# City of Austin Construction Contract Requirements: Bonds, Surety and Insurance

URL: https://mycontractorsinsurancequote.com/construction-surety-bonds/public-agency-contractor-requirements/city-of-austin
Updated: 2026-10-29 · Reviewed by the Principal, Gleason Insurance Brokers, LLC
Publisher: My Contractors Insurance Quote, a website of Gleason Insurance Brokers, LLC

City of Austin capital bids carry a bid guaranty of at least 5 percent of the total bid, and the Section 00700 General Conditions revised October 3, 2025, require 100 percent performance and payment bonds above $100,000, with a surety holding a U.S. Treasury certificate of authority on bonds over $100,000. Insurance limits come from each project's Section 00810 Supplemental General Conditions, which the City's template tiers by project type, from $500,000 general liability on governmental-function work to $5,000,000 inside an airport operations area. Every bid also carries an MBE/WBE or DBE compliance plan, with goals set in each solicitation.

## Key Decision Points
- Section 00100: a bid guaranty of at least 5 percent with power of attorney, and the three apparent low bidders' bonds are held until award.
- Section 00700: performance and payment bonds at 100 percent above $100,000, with lower tiers that waive bonds on short or small contracts.
- Bonds over $100,000 need a Treasury certificate of authority or reinsurance above $1,000,000 from an authorized or Treasury-listed reinsurer.
- The 00810 template sets A.M. Best B+VII insurers and limit tiers by project type; each solicitation's 00810 sets the actual limits.
- Retainage is 10 percent under $400,000 and 5 percent at $400,000 or more, with a one-year warranty after Substantial Completion.

## Austin's Standard Bid Documents and Registration

The City's Financial Services department posts its standard construction bid documents for capital improvement projects on the Capital Procurement Resources page. The revisions listed there include Section 00100 Instructions to Bidders (09/21/2023), Section 00700 General Conditions (10/03/2025), Section 00810 Supplemental General Conditions (02/28/2023), an IDIQ version of 00810 (06/01/2026), the 00610 and 00620 bond forms (02/04/2020) and the 00410 Safety Experience form (01/12/2026). A Summary of Changes dated 08/17/2026 sets the FY27 living wage at $22.15. The 00810 template includes Austin Water facility options, so Austin Water capital work uses the same set.

Section 00100 states, "All CONTRACTORS must be registered to do business with OWNER prior to Contract Award." Prime contractors register in Austin Finance Online before award and subcontractors before contract execution. Section 1.3 says "Bidders must attend" the pre-bid conference unless notified otherwise, and no contractor prequalification program beyond the 00400 and 00410 experience statements appeared in the documents read.

For how Austin compares with state DOT, city and district owners, see [public agency contractor requirements](https://mycontractorsinsurancequote.com/construction-surety-bonds/public-agency-contractor-requirements).

## The 5 Percent Bid Guaranty and Local Preference

Section 4 of the Instructions to Bidders calls for a "Bid guaranty in an amount of not less than five percent (5%) of the total Bid," with the surety's power of attorney attached. The bonds of the three apparent low bidders are held until award, so a firm that places second or third can have its bid bond tied up for the evaluation period. Section 5 asks for performance and payment bonds equal to the Contract Amount from a solvent corporate surety authorized in Texas.

On contracts under $100,000, the City may award to an Austin-based bidder whose bid is within 5 percent of the low non-local bid. For a small-contract bidder from outside the city, that preference can change the bid math before bonding enters the picture.

For how sureties underwrite the bid guaranty, see [bid bonds and bid guaranties](https://mycontractorsinsurancequote.com/construction-surety-bonds/bid-bonds).

