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 Pennsylvania
Pennsylvania's Commonwealth Procurement Code, 62 Pa.C.S. § 533, gives contracting officers discretionary authority to require bid security and performance bonds on supply and service contracts—the statute uses 'may be required,' not 'shall.' The Public Works Contractors' Bond Law of 1967 (8 P.S. § 193) mandates 100% performance and payment bonds on public works construction contracts over $5,000, but that law is expressly limited to construction, reconstruction, alteration, or repair of public buildings and public works, not standalone supply contracts.
- 62 Pa.C.S. § 903 mandates performance bonds for public construction contracts (50% of contract price for $25,000–$100,000; 100% for contracts over $100,000), but is expressly limited to construction—not supply contracts.
- 8 P.S. § 193 (Public Works Contractors' Bond Law of 1967) requires 100% performance and payment bonds on public works construction contracts over $5,000 but does not extend to standalone supply or equipment delivery contracts.
- Under 62 Pa.C.S. § 533, when the invitation for bids requires security, noncompliance by the bidder requires rejection of the bid unless the failure is nonsubstantial.
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.