Oregon Public Works Bond

Oregon Public Works Bond

The Bureau of Labor and Industries (BOLI) requires any business paying prevailing wage on public works projects over $100,000 to hold a $30,000 Public Works Bond. The bond is required exclusively to cover unpaid prevailing rate of wage or overtime wages.

APPLY FOR PUBLIC WORKS BOND

Construction and non-construction related businesses on a public works job over $100,000, regardless of the value of their work, are required to have a public works bond. For example, if the value of your work was only $2,000 of the total $100,000 of the job value, you are required to carry a public works bond. Only one bond is required even if you perform multiple public works jobs at the same time. 

How Much Does the Public Works Bond Cost?

The $30,000 public works bond pricing starts at $600 annually or $60 monthly. The bond price is based on the construction business owners personal credit and experience. Even with poor credit, Jet offers payment plans with the lowest down payments in the market. For example, if the quote is $60 monthly for the bond, the down payment is only $60, that’s amazing! 

TermCost
Monthly$60
1 Year$600
2 Years$1,050
3 Years$1,500


Jet cuts out middleman brokers and agents and thus can offer a uniquely streamlined process. You will never have to wonder who to call, Jet is the place for bonding.

How Is the Public Works Bond Filed?

Jet files the public works bond electronically to the Oregon Construction Contractor Board (CCB) on your behalf. If you are not a construction company, the bond must be filed along with the Non-Construction Company Public Works Bond Form to:

Mail: PO Box 14140 Salem, OR 97309-5052. 
In Person: CCB, 201 High St. SE, Suite 600, Salem, OR 

The CCB is the entity that simply warehouses the bond form because they have a system already in place for bond reporting, however the Bureau of Labor and Industries (BOLI) is the agency requiring the public works bond and handling all claims activity related to it. 

Who Needs a Public Works Bond?

Any business, construction or non-construction, that pays prevailing wages on a public works job, such as a contractor, valued over $100,000 is required to hold a $30,000 public works bond per the Bureau of Labor and Industries. Only one public works bond is needed if the business is performing multiple public works jobs over $100,000. The public works bond is required regardless of the value of work performed by an individual, even $1,000 out of the total $100,000 job value.

APPLY FOR PUBLIC WORKS BOND

Businesses that are exempt from prevailing wages are not required to have the public works bond. The following businesses listed under Oregon Statutes ORS 200.055 can apply to be exempt for up to four years: women business enterprise, minority business enterprise, emerging small business, disadvantaged business enterprise, and service disabled veteran business enterprise. 

The bond can also be waived in the case of an emergency or if delay would cause damages, per Oregon Statute ORS 279C.836 (9)

Failure to provide a public works bond can result in the civic penalty assessed by the BOLI commissioner against the business.

How Can I Avoid a Claim On My Public Works Bond?

The bond is in place exclusively to cover nonpayment of wages on public works jobs should you fail to pay employees the correct rate. Be sure to pay employees the current prevailing wage rate for the work performed and any overtime wages to avoid a bond claim.  Even if you do not initially pay the correct amount of wages, you can always rectify that directly with the employee or company furnishing employees before it gets to BOLI and they take action against the bond. 

Understanding the current prevailing wage rates is important in claim prevention. Every year in January and July the Bureau of Labor and Industries publishes the prevailing wage rates, and are updated in April and October. The current prevailing wage rates can be found on the BOLI prevailing wage web page, and if you have difficulty understanding how to find the rates go here for more information. 

What Happens When I Get a Claim On My Public Works Bond?

A claimant can take action on a public works bond only if they were not paid in full the prevailing wage rate. The claimant must send a certified mail or hand delivered notice of a claim no later than 180 days after the last day labor was performed otherwise the claim is not valid. 

While Jet’s claims department works hard to protect contractors from claims and there is only so much we can do in defense of a claim for unpaid wages. The bond is required exclusively to cover unpaid wages in public works jobs. At any point before a claim is filed against the bond, you have an opportunity to rectify the unpaid wages to the claimant.

Jet will investigate claim notices sent to us and deny any claim where fraud is evident. However, should the claim be valid, Jet will make payment to the claimant(s) up to the limit of the bond.

Unlike an insurance policy, which protects contractors from their work causing accidental damages, the surety bond protects the employees from unpaid wages. The contractor is ultimately responsible for paying employees the prevailing wage rate in public works jobs and must reimburse the surety company for paid claims. Think of the surety bond as a letter of credit that demonstrates to the Bureau of Labor and Industries that they are responsible to pay prevailing wages. It is not Jet’s intent to pay bond claims, but to stop claims activity through proper education and representation of contractors.

Can I Cancel the Public Works Bond and Get a Refund?

Of course! Jet can cancel the bond at your request and provide a prorated refund for the bond if you are paying on annual terms. For those on monthly payments, we will simply stop the payment process and file cancellation with the Oregon Construction Contractor Board. 

The bond has a 30-day cancellation provision meaning it will cancel 30 days after the cancellation notice is received and processed by the CCB. Jet’s cancellation processing takes into account the 30-day cancellation provision in which the bond is still active.

How Is the Public Works Bond Renewed in Oregon?

A public works bond will need to be renewed every year if you are continuing to work on public works jobs over $100,000. If your project ends that requires this bond, please inform us immediately to cancel the bond. At Jet, we make every step of the bond process easy, especially the renewal if it is needed. We do not require updated paperwork, only a simple payment is required. A renewal notice will be sent to you well in advance of the renewal date so you will have ample time to take care of it. 

For those on monthly payments, just make sure that the payment information is still current and we will simply continue to take payments for as long as you need the bond. 

What Other Bonds Might I Need?

Contractor License Bond: Businesses performing construction on residential or small commercial structures are required to have a residential contractor license with a contractor license bond. The bond can be $10,000, $15,000, or $20,000 depending on the residential license.

Businesses performing construction on large or small commercial structures are required to have a commercial contractor license with a contractor license bond. The required bond amount ranges from $20,000 to $75,000 for license holders. 

APPLY FOR CONTRACTOR LICENSE BOND

Developer License Bond: Licensed commercial and residential developers in Oregon are required to provide a $20,000 bond per ORS 701.081 and ORS 701.084. Developers, as defined in ORS 701.005, are contractors that own or have interest in a property and arrange for development or improvement with the intent to sell the property. Licensed developers cannot perform actual construction work unless they are also licensed as a residential or commercial contractor. 

APPLY FOR DEVELOPER LICENSE BOND

Restricted Residential Contractor License Bond: Residential and commercial contractors that have a developer license endorsement in addition to their license do not need an additional bond. 

There are five restricted residential endorsements you can add to your license that the Oregon Construction Contractor Board offers including: home services, home energy performance score, residential restoration services, home inspector services, and residential locksmith services. This work can be added as an endorsement to an existing license, or be stand alone licenses. Stand alone restricted residential contractor licenses cannot perform any other construction activity than what is explicitly described for the license. Stand alone license holders must have a $10,000 bond on file.

APPLY FOR RESTRICTED RESIDENTIAL CONTRACTOR LICENSE BOND

Construction Flagging Contractor Bond: Construction flagging contractor is the most recent stand alone license to be offered by the Oregon Construction Contractor Bond. License holders are required to hold a $20,000 bond.  This license can direct traffic flow on public roads to prevent conflict between vehicle traffic and construction near the roadway. 

Current commercial contractors and residential general contractors are not required to have this license to perform construction flagging activity. However residential specialty or limited licenses must apply for this license to perform this work. 

APPLY FOR CONSTRUCTION FLAGGING CONTRACTOR BOND