Surety bonds • Tennessee
Tennessee Public Works Bonds (T.C.A. § 12-4-201): Requirements and Alternatives
Under T.C.A. § 12-4-201, contractors on Tennessee public works contracts over $100,000 must provide a bond of at least 25% of the contract price, guaranteeing payment for labor and materials. Many public owners also require 100% performance and payment bonds and a 5% bid bond.
This guide covers the statutory bond, what owners commonly require, alternatives, and cost. Blake Insurance Group is an independent agency and does not give legal advice; a licensed agent can help contractors set up bonding.
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The statutory bond
T.C.A. § 12-4-201 applies to public works contracts let by the state, a county, or a city. On contracts over $100,000, the contractor must give a bond of no less than 25% of the contract price, conditioned on paying for all labor and materials used by the contractor and its subcontractors. The surety must be on the U.S. Treasury’s approved list and licensed in Tennessee.
What public owners commonly require
| Bond | Typical amount |
|---|---|
| Bid bond | 5% of the bid |
| Performance bond | 100% of the contract price |
| Payment bond | 100% of the contract price (statutory minimum 25% over $100,000) |
Source: UT County Technical Assistance Service. Check the bid documents for the amounts on your project.
Alternatives to a bond
T.C.A. § 12-4-201 lets contractors substitute U.S. Treasury securities, Tennessee general obligation bonds, qualifying certificates of deposit, approved letters of credit, or cash for the statutory bond. See our performance bond and payment bond guides.
How much Tennessee contract bonds cost
Contract bonds are priced as a percentage of the bond amount, commonly about 0.5% to 3% based on the contractor’s finances and experience (NASBP).
Tennessee public works bond FAQs
When is a bond required on Tennessee public works?
On public works contracts over $100,000 let by the state, a county, or a city.
How much is the Tennessee public works bond?
At least 25% of the contract price under § 12-4-201, though many owners require 100% performance and payment bonds.
Can I use something other than a surety bond in Tennessee?
Yes. The statute allows certain securities, certificates of deposit, letters of credit, or cash instead.
Related guides
- Tennessee surety bonds
- Performance bonds
- Payment bonds
- Georgia public works bond
- Surety bonds
- Surety bond cost
- Surety bond cost calculator
- Buy a surety bond online
- South Dakota public works bond
- West Virginia public works bond
- New Mexico public works bond
- Nebraska public works bond
- Kansas public works bond
- Iowa public works bond
- Oklahoma public works bond
- South Carolina public works bond
- Alabama public works bond
Important information
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Cost figures. Published averages and ranges are cited from the sources named, as of the dates shown. They are not quotes and may not reflect your price, which depends on the insurer, the surety, your credit, the bond type, and underwriting.
Availability. Coverage, prices, discounts, and eligibility vary by insurer, state, and applicant, and are subject to underwriting. The issued policy controls.
Your next step
Tell us about your Tennessee public project, and a licensed agent will help you set up bonding.
