June 26, 2017
Technical Assurance, LLC

New Client Request for Information 

 

Management and Construction Capacity                                                 

    Business Plan or Narrative   

            Organizational Documents          

            NASBP Contractors Questionnaire               

            Organizational Chart 

            Resumes on Key Personnel

            Completed Jobs List    

            Business References                            

            Sample Insurance Certificate

            Appraisals or Schedule of Insured Values on Equipment 

            The Company Succession Plan and/or Completion Agreement

            Copies of any Key Man Life Insurance                                   

                            

Financial Capacity

            Bank Working Capital Lines of Credit and Security Agreements

            Three years of the Company Financial Statements

            Personal Financial Statement on each Principal

            Quarterly Financial Statements and Work in Process 

            Statement/Tax Return on any Related Party Companies

            Latest Corporate and Personal Tax Return

 

 

Print New Client, Request for Information

 

 

Sufficient lead time should be allowed when seeking surety bonds – especially when seeking a bond for the first time.  In no event should a bid be submitted for a bonded project before surety arrangements are in place. 

             

Business Plan  (Narrative)

A contractor’s business plan might include the company’s mission, articulate its values, and assess its strengths, weaknesses, opportunities and threats. Some plans will also identify and communicate the company's goals and the action steps to achieve these goals. 

What is most important is to address the company's contracting specialties, target owners/engineers, geographic work area, subcontract items, equipment needs (leased or owned), financial targets and surety needs.

 

Organizational Documents

It is important to have a clear understanding of the company's organizational structure including a copy of all legal documents and state filings.

 

                If you are a Corporation:

                                Articles of Incorporation

                                Certificate of Incorporation

                                Corporate By-laws

                                Assumed Name Certificate (DBA), if you have one

 

                If you are a LLC:

                                Articles of Organization

                                Certificate of Organization

                                Operating Agreement

                                Assumed Name Certificate (DBA) if you have one

 

                If you are a Limited Partnership:

                                Certificate of Partnership

                                Partnership  Agreement               

 

Contractor's Questionnaire

Completion of the NASBP general questionnaire summarizes the company's ownership, scope of work, geographic areas of operations, completed projects, reference lists, professional support and internal controls.  The standard AIA questionnaire and the more detailed TxDOT questionnaire should also be provided if available.

Complimentary information might include a company brochure and a copy of any program certifications, (MWDBE,SBE), newspaper publications/awards, etc. 

 

Organizational Chart and Resumes on Key Personnel

An Organizational Chart and Resumes on the Key Personnel should address the primary leadership positions in the area's of accounting, estimating, project management and field supervision.  Construction oriented resumes will generally list position, educational background, and years of experience including past employment history, duties and responsibilities, and completed job experience, (contract amount and description).

 

Completed Jobs List

List the major projects that have been completed by the company including the date/year completed, owner, final contract price, job description, and the final gross profit at completion.  Owner/Engineer contact information for these projects should also be made available for reference purposes.

 

References

List or letters from suppliers, architects, engineers, subs, key business associates or advisors including their contact information.

 

Sample Insurance Certificate

A “sample” accord insurance certificate evidencing coverage and introducing the lines of insurance, the insurance carriers, the limits of liability, and the policy expiration dates. 

 

Appraisals or Schedules of Insured Values on Real Estate and Equipment

Include a copy of any third party appraisals on business real estate holdings or equipment.  If unavailable, provide an itemized list including their insured values.

 

Succession Plans and Key Man Life Insurance

Succession planning, often referred to as continuity, protects the financial integrity of the balance sheet and ensures that there are qualified and experienced individuals to assume the responsibilities of those who, for whatever reason, are no longer with the company. 

Related documents include buy/sell agreements, completion agreements, and employment contracts, that are prepared in advance, to address the death, disability or departure of key personnel. A copy of the declaration page of the funding mechanism, typically a key man life insurance policy, should also be made available. 

 

Banking

Bank reference should outline the Name of the Bank (s), and the length of the relationship.  Working Capital Lines of Credit should disclose the amounts, the security which is pledged as collateral, rates, and any restrictive covenants, including trigger mechanisms.

 

Company Financial Statements

In effort to trend financial results, the surety will look to receive three to five (3-5) years of company financial statements.  Statements should be of Audit or Review quality and be prepared on the Percentage of Completion method of accounting. Notes and supplemental schedules of completed job schedules and those which are in progress should be included.

If more than 3 months past the contractors fiscal year end, it is customary to receive quarterly financial report(s) and the related work in process information. This enables the surety to track job profitability and cash flow.

 

Subsidiary and Related Party Companies

Identify any commonly owned businesses, or joint venture arrangements that may be related or affiliated.  Please outline their ownership structure, nature of operations, the extent of inter-company transactions, and any indemnification and cross guarantees that might be in place.  A financial statement or the most recent tax return should be made available on each if they have not been consolidated in the CPA's annual report.

 

Personal Financial Statements

A personal financial statement should be made available and dated concurrently with the company's annual report. 

 

Tax Returns

A copy of the most recent tax return that has been filed on the business and each principal individually.