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 New Jersey
New Jersey has no statewide law mandating a supply bond on supply contracts. N.J.S.A. 40A:11-22 (Local Public Contracts Law) requires performance and payment bonds for public construction contracts exceeding $100,000 but makes bonding for non-construction supply contracts entirely discretionary—a contracting unit 'may' require a surety certificate for 'any other contract.' Public agencies that want a supply bond must include it in their bid documents and contract specifications.
- N.J.S.A. 2A:44-143 (the 'Little Miller Act') covers public construction work only—it protects subcontractors and material suppliers on construction projects, not stand-alone supply contracts.
- Under N.J.S.A. 40A:11-22, only construction and building contracts trigger a mandatory bond obligation (over $100,000); supply contracts are addressed by the permissive clause allowing—but not requiring—contracting units to demand a surety certificate.
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.