In a painful lesson, the City of Peru, Illinois is learning first-hand why it's important to get a payment and performance bond from its contractors before signing a contract.
No Sign of Half-Million Dollar Bond: In January 2011, the city contracted with A-Unified, LLC, of Ohio to demolish a 120-year-old power plant, but work has yet to begin. "The biggest problem here is A-Unified is having difficulty getting a performance bond," said city attorney Doug Schweickert, according to the Illinois NewsTribune. In January, the NewsTribune reported that A-Unified promised to post a $500,000 performance bond, but - months later - has yet to do so.
No Sign of Half-Million Dollar Bond: In January 2011, the city contracted with A-Unified, LLC, of Ohio to demolish a 120-year-old power plant, but work has yet to begin. "The biggest problem here is A-Unified is having difficulty getting a performance bond," said city attorney Doug Schweickert, according to the Illinois NewsTribune. In January, the NewsTribune reported that A-Unified promised to post a $500,000 performance bond, but - months later - has yet to do so.
Lessons Learned: Prior to executing a public works construction contract, public agencies should obtain the payment and performance bond from the contractor. If the contractor fails to provide the required bonds within the period of time allowed for after award, it is easier for the public agency to revoke the award of the contract (and award to the second low bidder), than it is to terminate an already executed contract for failure to provide the bonds.
Mike Purdy's Public Contracting Blog© 2011 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
Posts
No comments:
Post a Comment