So what do we know about military performance bonds? For those of you who haven’t heard of this term before, the DoD performance bond represents a type of surety bond, demanded from military freight carriers to warrant that they will successfully transport all contracted loads. 

This bond typically covers losses in various types of inconvenient situations, like bankruptcy, carrier default, and deserted shipments. Namely, if a carrier is incapable of delivering the freight, the surety bonds firm which issues the performance bond will be forced to compensate the DoD.

And then, the surety will seek indemnity from the carrier. The info that we provided you with so far is just the basics. If you would like to gather more useful information concerning military performance bonds, then just scroll below!

Relevant Facts Regarding The Military Performance Bonds

Before we proceed, we would like to remind you that this is a very complex topic that one article cannot thoroughly cover. Therefore, if you’re interested in more in-depth info then go now to this website, and you’ll learn everything that needs to be known. Now, let’s go back to these bonds.

The Cost Of DoD Performance Bond

The cost of these bonds mostly depends on the number of states you plan to serve, the size of your business, as well as the number of years you have been in the industry. The bond amounts require from bigger freight companies are:

• $25,000 for one state
• $50,000 for two to three states
• $100,000 for four states or more

And then we have the category that refers to the Carriers registered with SBA. Their bond amounts are:

1. $25,000 for transporting in up to three states
2. $50,000 for transporting in no more than ten states
3. $100,000 for eleven states or more

What About Carriers Who Have Over Three Years Of Experience With The DoD?

For those who have collaborated with the DoD for more than three years, the bond amount is calculated as 2.5 % of their income (with DoD) in the previous year. Just keep in mind that the amount cannot be less than $25,000 and over $100,000.

Other DoD Performance Bond Amounts

Forwarders, surface freight brokers, shipper agents, and air freight forwarders are obligated to post a $100,000 surety bond. On the other hand, the amount for bulk fuel carriers is somewhere around $25,000. 

Carriers exempt from acquiring a performance bond are commercial zone, local drayage, sealift, barge, and pipeline carriers.

Adding More Informative Details Below

Can You Have A DoD Performance Bond If Your Credit Is Not Admirable?

This is one of the most common questions when it comes to this topic. But don’t worry! We have great news for you! The answer is yes you can have these bonds even if your credit is not the best.

Now, don’t forget that oftentimes, a vast majority of sureties will offer quotes only to consumers with impeccable credit, however, luckily, there are still those who would make an exception (they usually have an exclusive DoD Performance Bond Program) and offer quotes even to those with relatively poor credit. 

How Long Does It Take To Get Bonded?

This depends on the surety bond agency you select. Namely, if you pick the one that’s fast and effective, you will most likely receive a free quote for your performance bond very quickly, in a matter of several minutes.

All you have to do for starters is to complete the online application. Once you get a quote, the next step is to pay the premium and then send a signed copy of the contract so the agency can get started on your bond as soon as possible. 

Generally speaking, the typical turnaround time is within one to two days, depending on how long it will take to get filling confirmation from the SDDC. 

What Does SCAC Represent?

SCAC represents the Standard Carrier Alpha Code. It’s a unique two-to-four-letter code that is employed to recognize transportation companies. Furthermore, these codes are issued via the National Freight Traffic Association. If you want your bond to be filled with the SDDC, then you simply must obtain a SCAC.

Are Brokers Obligated To Have SCAC As Well?

The answer is yes. They must pay for this fee as well, however, the annual fee depends on the fleet size. Namely, non-asset-based brokers only have to pay a relatively small amount of money for the fee. 

As stated in the beginning, this topic encompasses a lot of details, however, we honestly hope that the information we mentioned today in this article was enough to help you understand things better.