Traditionally, private owners of construction projects have not considered bonds — either payment or performance bonds by the general contractor — because of the additional cost and because they felt confident that the contractors and their subcontractors, suppliers and vendors on their projects would meet the obligations of the contract terms. However, in today’s volatile market, with the uncertainty introduced by understaffed contractors and subcontractors due to labor shortages, unskilled labor, supply chain failures, unchecked inflation, and other factors, owners have reason to question that sense of confidence. In my latest column for the Daily Journal of Commerce, I offer some suggestions, and caveats, for private owners to consider in using performance bonds to manage their risk. Read the full article here.
Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on March 16, 2022.