My question is, when should performance bonds be valid? I am at the project where client is demanding contractor to renew performance bond and retention bond for 12 month period after practical completion.
1 reply
Dec 11, 2019
Kansas doesn't seem to have a specific time limit set out in its Little Miller Act for which a performance bond must be valid. However, it's common for bonds to exceed the life of the project. Considering claims against Kansas payment and performance bonds can generally be made up to 6 months after the completion of the project, the bonds would have to be to be valid for at least 6 months after completion and potentially longer than that period.
If there are contractual provisions that state how long the project's bonds must be in place, those provisions should be followed. But, in the event there's nothing stating the bonds should be valid for a year after completion (either in statute or in contract), a contractor might not have all that much choice but to take direction from their customer on that front.
For a little more discussion on performance bonds: Construction Performance Bonds | Protecting Cash Flow on Public Jobs.