Most state bond statutes have one triggering sentence. Pennsylvania’s Bond Law has two, and they do not say the same thing — not about the figure, and not about what you are allowed to hand over.
Two sections, and the second one wins for the bodies it covers
The first provision, quoted from 8 P.S. § 193:
“(a)—Before any contract exceeding five thousand dollars ($5,000) for the construction, reconstruction, alteration or repair of any public building or other public work or public improvement, including highway work, of any contracting body is awarded to any prime contractor, such contractor shall furnish to the contracting body the following bonds, which shall become binding upon the awarding of said contract to such contractor: (1) A performance bond at one hundred percent of the contract amount, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract.”
The second, also in 8 P.S. § 193:
“(a)—Before any contract exceeding ten thousand dollars ($10,000) for the construction, reconstruction, alteration or repair of any public building or other public work or public improvement, including highway work, of any contracting body is awarded to any prime contractor, such contractor shall furnish to the contracting body the following financial security, which shall become binding upon the awarding of said contract to such contractor: (1) 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, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract.”
Read them side by side and three differences stand out. The figure doubles. The noun changes — “bonds” becomes “financial security”. And the list of acceptable instruments goes from one to three.
The second provision is written for a defined class of contracting body and displaces the first for it. Which means a Pennsylvania contractor cannot answer “what do I owe” from the contract value alone. It has to know who is buying.
Five thousand dollars is very low
Set the first figure against the rest of the country. Idaho requires bonds at fifty thousand dollars, Texas at one hundred thousand for its performance bond, Illinois at one hundred and fifty thousand, North Dakota at two hundred and fifty thousand.
Pennsylvania’s general provision bites at five thousand, which is close to the bottom of the national range and means a very large share of Pennsylvania public work is bonded work. For a small contractor that changes the calculation about bonding capacity: it is not something you arrange for the occasional big job, it is a standing requirement of operating in the market.
The noun change is doing real work
Every state that shifts from “bond” to “security” widens what satisfies the requirement — Maryland does it across its whole subtitle under Md. State Fin. & Proc. § 17-103, and West Virginia does it by allowing a cash or securities deposit under W.Va. Code § 38-2-39.
Pennsylvania does it in one of two parallel provisions, which is unusual: the same law, the same percentage, the same conditioning language, and two different answers to “what may I hand over”.
Three instruments, one figure
For the bodies the second provision covers, the list is closed and specific:
A performance bond — the ordinary route, from a surety.
A Federal or Commonwealth chartered lending institution irrevocable letter of credit — note the qualifier on the issuer. Not any bank; a federally or Commonwealth-chartered one. Oklahoma’s 61 O.S. § 1 draws the same kind of line by requiring an FDIC- or FSLIC-insured institution.
A restrictive or escrow account in such lending institution — money held under restriction at the same class of institution, which is neither a surety’s promise nor a bank’s undertaking but the funds themselves.
All three at one hundred percent of the contract amount. The instrument changes; the exposure does not.
The practical consequence is the one that matters for a contractor near its limits: on work covered by the second provision, surety capacity is not the only path. A contractor whose bank relationship is stronger than its bonding relationship has a route the first provision does not offer.
Ninety days, and the notice names who you worked for
Pennsylvania’s second-tier notice follows the federal shape with one wording difference worth noticing:
“(b) Any claimant who has a direct contractual relationship with any subcontractor of the prime contractor who gave such payment bond or other financial security but has no contractual relationship, express or implied, with such prime contractor may bring an action on the payment bond or other financial security only if he has given written notice to such contractor within ninety days from the date on which the claimant performed the last of the labor or furnished the last of the materials for which he claims payment, stating with substantial accuracy the amount claimed and the name of the person for whom the work was performed or to whom the material was furnished.”
The period and the “substantial accuracy” standard match 40 U.S.C. § 3133(b)(2). The content requirement is broader: the federal rule asks for “the name of the party to whom the material was furnished”, and Pennsylvania asks for the name of the person for whom the work was performed or to whom the material was furnished — covering labor as explicitly as supply.
Note also that the right of action runs against “the payment bond or other financial security”. Where a body accepted a letter of credit or an escrow account, the claimant’s remedy follows the instrument that was actually posted.
What the Bond Law does not carry
This page reads the two triggering provisions and the claim notice. Several things sit outside them.
The section does not state a payment bond percentage separately in what we have read — the hundred percent quoted above attaches to the performance obligation, and the payment security is referred to without a figure of its own here.
It does not carry a limitation period for suit once notice has been given, which is the provision that decides a late claim.
And it does not cover bid security, which in Pennsylvania as in most states lives in the procurement rules for the particular contracting body rather than in the Bond Law. That is a separate read and this page does not guess at it.
