Surety Bonds might only cover 10% of the bid cost. They can cover 100%, but usually cover less. This is where my local area seems to be getting hit. They are hiring companies from other countries and getting skipped out on once they hit a certain payment milestone.
That and the low bidder system. I am in heartland America, it is way too common here.
Interesting. There must be some serious differences between there and here (Canada). I have no doubt companies fail here too, but even for companies that have soon gone out of business, they always finish their jobs.
We often only hire companies who can show past experience on similar sized projects, our bonds cover the full contract amount (every municipality around here has that requirement), and the contracts are generally pretty stringent on things like working days with severe liquidated damages for projects that go over the deadline (I’ve seen $500/day up to $3,000/day).
It is totally different in the US. City planning will go with the absolute lowest bid, unless it is one of their relatives or they are getting a bribe.
Regardless, the incompetence would astound you. My city hired a construction company out of India that did not do construction cuts in the concrete. The roads developed “fault lines” within two months. The news said it apparently never snows where the construction company was from and they didn’t know it had to be done. That makes no sense because it would still expand in summer.
The high failure rate of construction companies would be here https://www.constructconnect.com/blog/6-reasons-why-construction-companies-fail
Surety Bonds might only cover 10% of the bid cost. They can cover 100%, but usually cover less. This is where my local area seems to be getting hit. They are hiring companies from other countries and getting skipped out on once they hit a certain payment milestone.
That and the low bidder system. I am in heartland America, it is way too common here.
Interesting. There must be some serious differences between there and here (Canada). I have no doubt companies fail here too, but even for companies that have soon gone out of business, they always finish their jobs.
We often only hire companies who can show past experience on similar sized projects, our bonds cover the full contract amount (every municipality around here has that requirement), and the contracts are generally pretty stringent on things like working days with severe liquidated damages for projects that go over the deadline (I’ve seen $500/day up to $3,000/day).
It is totally different in the US. City planning will go with the absolute lowest bid, unless it is one of their relatives or they are getting a bribe. Regardless, the incompetence would astound you. My city hired a construction company out of India that did not do construction cuts in the concrete. The roads developed “fault lines” within two months. The news said it apparently never snows where the construction company was from and they didn’t know it had to be done. That makes no sense because it would still expand in summer.