Bond Claims FAQ's
What is a bond claim?
A bond is a written commitment by a surety to guarantee the performance of a contractor. Bonds which guarantee payment to subcontractors are “payment bonds.”
Bonds which assure the owner that the contractor will complete the work in accordance with the contract documents are “performance bonds.” Public works projects virtually always have both payment bonds benefiting subcontractors and performance bonds benefiting the public owner.
A bond claim is the filing and presentment of a subcontractor's or supplier's claim for payment.
Who can make a bond claim on a Washington public works project?
Anyone who furnishes labor, equipment, materials, and/or goods in furtherance of a public works project may make a claim against the bond.
This includes second tier subcontractors, but not suppliers supplying materials to another supplier.
Do I need to provide a pre-claim notice to make a bond claim on a Washington public works project?
In some cases, yes. If you are a subcontractor that contracted directly with the prime contractor, you do not need to give a pre-claim notice to make a bond claim.
However, when materials are supplied by someone other than the subcontractor (i.e. a third party who has no direct contractual relationship with the prime contractor), that supplier must provide a conforming pre-claim notice to the prime contractor by either personal delivery or certified mail within 10 days of supplying materials to the public works project.
Failure to provide such notice will be a bar to the supplier's public works bond claim.
How do I make a bond claim on a Washington public works project?
A subcontractor can make a claim on a public works project bond by presenting a bond claim to the public owner in a signed notice stating the claimed amount and a brief description of work performed.
The notice must be either delivered, or sent via certified mail, to the public owner's governing body.
What do I have to include in my Notice of Claim?
Your Notice of Claim must include the name of the public owner, your name, a description of the nature of the work performed, the name of the bonding company, and the amount of money.
What is the deadline for filing a Notice of Claim on a Public Works Contractor's Bond?
You must file a public works bond claim with the public owner no later than 30 days after the project is accepted as complete by the public owner's governing body.
If you fail to provide notice within that time frame, your claim against the bonding company will be released.
Can I file a bond claim before the public owner accepts the project as complete?
Yes. The acceptance of the project as complete does not invalidate a notice filed after completion of your work even if your claim is made prior to final acceptance by the public owner.
What if I missed the deadline, can I still get paid?
Yes, but not against the bonding company. If you fail to timely file your public works bond claim, the bonding company will be released from paying your claim. In that case, time is of the essence to pursue your claim against the prime contractor.
Often times, on large public works jobs which have not gone well, the prime contractor may become unable to pay all the claims against it. The faster you get a judgment, the better position you will be in attach it to assets.
Further, your chances of getting paid could depend on piercing the corporate veil to obtain a judgment against the prime contractor's parent company or individual owner.
How long does my Notice of Claim last?
The time frame to bring suit on your public works bond claim depends on a number of things.
For example, whether your subcontract is written or oral; and the stated terms of prime contractor's public works bond.
Because this is a complex and case specific question, you should consult an attorney as soon as possible to get an answer in your case.
How does filing my Notice of Claim on a public works contractor's bond help me get paid?
In the case of a public works payment bond, the bonding company is promising to pay a subcontractor who has not been paid by the prime contractor.
In short, the way to get paid is to sue the prime contractor for breaching your subcontract, and the bonding company for failing to pay on behalf of the prime contractor.
The bonding company's commitment is not unconditional. Among other things, you must show that you have performed work under your subcontract at the time you made a claim on the bond.
The bonding company can raise any defense to paying you that the prime contractor could have raised.
Assuming you are successful, judgment will be entered against both the prime contractor and the bonding company.
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