### Illustrative scenario: A Lift Station Bid with a Proprietary-Function 00810

Blue Hollow Civil, a utility contractor, prices a $2.4 million Austin Water lift station rehabilitation. The solicitation's 00810 marks the work as a proprietary function, so its general liability and auto need $1,000,000 minimums and its employers' liability needs $1,000,000 limits, up from the governmental-function figures it carried on a prior City street job. Its surety is Treasury-listed, so the bond over $100,000 raises no reinsurance issue. The firm contacts certified subcontractors more than seven business days before bid opening, files its MBE/WBE compliance plan through Austin Finance Online and arranges builder's risk in the Contract Amount with the City as loss payee. These details are hypothetical, and a real program depends on the City, the surety or carriers and the firm's own risk.

## Performance and Payment Bond Tiers in Section 00700

Article 5.4 of the General Conditions sets the bond tiers by Contract Amount, and where bonds apply "each shall be issued in an amount of one hundred percent (100%) of the Contract Amount." The original Contract Time drives one of the waivers: a short contract of 60 calendar days or 40 working days or less can drop the performance bond in the middle tiers.

- Over $100,000: performance and payment bonds required.
- Over $50,000 to $100,000: payment bond required; performance bond required unless the original Contract Time is 60 calendar or 40 working days or less.
- Over $25,000 to $50,000: performance bond required unless the original Contract Time is that short; payment bond not required.
- $25,000 or less: neither bond required.

For the state notice and claim rules that sit behind the payment bond, see [Texas public works payment bond claims](https://mycontractorsinsurancequote.com/construction-surety-bonds/public-works-bond-requirements/texas).

## What a Waived Bond Costs and Who Can Write the Bond

A waived bond carries a cash-flow cost. Wherever a bond is waived under Article 5.4, the contractor receives no progress payments; it is paid 95 percent after Final Completion and 5 percent after the one-year warranty. For a small firm, bonding a contract it could legally leave unbonded can be the difference between monthly payments and financing the whole job. The performance bond also extends through the one-year warranty.

Article 5.1 asks for a surety licensed in Texas and compliant with Texas Insurance Code Chapter 3503, with reinsurance on any bond above 10 percent of the surety's capital and surplus. The General Conditions add, "For bonds exceeding $100,000, the surety must also hold a certificate of authority from the U.S. Secretary of the Treasury," or reinsurance of any liability above $1,000,000 from a reinsurer that is authorized or Treasury-listed. A smaller regional surety may meet the first test and not the second, so the bond size typically decides which markets can write it.

For how sureties underwrite the performance bond and its warranty tail, see [performance bonds for public contracts](https://mycontractorsinsurancequote.com/construction-surety-bonds/performance-bonds).

## Section 00810: Insurance Tiers by Project Type

Article 5.3 of the General Conditions refers to the Supplemental General Conditions for insurance. The posted 00810 (revised 02/28/2023) is a project-manager template: the limits are chosen per project as a governmental or proprietary function, aviation, railroad or ROCIP job, so the figures below are the template's options and each solicitation's own 00810 sets the limits that apply. The template asks for insurers "with A.M. Best ratings of B+VII or better," and A- or better for hazardous-materials coverage.

- General liability: $500,000 per occurrence for a governmental function, $1,000,000 minimum for a proprietary function or hazardous materials, $5,000,000 inside an airport operations area and $2,000,000 per occurrence with $4,000,000 aggregate for railroad work.
- Auto: $500,000 combined single limit for a governmental function, $1,000,000 minimum for a proprietary function or hazardous materials, $5,000,000 inside an airport operations area and $2,000,000 within 50 feet of a railroad.
- Employers' liability: $100,000 per accident, $500,000 disease policy limit and $100,000 disease each employee for a governmental function, or $1,000,000 for each limit on proprietary, airport or railroad work.
- Professional liability of $500,000 per claim and aggregate where the work needs engineering or survey, such as trench safety or traffic control plans.

For the full program a public works prime typically carries, see [public works contractor insurance and bonds](https://mycontractorsinsurancequote.com/who-we-serve/general-contractors/public-works-contractors).

