Yesterday my Twitter feed delivered a pair of tweets about a rash of fraudulent contract surety bonds in Tennessee:
The owner/obligee got “lucky” in the case of the Regency Hotel demolition project at the Memphis International Airport, in that it discovered the fraud before contract award; that at least provided an opportunity to rebid the contract and award it to a properly bonded prime contract. Goes without saying that the discovery of a forged or otherwise fraudulent bond during contract performance can be a much messier proposition.
What can owners/obligees do to protect themselves? Verify your bonds. How? I suggest utilizing the resources furnished by the Surety & Fidelity Association of America (@SuretyFidelity) on its “Verify Your Bond” webpage. There you will find information needed to locate a particular bonding company and inquire about the authenticity of a specific bond. You’ll also find a current list of surety companies participating in the Association’s Bond Authentication Program.
Stay vigilant, owners/obligees.