Performance Bond Cost by State
Federal Miller Act and state Little Miller Act statutes set the bond face amount; the carrier rate filings set the premium. This page covers both — federal triggers, state-by-state thresholds, the 0.75%–7% rate band by FICO, and three worked examples drawn from the controlling statutes. If you just want a number, jump to the cost calculator.
Three projects, three penal sums, three premium outcomes
Same contractor profile across three procurement modes. Bond face amount is set by statute; premium is set by the carrier's filed rate band keyed to FICO. Every dollar amount below traces to the cited statute or FAR section.
Federal Miller Act
$20,000/yr
$2M federal construction contract above the $150K Miller Act trigger ( 40 U.S.C. § 3131). Bond face = 100% of contract = $2,000,000 per FAR 28.102-2. 700+ FICO at a 1.0% filed rate = $20,000/yr.
State Little Miller Act
$7,500/yr
$500K California public works contract above the $25,000 trigger ( Cal. Civ. Code § 9550). Bond face = 100% of contract = $500,000. 680 FICO at a 1.5% filed rate = $7,500/yr.
Private commercial
$3,750/yr
$1M private commercial contract — no statutory mandate; the contracting parties negotiated a 50% performance bond per AIA A312-style language. Bond face = $500,000. 720 FICO at a 0.75% filed rate = $3,750/yr.
Rate bands reflect public carrier filings with state insurance departments. Final rate is set by the underwriting Treasury-listed surety at bind. Statutes verified May 2026 against the cited .gov source.
Performance bond cost is a percentage of the bond's penal sum, not a percentage of profit. Standard-credit prime contractors pay 0.75%–1.5% of the bond face amount per year on federal Miller Act and state Little Miller Act jobs. Subprime credit pushes the rate to 3%–7%. Federal jobs price on the full contract value (100% penal sum); state jobs follow the state LMA percentage (typically 100%, occasionally 50% on payment-only bonds); private commercial bonds are negotiated and commonly settle at 50% of contract.
Statutes verified May 2026. Rate bands reflect carrier filings with state insurance departments; verify your state's filed rate at your DOI before committing budget.
Federal Miller Act — 40 U.S.C. § 3131 / FAR 28.102
The Miller Act (40 U.S.C. §§ 3131–3134) requires a performance bond and a payment bond on every federal construction contract exceeding $150,000. FAR Subpart 28.1 implements the statute: FAR 28.102-1 sets the threshold, FAR 28.102-2 sets the 100% penal sum, and FAR 28.102-3 directs contracting officers to insert clause FAR 52.228-15 into the solicitation. The eligible surety pool is restricted to companies on Treasury Circular 570 up to each surety's underwriting limitation. Federal premium pricing reflects the deepest competitive market in the surety industry — the rate filings show roughly 0.75%–1.5% for investment-grade credit on accounts under $5M aggregate.
State Little Miller Acts — 50 separate statutes
Every state has enacted its own version of the Miller Act, governing state-funded public works projects. The state Little Miller Act statutes vary on three dimensions: the dollar threshold triggering the bond requirement (California $25,000 under Cal. Civ. Code § 9550, Texas $100,000 under Tex. Gov. Code Ch. 2253, Florida $100,000 under Fla. Stat. § 255.05, North Carolina $300,000 under N.C.G.S. § 44A-26); the bond percentage (most states track the federal 100% rule, a minority allow 50%); and the eligible surety pool (most states accept any A-rated carrier admitted in the state, not just Treasury-listed). The 50-state table below consolidates the threshold and percentage for the largest jurisdictions.
Private commercial — negotiated by contract, no statute
Private commercial performance bonds are not statutorily required. The bond percentage and the trigger are set by the construction contract itself — the AIA A312 form is the most common template, and the parties commonly negotiate 50% as a compromise between the federal 100% norm and zero. Private bonds price slightly tighter than public-works bonds on the same credit because the underwriting carrier has more flexibility on indemnity terms (collateral, personal guarantees) and shorter expected exposure windows.
