Out of State Contractor Bond Requirements

Each contractor with a principal place of business outside of Iowa must file a $25,000.00 bond in order to register (limited exceptions may apply). Having a branch office in Iowa does not exempt a contractor from the bonding requirement.

The bond guarantees the contractor will pay all taxes, penalties and other monies due to the State of Iowa as a result of the work performed in Iowa. Only the State of Iowa and its agencies can collect under the bond.

Contractor bonds must be prepared using the Bond Form provided by the Iowa Division of Labor.

Contractors must file the original bond when applying for the construction contractor registration number. A surety company licensed to do business in Iowa must execute contractor bonds, and in most cases, contractors must attach the surety company’s power-of-attorney.  Bond effective date must match application date.

False Information

Supplying false information with a contractor registration application may result in a $500.00 civil penalty and criminal prosecution.

Exemptions

Instead of submitting a bond, a contractor may submit (with the New Contractor Registration Application/Renwal Form) the letter they received from the Iowa Department of Transportation stating the contractor's prequalification to bid on projects pursuant to Iowa Code section 314.1.

If enforcement of the bonding requirement would cause denial of federal funding or be otherwise inconsistent with federal law, the bonding requirement will be suspended.