It’s Surety high tide season when your principal abandons ship


In the wake of Hurricane Sandy, FEMA made grants available to enable coastal communities advance warning and greater evacuation time. The grants were intended to fund the installation of tidal sensors, which sit atop constructed platforms both onshore and offshore. Our surety-client’s principal was awarded the project based on a too-low bid (about one quarter of the amount required), and his company simply lacked the resources to complete the contract. The obligee on the bond, US Geological Survey, was obviously constrained to the amount of the limited grant monies; there was simply no room for overruns.


Guardian’s Surety Group confirmed that the defaulted contractor had only completed the first platform, and even that platform failed to meet the specified height requirement. Work on a second onshore platform at a Coast Guard Station had commenced with the sinking of pilings. Guardian’s surety claim expert further noted that none of the offshore work had begun because, quite clearly, the principal lacked access to a barge to run many of the longer pilings. Additionally, the locations of these tidal sensor platforms spanned the New Jersey coastline. Vastly complicating construction was the narrow window of work time available. Many of these popular beach communities maintained various noise and other restrictions, specifically enforced during their high season, May thru September. Identifying a group of contractors to bid on the remaining work, and ensuring they possessed the requisite equipment, drive, and tenacity, would prove no simple task.


Guardian’s surety experts completed the bidding and relet process and remained in place to assist the new contractor in navigating many of the project’s challenges. The seasonality meant working throughout the winter and trying to avoid ice flows, with the crew, at one point, sharing occupancy of the barge with a family of seals. Another major hurdle posed was the platforms that had marina locations; property owned by beach condominiums had HOAs that felt installation interfered with their operations or might diminish their ocean view. Yet another challenge came in the form of a community that had passed a post-contract requirement for the wrapping of pilings so as to avoid damage to oyster bedding areas… but the FEMA grant didn’t allow for any modifications or additional costs. Guardian’s team also helped the selected contractor overcome other complications such as those instances where the USGS didn’t hold waterway rights and these had to be negotiated.

But in the aftermath of one of our country’s most deadly and devastating storms, Guardian and all involved parties understood the importance of the work. Communicating and collaborating effectively throughout, the team worked through every adversity and successfully brought the project to a close. Ultimately, though consequential losses on the bond were expected by all parties, Guardian’s work for its longstanding client was celebrated. Only genuine surety claims and problem-solving experience could have substantially reduced the losses, limited exposure, and successfully resolved the claim.


Whether you require support on a single, small claim, a large or complex claim, or on all of your daily incoming surety claims, Guardian Group, Inc. was engineered from the outset to provide sureties the technical expertise and seasoned claims investigation experience that results in more rapid resolution. For over 30 years, Guardian’s Surety Group has helped sureties achieve their vision for effective claims handling, including both contract and non-contract claims. Should you require immediate assistance on any pending claims or should you be open to discussing any of the multitude of ways we can be an asset in achieving your company’s objectives, kindly give us a call today.


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