2.2-4317, is for "contracts in excess of $500,000." If the public body does not do prequalification, the threshold to require bonds for such contracts remains $100,000. The threshold for certain transportation-related projects remains $250,000.

As noted, public bodies not requiring bonds for non-transportation-related construction contracts in excess of $100,000 but less than $500,0001 must prequalify the prospective contractors for the individual project at issue in accordance with Va. Code § 2.2-4317. If the public body does not do such prequalification, it must require bonds for such contracts. Also, public bodies may still require bonds for projects below the new threshold if they wish, regardless of whether they prequalify prospective contractors.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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