Payment and Performance Bond

Texas Payment and Performance Bond

Public works bonds under the Texas Little Miller Act

Texas public construction commonly requires performance bonds (contracts over $100,000) and payment bonds (contracts over $25,000) under Government Code Chapter 2253, including TxDOT and local public works.

Overview

What Is a Texas Payment and Performance Bond?

Payment and performance bonds guarantee the contractor will perform the contract and pay subcontractors and suppliers up to the penal sums.

Key Provisions
  • Guarantees compliance with Tex. Gov't Code ch. 2253
  • Protects the obligee named on the Texas bond form
  • Remains subject to the penal sum and bond conditions
Surety Obligation Overview

What Does This Bond Guarantee?

The surety bond guarantees that the principal will perform the duties required under Tex. Gov't Code ch. 2253 up to the penal sum.

Principal
The party required to obtain the bond and perform the underlying obligation.
Obligee
Project owner or Texas public agency named in the contract
Surety
The company issuing the bond and guaranteeing the obligation to the obligee.

When a claim may arise

A claim may arise if the principal fails to comply with the bonded Texas obligation or causes covered loss to the obligee or protected parties.

If a claim is valid

If a claim is valid, the surety may pay up to the bond penalty according to the bond terms; the principal remains liable to reimburse the surety.

Scope of the Obligation
  • Comply with Tex. Gov't Code ch. 2253
  • Satisfy Project owner or Texas public agency named in the contract filing conditions
  • Maintain the bond for the required term
Bond terms

Bond summary

Amount, premium, term, and the authority that requires this filing.

Eligibility

Who Needs This Bond?

General contractors and construction managers bidding Texas public works or private jobs that require Miller-Act-style security.

Who Is Required to File
  • Applicants required by Project owner - Texas public agency (Gov't Code ch. 2253)
  • Texas businesses renewing or expanding licensed activity
  • Out-of-state firms filing into Texas markets
Requirements

What You Need to Apply

Match the owner’s form and penal sums (often 100% of contract value for public work) and issue dual payment - performance instruments when required.

Required Documentation
  1. Legal entity name matching the license or filing
  2. Bond amount: Typically 100% of the contract amount for Texas public works above statutory thresholds — confirm the bid package
  3. Texas obligee form or statute citation
  4. Owner or officer identification for underwriting
Filing

How this filing works

  1. 01

    Confirm the Texas requirement

    Share your license type, court order, or obligee form and the exact penal sum required by Project owner - Texas public agency (Gov't Code ch. 2253).

  2. 02

    Underwrite and price

    We review credit and filing details, then quote premium options through licensed surety markets.

  3. 03

    Issue and file

    Once approved, we issue the bond for delivery to Project owner or Texas public agency named in the contract or for your Texas filing package.

FAQ

Frequently Asked Questions

What is the required amount for a Texas payment and performance bond?

The amount is Typically 100% of the contract amount for Texas public works above statutory thresholds — confirm the bid package, as set under Tex. Gov't Code ch. 2253 and confirmed with Project owner - Texas public agency (Gov't Code ch. 2253).

Who is the obligee on a Texas payment and performance bond?

The obligee is typically Project owner or Texas public agency named in the contract. Always match the exact name on the Texas form.

How long does it take to get the bond?

Many Texas filings can be underwritten the same day when documents and credit are complete; complex amounts may take longer.

Does bad credit prevent approval?

Not always. Premium and collateral options vary by credit and bond size — ask for markets that still write the risk.

How do I renew the bond?

Most bonds renew on the term shown (1 Year). Keep continuity so your Texas license or filing does not lapse.

Authority Resources

Project owner - Texas public agency (Gov't Code ch. 2253)

statutes.capitol.texas.gov

Next step

Ready to file this bond?

We’ll match the requirement and route the application.

Apply for this bond

Or call (877) 477-7578