For many construction companies and contractors, public works are a great opportunity for growth. However, how can they manage the risk in the construction projects or how are they responsible for finishing them on time? Due to these concerns, the bonds arise.

Key points of bail bonds


The bonds provide financial security and guarantee that the work will be done in a timely manner, covering the responsibility of paying subcontractors, workers, and material suppliers. For this reason, the bonds in the CDMX, as well as in all of Mexico, are fundamental to comply with the obligations acquired in public works tenders.

Today, in the Escarce blog, we share ten key points of bonds for public works, based on the Law of Public Works and Related Services:

  1. The agencies and public entities can choose the guarantee or bond that fits their needs, thus having the certainty of supporting the obligations of their project.
  2. Each time a fiscal year changes, the bond must be adjusted or changed.
  3. When contracting a compliance bond, article 91 specifies that the amount of the bond cannot be less than 10% of the total amount authorized to the contract in each fiscal year.
  4. If a contractor has a good record, the public agency can reduce the percentage of the compliance bond.
  5. If defects or hidden defects appear in the project, within the term covered by the bond, the public entity must contact the surety and notify the contractor in writing to correct or replace it.
  6. If you have a good quality bond or hidden defects, you can only cancel it according to the provisions of the policy.
  7. To make a bond effective, public agencies must send a request to the Treasury of the Federation. To make this request, they must have complete information about the subjects linked to the bond.
  8. Interesting fact: the bonds are included in the “indirect cost” section, in the general expenses of public works.
  9. In the public tenders, the bid bonds also come into play to guarantee the support of the bid submitted.
  10. The bond policy must include the following provisions :
    • Comply with all the agreements included in the contract.
    • To cancel it, they will need the administrative act of extinction of rights and obligations or, as the case may be, the settlement and liquidation of balances by the contractor.
    • The deposit will be valid during the contract period and will continue if there is an extension.
    • The surety agrees to submit to the procedures established by the Federal Law of Bonding Institutions.

In this aspect, there are two major challenges:

  • The public dependencies have to support their projects.
  • Companies must meet many objectives and obligations if they wish to participate in public works.

Winning a contract is not an easy task, because contractors must work hard and provide all their information: from their general data to their record in compliance contracts. Without a doubt, they must have a good performance in the sector, since their background is the key to obtain the opportunity to participate in a public project.

With more than 30 years of experience in the sector, in LionsBailBonds we offer personalized advice for bail bonds.