a. NO personal or company financial statements;

b. NO collateral required;

c. NO disclosure of license information;

d. NO work history needed;

e. NO initial formal or informal meetings between contractor and escrow agent;

f. NO attorney, banker or accountant referrals;

g. NO establishing or justifying contractor’s projects work in progress;

h. NO information about contractor’s credit history or any of its financial accounts;

i. NO disclosure of contractor’s personal or company assets;

j. NO indemnification by contractor;

k. NO limitations on number of contracts;

l. YOU can bid as many solicitations as you desire;

m. YOU pay a fee of only 2% of the total contract amount, change orders fee rate is 0%, (no extra cost).

Pursuant to the Federal Acquisition Regulation Part 28 Section 28.102, (FAR 28.102) the federal government authorizes tripartite escrow agreements in lieu of Payment Bonds.

Check your specific solicitation of your contract. You will find most government departments/agencies allow tripartite escrow agreements in lieu of payment bonds for projects up to $150,000. If you have a tripartite escrow agreement as an option in your solicitation you can save much money and time, and avoid the anxiety and possible disappointment caused by dealing with bonding companies. Tripartite Escrow Company’s fee is only 2% of the total contract amount.

All that is required to establish a tripartite escrow agreement for your contract is the company name, address, Email, telephone number, fax number, and point of contact of all the suppliers of material and/or labor; name of government department/agency; and your company name, address, Email, telephone number, and fax number.

We are unlike the vast majority of bonding companies.  Bonding companies may charge anywhere from 3% to 7% of the contract price for a Payment Bond. In contrast, we charge for a Tripartite Escrow Agreement only 2% up to four times less, depending on the bonding company. Moreover, suppliers who may not want to take the risk with certain contractors are ensured they will all get paid.

First, the contractor establishes an escrow account in a federally insured financial institution and enters into a tripartite escrow agreement with the financial institution (Bank), as escrow agent, and all of the suppliers of labor and/or material. The Tripartite Escrow Agreement establishes the terms of payment under the contract and process for resolution of disputes among the parties. The government makes payments to the contractor’s escrow account, and the escrow agent (Bank) distributes the payments in accordance with the agreement, or triggers the disputes resolution procedures, if required. It is that easy!

The government makes payments to the contractor’s escrow account, and the escrow agent (Bank) distributes the payments in accordance with the agreement, or triggers the disputes resolution procedures if required.

Yes, the maximum threshold for a Tripartite Escrow Agreement is $150,000.

To establish an account with TEC is free. After an escrow account is established the escrow management fee is 2% of the total contact amount, change orders fee rate is 0%, (no extra cost).

Other fees:

a. Setting up fee for a Tripartite Escrow account is FREE;

b. Cashier’s checks are FREE for each Payment Authorization Form;

c. Redrafting services for each addition to an escrow agreement is FREE;

d. Mail escrow agreement FREE to you and government via USPS, Priority Mail;

e. Mail cashier’s checks FREE to you and supplier/subcontractor via USPS, Priority Mail;

f. Wire transfers are $50.00 for each Payment Authorization Form;

g. Mail escrow agreement with your account number via FedEx, UPS or DHL next day delivery.

The  contractor is responsible for all Tripartite Escrow Agreement fees.

Wire transfers make payment processing fast and simple, but it depends upon your financial institution. Some institutions require a few hours. However, Bank wire transfer account can receive funds at any time of the day or night and processes all transfers immediately.

Call TEC at (559) 478-9611 or Email at abelc@tripartiteescrow.com.

The prime contractor establishes an escrow account in a federally insured financial institution and enters into a Tripartite Escrow Agreement with the financial institution, an escrow agent, and all of the suppliers of labor and material. The Tripartite Escrow Agreement establishes the terms of payment under the contract and resolution of disputes among the parties. The Government makes payments to the contractor’s escrow account, and the escrow agent distributes the payments in accordance with the agreement, or triggers the disputes resolution procedures if required.

