• Bonding Your Next Project: Here’s what you need to know

    For many small businesses, the bonding process can seem confusing and overwhelming. Here are some answers to common questions:

    What is a bond?

    A bond is a guarantee. Payment bonds guarantee that workers, subcontractors and suppliers will be paid, while performance bonds guarantee that a project will be accomplished according to plan.

    Why is a bond necessary? 

    Surety bonds for public works are mandated by Texas Government Code Chapter 2253 and required by HISD Board policy. These surety bond requirements benefit project owners, contractors, subcontractors and suppliers. A surety bond guarantees the job will be completed, and the workers and suppliers will be paid. The ability to rely on a surety bond enables HISD to award jobs to a diverse variety of contractors. The assurance of a surety bond may also help contractors secure more favorable payment terms for supplies and subcontract agreements. Suppliers and subcontractors can participate in projects, confident they can pursue payment from a bond if payments they are entitled to are not made.

    How can I get a bond?

    You must obtain a bond from a licensed Texas insurance agent. You can find an agent by consulting any of the following:

    • Your current agent 
    • Yellow pages 
    • National Association of Surety Bond Producers at www.nasbp.org

    Approval time depends on the agency and the bond requested, but it usually takes up to five business days.

    What information will I have to provide with my bond application?

    The following documents are necessary to complete the bond application process:

    • Detailed description of the project
    • Indemnity Agreement
    • Statement of work on hand – do you have sufficient funding, time, manpower and supplies for this project?
    • Financial statements – applying for a bond is a lot like applying for a credit card or a mortgage. The underwriter will want to know you have the financial strength to meet your obligations.
    • References or letters of recommendation. References from your bank or current insurance agent are especially useful. 

    Bond forms are available on-line on the HISD Procurement Services website at www.Houstonisd.org, click on Departments, scroll down and select Procurement Services, click on Forms and Documents, choose RFP General Information.pdf, then select Bond Forms. 


    How can I learn more?
    HISD offer workshops on a variety of business topics on the first on the first Wednesday of each month at the HISD CFS Operations - Grounds & Facilities Ctr. (Formerly Brock ES) located at 1417 Houston Avenue, Houston, TX 77007-6237 from 3:00 PM to 5:00 PM.  If the first Wednesday should fall on a scheduled holiday, the workshop will move to the next Wednesday that month. Contact our office for a list of scheduled times and dates for these events.  You may also call the Business Assistance Department at (713) 556-7273 for assistance by telephone or to schedule a meeting with a Supplier Diversity Specialist.