## Additional Insured Forms, Builder's Risk and ROCIP

The 00810 template lists the forms by number. General liability carries the "OWNER listed as an additional insured, endorsements CG 2010 and CG 2037 or equivalent," plus CG 2503 per-project aggregate, CG 2404 waiver and CG 0205 notice, with contractual liability, completed operations for the warranty period, XCU and independent contractors. Auto carries CA 2048 additional insured, CA 0444 waiver and CA 0244 notice, and workers' compensation carries WC 420304 waiver and WC 420601 notice. An umbrella on a follow-form basis may fill a gap below the stated limits, every deductible and self-insured retention is disclosed, and the insured gives 30 days' notice of aggregate erosion. The IDIQ version dated 06/01/2026 uses the same tiers and rating.

Building, utility plant, tunneling, bridge and lift station projects take all-risk builder's risk or installation insurance in the Contract Amount with the City as loss payee. Asbestos abatement carries a $1,000,000 endorsement, and bulk asbestos transport an MCS-90 at $5,000,000. On designated CIP projects, the City's ROCIP provides workers' compensation, general liability and excess of $50,000,000 each occurrence, with a 10-year completed operations extension; the contractor bears the first $5,000 of each general liability property damage loss and excludes enrolled insurance cost from its bid on Form 00425A. Pollution and asbestos subcontractors stay outside the ROCIP. Placement is subject to underwriting and the terms of the policies issued.

For how enrollment and bid deductions work under an owner wrap-up, see [owner-controlled insurance programs](https://mycontractorsinsurancequote.com/wrap-up-insurance/ocip).

## Retainage and the One-Year Warranty

Article 14.1.5 holds 10 percent where the original Contract Amount is under $400,000. "Where the original Contract Amount is $400,000 or more," the City pays less 5 percent and holds it until final payment. Subcontractors may ask for early release of retainage on their completed work. Article 13.7.1 sets the warranty: "If within one year after the date of Substantial Completion" the work is found defective, the contractor corrects it. The contract or law can set a longer period.

Since the performance bond runs through that year, the surety's exposure on an Austin job typically ends with the warranty rather than at acceptance, and the final 5 percent on an unbonded job waits for the same date.

State highway contracts in Central Texas follow different retainage and bonding rules, explained in [TxDOT contractor requirements](https://mycontractorsinsurancequote.com/construction-surety-bonds/public-agency-contractor-requirements/txdot).

## The MBE/WBE Compliance Plan in Every Bid

Section 00100 states, "Bid must be accompanied by an MBE/WBE or DBE Compliance Plan submitted electronically" through Austin Finance Online. Good-faith efforts under Section 1.11 include contacting certified firms at least seven business days before bid opening, so outreach has to start well before the bid is priced. The Small and Minority Business Resources department certifies MBE and WBE firms for City-funded contracts and SBE firms for small business construction work.

The goal percentages are not set in the standard documents and vary by solicitation; each bid's MBE/WBE Procurement Program Package states them. Reading that package as soon as the solicitation posts typically leaves time for the outreach the plan documents.

For county contracts and requirements north of the city, see [Williamson County requirements](https://mycontractorsinsurancequote.com/texas/metros/austin/williamson-county).

## Airport Expansion

Airport work for the City runs under the ROCIP AUS owner program, which changes what contractors carry and price.

Those requirements are set out in [Austin-Bergstrom airport expansion requirements](https://mycontractorsinsurancequote.com/projects/airport-and-port-construction/austin-bergstrom-airport).

## The November 3, 2026, Bond Election

Austin voters decide a bond election on Tuesday, November 3, 2026. The City's bond pages describe Proposition A as a $260 million proposal for parks and recreation and Proposition B as a $35 million proposal for libraries. The bond development page lists an initial recommendation list totaling $700 million and Ordinance No. 20260806-002 of August 6, 2026. The propositions are on the ballot and have not been approved; the outcome is not known until after the election.

For contractors weighing capacity for 2027 and later, the result matters more than the headline figures, and a surety's view of a firm's aggregate program can vary by carrier guidelines and programs. Encroachment and street work permits are a separate process from these contracts, explained in the Texas encroachment permit bond guide.

