Apparatus Purchase Agreements/Contracts

[EJR]

Is anyone requiring performance bonds, or has other contractual language (such as a 10% holdback, etc.) when preparing specifications or contracts for new apparatus or other large purchases? I am NOT looking at the contract language that the dealer/seller puts in. I am specifically looking to those required by the fire department/buyer.

If you have anything like this and would be willing to share that (or your experience with this) with me, please contact me at the email address below.

Thanks,
EJR

[Lieutenant387]

If you are prepaying any portion then a performance bond would potentially be wise. If you aren't prepaying anything and will write a single check on the completed operation it is not wise to require a PB as the cost of such a bond is built back into the purchase price of your apparatus. By doing it on the latter you are doubly paying on an insurance policy that you aren't going to have any risk (potential loss) and if you read most bond issues, it only pays for money lost. If you haven't paid anything, you haven't lost anything.

[lvwrench]

We make recommendations to the contractring staff and they pass on our thoughts to the legal beagles for final determination. We usually have penalties associated with late delivery etc as well as clauses for time lines for parts deliveries and service should we need something. Of course anything not built to spec is automatic grounds for refusal of the apparatus or cause for the manufacture to correct before delivery and this has happened. All of the legal jargon is called the boiler plate part of the contract and you can pretty near put whta you want there as long as it is legal for your area.

[VanIsleEVT]

We requested a Performance Bond on the two Engines we have on order. Like mentioned earlier though, we are paying for the chassis upon delivery to the body plant.

[FWDbuff]

Here is our requirment, cut-and-pasted right from our 2006 pumper spec which should be going out by Jan 1:

The Company reserves the right to require a performance bond from the successful bidder. The amount of the bond shall be equal to 100% of the bid amount. The bond shall be written by a corporate surety acceptable to the Company. The bidder shall state in its bid the cost of the bond. If a performance bond is not required by the Company, that amount shall be deducted from the total cost of the apparatus.

The contractor shall execute a satisfactory waiver of liens for recording.

The Company reserves the right to require bidders to submit their latest audited financial statement. The statement must be in written form and include profit or loss statements, Dun & Bradstreet rating and bank references.

Hope this helps!