is study investigates the costs and benefits of performance bonding versus replacing performance bonding, to various degrees, with performance-based contractor prequalification. The scope of the study covers all types of contracts for all types of work that are awarded by State highway agencies. The research involves the collection, organization, and analysis of data and information from State highway agencies, contractors, and sureties. The research product is a recommendation on the cost effectiveness of performance bonds, and if applicable, guidance for State highway agencies that wish to develop and transition to a performance-based contractor prequalification system and recommendations for how such systems can best be implemented.
Below are the key project objectives:
(1) Document the benefits and cost of the current system of performance bonding in highway construction.
(2) Quantify the benefits of replacing currently required performance bonds on some highway construction projects with a rigorous performance-based contractor prequalification system.
(3) Provide State highway agencies with guidance on the development and implementation of the prequalification system.