Bonds, Retention, and Labor Burden

The bidding-and-PM side of the business: the bonds you'll be asked for, the money owners hold back, and the labor cost most new contractors underestimate.

1. The three construction bonds

Bond	Guarantees
Bid bond	the bidder, if awarded, will enter the contract and furnish the required bonds
Performance bond	the contractor will complete the work per the contract
Payment bond	subcontractors, laborers, and suppliers get paid

Public works projects typically require performance and payment bonds from the winning contractor.

2. Retention (retainage)

Retention is money withheld from progress payments until the work is completed and accepted — it protects the owner and motivates completion.