For contractor insurance and bonding across the metro, see [Austin construction insurance and bonds](https://mycontractorsinsurancequote.com/texas/metros/austin).

## Before You Ask for a Quote

### What to Gather
- The solicitation's own Section 00810 and the function or project type it selects
- A bid guaranty of at least 5 percent with the surety's power of attorney
- The surety's Treasury certificate of authority or its reinsurance for bonds over $100,000
- Certificates on Section 00650 with B+VII insurers and the listed endorsement numbers
- Austin Finance Online registration for the firm and its subcontractors
- The MBE/WBE compliance plan with records of outreach to certified firms

### What to Ask the Insurer or Surety
- Is this project a governmental or proprietary function, aviation, railroad or ROCIP job?
- Is the Contract Time short enough to waive the performance bond, and do we want progress payments anyway?
- Do our policies carry CG 2010, CG 2037, CG 2503 and CA 2048 or equivalent forms?
- Does the work need professional liability for trench safety or traffic control plans?
- If the project is under the ROCIP, which costs come out of our bid on Form 00425A?
- What MBE/WBE goals does this solicitation's program package set?

## Broker Notes

**Quick Answer:** Austin requires a 5 percent bid guaranty, 100 percent performance and payment bonds above $100,000 with a Treasury-listed or reinsured surety, insurance limits set by each project's 00810, 10 or 5 percent retainage, a one-year warranty and an MBE/WBE compliance plan with every bid.

**Common Mistake:** Quoting insurance from the posted 00810 template's governmental-function limits when the solicitation's 00810 marks the job as proprietary, aviation or railroad work with higher limits.

**Broker Perspective:** The Treasury certificate test on bonds over $100,000 narrows which sureties can write Austin work without reinsurance, so it is worth checking before the bid guaranty is issued.

**Coverage Impact:** The template lists additional insured forms CG 2010, CG 2037 and CA 2048 or equivalent, so a policy with only blanket wording can need an endorsement change before execution.

## Questions Buyers Ask

### What bid guaranty does the City of Austin require?

Section 00100, revised September 21, 2023, calls for a bid guaranty of not less than 5 percent of the total bid with the surety's power of attorney. The bonds of the three apparent low bidders are held until award.

### When does the City of Austin require performance and payment bonds?

Under Article 5.4 of the October 3, 2025, General Conditions, both bonds are required above $100,000, a payment bond above $50,000 and a performance bond above $25,000 unless the original Contract Time is 60 calendar or 40 working days or less, and neither at $25,000 or less. A waived bond means no progress payments.

### Does Austin require a Treasury-listed surety?

For bonds over $100,000, Article 5.1 requires a surety holding a certificate of authority from the U.S. Secretary of the Treasury, or reinsurance above $1,000,000 from an authorized or Treasury-listed reinsurer. Smaller bonds need a surety licensed in Texas.

### What insurance limits does an Austin construction contract set?

Each solicitation's Section 00810 sets them. The template ranges from $500,000 general liability and auto on governmental-function work to $1,000,000 for proprietary work, $2,000,000 for railroad work and $5,000,000 inside an airport operations area, with B+VII insurers.

### What MBE/WBE goal applies to City of Austin construction bids?

The standard documents do not state one. Each bid includes an MBE/WBE or DBE compliance plan submitted through Austin Finance Online, and the goals appear in that solicitation's MBE/WBE Procurement Program Package.

### Has Austin's 2026 bond package been approved?

Not as of October 26, 2026. The election is on November 3, 2026, with Proposition A, a $260 million proposal for parks and recreation, and Proposition B, a $35 million proposal for libraries, on the ballot.

