What are They?
- Payment bonds guarantee payment of subcontractors, laborers, and suppliers.
- Performance bonds guarantee completion of the contract in accordance with all specifications, terms, and conditions.

Who Needs them?
- Federal projects. Texas contractors selected for federally funded public works projects valued in excess of $100,000 are required to purchase payment and performance bonds.
- State-funded projects. The Texas Little Miller Act also requires a payment bond for state-funded projects valued over $25,000. A performance bond is required for projects valued over $100,000.
- Private projects. Owners of private construction projects of any size can require payment and performance bonds.