A Class B contractor in Nevada wants to bid on a public works project valued at $750,000. What additional bonding requirement must be met?
Correct Answer
A) Payment and performance bonds equal to 100% of contract value
Nevada public works projects typically require both payment and performance bonds equal to 100% of the contract value for projects over certain thresholds.
Why This Is the Correct Answer
Nevada law requires both payment bonds and performance bonds equal to 100% of the contract value for public works projects above certain thresholds. For a $750,000 project, this means the contractor must obtain a payment bond of $750,000 AND a performance bond of $750,000 — ensuring both that subcontractors/suppliers get paid and that the project is completed as specified.
Why the Other Options Are Wrong
Option B: No additional bonding required beyond license bond
Claiming no additional bonding is required beyond the license bond is incorrect. Nevada's public works statutes specifically mandate payment and performance bonds for projects at this scale. The standard contractor license bond alone is insufficient for large public works contracts.
Option C: Payment and performance bonds equal to 50% of contract value
Payment and performance bonds at 50% of contract value do not meet Nevada's public works bonding requirement. The statute requires 100% coverage for both bond types to provide full protection to the public entity, subcontractors, and suppliers.
Option D: Only a payment bond equal to 100% of contract value
A payment bond alone at 100% is insufficient — Nevada requires both a payment bond AND a performance bond, each at 100% of contract value. The performance bond protects the public owner if the contractor defaults; omitting it leaves the project owner exposed.
Memory Technique
For public works, remember 'Both at 100%' — Payment bond (protects subs and suppliers) + Performance bond (protects the owner) = double coverage at full value. Think: 'Public money demands full protection — both bonds, full amount.'
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