Glaziers Speak Out on Surety Bonding:
Glaziers like to be in
a position to be bondable for easy eligibility for public projects;
others direct their focus on plentiful, non-bonded opportunities
in the private sector.
Surety bonding is an integral part of the glass and glazing business.
By law, bonding is required on public jobs. At the Federal level,
jobs of more than $100,000 require surety bonding and generally
those between $50,000 and $100,000 for state level projects. In
terms of issuing a surety bond for public projects underwriters
look at the three "Cs": character, competence and capital
of the contractor to determine eligibility. With construction up
across the nation, work is plentiful and glazing subcontractors
can be more selective in the projects they pursue and forego jobs
in the public sector.
"We view bonding not as a stumbling block but as a component
of both our strategic risk management plans," explains Lou
Sigman, president of Horizon Glass, a mid-size glazing contractor
serving the greater Denver area.
"It is of value for us to have a reasonable level of bonding
capacity and to be able to meet the required criteria when a particular
project or series of projects call for such additional coverage.
And, when bonding requirements do present themselves, we of course,
want to have in place the appropriate coverage at competitively
priced premium rates. For these reasons, a strong relationship with
one's bonding agent and their respective surety is as important
as meeting the necessary requirements in terms of capacity and financial
performance when securing a bond."
"Under normal circumstances we would strive to not let the
issue of bonding be a deal breaker if the other parameters of a
particular project are an otherwise good fit," adds Sigman.
"We believe having approximately 20 to 30 percent of your work
bonded at any given time can add valuable and recognizable strengths
to the organization."
For Peter Hasek, the fourth-generation owner of The Peter Hasek
Glass Co. in Medina, Ohio, surety bonding is no longer an issue.
"This last time I bonded was in 2001 just before I downsized
our operations and stepped away from the hassles of the public arena.
At this point I only work for private companies and take on small
projects where I know payment will be prompt and forthcoming,"
Bill Wiedemann, general manager for Harmon Inc.'s Denver location,
says bonding has never been an issue. "It's not been an issue
for us because of our parent company, Apogee," explains Wiedemann.
"Bonding often depends upon the owner, town and type and size
of the building. Here, it just doesn't seem to be much of an issue.
Bonding is often requested as a part of a project. In some cases,
general contractors will cover the cost of the bond for those subcontractors
who can't or won't provide bonding themselves. In other cases, the
bond will be waived to get the value of the most competitive bid."
But is bonding just for the big guys?
In his line of work, Bob Busking, the second-generation owner of
Westhampton Glass in Westhampton, N.Y., says he has never been asked
to provide a bond nor does he chase that type of work. "We
have been serving customers in the Hampton's with custom windows,
doors and shower enclosures for close to four decades," Busking
points out. "The way I look at it is the large-scale projects
draw in 20 to 30 bidders and typically result in the low bid being
awarded the project. The general contractor has to go through a
great deal of time and effort to gather quotes, estimates, secure
a bond and participate in what can be a lengthy process with an
array of pitfalls along the way. Often the project is underbid which
can end up being a mess and it just seems like businesses are beating
each other up for no reason."
" I subscribe to the mantra of developing a niche where I can
make money, get as good as I can at my craft and bring in as much
work as possible in my area of expertise," continues Busking.
"I treat people well, provide quality materials, highly trained
labor and the type of service and workmanship that earns repeat
business and decent margins. There is very little haggling in my
business and I like it that way."
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