Case Study: A Bid That Raised Concerns

A long-time JRG Surety client recently bid on a $3 million construction project in Orange County, CA. The contractor was the lowest bidder, but their bid was an astonishing $1.3 million lower than the second-place competitor. This significant gap raised red flags for the surety company, which questioned how the contractor could complete the project profitably with so much left on the table. Concerned about financial risk, the surety company was hesitant to approve the performance and payment bonds, putting the entire project at risk.

Rather than accept the denial, JRG Surety took immediate action, meeting with the contractor to build a compelling case for approval. Drawing on our deep industry expertise, we crafted a detailed email on the contractor’s behalf, demonstrating why they were fully capable of delivering the project successfully:

• Proven Track Record of Cost Savings: The contractor had a long history of masterminding cost-efficient projects, identifying unique ways to cut costs without cutting quality—a skill that set them apart from competitors.
• Bid Strategy of the Second-Place Competitor: The second-place bidder only had two days to calculate their bid and, to avoid underbidding, padded their estimate as a safeguard.
• Strategic Confidence: The contractor’s ability to innovate and optimize project costs provided a strategic advantage that allowed them to bid lower while still maintaining profitability.

 JRG Surety’s expert negotiation and advocacy convinced the surety company to approve the performance and payment bonds, ensuring our client could move forward with the project.

When the project was completed, the contractor proved their expertise once again—turning a tidy profit of $330,000, approximately 10% of the total project cost.

This case underscores JRG Surety’s commitment to supporting contractors beyond just issuing bonds. Our deep understanding of contractor operations, risk assessment, and surety negotiations allows us to advocate effectively for our clients, ensuring they can secure the bonding they need—even in challenging situations.

If you’re a contractor in need of a strategic surety partner, JRG Surety is here to help you win bids, secure bonds, and maximize your success.