Certain Concerns with Bonding Requirements in University Construction Contracts

The National Association of Surety Bond Producers (“NASBP”) is a national trade association of professional surety bond producers, representing firms employing licensed resident and nonresident producers placing surety bonds on contracts in the State of Iowa and in other jurisdictions. Recent changes to the University’s standardized contract language addressing bonding requirements have been brought to our attention. More specifically, new language, e.g., Supplement Conditions Clause 11.3.7, calls for the owner to be notified by the contractor in writing “of all communications with the surety.” We believe this is an unwarranted intrusion in the confidential business relationship between the contractor and the surety and that such a change in requirements ultimately will not inure to the benefit or reputation of the University of Iowa.

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