A performance bond guarantees that a construction project will be completed in accordance with the contract. If the contractor fails to deliver, the surety steps in to arrange for completion or compensate the owner for any resulting losses.
Performance bonds are the backbone of public construction in the U.S. and Texas. Without them, owners would carry the full risk of a contractor defaulting.
Performance bonds protect owners, taxpayers, and lenders from financial loss. They ensure that even if a contractor encounters financial or operational difficulties, the project won’t be abandoned.
For contractors, a performance bond is proof of credibility. It shows that a surety company has reviewed your financials, track record, and operations — and trusts you to complete the work.
On federal projects over $150,000, performance bonds are required by the Miller Act. Texas enforces its own version, the Little Miller Act, for state and municipal projects over $100,000.
That means on jobs for TxDOT, counties, cities, and school districts, performance bonds aren’t optional — they’re mandatory. Private owners also frequently require them for added security.
Example: A general contractor building a new Travis County courthouse must provide a performance bond for the full contract value. If the GC defaults, the surety ensures the contract is completed, protecting taxpayers from costly delays or unfinished work.
Performance bonds in Texas are typically required for the full contract amount.
Highways, bridges, airports, military bases, and other infrastructure.
Courthouses, fire stations, libraries, police facilities.
K–12 schools and higher education facilities.
Industrial facilities, commercial buildings, healthcare projects, energy sector work.
If you’re bidding public work in Texas or negotiating private contracts, performance bonds will almost always be required. Having the right bond program in place ensures you can provide them quickly and confidently.
At AI Surety Bonding USA, we help contractors secure performance bonds backed by leading U.S. surety carriers. Whether you’re taking on your first $500,000 bonded job or managing $50 million in backlog, we’ll structure a program that supports your growth.