State Little Miller Act thresholds
Verified May 2026Performance Bond Trigger by State (Public Works)
Bond required above the threshold; bond percentage of contract; controlling LMA statute
| State | Threshold | Bond % | LMA Statute |
|---|---|---|---|
| Alabama | $50,000 | 100% | Ala. Code § 39-1-1 |
| Arizona | $250,000 | 100% | A.R.S. § 34-222 |
| California | $25,000 | 100% | Cal. Civ. Code § 9550 |
| Colorado | $50,000 | 50% | C.R.S. § 38-26-105 |
| Florida | $100,000 | 100% | Fla. Stat. § 255.05 |
| Georgia | $100,000 | 100% | O.C.G.A. § 13-10-40 |
| Illinois | $50,000 | 100% | 30 ILCS 550/1 |
| Indiana | $200,000 | 100% | IC 5-16-5.5 |
| Massachusetts | $25,000 | 50% (paymt) | M.G.L. c. 149 § 29 |
| Michigan | $50,000 | 100% | MCL 129.201 |
| Minnesota | $175,000 | 100% | Minn. Stat. § 574.26 |
| Missouri | $50,000 | 100% | RSMo § 107.170 |
| Nevada | $100,000 | 100% | NRS 339.025 |
| New Jersey | $200,000 | 100% | N.J.S.A. 2A:44-143 |
| New York | $100,000 | 100% | NY State Fin. Law § 137 |
| North Carolina | $300,000 | 100% | N.C.G.S. § 44A-26 |
| Ohio | $50,000 | 100% | Ohio Rev. Code § 153.54 |
| Oregon | $100,000 | 100% | ORS 279C.380 |
| Pennsylvania | $100,000 | 100% | 8 Pa.C.S. § 191 et seq. |
| Tennessee | $100,000 | 100% | Tenn. Code § 12-4-201 |
| Texas | $100,000 | 100% | Tex. Gov. Code Ch. 2253 |
| Virginia | $500,000 | 100% | Va. Code § 2.2-4337 |
| Washington | $35,000 | 100% | RCW 39.08.010 |
| Wisconsin | $50,000 | 100% | Wis. Stat. § 779.14 |
Thresholds and percentages reflect each state's general public-works LMA. Specialized procurement (state DOT highway, school construction, water/sewer) may impose lower thresholds or modified percentages. Federal Miller Act threshold is $150,000 with a 100% bond at 40 U.S.C. § 3131.
Verified against state legislative .gov sites and Treasury / FAR sources, May 2026.
Performance Bond Premium by Credit Tier
Based on a $1,000,000 bond amount
- Excellent (740+)Rate: 0.75% – 1.0%$7,500 – $10,000 / yr
- Very Good (700–739)Rate: 1.0% – 1.5%$10,000 – $15,000 / yr
- Good (650–699)Rate: 1.5% – 2.5%$15,000 – $25,000 / yr
- Fair (600–649)Rate: 2.5% – 4.0%$25,000 – $40,000 / yr
- Subprime (under 600)Rate: 4.0% – 7.0%$40,000 – $70,000 / yr
Annual premiums shown are based on a $1,000,000 performance bond — typical of mid-size state public works and federal sub-$5M Miller Act projects. Scale linearly for other bond amounts. Rates above 4% trigger collateral or letter-of-credit requirements at most A-rated carriers; the SBA Bond Guarantee Program is the standard alternative for subprime contractors on contracts up to $9M.
Enter the prime contract amount (without the $ sign).
Authority: 40 U.S.C. § 3131 / FAR 28.102-2. Final premium set by the underwriting Treasury-listed surety at bind.
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Estimates are illustrative. Final premium is set by the underwriting surety at time of application and varies by credit, experience, state, and carrier.
Estimates are illustrative. Final premium is set by the underwriting Treasury-listed surety at bind. For other bond types, see the surety bond cost guide or the dedicated performance bond calculator.
1. Aggregate work-on-hand drives the rate, not the single-job exposure. The carrier rate filings show that two contractors at the same FICO and the same single-job exposure can price 50–100 basis points apart depending on aggregate bonded backlog. The documented pattern from federal procurement records is that prime contractors at 60%+ of stated aggregate capacity see the surety push the rate toward the upper end of the filed band, because the marginal exposure exhausts capacity that would otherwise underwrite future work. SFAA industry standard capacity benchmarks sit at roughly 10x net working capital for single jobs and 20x for aggregate bonded backlog — pushing those benchmarks materially is the most common reason a clean-credit contractor prices above the headline 1% rate.
2. State LMA threshold misses create surprise re-rating events. State Little Miller Act statutes require a performance bond above the statutory threshold; below it, a contractor can complete public works without a bond. The carrier rate filings indicate that when a contractor crosses the threshold mid-fiscal-year — typically by accepting a change order that moves the contract from $95K to $130K on a Texas job (Tex. Gov. Code Ch. 2253 threshold: $100K), or from $20K to $30K on a California job (Cal. Civ. Code § 9550 threshold: $25K) — the bond requirement becomes retroactive to the original contract date in the typical change-order language. The filed pattern is to price the retroactive bond at the standard rate but with a shortened term, which can increase the effective annualized cost by 30–50%.
