Strengthening the Contractor-Surety Relationship
NATE HAGGE, AUDIT MANAGER
If you are a contractor seeking a long-lasting relationship with a surety, it helps to first understand how that surety views certain factors related to you and your ability to perform and complete jobs.
THE THREE C’S
Sureties and bonding agents rely on the three “C’s” when evaluating a potential contractor:
Capital: Refers to the ability for a contractor to financially complete the job, examining working capital and equity
Capacity: Refers to the skill and expertise that the contractor possesses in order to complete the job
Character: Refers to the faithfulness of the contractor to complete the job
THE THREE M’S
Once the relationship between the contractor and the surety has begun, the three “M’s” lay the groundwork in order to build the relationship:
Meeting: Meet regularly with your surety, bonding agent, and CPA to discuss updates to the industry review financial information.
Maintain: Maintain the relationship refers to the quality of the meetings and to develop trust between the surety and contractor. Sureties are always appreciative when the contractor lets them know immediately when serious problems arise.
Mature: Maturing the relationship develops over time and can mean the difference in getting the work or being rejected. The surety is more likely to be receptive to a contractor that has invested time to mature the relationship.
Contractors that work on the three “M’s” to strengthen and grow their relationship with their surety have a much better chance at running a successful business.
Would you like more information about Surety Bonds? Check out our blog “What are Surety Bonds, and When Might you Need One?” Or visit the construction industry page to learn more about the services we offer.
ABOUT THE AUTHOR
NATE HAGGE + AUDIT MANAGER
Nate Hagge is an Audit Shareholder at Lutz with over nine years of experience. He has significant experience in providing accounting, auditing and consulting services to privately-held companies.
AFFILIATIONS AND CREDENTIALS
- American Institute of Certified Public Accountants, Member
- Construction Financial Management Association, Affliate Member
- Construction Industry CPAs/Consultants Association, Member
- National Utility Contractors Association, Affiliate Member
- Associated General Contractors, Affliate Member
- Certified Public Accountant
- BSBA in Accounting, University of Nebraska, Lincoln, NE
- MPA, University of Nebraska, Lincoln, NE
- Alpha Tau Omega - Gamma Theta Chapter, Alumni Board Member
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