## Official Sources

1. [Capital Procurement Resources](https://www.austintexas.gov/financial-services/capital-procurement-resources), City of Austin, Financial Services. Index of standard capital bid documents and revision dates for 00100, 00700, 00810, 00810 IDIQ, 00610/00620 and 00410; Summary of Changes 08/17/2026 with FY27 living wage $22.15; ROCIP VIII documents Verified 2026-10-26.
2. [Section 00100, Instructions to Bidders (09/21/2023)](https://austin.widen.net/content/axnhdk1awq/original/00100_rev_09.21.2023.pdf?download=true), City of Austin. Registration before award; mandatory pre-bid conference unless notified; 5 percent bid guaranty with power of attorney; three low bidders' bonds held; bonds from a solvent surety authorized in Texas; MBE/WBE or DBE compliance plan; seven-business-day outreach; local preference under $100,000 Verified 2026-10-26.
3. [Section 00700, General Conditions (10/03/2025)](https://austin.widen.net/content/mmczv9mxqo/original/00700-General-Conditions.pdf?u=ejjx7p&download=true), City of Austin. Surety licensing, Chapter 3503 and reinsurance; Treasury certificate for bonds over $100,000; bond tiers and Contract Time waivers; no progress payments on waived bonds; retainage tiers; one-year warranty; insurance referred to the Supplemental General Conditions Verified 2026-10-26.
4. [Section 00810, Supplemental General Conditions template (02/28/2023)](https://austin.widen.net/content/e3np8kxfz1/original/00810_rev.02.28.2023.doc?download=true), City of Austin. B+VII rating; limit tiers by project type for auto, employers' liability and general liability; additional insured, waiver and notice endorsement numbers; builder's risk; asbestos and MCS-90; professional liability; ROCIP terms Verified 2026-10-26.
5. [Section 00810 IDIQ, Supplemental General Conditions (06/01/2026)](https://austin.widen.net/content/vzyjulzehc/original/00810-IDIQ.docx?download=true), City of Austin. Same tiered limits and B+VII rating as the standard template Verified 2026-10-26.
6. [Small and Minority Business Resources](https://www.austintexas.gov/department/small-and-minority-business-resources-0), City of Austin, Small and Minority Business Resources. MBE and WBE certification for City-funded contracts and SBE certification for small business construction work; no goal percentages stated Verified 2026-10-26.
7. [2026 Bond Development](https://www.austintexas.gov/capital-delivery/2026-bond-development), City of Austin, Capital Delivery Services. Initial recommendation list totaling $700 million; Ordinance No. 20260806-002 (August 6, 2026) Verified 2026-10-26.
8. [Bond 2026](https://www.speakupaustin.org/bond2026), City of Austin, Capital Delivery Services. Election on Tuesday, November 3, 2026; Proposition A $260 million for parks and recreation; Proposition B $35 million for libraries Verified 2026-10-26.

## Related Decisions

- [City of San Antonio contractor requirements](https://mycontractorsinsurancequote.com/construction-surety-bonds/public-agency-contractor-requirements/city-of-san-antonio)
- [Texas encroachment permit bonds](https://mycontractorsinsurancequote.com/construction-surety-bonds/encroachment-permit-bonds/texas)
- [payment bonds for public contracts](https://mycontractorsinsurancequote.com/construction-surety-bonds/payment-bonds)
- [per-project aggregate endorsements](https://mycontractorsinsurancequote.com/project-specific-liability-insurance/per-project-aggregate)
- [civil and underground utility contractor insurance](https://mycontractorsinsurancequote.com/who-we-serve/civil-underground-utilities)
- [builder's risk for public projects](https://mycontractorsinsurancequote.com/builders-risk-insurance)

---

Start a quote request: https://mycontractorsinsurancequote.com/get-a-quote · Call 844-978-7283

Contract and insurance reviews are a courtesy service that may be available at times, depending on our workload and on the size, timing and complexity of the project. A review is not guaranteed and is limited to insurance considerations. It is not legal advice and is not a substitute for advice from your own legal counsel, which you may need before signing a contract or obtaining coverage.

Insurance and surety services are provided through Gleason Insurance Brokers, LLC. Site information is educational and does not constitute legal advice, a binder, an offer of coverage, a guarantee of eligibility or confirmation of policy terms. Insurance conditions are governed by actual issued policies; surety rights and obligations are governed by bond and indemnity documents.