3. Federal advance-payment bonds are filed at a separate (higher) rate band. FAR 28.106-1 implementing rules indicate that where the federal contracting officer authorizes advance payments, the prime must furnish a bond covering the unliquidated advance separately from the standard performance bond. The documented pattern from federal procurement records is that carriers file these advance-payment bonds at roughly 25–50 basis points above the corresponding performance bond rate, because the bond covers cash recovery rather than work completion — a fundamentally different exposure profile than the standard FAR 52.228-15 performance bond. SBA Bond Guarantee Program participants ( SBA OSG) are typically not eligible for advance-payment bond support, narrowing the surety pool further for small contractors taking advance payments.
Want a project-specific quote? The producer team writes Miller Act and state LMA performance bonds nationally with Treasury-listed carriers. Use the cost calculator above to start, or call 1-844-810-BOND.
- Locate your contract's bond clause. Federal projects: search the solicitation for FAR 52.228-15 (Performance and Payment Bonds — Construction). State highway projects: pull the controlling DOT spec book section. State school or municipal: pull the LMA statute (e.g. Cal. Civ. Code § 9550).
- Confirm the bond percentage. Federal: 100% of original contract price under FAR 28.102-2. State: typically 100%; a minority of states (Colorado at 50%, some Massachusetts payment-only bonds) deviate. Private: whatever the construction contract negotiates — typically 50% on AIA A312 forms. Verify the percentage in the statute or contract clause text, not just the cover memo.
- Pull a quote from a Treasury-listed surety. Federal Miller Act jobs require the surety appear on Treasury Circular 570 with an underwriting limitation at or above the project's penal sum. Most state LMAs accept any state-admitted A-rated carrier; verify against your state DOI's admitted-carrier list before binding.
- Check SBA Bond Guarantee Program eligibility. Small contractors with limited bonding history can apply through the SBA Office of Surety Guarantees for federal guarantees on contracts up to $9 million ($14M with federal contracting authorization). The SBA guarantee makes Treasury-listed sureties willing to underwrite contractors that wouldn't otherwise qualify, often at standard rate bands rather than subprime pricing.
This page is informational. Statutes verified May 2026. For an actual procurement, rely on the controlling solicitation and the issuing surety's bond form as the authoritative source.
When does the federal Miller Act trigger a performance bond requirement?
The Miller Act (40 U.S.C. § 3131) requires a performance bond on any federal construction contract exceeding $150,000. Below the threshold the contracting officer must select alternative payment protections under FAR 28.102-1 — most commonly an irrevocable letter of credit. The performance bond face amount equals 100% of the original contract price under FAR 28.102-2; if the contract price increases via modification, an additional 100% bond must cover the increase. Service contracts (non-construction) are governed by FAR 28.103, which has a different threshold and percentage structure.
Why is the federal performance bond required at 100% of contract value?
FAR 28.102-2(a) sets the penal amount at 100% because the federal government must be made whole if the prime contractor defaults — the bond has to fund completion at any qualified replacement contractor, not just the original price. The 100% rule traces back to the original 1935 Miller Act and was preserved in every subsequent FAR rewrite. The contracting officer may revise the percentage downward only under the narrow conditions in FAR 28.102-2(b) or (c). For a comprehensive walkthrough of federal bonding obligations, see the Miller Act bond requirements guide.
Are advance-payment performance bonds priced differently from standard performance bonds?
Yes. Where the federal contracting officer authorizes advance payments to the prime, FAR 28.106-1 requires an additional bond covering the unliquidated advance — separately rated by the surety because the bond covers a different exposure (cash recovery rather than work completion). The documented pattern from federal procurement records is that carriers file advance-payment bonds at roughly 25–50 basis points above the corresponding performance bond rate, and the indemnity package extends to personal guarantees from beneficial owners.
How does a bid bond price compare to a performance bond on the same project?
Bid bonds are typically a small fixed fee (often $100–$500) or a low percentage of the bid amount, because the bid bond exposure is short-term and tied to the bid-bond percentage rather than the full contract. Performance bonds price as a percentage of the full contract value (0.75%–3% for standard credit). On a $2M federal project, the bid bond might cost $200 while the performance bond costs $20,000–$60,000 per year. See the bid bond cost guide and the bid bond requirements guide for the percentage-floor mechanics.
