Performance bond cost by the numbers
- $150,000
- Federal contract size that requires performance and payment bonds
- Acquisition.gov (FAR 28.102)
A percentage of the contract, not a flat fee
A performance bond premium is a percentage of the contract amount, typically 1% to 3%, on a sliding scale that declines as the contract grows. So a $100,000 job and a $2,000,000 job are not priced at the same rate, and the bigger job pays a lower marginal percentage. The premium is set by underwriting, not a published price.
What moves your rate
- Financials. Working capital, net worth, and CPA-prepared statements on larger bonds. The stronger the file, the lower the rate.
- Experience. A track record on similar size and type of work earns better pricing and more capacity.
- Credit. Personal and business credit factor into the rate, especially for smaller contractors.
- Contract size and length. Larger and longer jobs carry more risk, which the sliding scale reflects.
Performance and payment, one premium
On public work you post both a performance bond and a payment bond, and they are usually quoted together as a single premium for the pair, not billed separately. The contractor pays, and most build the cost into their bid.
Newer or credit-challenged?
If your financials or credit make the bond hard to place, the SBA Surety Bond Guarantee program and a broker who shops multiple markets can still get you bonded, often at a workable rate. Read how to get a performance bond, then start a project intake for your real number.