“A bond is required” is how most contractors read a public-works solicitation, and on plenty of jobs it is the whole story. On smaller work in several states it is not — the statute names other instruments, or authorizes the body to require nothing at all, and the contractor who goes straight to a surety has skipped a cheaper answer that was written into the law.
This page collects the alternatives that appear in the statutes we have read, and it is organized by what the alternative is rather than by state, because the same idea shows up in different places.
Nothing at all: the waiver tiers
Two states we have read give the contracting body express authority to require no security below a figure.
South Carolina. Under S.C. Code § 11-35-3030, “in the case of a construction contract valued at fifty thousand dollars or less, the governmental body may waive the requirements of subitems (i) and (ii) above, if the governmental body has protected the State”. Subitems (i) and (ii) are the performance bond and the payment bond, so the waiver reaches both. Note the condition attached — the body must have protected the State, which is a judgment it has to make rather than a box it ticks.
Vermont. Under Vt. Stat. tit. 19 § 10, the Secretary “in cases involving contracts for $100,000.00 or less, may waive the requirement of a performance bond”. Twice South Carolina’s figure, and discretionary in the same way.
Both are permissive. Neither says the body shall waive, and a contractor cannot rely on one without reading the solicitation.
Something else that is not a bond: “other good and sufficient surety”
The Vermont section carries a second, broader provision, and it is the most open-ended formulation in our reading. The Secretary “at his or her discretion as to the best interest of the State, may accept other good and sufficient surety in lieu of a bond”.
That is not a list. It is a standard, and it leaves the instrument to be negotiated against a test — good, sufficient, and in the best interest of the State. A statute drafted that way is telling you the conversation is available.
An affidavit instead of an instrument
Oklahoma is the only state in our reading that accepts a sworn statement in place of security. Under 61 O.S. § 1:
“For a contract not exceeding Fifty Thousand Dollars ($50,000.00), in lieu of a bond or irrevocable letter of credit, the contractor shall submit an affidavit of the payment of all indebtedness incurred by the contractor, the contractor’s subcontractors, and all suppliers of labor, material, rented machinery or equipment, and repair of and parts for equipment used or consumed in the performance of the contract.”
Read what it substitutes. Not a promise to pay — a sworn statement that everything has been paid. It is a backward-looking certification, and its reach is unusually wide: subcontractors, suppliers of labor and material, rented machinery and equipment, and even repair parts for equipment consumed on the job.
For a small Oklahoma contract that is a genuinely different compliance task from arranging a bond, and it lands on the contractor’s own records rather than on an underwriter.
A bank’s undertaking instead of a surety’s
The letter of credit appears in three of the statutes we have read, at three different scopes.
Federal work names it below the bond threshold: FAR 28.102-1(b)(1) lists an irrevocable letter of credit among five payment protections and tells the contracting officer to give it particular consideration.
Oklahoma puts it on equal footing with the bond at any size — “a bond in a sum equal to the contract price, with adequate surety, or an irrevocable letter of credit … in a sum equal to the contract price”, with the terms prescribed by the state’s Construction and Properties Division and the issuer required to be federally insured.
Pennsylvania, for a defined contracting body, accepts “A performance bond, Federal or Commonwealth chartered lending institution irrevocable letter of credit or restrictive or escrow account in such lending institution, equal to one hundred percent of the contract amount” (8 P.S. § 193). Note the third option in that list — a restrictive or escrow account — which is neither a bond nor a letter of credit.
Cash and government securities
West Virginia is the clearest case of the money itself standing in for the instrument. W.Va. Code § 38-2-39 provides that a bond shall have as surety an incorporated bonding or surety company authorized in the state, “or in lieu of such corporate surety the contractor may deposit as security for such bond … a sum in cash or bonds and securities of the United States of America or of the State of West Virginia of sufficient amount and value equal at least to the reasonable cost of materials, machinery, equipment and labor required for the completion of such contract.”
The same measure governs the deposit as governs the bond. For most contractors this is theoretical — depositing the full input cost of a contract in cash defeats the purpose of a bond — but it tells you what the statute is really asking for: a fund of a certain size, available, and it does not much mind who provides it.
A certified check, usually with the bid
Cash equivalents show up most often at the bid stage rather than the performance stage.
Indiana, under Ind. Code § 5-16-5.5-2, requires the political subdivision or agency to “require a bond or a certified check to be filed with each bid by a bidder in the amount determined and specified by the board in the notice of the letting if the cost of the public work is estimated to be more than two hundred thousand dollars”.
Oklahoma, at 61 O.S. § 1, takes “a certified check, cashier’s check or bid bond equal to five percent (5%) of the bid, which shall be deposited with the awarding public agency as a guaranty”.
The word deposited in that Oklahoma sentence is the difference that catches contractors out. A check is money held and returned. A bid bond is a promise, and there is nothing to return.
What this page does not tell you
It does not tell you what your obligee accepts. Every provision above is permissive from the body’s side or conditional on the body’s judgment, and the operative answer is in the solicitation.
It also covers only the states whose statutes we have read in full — a state absent here is absent because we have not finished reading it, not because it offers nothing. And it says nothing about private work, where the contract documents rather than a statute decide what is acceptable, and where the range of instruments is wider still.
