What a supply bond is
A supply bond guarantees a supplier will deliver materials or equipment as the contract says. Public agencies and project owners use them on large supply contracts.
In Delaware
Delaware law lets state agencies require bonds on contracts for materiel (supplies) under 29 Del. C. § 6927: a bid bond or security of at least 10% of the bid, and a performance bond generally equal to 100% of the contract award. For smaller material purchases the requirement can be reduced or waived if the bid specifications say so.
- Below the threshold amounts, an irrevocable letter of credit or other security may replace the bond if the bid specifications allow it.
- The performance bond also covers payment to everyone furnishing materiel or labor on the contract.
You need this bond if you're
- A material supplier on a public contract
- An equipment vendor or manufacturer
- A distributor supplying a large private project
What the surety looks at
Your business, credit and the supply contract. Large contracts can need financial statements.