City of San Diego Construction Contracts: Prequalification, Bonds and Insurance

The application asks for a CPA financial statement, a bond letter addressed to The City of San Diego and three client references. The type of financial statement sets the ceiling on the firm's maximum bidding capacity:

• Compiled statement: accepted only from SLBE-certified firms, up to the single-project bond limit or $1 million, whichever is less.
• Reviewed statement: up to the bond limit or $30 million, whichever is less.
• Audited statement: up to the single-project bond limit.

Because the bond letter feeds the capacity figure, the surety relationship and the accountant's work product together shape which City projects a firm can pursue. The single-project limit a surety puts in writing is subject to underwriting and can vary by surety and program, and a move from a reviewed to an audited statement is typically planned with the surety before a large bid cycle.

Joint ventures have their own rule. Under instruction 1.4 of the Sunset Cliffs bid, joint venture partners may combine bidding capacity on projects with an engineer's estimate of $30 million or more, and each joint venture entity must be prequalified at a minimum of $15 million. A smaller firm teaming with a larger one still needs its own prequalification at that level.

Section 19.1 of the Sunset Cliffs instructions calls for bid security on bids of $250,000 and above in the form of an approved corporate surety bond payable to the City of San Diego for not less than 10 percent of the total bid amount. Section 19.4 adds a logistics step: a PDF copy of the bid bond is uploaded to PlanetBids with the bid, and the original is due by 5 p.m. one working day after bid opening.

After award, the document schedule in the same bid gives the bidder 10 working days after it receives the contract forms to deliver the contract bonds and insurance documents. On M-26-0133, section 11.1 asks for insurance certificates and endorsements upon issuance of the City's Notice of Intent to Award. Those windows are short for an endorsement a carrier has not yet issued, so the insurance exhibit is worth reading before the bid goes in.

Section 1-7.2(1) ties the surety to the funding. On state or local funds the surety must be an admitted surety authorized by the California Department of Insurance (Code of Civil Procedure §995.670), and on federal funds it must be listed in U.S. Treasury Department Circular 570. The surety agent's signature must be notarized. Section 1-7.2(5) keeps the bond in effect until the end of the warranty period set in the contract documents, so the bonded obligation runs past acceptance. On the executed Slurry Seal Group 2626 contract (K-26-2430-DBB-3, gas-tax funded, awarded at $3,538,831.50), the faithful performance bond and the labor and materialmen's bond were each written in the full contract amount.

Bids already in the pipeline can name earlier editions. The Sunset Cliffs documents adopt the 2021 Greenbook and 2021 Whitebook, which pre-date the 2024 edition's April 2026 effective date, so confirm which edition each bid adopts.

The City does not publish one insurance schedule for every job. Each solicitation's Supplementary Special Provisions set the limits, the figures below come from the named documents, and the insurance provisions of the bid in hand control:

• Slurry Seal Group 2626 (bids due January 29, 2026): general liability of $5 million each occurrence and $5 million personal injury, with $10 million general and products-completed operations aggregates; auto of $1 million combined single limit, Any Auto; statutory workers' compensation with employer's liability of $1 million per accident for bodily injury or disease.
• Sunset Cliffs Devonshire (bids due March 18, 2026): general liability of $5 million each occurrence with $10 million general and products-completed operations aggregates, with auto and employer's liability on the slurry seal terms.
• Both 2026 design-bid-build bids: contractors pollution liability of $2 million per claim and $4 million aggregate. The slurry seal contract adds hazardous transporters pollution at $2 million per occurrence and $4 million aggregate and a 12-month extended reporting period on claims-made pollution policies.
• Minor contract M-26-0133 (posted October 2026, $131,501.41 lump sum): general liability of $1 million each occurrence with $2 million general and products-completed operations aggregates, auto of $1 million combined single limit and employer's liability of $1 million.

The endorsement language is consistent across the documents read. The general liability policy must be endorsed to include as an additional insured the City and its elected officials, officers, employees, agents and representatives, for ongoing operations, products, completed operations and premises, limited as Civil Code §2782 and Insurance Code §11580.04 allow. The same wording appears in the Sunset Cliffs bid and in M-26-0133.

M-26-0133 also lists primary and noncontributory coverage, a designated construction project general aggregate limit, a workers' compensation waiver of subrogation in favor of the City and 30 days' notice of material change. Carrier forms word each of these differently, so the endorsement on file can matter as much as the limit. Whether a given endorsement is available is subject to underwriting and can vary by carrier guidelines and programs.

Whitebook section 3-13.3 requires the contractor to warranty and repair all defective materials and workmanship for 1 year, and it also sets a 10-year period for latent defects and a 4-year period for patent defects. Some items carry longer minimums, such as luminaires with 10 years of manufacturer's warranty. Project provisions can add their own terms; the slurry seal contract calls for surface seal repairs within one year after construction operations are completed.

The Whitebook does not state a retention percentage; it defines retention by reference to the Greenbook, so the percentage is set in each solicitation's contract documents. The Whitebook does state that retention can be released 35 calendar days after the Notice of Completion (3-13.2(5)), that the City pays 6 percent annually on late retention payments (7-3.2) and that final payment requires Consent of Surety and the EOCP Final Summary Report. Local hire terms were not found in the bids read for this page; they are set in each solicitation, alongside the prevailing wage and apprenticeship requirements those bids carry.

The City's Small Local Business Enterprise program shapes bids. The EOC program page says certified SLBE and ELBE firms may qualify for restricted bidding, bid discounts and preference points. Attachment C to the Sunset Cliffs bid sets the thresholds: contracts of $1.5 million and above are Major Public Works Contracts with a mandatory SLBE-ELBE subcontracting requirement unless the bidder shows good faith effort, and contracts over $1 million and under $1.5 million carry a 5 percent bid discount for SLBE-ELBE firms. That project's goals were 0.7 percent SLBE and 2.3 percent ELBE, a 3.0 percent mandatory total under General Conditions §7.1.

The Mayor's message on the FY2027 Adopted Budget puts the Fiscal Year 2027 Capital Improvements Program at $858.1 million within a $6.49 billion total budget. The City's Forecast of Projects to be Awarded, with data as of July 1, 2026, lists an estimated $576,807,208 in FY2027 construction contract awards and $811,451,096 in total project cost, with Public Utilities the largest department at $403,036,702 in construction awards. A forecast can change as projects move, so it serves as a planning tool for bonding capacity rather than a list of awards.