Surety Bond Quarterly - Fall 2015 - (Page 30)
job without any incoming payment.
Moreover, it is extraordinarily hard
for the constructor to anticipate and
to price out this kind of risk.
ConsensusDocs takes a balanced
approached to this difficult issue.
The constructor gets paid for all
undisputed work and 50 percent of
the estimate of the directed change.
The owner retains its claim against
disputed work. The constructor's
cash flow, which is a constructor's lifeblood, is not endangered.
offers its bond form
package for free
Additionally, ConsensusDocs includes an obligation to convert
directed changes into change orders
upon agreement, as other change
orders are processed.
Surety professionals and their contractor clients can download the free
ConsensusDocs Prequalification &
Bond Form Package, which offers:
* E asy editing through the
ConsensusDocs Micosoft Wordbased technology,
* A collaborative platform helping
parties reach consensus faster,
* C urrent versions of each
ConsensusDocs bond form, and
* C onvenient access with 24/7
To access the package, go to the
Quick Purchase tab at www.consensusdocs.org. Follow the purchase process, and the balance
due will be $0.
Proper risk management includes
making sure that the owner has
the appropriate finances or financing for the construction project.
Learning that project financing is
gone when a constructor is in the
BKD National Construction & Real Estate Group
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BOND QUARTERLY | FALL 2015
midst of performance can spell ruin.
ConsensusDocs contracts address
this by allowing a constructor to
request project financial information
throughout the life of the project. The
provision has teeth because the constructor may stop work if the owner
doesn't respond. Moreover, there are
Guidelines for Obtaining Financial
Information (ConsensusDocs 290)
and a Standard Questionnaire (290.1)
that are available. By comparison, the
American Institute of Architects (AIA)
A201, General Conditions Document,
requires that a constructor must ask
permission and provide justifications
to get access to financial information,
once construction has begun.
Holding money in the form of retainage is a protection for owners, but it
shouldn't be used as a hammer hovering over a contractor's head. Excessive
retainage unnecessarily impedes cash
flow and adds costs for carrying an
increased capital load that have to be
passed on to owners. Consequently,
ConsensusDocs has created a standard
that improves upon what is typically
seen. Once a project is 50 percent complete, no additional retainage is held.
Contingent upon the owner's release
07/08/15 12:55 AM
Table of Contents for the Digital Edition of Surety Bond Quarterly - Fall 2015
2015-2016 Executive Committee
NASBP Upcoming Meetings & Events
From the CEO - Resources: Forms, Opinions & Risk Management Practices
Practical Insights: What You Need to Know - Key Takeaways
Alternative Project Delivery, Alternative Risks
Contractors in a New Age of Product Delivery - Sharing Design Liability
DBIA Releases New Bond Forms for Design-Build Projects
AIA’s New Teaming Agreement: AIA Document C102TM–2015
ConsensusDocs Contracts Help Ensure Smooth Sailing
NASBP’s Seven Virtual Seminars on Leadership
Guidance in Addressing Ethical Dilemmas
2015 NASBP Resource Directory
Index to Advertisers
Surety Bond Quarterly - Fall 2015