Long-term Warranties and Long-term warranty bonds for NMDOT Projects – May 2015

I am contacting you on behalf of the National Association of Surety Bond Producers (NASBP), a national trade association of surety bond producers, including agencies employing licensed resident and nonresident producers placing bind, performance, and payment bonds in the State of New Mexico and all other jurisdictions.

We recently received information from some of our members that the New Mexico Department of Transportation (NMDOT)seeks to impose onerous terms in the Warranty Bond required from contractors for the overlay material and installation, item #536001. The Notice to Contractors (April 14, 2015) specified that the “value of the warranty bond shall equal the Total Original Contract Amount.” The onerous term is now pile on the top of the lengthy, five-year warranty period, as already specified in section 536.3.11.

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