The Financial Management Service (FMS), a bureau of the US Treasury Department, is responsible for administering the surety bond program for the federal government under 31 U.S.C. 9304-9308. Companies who wish to do the following must apply to the FMS:
- direct write federal bonds or
- reinsure federal bonds or
- be recognized as an Admitted Reinsurer for the companies in Categories 1 and 2.
- the obligee or project owner,
- the principal or contractor, and
- the surety who assures the obligee or project owner that the principal can fulfill the project to the agreed specifications or else pay a sum to ensure project completion.
- bid bonds ensure that the contractor will enter into the specified contract if awarded the bid;
- performance bonds ensure that the contractor will complete the project according to specifications;
- maintenance bonds ensure that the principal/contractor will perform maintenance for the duration of the project.
Companies' applications are reviewed thoroughly to ensure that only financially sound companies receive Treasury recognition. It is the responsibility of FMS to continually review and monitor the financial status of companies to be approved in all three categories listed above.
Companies in category 3 cannot directly write a federal bond or reinsure an excess risk for a direct writer.
A free program with the City offers up to $500,000 in collateral assistance for surety bond applications. Your business may be eligible if:
- your business is bidding or planning to bid on a project as a contractor with a City agency or the NYC Economic Development Corporation; and
- the project requires surety bonding.
For more information, contact:
New York District Office
26 Federal Plaza, Suite 3100
New York, NY 10278
Phone: (800) 827-5722
Fax: (212) 264-4693