BID BOND

Please reference Federal Acquisition Regulation Part 28 Section 28.101 — Bid Guarantees. This section states in subsection (a) of FAR Part 28 Section 101-1, “A contracting officer shall not require a bid guarantee unless a performance bond or a performance and payment bond is also required.”

In section 28.102 — Performance and Payment Bonds and Alternative Payment Protections for Construction Contracts.

28.102-1 — General.

(a) The Miller Act (40 U.S.C. 270a-270f) requires performance and payment bonds for any construction contract exceeding $150,000, except that this requirement may be waived

(1) By the contracting officer for as much of the work as is to be performed in a foreign country upon finding that it is impracticable for the contractor to furnish such bond; or

(2) As otherwise authorized by the Miller Act or other law.

(1) Pursuant to 40 U.S.C. 3132, for construction contracts greater than $35,000, but not greater than $150,000, the contracting officer shall select two or more of the following payment protections, giving particular consideration to inclusion of an irrevocable letter of credit as one of the selected alternatives:

1. A payment bond.

2. An irrevocable letter of credit (ILC).

3. A tripartite escrow agreement. The prime contractor establishes an escrow account in a federally insured financial institution and enters into a tripartite escrow agreement with the financial institution, as escrow agent, and all of the suppliers of labor and material. The escrow agreement shall establish the terms of payment under the contract and of resolution of disputes among the parties. The Government makes payments to the contractor’s escrow account, and the escrow agent distributes the payments in accordance with the agreement, or triggers the disputes resolution procedures if required.

4. Certificates of deposit. The contractor deposits certificates of deposit from a federally insured financial institution with the contracting officer, in an acceptable form, executable by the contracting officer.

5. A deposit of the types of security listed in 28.204-1 and 28.204-2.

(2) The contractor shall submit to the Government one of the payment protections selected by the contracting officer.

(c) The contractor shall furnish all bonds or alternative payment protection, including any necessary reinsurance agreements, before receiving a notice to proceed with the work or being allowed to start work.

A. COMMUNICATIONS BETWEEN CONTRACTING OFFICER AND TRIPARTITE ESCROW COMPANY.

Some contracting officers are unfamiliar with the Tripartite Escrow Agreement as it relates to the Federal Acquisition Regulation. At Tripartite Escrow Company we are aware of this circumstance and communicate with the contracting officer regarding the tripartite escrow agreement. Moreover, if the contracting officer has any questions about the escrow agreement Tripartite Escrow Company answers all questions.

B. COMMUNICATIONS BETWEEN CONTRACTING OFFICER AND CONTRACTOR BEFORE AWARD OF CONTRACT.

First, contractors must ensure a tripartite escrow agreement is expressly authorized within their respective federal solicitation. Tripartite Escrow Company recommends contractors communicate with the contracting officer their intentions of utilizing a Tripartite Escrow Agreement versus a payment bond or any other payment protection before submitting their bids. Also recommended in your oral and written communications to the contracting officer is the identification of the applicable and specific Federal Acquisition Regulation within your respective solicitation.

Tripartite Escrow Company is presently unaware of any such escrow agreement or instrument. The maximum threshold for a Tripartite Escrow Agreement is $150,000. The purpose of this alternative payment protection is to assist small businesses performing contracts $150,000 and less for the federal government.

Within your solicitation under the section heading 28.102 Alternative Payment Protections you will find subsection (iii) Tripartite Escrow Agreement listed as one of the alternative payment protections.

Tripartite Escrow Company will assist in establishing the Tripartite Escrow Agreement with the contracting officer. This service by Tripartite Escrow Company is completely free for those who have established an account with Tripartite Escrow Company.

Contractor must have an existing Escrow Agreement to add a subcontractor or supplier. Then go to “ORDER FORMS” and then to “AMEND ESCROW AGREEMENT”.