Surety Bonds
DRS supports clients in managing their bond capacity, ensuring that the ability to bond forthcoming immediate contracts is never compromised.
Tender Services
For clients with regular bond requirements, it is extremely important to manage not only live exposure (issued bonds) but also quoted exposure (quotations given for tenders).
Key aspects include:
• DRS’ tailored software platform within Blueprint OneWorld ensures that our clients avoid potential pinch points in capacity well before they happen;
• Commentary in the suitability of the bond wording and ensuring the bond is equitable to all parties.
• Confirmation of Surety – DRS utlises its library of previously accepted bond wordings to assist our clients in negotiations with employers and their
agents. DRS expertise in advising employers and their agents on the acceptability (technical and commercial) of proposed bond wordings including
suitable amendments.
Capacity Management
Surety bond facilities are ‘off balance sheet’ and for accounting purposes are treated as contingent liabilities. This enables DRS to obtain multiple facilities from DRS Approved Sureties. Facilities are typically uncommitted and security is often limited to a counter indemnity. Capacity is linked to your financial covenant and not unlimited. DRS understands the importance of this critical resource and is focused on maintaining suitable liquidity at all times. DRS constantly monitors all bonded works from tender stage through to issue of the bond, rigorously checking all details, as even small amendments may impact capacity.
Expiry Management
DRS will actively manage this process with you and draft your letter of release. For bonds expiring beyond completion of works, we will automatically contact you at the estimated date of contract completion to enable any additional costs to be calculated in preparation of your final account negotiations, whereas standard Surety practice is to wait until the defects liability certificate has been issued, which can make it too late to negotiate additional costs.
Submission to Market
Surety is a highly transactional business. For successful outcomes, in often time critical situations, it is important that all information received from you is understood, validated and transparent. All DRS presentations make sure that your company and its culture, financial strength, vision, abilities and successes are communicated effectively.
DRS is pleased to be able to support any Bonding requirement, including the following bond types.
Performance bonds are a contract guarantee bond in which the Surety undertakes to pay damages to a third party if there is a contractual breach by the contractor. This is typically for 10% of the contract sum, to cover losses incurred by the employer following a breach of contract, including insolvency of the contractor.
Retention bonds ensure that the contractor receives the full amount of their agreed payment certificates, without deduction of retention. This can apply from the beginning of the works period through to the expiry of the defects period. In short, a retention bond replaces retention monies.
Advance payment bonds protect the employer by guaranteeing upfront payments for goods or services.
Highways bonds, also known as an infrastructure bond, is used to guarantee to local authorities or utility companies that work carried out by contractors will be delivered and completed to an adoptable standard. It covers the financial area of the Highways Act 1980.
NHBC bonds are a financial guarantee issued to the NHBC, against the failure of the contractor/developer to maintain properties within the 10-year post-construction period covered by the NHBC building warranty. The NHBC sometimes requires a guarantee from a bank. We can supply this type of bond, which is usually required for five and a half years.
Bid bonds are often submitted with tenders to demonstrate that the tendering party can commence the contract if it is awarded to them and that it can procure any other bonds required.
Duty deferment bonds guarantee payment of a contractor’s deferred VAT or duty liabilities to Her Majesty’s Revenue and Customs (“HMRC’).
This is a mandatory requirement of the RPA, related to the importation of foodstuffs from outside the European Union. RPA bonds guarantee that the importer has the means to conclude the relevant financial transactions and acts as a penalty if the importer cannot conclude the transaction.
WRAP bonds guarantees waste is disposed of safely and responsibly.
Restoration bonds guarantee to the employer that land will be returned to its original condition upon the expiry of the relevant operating license. Returning land to its original condition once permissions have expired is mandatory, for example, in quarries.