Bonds for public works: What your company should have ready before winning the bid

Eduardo Ramos
Jul 14
2 min read

A team of engineers and administrators reviewing documents in a construction office, with plans and contracts on the table. — Contar con tus fianzas listas antes de la licitación te permite ganar tiempo y contratos.

Participating in a public works bidding process represents a great growth opportunity for any construction, supplier, or service company. However, it also entails meeting strict requirements and tight deadlines. One of the key factors is being able to obtain the required bonds.

Getting ahead of your game and preparing your dossier ahead of time can make the difference between winning or losing a project.

In this article, we share what types of bonds are required for public works projects and what you should have ready even before you are awarded the contract.

What are the most common bonds for public works?

Depending on the stage of the process and the type of contract, government entities typically request:

Bid deposit (bid): guarantees that the bidder will not withdraw their bid and will uphold it if awarded. This deposit is typically 5% of the proposed value.
Performance bond: Ensures that the contract will be executed as agreed. This is an essential requirement when signing the contract, typically 10% of the total amount.
Advance payment guarantee: If the contract includes advance delivery of funds, this guarantee guarantees their proper use. The amount covers 100% of the advance payment.
Latent defects bond: covers hidden defects that appear after the project has been delivered. The minimum duration is 12 months, but it can be longer.

Bonds for public works: What you should have ready BEFORE winning the bid

Although surety bonds are formally issued after you've been awarded the contract, surety companies will evaluate you beforehand. To be ready and not waste time, we recommend preparing:

Updated articles of incorporation and powers of attorney.
Official identification and proof of address of the representatives.
Updated audited and partial financial statements.
Opinions on tax and IMSS compliance.
List of previous contracts , especially with the government.
Evidence of technical experience (work or service resume).
Projected cash flow if you are going to ask for an advance.
Model contract or bidding guidelines indicating the types and amounts of bonds requested.

Why does anticipation give you an advantage?

Avoid delays: If you wait until you're awarded a contract to begin the process, you might not be able to sign the contract in time.
Negotiate better terms: With a complete file, your broker can present your case to several insurance companies and get better rates.
You project strength: Being prepared conveys professionalism and improves your reputation with authorities and clients.

We Link helps you even before the award

At We Link, we work with you from the start. If you're participating in a tender:

We help you prepare your financial and technical file.
We guide you on the types of bonds that will be required.
We look for the surety company that best suits your profile.
And if you win, we'll issue your bonds in less than 24 hours (if you're already approved).