Leaving Performance Bonds at the Door for Improved IT Procurement
This is the second in a series of briefs on IT procurement modernization. The brief focuses on performance bond trends for state IT projects and is intended to give an overview of how the surety market has significantly changed because of a wave of factors external to the IT industry. The amount of readily available performance bonds has become a challenge and, in some instances, bond companies have begun to require companies to partially or fully collateralize performance bonds with bank letters of credit. In order for states to lower costs and create a competitive procurement pool, states need to consider finding ways of leveraging existing protections and adjusting performance bond requirements if necessary. This brief was developed in partnership with TechAmerica and with contributions from the National Association of State Procurement Officials (NASPO).