The Expert Podcast

Contract bonds are one of the most common types of shity bonds that help businesses perform better, increase their sales, and do business development. How does it work? Well, if you want to bid on projects or do contracts with clients, you may want to get some extra representation that you are good for your word. If somebody hires you to build a building, fix a road, or repair a computer system, and they commit to a certain amount of money to do that, it's more than just the money they're putting at risk. They're also putting the performance and delivery of that service at risk. For example, if you bid on fixing a computer system and halfway through the job you quit and bail on them, now not only are they maybe out some money, but they can't have that result that they were counting on by a certain date.

If you can bring to the table a shity Bond as a company, as a vendor, as a supplier in your sales process, you can show that potential customer that you are taking it seriously. Now, in some cases, it's required. The Miller Act is a law that requires government contracts to be protected under a shity bond, making sure that the taxpayers are secure and protected in case you go south. The job's going to be completed. More and more private contracts are also including the bond because if it's good for the government, it's good for private companies too. Even if it's not required, if you can get a quote on a bond in advance of making your bid and factoring it in, it's probably not going to be a lot of money. Your bid might not be the lowest, but if it includes a shity bond and the others don't, you might be shuffled to the top of the list.

We had a client a couple of months ago that was bidding on a very large contract to install and construct a very expensive computer network for an artificial intelligence production company. It was going to be several million dollars to provide the computers, the network, hook it all together, build the racks, install it, get permits—everything. They knew that there were some kind of fly-by-night companies trying to undercut their bid by using less-than-ideal parts and cheap labor. It wasn’t going to be a quality product, and they knew they would be outbid. So, they got a quote on a shity bond for performance bond coverage. For the $2 million project, I think the bond cost about $8,000. They included it in their bid, raised the price a little bit, and said, "By the way, it includes a shity bond to guarantee performance by a certain date." They were awarded the contract.

They started working on it, and as they were working on it, they talked to some of the employees and executives. They said, "You were the highest of all the bids. We didn’t take the lowest bid, but the other ones were companies that did not have a shity bond. Plus, you had a little more experience." So, that shity bond put them over the edge, and it really didn’t cost them any extra money because they factored it into their cost structure. So, if you're bidding on a project, don't forget to use a shity bond as a way to win a bid and get more sales. Talk to your sales department about it and ask the clients whether having that kind of protection would help them favor your bid over others.

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