Does aggregate bonding capacity affect the rate on a single project?
Yes. A-rated sureties underwrite both single-job limits and aggregate work-on-hand limits. A contractor pushing aggregate capacity (total bonded backlog plus the new project) typically sees a rate increase of 25–50 basis points relative to a contractor at half capacity, because the surety prices the marginal exposure higher as the cumulative book of business grows. Capacity is a function of working capital, retained earnings, and current-ratio benchmarks; the SFAA-published industry standard is roughly 10x net working capital for single jobs and 20x for aggregate.
What is the relationship between performance bonds and payment bonds in the same procurement?
On federal Miller Act jobs the contractor must furnish both a performance bond (covers project completion to the federal owner) and a payment bond (covers subcontractors and material suppliers if the prime fails to pay). Both are typically issued by the same surety on a paired form (FAR 52.228-15) and rated together — the combined premium is roughly the same as a standalone performance bond at the same percentage because the payment-bond exposure is largely already inside the performance underwriting. Most state LMAs mirror this pairing; see the combined performance and payment bonds page for the dual-bond structure.
If you want the requirements behind the prices, the performance bond requirements guide covers FAR 52.228-15 mechanics, AIA A312 form differences, and how state LMA forms diverge from the federal template. The performance bonds hub page lists state-specific purchase pages, and the performance bond cost hub covers commercial pricing for non-construction performance bonds (service contracts, supply contracts, IT projects).
For sibling guides being published in this batch, the bid bond cost by state guide covers the bid-bond percentage floors and federal vs state procurement bid-bond rules; the court bond cost by state guide covers judge-set appeal, injunction, replevin, and attachment bonds; the probate bond cost by state guide covers executor, administrator, guardian, and trustee bonds; and the mortgage broker bond cost by state guide covers NMLS-mandated state mortgage broker bonds.
For pricing context across all surety lines, the surety bond cost guide covers contractor, license, court, and probate bond rate structures. To request a quote directly, submit the performance bond quote form — same producer team, same Treasury-listed carriers, same pricing as the calculator above.
Bid deadline tomorrow? Get a Treasury-listed surety in hours.
Federal solicitations close hard. If your bid opens at 2pm Eastern and you need a performance bond commitment letter on the bid form, an indemnity package signed and a Treasury-listed carrier's underwriter on a same-day call gets the bond in hand before the bid window closes. Standard credit, contracts under $5M aggregate, finishes in roughly 24 hours. Larger programs and aggregate over $10M run 48–72 hours with audited financials.
Treasury Circular 570 carriers · A-rated · YMYL disclaimer: this page describes pricing for surety bonds, which are regulated insurance products. Premiums are illustrative; binding rate is set by the carrier at underwriting.
Federal Miller Act, FAR implementing rules, Treasury Circular 570, and SBA Bond Guarantee authorities, along with state Little Miller Act statutory citations, were verified against primary .gov sources during May 2026 research:
- Miller Act (40 U.S.C. § 3131) — law.cornell.edu/uscode/text/40/3131
- FAR Subpart 28.1 (Bonds and Other Financial Protections) — acquisition.gov/far/subpart-28.1
- FAR 28.102-2 (Amount required) — acquisition.gov/far/28.102-2
- FAR 52.228-15 (Performance and Payment Bonds — Construction) — acquisition.gov/far/52.228-15
- Treasury Circular 570 (Listed Surety Companies) — fiscal.treasury.gov/surety-bonds/circular-570
- SBA Bond Guarantee Program — sba.gov/funding-programs/surety-bonds
- California Civil Code § 9550 (LMA payment bond, $25,000 trigger) — leginfo.legislature.ca.gov — CIV § 9550
- Texas Government Code Ch. 2253 (Public Work Performance and Payment Bonds, $100,000 trigger) — statutes.capitol.texas.gov — Ch. 2253
- Florida Statutes § 255.05 (Public works payment and performance bond) — leg.state.fl.us — § 255.05
Premium ranges reflect public carrier filings with state insurance departments observed during May 2026 and are not guaranteed. Actual premium is set by the underwriting Treasury-listed surety at time of application. This page is informational and does not constitute legal or financial advice; verify current requirements with your contracting officer or state procurement authority before relying on any figure for a federal or state filing.